Madhya Pradesh High Court
Pravesh Maheshwari vs The Union Of India on 18 September, 2024
Author: Vivek Agarwal
Bench: Vivek Agarwal
NEUTRAL CITATION NO. 2024:MPHC-JBP:47153
W.P. No.26941/2021 and connected matters
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK AGARWAL
&
HON'BLE SHRI JUSTICE DEVNARAYAN MISHRA
WRIT PETITION No. 26941 of 2021
GOVIND SINGH LODHI
Versus
UNION OF INDIA AND OTHERS
Appearance:
Shri Bhoopesh Tiwari - Advocate for the petitioners.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 25928 of 2021
VIRENDRA AGLECHA
Versus
THE UNION OF INDIA AND OTHERS
Appearance:
Signature Not Verified
Signed by: PUSHPENDRA
PATEL
Signing time: 18-09-2024
19:23:08
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W.P. No.26941/2021 and connected matters
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Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 25931 of 2021
PRAVESH MAHESHWARI
Versus
THE UNION OF INDIA AND OTHERS
Appearance:
Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 25941 of 2021
PRAVESH MAHESHWARI
Versus
THE UNION OF INDIA AND OTHERS
Signature Not Verified
Signed by: PUSHPENDRA
PATEL
Signing time: 18-09-2024
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Appearance:
Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 26050 of 2021
VIRENDRA AGLECHA
Versus
THE UNION OF INDIA AND OTHERS
Appearance:
Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 26051 of 2021
VIRENDRA AGLECHA
Versus
Signature Not Verified
Signed by: PUSHPENDRA
PATEL
Signing time: 18-09-2024
19:23:08
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W.P. No.26941/2021 and connected matters
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THE UNION OF INDIA AND OTHERS
Appearance:
Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 26053 of 2021
VIRENDRA AGLECHA
Versus
THE UNION OF INDIA AND OTHERS
Appearance:
Shri Manish Datt - Senior Advocate with Shri Siddharth Datt - Advocate
for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
WRIT PETITION No. 26942 of 2021
Signature Not Verified
Signed by: PUSHPENDRA
PATEL
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GOVIND SINGH LODHI
Versus
UNION OF INDIA AND OTHERS
Appearance:
Shri Bhoopesh Tiwari - Advocate for the petitioner.
Shri Pankaj Dubey - Advocate for the respondent-Central Bureau of
Investigation.
Shri Brian D'Silva - Senior Advocate with Shri Kapil Duggal, - Advocate
for the respondents-Punjab National Bank.
Reserved on : 28.08.2024
Pronounced on : 18.09.2024
ORDER
Per: Justice Vivek Agarwal
This bunch of petitions is filed by set of banking officers belonging to
the Punjab National Bank. It is submitted that these cases are similar in
nature, whereby the competent authority after refusing to grant sanction,
under the pressure of Chief Vigilance Commissioner and the Department
of Personnel & Training (DoPT) has granted sanction without there being
any change in the circumstances or without there being any new material
brought on record.
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2. For the purposes of reference, facts in the case of W.P.
No.26941/2021 (Govind Singh Lodhi Vs. Union of India and others) are
taken for consideration.
3. Petitioner’s contention is that petitioner was working as Manager
(Credit) in MMG Scale-II, for which selection was conducted by the
respondent-Punjab National Bank. He was declared successful and vide
order dated 21.01.2013, he was offered appointment on the said post of
Manager (Credit) in MMG Scale-II, where he gave his joining on
18.04.2013. Petitioner upon giving his joining, was posted at Kanthal
(Ujjain). Petitioner was initially appointed on probation for a period of two
years, as is evident from his appointment order (Annexure P-1).
4. It is submitted that as an employee of the Punjab National Bank,
provisions of the Punjab National Bank Officers (Conduct) Regulations,
1977, Punjab National Bank Officer Employees’ (Discipline and Appeal)
Regulations, 1977 and Punjab National Bank (Officers) Service
Regulations, 1979 and other rules and conditions of service laid down by
the Bank from time to time for its officers, were applicable to the
petitioner.
5. It is submitted that a complaint was made on 16.01.2018 by one Shri
Vijay Kumar Harit, Chief Manager, Punjab National Bank, Assets
Recovery Management Branch, Indore, and an FIR was registered against
certain persons. It was alleged that the accused officers in connivance with
the borrower and the guarantors, sanctioned a Cash Credit Limit (CCL) of
Rs.400 Lakhs on 19.07.2013 in favor of one Sohanlal Kothari, who was
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proprietor of M/s Jai Jinendra Industries. That cash credit limit was to be
used in the business of coal trading. Against the said cash credit limit,
borrower along with the guarantors had mortgaged land and building of
more than 100%.
6. The allegation is that the sanction of cash credit limit was in blatant
violation of the Bank norms and without verifying the required
stocks/securities. It was further alleged that the collateral security was
overvalued and false, forged and fictitious documents were procured by the
borrower for grant of the cash credit limit.
7. The Central Bureau of Investigation (CBI), ACB, Bhopal, lodged
FIR under Sections 120-B read with Sections 420, 471, IPC and Sections
13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988
(for brevity “PC Act”) against the accused persons. The allegation against
the petitioner Shri Govind Singh Lodhi is that when he was posted as
Manager (Credit) at Branch Kanthal (Ujjain) of the Punjab National Bank,
then without verifying and analyzing documents and financial details,
forwarded the application of the borrower. Another interesting fact is that
initially name of the petitioner was not mentioned in the FIR, but was
included in the array of accused in the charge-sheet. Thereafter, the
prosecution approached the competent authority of the respondent Bank
for the purpose of sanction for prosecution against the petitioner under
Section 19 of the PC Act.
8. It is submitted that since petitioner was a probationer, therefore, in
terms of the rules and regulations of the Punjab National Bank, he being
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the junior-most officer and on probation, still learning the tricks of the
trade, was not aware of the intricacies of the cash credit limit and,
therefore, he being only a recommending authority and not the sanctioning
authority of cash credit limit, he could not have been arrayed as an accused
in violation of the provisions contained in the service regulations,
especially, the instructions of the Government of India, Ministry of
Finance, Department of Financial Services, Vigilance Section vide
No.F.14/43/2015/Vig., New Delhi, Dated 15th December, 2015, wherein it
is informed by the Director (Vigilance) to the CEOs of all Public Sector
Banks/Financial Institutions that “CVC has advised this department to
instruct the Public Sector Banks to ensure that newly recruited officers
who are under probation or having a service of less than two years are not
asked to recommend and process loans, unless it forms part of their
learning process.” Copy of this order is available in the writ petition as
Annexure P-2.
9. Thus, it is submitted that as per Annexure P-2, petitioner being a
newly recruited and on probation, was not required to be given work of
recommending and processing loans, unless it was part of his learning
process. Therefore, it is submitted that if a loan was handled by the
petitioner as a part of his learning process, that will provide him with an
immunity to not to be prosecuted for minor lapses during the learning
process.
10. It is submitted by Shri Bhoopesh Tiwari, learned counsel for the
petitioner that on 30.01.2020 vide order in case No.RC0082018A0015-
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CBI, ACB, Bhopal, sanction to prosecute the petitioner was refused by the
then Zonal Manager on the ground that petitioner was involved in
preprocessing of the loan and the main reason for the negligence on his
part was that he was newly recruited in the Bank and that was his first
posting, he was, therefore, not having any previous experience which
caused such mistake. He has already been chargedsheeted and penalty of
reduction of two lower stage in the time scale of pay for two years has
already been imposed upon him for his lapses. Therefore, taking such a
stand, a decision was taken not to prosecute the petitioner in the court of
law for the alleged lapses, which were termed to be ‘procedural in nature’
and not involving any malafides or criminal conspiracy on his part. A copy
of this order is enclosed with the petition as Annexure P-3.
11. It is further submitted that, thereafter, again matter was referred to
the competent authority, who had passed the order dated 30.01.2020
(Annexure P-3), and vide order dated 02.08.2021, the sanctioning
authority/competent authority referring to the letter No.VIG SOP-39/RC-
14 dated 16.07.2021 informed that DoPT vide its OM No.118/6/21-AVD-
III dated 06.07.2021 agreed with the recommendation of CVC to grant
sanction for prosecution in respect of another officer, namely, Virender
Aglecha, the then Manager (Credit), Branch Office, Marwadi Road,
Bhopal. It was informed that the disciplinary authority by order dated
14.07.2020 has decided not to accord sanction for launching of prosecution
against said Virender Aglecha, on whom there was an allegation of
processing proposal/application of M/s Sahyog Coal India Private Ltd. and
who too had joined the services of the Bank as a probationer on the post of
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Manager (Credit) at Marwadi Road, Bhopal in May 2013 and asked the
competent authority to re-examine his case.
12. Vide order dated 02.08.2021, the competent authority i.e. the Zonal
Manager, referring to the judgment of High Court of Rajasthan in case of
Munish Kumar Sharma Vs. The State of Rajasthan and others (S.B.
Civil Writ Petition No.7156/2007, decided on 10.03.2010), decision of
Hon’ble Supreme Court in Mansukhlal Vithaldas Chauhan Vs. State of
Gujarat, (Criminal Appeal No.000502/1993, decided on 03.09.1997),
decision in case of Mohd. Iqbal Ahmed Vs. State of Andhra Pradesh
and others, AIR 1979 SC 677, judgment of Supreme Court in State of
Bihar and another Vs. P.P. Sharma, 1991 Cr.L.J 1438 (SC), judgment
in case of Jaswant Singh Vs. State of Punjab, AIR 1958 SC 12, so also
the judgment of Hon’ble Supreme Court in State of Himachal Pradesh
Vs. Nishant Sareen, (2010) 14 SCC 527, observed that since disciplinary
authority had already taken action against the delinquent under the Punjab
National Bank Officer Employees’ (Discipline and Appeal) Regulations,
1977 (Clause 6) and there was no dishonest or malafide intention on the
part of the officer, but the act was due to his inexperience or lack of
knowledge or negligence, it would not amount to dishonest
misappropriation and on the ground of negligence or shortage alone, he
cannot be given sanction for prosecution and, therefore, sanction for
prosecution was refused in case of Virendra Aglecha.
13. Petitioner’s counsel submits that charge-sheet which issued against
the petitioner was under Regulation 8 of the Punjab National Bank Officer
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Employees’ (Discipline and Appeal) Regulations, 1977 and it was under
the head of non-vigilance. Thus, it is pointed out that an action taken
against the petitioner under non-vigilance head and for the inexperience of
the petitioner to process a credit limit, while being on probation as a part of
his learning, cannot entail criminal consequences. Therefore, the petition
deserves to be allowed and be allowed.
14. Thus, it is submitted that once sanction was refused, it cannot be
thrust upon the officers by changing the concerned officer as is evident
from the representation (Annexure P-4) made by the General Secretary of
All India Punjab National Bank Officers’ Federation on 09.09.2021 vide
impugned order dated 28.10.2021, without mentioning any change of
circumstances merely on the dictates of the CVC and the CBI, so also at
the behest of DoPT.
15. Reliance is placed by the learned counsel for the petitioner on the
following judgments:-
(i) Judgment of Hon’ble Supreme Court in Nagaraj Shivarao
Karjagi Vs. Syndicate Bank, Head office, Manipal and another,
(1991) 3 SCC 219;
(ii) Judgment of Hon’ble Supreme Court in Satyendra Chandra
Jain Vs. Punjab National Bank and others, (1997) 11 SCC 444;
(iii) Judgment of High Court of Madhya Pradesh in Gagan Gupta
Vs. The State of Madhya Pradesh, 2016 SCC OnLine MP 8968;
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(iv) Judgment of High Court of Madras in M.S. Vijayakumar Vs.
The Chairman and Managing Director, Indian Overseas Bank,
2010 SCC OnLine Mad 6237;
(v) Judgment of High Court of Kerala in Ramesh Chennithala Vs.
State of Kerala, (2018) SCC OnLine Ker 14261;
(vi) Judgment of High Court of Madras in Ravikumar and
another Vs. State, Rep. by Deputy Superintendent of Police,
SPE/CBI/ACB/Chennai, as reported in 2012 (2) MWN (Cr.) 141;
(vii) Judgment of Himachal Pradesh High Court in Nishant Sareen
Vs. State of Himachal Pradesh, 2009 SCC OnLine HP 956; and,
(viii) Judgment of Allahabad High Court in Giri Raj Sharma Vs.
State of Uttar Pradesh Through CBI/ACB/LKO, in case under
Section 482/378/407 No.3274 of 2018 decided on 17.12.2021.
16. Thus, referring to aforesaid judgments, it is submitted that the
subsequent order of sanction being not based on any fresh material
collected by the investigating agency, is not sustainable in the eyes of law.
17. Shri Manish Datt, learned Senior counsel appearing for the petitioner
in connected matter, submits that in his case, sanction was refused for the
first time on 02.03.2020 and then again it was refused on 03.08.2020. On
16.08.2021, it was again refused, but on 28.10.2021, it was granted. He
places reliance on the judgment of Hon’ble Supreme Court in case of Vijay
Rajmohan Vs. State, Represented by the Inspector of Police, CBI,
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ACB, Chennai, Tamil Nadu, 2022 SCC OnLine SC 1377 and judgment
of High Court of Judicature at Bombay Central Bureau of Investigation
Vs. R. Bhuvaneshvari W/o C.N. Venkataraman and another (Criminal
Revision Application No.297 of 2023 and Criminal Application No.246 of
2019, decided on 09th January, 2024).
18. Shri Kapil Duggal, learned counsel appearing for the respondent-
Bank, in his turn, submits that he would be fair in admitting that no fresh
material was considered. He further submits that previous order declining
sanction i.e. order dated 30.01.2020 (Annexure P-3) is not an order, but a
decision taken in the note-sheet and, therefore, the provisions of the
Vigilance Manual will be applicable. It is further submitted that Regulation
19 of the Regulations of 1977, provides for consultation with Central
Vigilance Commission (CVC). It is provided that the Bank shall consult
the Central Vigilance Commission wherever necessary in respect of all
disciplinary cases having a vigilance angle. Thus, it is pointed out that the
consultation with the Central Vigilance Commission was mandatory before
passing an order.
19. It is further submitted that Clause 7.15 of the Vigilance Manual,
2020 issued by the Vigilance Department of the respondent- Bank states
that in case where there is a difference of opinion between the competent
authority and the CBI on the issue whether the sanction for prosecution in
respect of the officer employees’ should be granted or not, the opinion of
Chief Vigilance Commissioner is binding and the matter is required to be
referred to the Commission for its advice irrespective of the level of the
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officer involved and the authority will take further action after taking into
consideration the advice of the Commissioner. The matter is required to be
referred to the Commission through CVO of the Bank and where the
administrative authorities do not propose to accept the advice of the
Commission for grant of sanction for prosecution, such cases should be
referred to DoPT for a final decision. Thus, it is submitted that since there
was a difference of opinion between the competent authority and the
Central Bureau of Investigation, the matter should have been referred to
the Vigilance Commission and, thereafter, the aspect of sanction should
have been processed and, in case, the disciplinary authority was not willing
to accept the recommendations of the CVC, then matter was mandatorily
required to be referred to the DoPT, whose advice is binding.
20. Shri Pankaj Dubey, learned counsel appearing for the respondent-
CBI, in his turn, submits that there is an element of criminal conspiracy,
indulging in which the petitioner not only violated the prescribed
procedure of the Bank, but made the Bank to suffer a huge loss due to his
non-performance and not adhering to book of instructions. It is submitted
that the High Court of Chhattisgarh at Bilaspur in Dilip Kumar Sharma
Vs. State of Chhattisgarh, (W.P. (Cr.) No.355/2017 decided on
06.04.2018), after considering several judgments of Hon’ble Supreme
Court has held that an order passed under Section 19 of the Act of 1988 by
the sanctioning authority can be reviewed / reconsidered on the following
circumstances, namely, (i) Where fresh materials have been collected by
the investigating agency and if on that basis, the matter can be
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reconsidered; and, (ii) When the authority has failed to take into
consideration a relevant fact or took into consideration an irrelevant fact.
21. Shri Pankaj Dubey also places reliance on the judgments of Hon’ble
Supreme Court in State of Bihar Vs. Rajmangal Ram, (2014) 11 SCC
388 and P.L. Tatwal Vs. State of Madhya Pradesh, AIR 2014 SC 2369.
Thus, placing reliance on these judgments, it is submitted that there is no
estoppel from reconsidering the earlier decision of refusal to grant sanction
for prosecution. Shri Pankaj Dubey also takes an objection that trial is
already underway and no useful purpose is going to be served, even if the
petitions are allowed at this stage.
22. Shri Manish Datt, learned Senior Counsel submits that petitions are
filed against the order of cognizance, a fact which is admitted by Shri
Pankaj Dubey and, then it is submitted that charges were framed after
filing of the petition, another fact admitted by Shri Pankaj Dubey. Thus,
pendency of petitions cannot prejudice the interest of the petitioners.
23. Though Shri Pankaj Dubey submits that trial court is only required to
see whether the sanction is there or not and draws attention to the
Explanations below Section 19 (4) of the Prevention of Corruption Act,
1988 and placing reliance on the judgment of a coordinate Bench of this
High Court in Shashikant Mishra Vs. Union of India (M.Cr.C.
No.49651 of 2023, decided on 23rd January, 2024), it is submitted that in
para 36 of the said order, various aspects have been considered and since
order dated 30.01.2020 (Annexure P-3) was never communicated to the
CBI, that cannot be said to be an order and, therefore, that order being
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confined to note-sheets as submitted by Shri Kapil Duggal, case of the CBI
will be squarely covered by the decision of the coordinate Bench in
Shashikant Mishra (supra).
24. After hearing learned counsel for the parties and going through the
record, first and foremost issue is that whether order dated 30.01.2020
(Annexure P-3) is an order or a decision taken in the note-sheet which was
never formalized as an order? Whether that order was ever communicated
to the CBI or not?, and what will be the impact of the decision of
coordinate Bench in Shashikant Mishra (supra)? Another issue which
emerges is that what will be the impact of the procedure given in Clause
7.15 onwards in the Vigilance Manual, 2020?
25. As far as first issue is concerned, though Shri Kapil Duggal has
vehemently submitted that order dated 30.01.2020 (Annexure P-3), cannot
be treated as a formal order and it was only a decision confined to the note-
sheet. But, it is equally true that even on our asking, Shri Kapil Duggal,
learned counsel appearing for the Bank did not produce the original file to
show that order dated 30.01.2020 (Annexure P-3) was never issued by the
authority and it was only confined in the note-sheet, as a decision of the
authorities. We are constrained to note that order dated 30.01.2020
(Annexure P-3) was given by the Punjab National Bank under the Right to
Information Act, 2005, and such endorsement is available in the order
itself.
26. In the Principles of Statutory Interpretation, by Justice G.P. Singh,
Former Chief Justice of High Court of Madhya Pradesh, 13th Edition, 2012,
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LexisNexis, Butterworths Wadhwa Nagpur, in Chapter XII, under the
heading of “Delegated Legislation”, forms of delegated legislations have
been dealt with. Quoting from Allen: Law and Order, Second Edition,
p.112, it is noted that “The expression ‘regulation’ should be used to
describe the instrument by which the power to make substantive law is
exercised, and the expression ‘rule’ to describe the instrument by which the
power to make law about procedure is exercised. The expression ‘order’
should be used to describe the instrument of the exercise of (A) Executive
power, (B) The power to take judicial or quasi judicial decision.
27. As far as procedural requirements in regard to delegated legislation
are concerned, by referring to the decision of the Hon’ble Supreme Court in
I.T.C. Bhadrachalam Paper Boards and another Vs. Mandal Revenue
Officer, A.P. and others (1996) 6 SCC 634, where (d) typed formula was
used, made the following general observations:-
“Where the parent statute prescribes the mode of publication or
promulgation that mode has to be followed and such a
requirement is imperative and cannot be dispensed with”.
28. In case of ‘orders’, the following formula has been adopted:-
“An order made …. shall –
(a) in the case of an order of a general nature or affecting a class
of persons, be notified in the Official Gazette; and
(b) in the case of an order directed to a specified individual be
served on such individual –
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(i) by delivering or tendering it to that individual, or
(ii) if it cannot be so delivered or tendered, by affixing it on
the outer door or some other conspicuous part of the
premises in which that individual lives, and a written report
there of shall be prepared and witnessed by two persons
living in the neighbourhood.”
29. Order dated 16.08.2021 passed in case of Shri Virendra Aglecha
clearly makes a mention of the fact that earlier orders passed by the
disciplinary authority on 02.03.2020 and 03.08.2020 deciding not to accord
sanction for launching of prosecution against Virendra Aglecha, were
taken to the CVC and on the recommendation of the CVC, DoPT had
agreed with the recommendations of the CVC to grant sanction for
prosecution. Language of the order clearly reveals that the matter was
within the knowledge of the CBI and it never raised any issue in regard to
non-communication of the orders of refusal to grant sanction for
prosecution. Though CBI has taken a ground that order of refusal of
sanction was passed on 30.01.2020, but it was never forwarded to the
answering respondent for which prosecution sanction was sought vide their
letter dated 23.12.2019 and then they were made to write another letter
dated 18/21-09-2020 to the CVO, Punjab National Bank for expediting the
sanction qua the petitioner, in response to which vide letter dated
06.11.2020 Deputy General Manager, Punjab National Bank had conveyed
the order of denial of sanction dated 31.08.2020, but none of these
correspondences have been enclosed by the CBI. Even Punjab National
Bank has not enclosed copy of the communication received from the CBI
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and the letter sent by the Deputy General Manager. They have also not
categorically stated as to whether the order refusing the sanction was sent
to the CBI or not, as that order has been passed on the basis of the
communication made by the CBI.
30. In fact, the issue is that whether the order refusing sanction, is an
order? and once an order is passed, then without there being any new
material or further investigation, can there be review of the decision as has
been done by the disciplinary authority?
31. Clause 7.9 of the Vigilance Manual, 2020 deals with sanction of
prosecution. Clause 7.10 prescribes the timelines and authority responsible
for according/declining sanction of prosecution. It is provides that “The
competent authority shall after the receipt of the proposal requiring
sanction for prosecution of a public servant endeavour to convey the
decision on such proposal within a period of three months from the date of
its receipt. Provided also that in case where, for the purpose of grant of
sanction for prosecution, legal consultation is required, such period may,
for the reasons to be recorded in writing, be extended by a further period of
one month.” It is also provided that CBI normally sends its report to the
CVO seeking sanction of prosecution who in turn, forwards the same to
DA/competent authority for further necessary action. On receipt of reply
from DA, CVO forwards the same to CBI.
32. In the present case, as mentioned by the CBI, they had sent a
communication through letter dated 23.12.2019, copy not enclosed so to
make out as to whom this letter was addressed, and then it is mentioned
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that another letter was sent on 18/21-09-2020, whereas as per Clause 7.10,
the outer time limit was four months and, therefore, it is evident that CBI
itself was responsible for causing delay and not following the timeline,
given under the Vigilance Manual, 2020.
33. Clause 7.12 of the Vigilance Manual, 2020 provides guidelines for
the Sanctioning Authority (Disciplinary Authority/Competent Authority) to
be followed while processing such requests. Clause 7.12 reads as under:-
“7.12 Guidelines for the Sanctioning Authority :
The guidelines to be followed by the Sanctioning Authority
(Disciplinary Authority / Competent Authority) while processing such
requests are summarized hereunder :-
a. Grant of sanction is an administrative act. The purpose is to
protect the public servant from harassment by frivolous or
vexatious prosecution and not to shield the corrupt.
b. The question of giving opportunity to the public servant to
submit his / her defence at this stage does not arise. The
sanctioning authority has only to see whether the facts would
prima facie constitute the offence.
c. The competent authority cannot embark upon an inquiry to
judge the truth of the allegations on the basis of representation
which may be filed by the accused person before the Sanctioning
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by the accused person or by otherwise holding a parallel
investigation / enquiry by calling for the record / report of his
Department.
d. When an offence allegedly committed under the Prevention
of Corruption Act has been investigated by the SPE, the report of
the IO is invariably scrutinized by the DIG, IG and thereafter by
DG (CBI). Then the matter is further scrutinized by the
concerned Law Officers in CBI. When the matter has been
investigated by such a specialized agency and the report of the IO
of such agency has been scrutinized so many times at such high
levels, there will hardly be any case where the Government
would find it difficult to disagree with the request for sanction.
e. The accused person has the liberty to file representations
when the matter is pending investigation. When the
representation so made has already been considered and the
comments of the IO are already placed before the Competent
Authority, there can be no need for any further comments of IO
on any further representation.
f. A representation subsequent to the completion of
investigation is not known to the law, as the law is well
established that the material to be considered by the Competent
Authority is the material which was collected during investigation
and was placed before the Competent Authority.
g. However, if in any case, the Sanctioning Authority after
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any doubt on any point the competent authority may specify the
doubt with sufficient particulars and may request the Authority
who has sought sanction to clear the doubt. But that would be
only to clear the doubt in order that the authority may apply its
mind proper, and not for the purpose of considering the
representations of the accused which may be filed while the
matter is pending sanction.
h. The prosecution must send the entire relevant record to the
sanctioning authority including the FIR disclosure statements,
statements of witnesses, recovery memos, draft charge-sheet and
all other relevant material. The record so sent should also contain
the material / document, if any, which may tilt the balance in
favour of the accused and on the basis of which, the competent
authority may refuse sanction.
i. The authority itself has to do complete and conscious
scrutiny of the whole record so produced by the prosecution
independently applying its mind and taking into consideration all
the relevant facts before grant of sanction while discharging its
duty to give or withhold the sanction.
j. The power to grant sanction is to be exercised strictly
keeping in mind the public interest and the protection available to
the accused against whom the sanction is sought.
k. The order of sanction should make it evident that the
authority had been aware of all relevant facts / materials and had
applied its mind to all the relevant material.
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l. In every individual case, the prosecution has to establish and
satisfy the court by leading evidence that the entire relevant facts
had been placed before the sanctioning authority and the
authority had applied its mind on the same and that the sanction
had been granted in accordance with law.”
34. Thereafter, Clause 7.14 requires the sanctioning authority to apply its
mind to all the facts and circumstances of the case before according its
sanction. Clause 7.14 reads as under:-
“7.14 Application of Mind while dealing the cases of
Prosecution:
The sanction represents a deliberate decision of the competent
sanctioning authority. The Courts expect that a sanction should
ex-facie indicate that the sanctioning authority had before it all
the relevant facts on the basis of which prosecution was proposed
to be launched and had applied its mind to all the facts and
circumstances of the case before according its sanction. No
particular form or set of words has been prescribed in which the
sanction of prosecution is given. However, since the grant of
sanction or refusal for prosecution is an administrative function
performed in a quasi – judicial manner, it should always be in the
form of a speaking order. Reasons for not granting sanction for
prosecution should also be recorded by the competent authority in
the form of a speaking order while communicating the same to
CBI.”
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35. Thereafter, Clause 7.15 deals with difference of opinion with CBI,
which reads as under:-
“7.15 Difference of Opinion with CBI
In case of difference of opinion between the CBI and the Bank
i.e. in the cases where the Disciplinary Authority does not
propose to accord the sanction should for by the CBI, or other
investigating agency, as the case may be, the case will be referred
to the Commission for its advice irrespective of the level of the
official involved and the authority will take further action after
considering the Commission’s advice. The case is to be referred
to the Commission through CVO of the Bank.
The cases where the administrative authorities do not propose to
accept the advice of the Commission for grant of sanction for
prosecution, such cases should be referred to DoPT for a final
decision.”
36. In the present case, firstly disciplinary authority does not propose to
accord sanction sought for by the CBI, or other investigating agency, as the
case may be, case will be referred to the Commission for its advice
irrespective of the level of the officer involved, the case is to be referred to
the Commission through CVO of the Bank.
37. In the present case, firstly disciplinary authority had not proposed to
accord the sanction, but had passed an order denying sanction and,
secondly, admittedly the file was not referred to the CVC through the CVO
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of the Bank, but order was communicated through CVO of the Bank to the
CBI and, therefore, it is not a case of difference of opinion with the CBI,
but a clear case of denial of sanction by the competent authority. And, once
the prosecution sanction was denied, then there was not occasion for the
CVC or DoPT to thrust upon their will on the disciplinary authority.
38. Hon’ble Supreme Court in case of Nagaraj Shivarao Karjagi
(supra) has held that consultation with and acceptance of advice of the
Central Vigilance Commission is not binding on the Bank. Disciplinary
authority as well as the appellate authority are entitled to apply their minds
having regard to the particular fact situation while deciding the punishment
to be awarded. Hon’ble Supreme Court in case of Satyendra Chandra
Jain (supra) again held that the disciplinary authority to take decision on
the basis of the recommendations made by the Chief Vigilance Officer, is
not binding. In case of Gagan Gupta (supra), Division Bench of this High
Court, relying on the judgment of Supreme Court in Nagaraj Shivarao
Karjagi (supra) and in the subsequent decision of the Supreme Court in
case of State Bank of India and others Vs. S.N. Goyal, (2008) 8 SCC
92, held that merely on the basis of the report submitted by the Vigilance
Commission, Inquiry Officer as well as the Disciplinary Authority will not
be absolved to record independent opinion, keeping in mind the entire
record which comes before it during inquiry.
39. High Court of Madras in M.S. Vijayakumar (supra) in para 34 noted
that “It is seen that it is because of the joint sitting of the CBI, CVC along
with the Indian Overseas Bank (Sanctioning Authority), the Sanctioning
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Authority has changed its view. It is not the case of the bank that these
materials which are insisted by either the CBI or CVC were not available
on earlier two occasions when the order declining sanction of prosecution
was passed” and in view of that matter, quashed the orders of the
sanctioning authority, granting sanction.
40. In the present case also, subsequent order of sanction as contained in
Annexure P-6 dated 28.10.2021, is an order not mentioning that what were
the changed circumstances or which was the new material, which was
brought to the sanctioning authority, which was not available when the
sanction was declined at the earlier point of time.
41. In case of Ramesh Chennithala (supra), High Court of Kerala too
dealt with the aspect of the extent of the vigilance authority and held that
VACB cannot make recommendatory directions to the Government as was
done in this case by the Inspector. Legislation is a sovereign function.
Executive actions of the Government in carrying out the decisions of the
Cabinet will also come within the purview of sovereign functions.
42. High Court of Madras in case of Ravikumar (supra) held that the
guidelines available in the Vigilance Manual having no statutory force, but
are only directory and not mandatory. It is also held that CBI instead of
challenging the order of the competent authority, refusing to grant
sanction, approached different authority to get the sanction order based on
the same materials. The Chief Commissioner of Income Tax without
application of mind, accorded sanction, and that order of sanction was held
to be illegal and invalid. It is also held that order granting sanction cannot
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be subjected to judicial review by the High Court under Article 226 of the
Constitution of India, since such an order of sanction can be tested at the
time of trial. It is also held that the sanctioning authority is expected to
apply his mind and analyse the materials available on record. Mechanically
accepting materials and granting sanction, is not proper.
43. High Court of Himachal Pradesh in Nishant Sareen (supra) held that
“By now it is well settled that the appropriate authority i.e. the competent
authority, granting the sanction who on consideration of all the material
facts has refused to accord the sanction to prosecute a government servant
has no power on reconsideration to review the said order and thereby
according sanction to prosecute on the same material.” It is further held
that however, the matter would be different, if additional/fresh/new
material is brought before the competent authority.
44. Allahabad High Court in case of Giri Raj Sharma (supra) noted that
in case of Gopikant Choudhary vs. State of Bihar and others, (2000) 9
SCC 53, State of Punjab and another Vs. Mohammed Iqbal Bhatti,
[2009 (67) ACC 350] (SC) = JT 2009 (13) SC 180 and Nishant Sareen
(supra), so also considering the judgment of Bombay High Court in
Romesh Mirakhur Vs. State of Maharashtra, 2017 SCC OnLine Bom
9552, held that advice of the CVC is recommendatory/advisory, which is
not binding upon the competent authority. It has, thereafter, quoted the
observation of Lord Denning that “If the decision-making body is
influenced by considerations which ought not influence it; or fails to take
into account matters which it ought to take into account, the Court will
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interfere: see, Padfield v. Minister of Agriculture, Fisheries and Food, 1968
AC 997″ to hold that sanction order being passed on review without there
being any fresh material, is not a valid sanction order.
45. In Central Bureau of Investigation Vs. R. Bhuvaneshwari (supra),
referring to the decision of the Supreme Court in Mohd. Iqbal Bhatti
(supra), it is held that “Once the Government 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 order on the basis of the same material, which already
stood considered, would not be appropriate or permissible.” and
accordingly, it held that the decision in Central Bureau of Investigation
(CBI) etc. Vs. Mrs. Pramila Virendra Kumar Agarwal and another,
(2020) 17 SCC 664, is distinguishable on the facts that the present is not a
case regarding invalidity on account of non-application of mind or the
accused are picking holes the manner in which the sanction is granted or
claim that the same is defective which obviously are matters to be
considered in the trial. The present is a case where thrice the sanction was
refused by the Competent Authority and for the fourth time on the same
materials, on the insistence of CBI the earlier refusal of sanction is sought
to be reviewed in the absence of any fresh materials. In view of such facts,
criminal application No.246/2019 filed by the Central Bureau of
Investigation was dismissed and writ petitions bearing No.4812/2022 and
4811/2022 filed by the petitioners were allowed.
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46. In case of P.L. Tatwal (supra), the facts were different. In that case,
three issues were raised, namely, since he was appointed in service by the
Administrator, sanction for prosecution can be given only by the
Administrator and not by anybody else. Then, it was contended that there
was no proper and valid sanction by the competent authority, and the third
ground which was raised was that since the proceedings for prosecution
against his superior officers were quashed, proceedings in his case should
also be quashed. But, none of the similar facts obtained in the present case,
and therefore, this judgment will be of no assistance to the CBI.
47. Similarly, Hon’ble Supreme Court in State of Bihar Vs. Rajmangal
Ram (supra) allowing the petition filed by the State of Bihar and quashing
the orders of the High Court, dealing with another issue, namely, that
whether mere omission, error or irregularity in sanction is not to be
considered fatal unless it has resulted in failure of justice. It also took into
consideration a three Judge Bench in State of Madhya Pradesh Vs.
Virender Kumar Tripathi, (2009) 15 SCC 533, while considering an
issue, namely, the validity of the grant of sanction by the Additional
Secretary of the Department of Law and Legislative Affairs of the
Government of Madhya Pradesh instead of the authority in the parent
department, and the Supreme Court held that in view of Section 19(3) of
the PC Act, interdicting a criminal proceeding mid-course on ground of
invalidity of the sanction order will not be appropriate unless the court can
also reach the conclusion that failure of justice had been occasioned by any
such error, omission or irregularity in the sanction. It was further held that
failure of justice can be established not at the stage of framing of charge
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but only after the trial has commenced and evidence is led. But in the
present case, facts are different. Here the matter is not within the realm of
Sub-section (3) of Section 19, which provides for non-interference in the
finding, sentence or order passed by a Special Judge 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.
48. In the present case, the challenge was put before the commencement
of the trial as admitted by different stakeholders that after refusal of the
sanction by the competent authority merely by changing the competent
authority and bringing pressure on it to pass an order of sanction, is not
sufficient to treat it to be a valid sanction and such sanction being not a
valid sanction, cannot be the basis for trial. This view has found support
from the judgment in cases of Giri Raj Sharma (supra), Gopikant
Choudhary (supra), State of Punjab and another Vs. Mohammed Iqbal
Bhatti (supra), Nishant Sareen (supra) and Romesh Mirakhur (supra).
49. As far as law laid down in case of Dilip Kumar Sharma (supra) is
concerned, para 18 of the said judgment only says that sanctioning
authority can review/reconsider an order passed where fresh materials have
been collected by the investigating agency and if on that basis, the matter
can be reconsidered or when the authority has failed to take into
consideration the relevant fact or took into consideration and an irrelevant
fact. Both the aspects have not been brought on record either by the Punjab
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National Bank or the CBI. What was the fresh material after a decision was
taken refusing to grant sanction and in another case, even after refusing to
review the order resulting in passing of a third order of sanction with the
change of the disciplinary authority and which of the relevant facts were
not considered by the earlier authority and, therefore, the judgment of
Chhattisgarh High Court in Dilip Kumar Sharma (supra) will be of no
assistance to the respondents.
50. Judgment in case of Shashikant Mishra (supra) is also on a
different premise. Emphasis is placed on para 36 of the said judgment. On
careful perusal of the judgment, it is mentioned that until and unless the
refusal is communicated to the investigating agency, the inability to grant
sanction may be treated as internal comments or opinion. It is not a case
wherein clinching evidence is available on record that on earlier occasions
the refusal of sanction was communicated to the investigating agency and
the investigating agency based on same material, once again reagitated the
matter before the concerning department. In the present case, even if it is
hypothetically accepted, though there is no material to form such opinion
and, therefore, we refrain to form such opinion that order refusing to grant
sanction was not communicated to the CBI, but CBI has admitted in its
reply that it had written a communication to the CVO of the Bank in
November, 2020 and then had taken up the matter with the CVC, etc. But,
the question is that after getting the copy of the order of refusal in
November, 2020, what fresh material was brought to the notice of the
disciplinary authority or which relevant material was not considered by the
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disciplinary authority, is the issue involved in the present case and that is
the distinguishing factor in the present case.
51. Judgment of a coordinate Bench of this Court in Shashikant Mishra
(supra) is distinguishable on another aspect that in that case, no order of
refusal of sanction was brought on record. It was the sanctioning authority,
namely, Smriti Ranjan Das, who has in her deposition as PW-1, stated that
orders of refusal of sanction was passed on 31.12.2021 and 04.04.2022, but
those orders were not on record and, therefore, in absence of those orders
being brought on record, it could not have been said that there was any
review of the earlier order of sanction. That is a distinguishable feature in
the present case. Thus, in absence of orders dated 31.12.2021 and
04.04.2022 being exhibited through sanctioning authority, may be another
distinguishing factor, making the case of that petitioner Shashikant Mishra
to fall within the four corners of the law laid down by the Supreme Court
in State of Bihar Vs. Rajmangal Ram (supra), But in the present case,
there is on record an order refusing to grant sanction and no fresh material
could be produced to seek change of the opinion of the sanctioning
authority or to point out that some relevant fact was not considered.
Therefore, the judgment of coordinate Bench of this Court in Shashikant
Mishra (supra) is distinguishable on its own facts.
52. Another distinguishing factor is that there is a difference between
proposal and order. The order of the disciplinary authority refusing to grant
sanction as contained in Annexure P-3 is different from the opinion of the
disciplinary authority to not to grant sanction. For that, we had
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categorically asked the learned counsel for the Bank to provide us a copy
of the complete set of the order of refusal and also the note-sheet in which
that order was processed, but none of that sort has been produced before us
to persuade us that the order refusing to grant sanction as contained in
Annexure P-3, was not an order, but only an opinion to not to grant
sanction. Once an order refusing to grant sanction has been passed, then
except for two contingencies, that is, the new material being brought on
record and omission to consider some relevant fact which ought to have
been considered by the disciplinary authority, there could not have been
any review and, therefore, the opinion of the CVC or the DoPT will not
bind the Bank. Thus, in opinion of this Court, facts of the case of Shrikant
Mishra (supra) being different, are not having any applicability to the facts
of the present case.
53. As far as law laid down in case of Vijay Rajmohan (supra) is
concerned, Hon’ble Supreme Court has held that time limit for deciding
application is mandatory and sanction request must be decided within four
months time limit stipulated under Section 19. It is evident that CBI
despite lapse of four months time, which expired somewhere in April
2020, in response to its request for grant of sanction in December 2019, did
not take any action and, thereafter, if it had woken up from its slumber and
decided to seek opinion, etc., from CVC or obtain a copy of the sanction
order, then in para 20, the Supreme Court has held that opinion of the CVC
is only advisory. It is held that it may be necessary for the appointing
authority to call for and seek opinion of CVC before it takes any decision
on the request of sanction for prosecution. The statutory scheme under
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which the appointing authority would call for, seek and consider the advice
of the CVC can neither be termed as acting under dictation nor a factor
which could be referred to as an irrelevant consideration. It may be a
valuable input, but the final decision of the appointing authority must be of
its own by application of independent mind.
54. In the present case, when we peruse the impugned order of grant of
sanction as contained in Annexure P-6, then, we find that there is no
independent application of mind. It is no where mentioned that how the
earlier order refusing sanction was lacking in consideration of relevant
facts or how that authority had failed to apply itself to the fact situation and
now what were the changed circumstances, entitling the changed Zonal
Manager to accede to the demand of the CBI to grant sanction and when
tested on such touchstone, then impugned orders granting sanction for
prosecution having been passed without application of mind and without
existence of twin conditions of some new material on the basis of new
investigation or some fact being not considered by the disciplinary
authority and, therefore in absence of the twin requirements to reconsider
an order of sanction, impugned orders of sanction, cannot be sustained in
the eyes of law, without doing injustice to the petitioners, especially, when
there is a specific provision contained in Annexure P-2 to the effect that
Government of India, Ministry of Finance, itself had directed the public
sector banks to ensure that newly recruited officers who are under
probation or having a service of less than two years are not asked to
recommend and process loans, unless it forms part of their learning
process. Which means that no independent assessment could have been
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made by a probationer of having less than two years service and even if it
was a part of his learning process, that should have been under the
guidance of an experience hand and, therefore, a person to be blamed for
any lapse, is the person under whom the petitioners were under probation
and not the petitioners themselves.
55. In view of above, impugned orders of sanction dated 28.10.2021
(Annexure P-6 in W.P. No.29641/2021), 28.10.2021 (Annexure P-1 in
W.P. No.26050/2021), 28.10.2021 (Annexure P-1 in W.P.
No.25928/2021), 28.10.2021 (Annexure P-1 in W.P. No.25941/2021),
28.10.2021 (Annexure P-1 in W.P. No.26051/2021), 28.10.2021
(Annexure P-1 in W.P. No.25931/2021), 28.10.2021 (Annexure P-1 in
W.P. No.26053/2021) and 28.10.2021 (Annexure P-6 in W.P.
No.26942/2021) are hereby quashed. Petitions are allowed and disposed of.
(VIVEK AGARWAL) (DEVNARAYAN MISHRA)
JUDGE JUDGE
pp
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