Writ Petn. No.4231 of 2001

21st January, 2003

Petitioner Counsel: K. LAKSHMI NARASIMHA
Respondent Counsel: G. PEDDA BABU, C. PADMANABHA REDDY, PRAVEEN KUMAR

Cases Cited:
State of Bihar Vs. D. N. Ganguly, AIR 1958 SC 1018 [Para PARA16,21]
Gopichand Vs. Delhi Administration, AIR 1959 SC 609 [Para PARA17]
State of Kerala Vs. K.G. Madhavan Pillai, AIR 1989 SC 49 [Para PARA 18]
Abdul Karim Vs. State of Karnataka, AIR 2001 SC 116 [Para PARA25]

JUDGMENT

-This writ petition on important question of law viz., whether it is competent for the State Government to withdraw or rescind a notification issued by it according permission under Section 19 of the Prevention of Corruption Act, 1988 (for short the Act').

2. The relevant facts may be briefly stated as under:-

The petitioner is a partner in M/s. Teja Wines, a firm registered with the Registrar of Firms, having its object to do business in Indian Made Foreign Liquor. Its place of business is Ongole in Prakasam district. The firm was issued license by the competent authority under A.P. Excise Act on 31-3-1998.

3. The 5th respondent was working as Sub-Inspector of Police, Ongole Taluq Police Station in August, 1998. It is the case of the petitioner that the 5th respondent has been constantly demanding bribe from the petitioner and used to destroy the bottles in the shops whenever his demands were not complied with. The petitioner states that he has been running three wine shops within the jurisdiction of the Ongole Taluq Police Station. It is stated that during the 2nd week of August, 1998, the 5th respondent had directed one of the workers of the petitioner to inform the petitioner to meet him. The petitioner met the 5th respondent on 17-8-1998 and it is alleged that the 5th respondent demanded Rs.10.000/- for not booking any cases in respect of the wine shops owned by the petitioner. It is further alleged that the 5th respondent had warned the petitioner of dire consequences in case the amount is not paid. It was in this context that the petitioner claims to have complained the matter to the 3rd respondent, viz., the Director General of Anti Corruption Bureau (ACB). A trap was arranged by the ACB. On 28-8-1998, the petitioner went to the residence of the 5th respondent at 9.30 a.m. and handed over the amount of Rs.10.000/-to him. The 5th respondent received the same. In the meanwhile, the ACB officials rushed in. When the hands of the 5th respondent were washed with the SC solution, the solution turned out to be pink. The trap, therefore, proved successful.

4. Since the 5th respondent is a public servant, as defined under the Act, permission was necessary from the State Government to prosecute him for the offences under that Act. The 1st respondent had accorded permission through its order in G.O. Ms. No.333 dated 23-10-1999. The 5th respondent was initially placed under suspension. The same was, however, revoked. The petitioner alleges that on having been reinstated, the 5th respondent started giving serious threats to the petitioner and that he has brought the same to the notice of the higher authorities.

5. On the basis of the sanction accorded by the 1st respondent G.O.Ms.No.333, a case was registered against the 5th respondent under Sections 7,11 and 13(2) read with Sections 13(1)(d) of the Act and the same was being tried by the Court of Special Judge for ACB Cases, Nellore, as C.C.No.20 of 1999. Charge-sheet has been filed on 27-11-1999. When the case was pending trial, the 2nd respondent had issued G.O. Ms. No.35, Home (SC.A), Department, dated 13-2-2001 (hereinafter referred to as 'the impugned order'), withdrawing the permission. The same is challenged in this writ petition on various grounds.

6. Firstly it is contended that once the notification is issued by the 2nd respondent in exercise of power under Section 19 of the Act, it is not open to them to withdraw the permission so accorded, since the same is not provided for under the Act. It is further contended that even assuming that there is an implied power in the 2nd respondent to withdraw such a notification, there did not exist any ground or basis to exercise such power, and the action of the 2nd respondent in this regard is illegal, arbitrary and unreasonable.

7. The respondents 1,2,6 and 7 have filed counter-affidavit. It is stated that the permission was accorded to prosecute the 5th respondent through G. O. Ms. No. 333 dated 23-10-1999. Thereafter, the 5th respondent had made a representation pointing out the procedural lapses and lacunae in the case and taking the same into account, the impugned order was issued. They claim that the power to issue an order takes with it the power to withdraw the same and the impugned order does not suffer from any irregularity or illegality.

8. The 3rd respondent filed a separate counter-affidavit. It is averred therein that after successfully laying the trap, a case was booked against the 5th respondent under the provisions of the Act and on the permission having been accorded under Section 19, prosecution was launched and charge-sheet was filed. It is stated that the 5th respondent did not attend the Court on 15-12-2000 and 21-3-2001 when it was called. It is stated that the Government addressed a Memo dated 8-1 1-2000 to the 3rd respondent requesting them not to proceed with the prosecution. The ACB, through its letter dated 17-11-2000, informed the Government that since the charge-sheet had already been filed, the question of not proceeding with the prosecution does not arise and it is only after the withdrawal of the prosecution, that as to be restored to by the Government. It is further stated that the impugned order withdrawing the permission accorded by it was not yet communicated to the Public Prosecutor.

9. The 5th respondent filed counter-affidavit stating inter alia that the trap arranged against him was motivated and that the petitioner bore grudge against him for various reasons. It is also stated that he submitted a detailed representation to the Government narrating the circumstances under which he was falsely implicated and taking the same into account, the impugned order was,issued. He states that there is no irregularity or infirmity in the impugned order and it is competent for the Government to withdraw the permission accorded by it.

10. Sri. K. Laxmi Narasimha, learned counsel for the petitioner, submits that the ACB had laid a trap against the 5th respondent and that the same proved to be successful. When the matter was placed before the 2nd respondent by the ACB together with the relevant records for grant of permission, the Government took the various aspects of the matter into account and accorded permission under G.O. Ms. No.333, dated 23-10-1999 after elaborately discussing the case. He submits that the only representation submitted by the 5th respondent was the one in February, 1999 and the permission was accorded after considering the said representation. According to him, there were no subsequent representations or developments after the grant of permission and that there is no provision in the Act enabling the Government to withdraw the sanction once accorded under Section 19 of the Act. It is his case that the provisions of the Central and State General Clauses Acts do not apply to such cases. He sums up by stating that neither there is power vested with the Government to withdraw the sanction accorded by it nor there exist circumstances and reasons for withdrawing the permission.

11. The learned Government Pleader for Home submits that it is always open to the Government to withdraw any order issued by it. According to him, Section 21 of the Central General Clauses Act as well as Section 15 of the A. P. General Clauses Act confer power upon the Government to issue such notifications. He submits that the Government had considered the representations presented by the 5th respondent and had passed the impugned order in view of the various lapses noticed by it.

12. Sri. G. Pedda Babu, learned Standing Counsel for ACB, had only placed the legal and factual position before the Court. He does not either support or oppose the action of the Government in view of the fact that his client is the prosecuting agency.

13. Sri. C. Padmanabh Reddy, learned Senior Counsel, appearing for the 5th respondent, submits that the complaint submitted by the petitioner was motivated and the trap was only an arranged one. He submits that though the Government accorded permission to prosecute the 5th respondent, on having been convinced that there did not exist any truth in the version of the petitioner, it had withdrawn the permission. He too states that the power to withdraw is always inherent and relies upon the provisions of Central and State General Clauses Act. It is his further contention that mere withdrawal of permission of the Government is not going to be of any consequence and the case against the 5th respondent can be terminated only when the Public Prosecutor files a Memo seeking permission of the Court to withdraw the case under Section 321 of Cr.P.C. and the Court granting the same.

14. The learned counsel for the parties have relied upon several judgments in support of their respective contentions.

15. It is a matter of record that the ACB had laid trap against the 5th respondent and had launched prosecution against him for various offences under the Act,. It is also a matter of record that the Government had accorded permission as required under Section 19(1) of the Act and that the Charge Sheet also filed by the ACB before the trial Court. The permission accorded by it was withdrawn by the State Government through the impugned order. It is assailed on several grounds, which are referred to above. On the basis of these contentions, the following questions arise for consideration :

(a) Whether it is competent for the State Government to withdraw the permission accorded by it under Section 19(1) of the Act?

(b) Whether there existed any valid grounds and reasons in issuing the impugned order? and

(c) What is the impact of the impugned order on the case registered and pending against the 5th respondent?

16. The Prevention of Corruption Act, 1947 dealt with the prosecution and punishment of public servants on the charges of corruption. The same came to be replaced by the Prevention of Corruption Act, 1988. The Act defines the offences that may be said to have been committed by the public servants or the persons who abate the commission of the same, with special emphasis on acceptance of gratification, other than legal remuneration. The Courts constituted under Section 3 of the Act can take cognisance of the offences punishable under Sections 7,10,11,13 and 15 of the Act, only when prior sanction is accorded by the State or Central Government, as the case may be. Sanction by the concerned Government has been given a typical significance in the context of Section 19. While it is accorded an important and pivotal role as regards taking of cognisance of the offences, its absence or any error, omission, or irregularity in it, is declared as not constituting a ground to affect the outcome of the trial, unless it had occasioned in failure of justice. A reading of sub-sections (1) and (3) of Section 19 would demonstrate these aspects;

"19. Previous sanction necessary for prosecution.-

(1) No Court shall take cognizance of an offence punishable under Ss.7,10,11,13 and 15 alleged to have been committed by a public servant, except with the previous sanction a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government:

(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government of that Government:

(c) in the case of any other person, of the authority competent to remove him from his office."'

2).....................

3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,-

a) no finding, sentence or order passed by a special judge shall be reversed or altered 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;

b) no Court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfied that such error, omission or irregularity has resulted in a failure of justice:

c) no Court shall stay the proceedings under this Act on any other ground and no Court shall exercise the powers of revision in relation to any interlocutory order passed in any enquiry, trial, appeal or other proceedings."

Section 19 or, for that matter, any other provision of the Act, does not confer the power to withdraw the sanction, once accorded under the Act. While the learned counsel for the petitioner submits that in the absence of such a provision, it is not competent for the State Government to withdraw the notification, learned counsel for the respondents submit that the same is inherent and in view of Sections 21 and 15 of the Central and State General Clauses Acts respectively, it is competent for the State Government to withdraw the notification. Section 21 of the Central General Clauses Act reads as under :-

"21. Power to issue, to include power to add to, amend, vary or rescind, notifications, orders, rules or bye-laws.-Where, by any Central Act, or Regulation, a power to issue notifications, orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction, and conditions (if any), to add to. amend, vary or rescind any notifications, orders rules or bye-laws so issued."

Section 15 of the A.P. General Clauses Act is almost in para materia. The purport of Section 21 of the Central General Clauses Act has been considered by the Supreme Court in several cases. It was held that this Section by itself does not confer any absolute power on the Government to withdraw or amend the notification and the existence of such power should be discernible from the relevant provisions of the Act. As early as in 1958, the Supreme Court in State of Bihar Vs. D. N. Ganguly, AIR 1958 SC 1018, held as under (Para 9) :

"It is well settled this Section (Section 21) of the General Clauses Act) embodies a rule of construction and the question whether or not it applies to the provisions of a particular state would depend on the subject matter, context, and the effect, of the relevant provisions of the said statute."

17. The same legal position was reiterated by a Constitution Bench of the Supreme Court in Gopichand Vs. Delhi Administration, AIR 1959 SC 609. It was held as under (Para 20) :

"In our opinion, this argument is not well founded. Section 19 of the Punjab General Clauses Act. like S.21 of the General Clauses Act embodies a rule of construction, the nature and extent of the application of which must inevitably be governed by the relevant provisions of the statute which confers the power to issue the notification. The power to cancel the notification can be easily conceded to the competent authority and so also the power to modify or vary it be likewise concerned; but the said power must inevitably be exercised within the limits prescribed by the provision conferring the said power."

18. In State of Kerala Vs. K. G. Madhavan Pillai, AIR 1989 SC 49, the Supreme Court was dealing with an identical provision in Kerala General Clauses Act. The contention of the Kerala Government that it had power to cancel a notification in exercise of its inherent power under the General Clauses Act, even in the absence of any provisions in the relevant statute under which the notification is issued, was repelled. Approving the view taken by the Division Bench of the Kerala High Court, the Supreme Court observed as under (Para 27):

"The Division Bench was, therefore, right in taking the view that the General Power of rescindment available to the State Government under Section 20 of the General Clauses Act has to be determined in the light of the "subject-matter, context and the effect of the relevant provisions of the statute."

19. From the above, it is evident that Section 21 of the General Clauses Act (or other analogous provisions in the State enactments) does not by itself confer power on the Government to rescind notification and the existence of such a power has to be culled out from the provisions of the enactment under which the notifications came to be issued.

20. The orders issued by the State Government according permission under Section 19(1) of the Act radically differ from the other administrative orders in many respects. One of the distinguishing features is that with the grant of permission under Section 19(1), the prosecution against the accused public servant stands launched and thereunder nothing remains to be done by the Government, which accorded the sanction. So far as the other administrative orders are concerned, the subject-matter, the evaluation of pros and cons by the Government, the subsequent changes in the matter or policy of the Government, etc., may require the Government to respond to such situations. The administrative actions by their very nature are not static. They need to be taken, monitored from time to time, and changed or rescinded, depending on the circumstances. Such an exercise will be possible if only the Government continues to be in control of the situation after initiation of the action. The same however does not hold good in case of according sanction for taking cognisance of the matters or putting the adjudicatory process in motion. Once such sanction is accorded, the respective Courts or Tribunals will be in seisin of the matter and the same need to be adjudicated in accordance with the relevant statutes.

21. There does not appear to be any case, decided directly on the point, as to whether sanction, once accorded under the Act, can be withdrawn or rescinded. However, a precedent very nearer to the point is the one in D. N. Ganguly case (AIR 1958 SC 1018) (supra). That case arose under the provisions of the industrial Disputes Act. On existence of an industrial dispute between Bata Shoe Company and its employees, the Government of Bihar, in exercise of power under Section 10(1) of the Industrial Disputes Act. referred the disputes to the Industrial Tribunal. When the adjudication of the same was in progress, the State Government had withdrawn the reference made by it. The same was challenge before the Patna High Court. It was held by the High Court that the Government did not have the power to supersede the notification issued by it under Section 10(1) of the ID Act, referring the dispute to the Court. The Supreme Court upheld the same. After discussing the objects underlying the Industrial Disputes Act and the Scheme of adjudication of disputes thereunder, the Supreme Court held as under (Para 10):

"Thus, it is clear that the appropriate Government is given an important voice in the matter of permitting industrial disputes to seek adjudication by reference to the industrial tribunal. But once an order in writing is made by the appropriate Government referring an industrial dispute to the tribunal for adjudication under Sec. 10(1), proceedings before the tribunal are deemed to have commenced and they are deemed to have concluded on the day on which the award made by the tribunal becomes enforceable under Section 17A. This is the effect of S.20(3) of the Act. This provision shows that after the dispute is referred to the tribunal, during the continuance of the reference proceedings, it is the tribunal which is seized of the dispute and which can exercise jurisdiction in respect of it. The appropriate Government can act in respect of a reference pending adjudication before a tribunal only under Section 10(5) of the Act, which authorises it to add other parties to the pending dispute subject to the conditions mentioned in the said provision. It would therefore be reasonable to hold that except for cases falling under Section 10(5) the appropriate Government stands outside the reference proceedings, which come under the control and jurisdiction of the tribunal itself."

22. What was observed by the Supreme Court as regards reference under Section 10(1) of the Industrial Disputes Act, applies with a greater vigour in respect of permission accorded under Section 19(1) of the Act. The exclusiveness of the control over its proceedings is more pre-dominant in case of Criminal Courts than in case of Industrial Tribunal or Civil Courts. Further, the role assigned to the appropriate Government in referring the dispute under Section 10(1) of the Act is very wide and participatory. Various steps are required to be taken, such as, conciliation, arbitration, etc., whenever it is approached by an employer or an employee. It is only when all its attempts fail, that the appropriate Government is required to refer the dispute under Section 10(1). In a way, the appropriate Government can be said to be still in control of the situation inasmuch as it can declare certain measures in exercise of its sovereign power, which in turn, may have the effect of resolving or diminishing the controversy in the Industrial Dispute. Such a situation, however, does not exist as regards criminal proceedings. Once the cognizance of an offence is taken by the concerned Criminal Court, it is in its exclusive province, whether or not to proceed with the same, in accordance with the procedure under Cr.P.C. and the other relevant statutes. Therefore, the impugned order, withdrawing the permission accorded by the State Government, was without jurisdiction.

23. The 2nd aspect is as to whether there existed any basis for issuance of the impugned order. Any discussion on this aspect presupposes the existence of power on the Government to issue such a notification. No further discussion is necessary in view of the findings on the 1st aspect. However, even assuming that such a power existed with the State Government, it needs to be seen that the trap was laid on 24-8-1998 and the ACB had submitted its report to the State Government after complying with the preliminary requirements for launching prosecution. It was at this stage that the 5th respondent had submitted a detailed representation in February, 1999. G.O. Ms. No.333 was issued on 23-10-1999 i.e., about 8 months subsequent to the date of representation. There should exist proper grounds and reason for the State Government to reconsider its decision. Reference is made in the impugned order only to the representation of the 5th respondent dated (in February 1999) 0-2-1999, report of the Director General of ACB dated 11-6-1999 and G.O. Ms. No.333 dated 23-10-1999. There is no reference to any other proceedings or representations. A reading of the impugned order, particularly, Para 2, discloses that the basis for the Government to issue this order is the representation made by the 5th respondent in February, 1999. Para 2 of the impugned order reads as under :

"That the accused officer Sri V. Sreerama Murthy, Sub-Inspector of Police, Ongole Taluk Police Station, Prakasam district, represented to the Government mentioning certain infirmities in the trap, requesting to reinstate him into service pending examination of his representation."

The representation of February, 1999 was very much present before the Government when it accorded permission through G.O.Ms.No.333 dated 23-10-1999. If only there were any subsequent developments, there can exist any semblance of justification for the Government to reconsider it. A perusal of the relevant file discloses that after the 5th respondent has submitted his representation in February, 1999, which runs to about 30 to 40 pages, the 2nd respondent invited the remarks from the 3rd respondent. The 3rd respondent, in turn, through his proceedings dated 11-6-1999, pointed out that various lapses mentioned in the representation of the 5th respondent are incorrect and ultimately recommended for rejection of his representation. It was only after taking into account the remark of the 3rd respondent, that G.O. Ms. No.333 was issued. The record does not disclose any substantial developments thereafter. It is well settled that even where power existed with the authority, that by itself does not justify its exercise. The circumstances, which warrant exercising of the same, should be evident from the record.

24. Having regard to the facts and circumstances of the case, this Court is convinced that there did not exist any circumstances that warranted issuance of the impugned order in the context of withdrawal of prosecution.

25. Section 321 of Cr.P.C. provides for withdrawal of prosecution. It empowers the Public Prosecutor or the Assistant Public Prosecutor, incharge of the case, to withdraw the cases from the trial court with the consent of the Court. On such withdrawal, depending on the stage of the case, the accused shall be discharged or, as the case may be, acquitted. In Abdul Karim Vs. State of Karnataka, AIR 2001 SC 116 : 148), the Supreme Court held that the decision of the Public Prosecutor to withdraw the case from the prosecution is not absolute and it should be on consideration of all the relevant material and in good faith. The Court, while granting its consent, has to ensure that the Public Prosecutor has applied his mind independently and that he is acting in good faith.

26. It, therefore, follows that the decision to withdraw from the prosecution should emanate from the Public Prosecutor, which in turn, shall be on a dispassionate consideration of the matter. The Public Prosecutor is the creature under the Cr.P.C. and he cannot be said to be subordinate to Government. In the given case, the Government being the prosecuting agency can place the necessary material before the Public Prosecutor. On a consideration of the same, the ultimate decision to withdraw from or proceed with the prosecution should rest with the Public Prosecutor. In view of the judgment of the Supreme Court in Abdul Karim's case, the decision of Public Prosecutor to withdraw the prosecution under Sec. 321, Cr.P.C. is justiciable.

27. The impugned order does not, by itself, terminate the prosecution. It is only as and when the concerned Public Prosecutor comes forward with a Memo before the trial Court seeking permission to withdraw, the trial Court has to consider the same on the principles laid down by the Supreme Court in the said decision.

28. From the above discussion, it is evident that the 2nd respondent did not have the power and jurisdiction to issue the impugned order withdrawing the permission accorded under Section 19(1) of the Act to prosecute respondent No.5 nor there existed any basis to pass the impugned order. At any rate, the impugned order does not have the effect of terminating the proceedings against the 5th respondent and the same are required to be continued and disposed of expeditiously by the concerned Court.

29. The writ petition is accordingly allowed. There shall be no order as to costs.

Petition allowed.