B.S Yeddyurappa cannot claim immunity from prosecution on the ground of lack of sanction as defrauding the exchequer is not part of a public servant's official duties, submits the CBI before the Supreme Court

Opposing former Karnataka chief minister B.S Yeddyurappa’s plea for quashing of the charge-sheet against him and his two sons, the CBI told the Supreme Court on Friday that it had evidence to back its charges accusing the former CM of unilaterally de-notifying a piece of land marked for acquisition by Bangalore Development Authority for Arkavati Layout, and then allowing his sons and son-in-law to sell it at an exorbitant price to South West Mining Ltd.

 

Yeddyurappa has sought quashing of the cases registered by the CBI against him on the ground of lack of sanction from the Governor for prosecuting him.

 

Rebutting this contention of Mr. Yeddyurappa, the Central Bureau of Investigation has submitted before the Supreme Court that former Karnataka chief minister B.S Yeddyurappa cannot claim immunity from prosecution on the ground of lack of sanction as defrauding the exchequer was not part of a public servant's official duties. 

 

File picture : former Karnataka Chief Minister B.S. Yeddyurappa

Under the Criminal Procedure Code, the governor's sanction is required to prosecute any public servant, including chief minister or other ministers. Yeddyurappa is accused of granting land at throwaway prices and hastening environmental clearances to certain companies in return for funds worth crores of rupees being put into some family run trusts. He is also accused of imposing a ban on mining imports into the state to benefit some companies.

These actions are alleged to have cost the state exchequer a loss of an estimated Rs 876.90 crore. CBI filed a chargesheet in May 2012 under court directions against Yeddyurappa, his sons BY Vijayendra and BY Raghavendra and son-in-law RN Sohan Kumar. 

Among those who figure in the chargesheet are Prerna Educational and Social Trust, JSW Steel, South West Mining Ltd and certain other local companies which paid unspecified amounts into the trusts. 

Yeddyurappa later moved the Apex court seeking quashing of the charge sheet in the case on  the ground that the governor's sanction was not obtained, as needed under Section 197 of the Criminal Procedure Code to prosecute a public servant. CBI has stoutly opposed his contentions in its affidavit filed on Friday. 

The CBI also said in its affidavit filed before the Court that it had documentary evidence to prove that the Yeddyurappa family-run Prerana Educational and Social Trust had received Rs 10 crore in donation from JSW Steel Ltd through various firms as a quid pro quo for favours shown by the then CM to JSW. "It is a matter which needs to be taken to its logical end," the agency said.

 

The CBI has also claimed that Yedduurappa had misused his official position as urban development minister to de-notify government land to enable his family members to purchase plots and later sell them at concessional rates in return for quid pro quo investments in the trusts. "Yeddyurappa was directly involved in the de-notification of the land, which was purchased by his kin by resorting to forgery and other illegal means and got undue benefits. Yeddyurappa himself took the decision to de-notify the land, bypassing the De-notification Committee which alone was competent to consider requests for de-notification of land marked for acquisition," the investigation agency said. 

 Yeddyurappa has been charged with criminal conspiracy and of committing offences punishable under Sections 13(1(d) and 13 (2) of the Prevention of Corruption Act. 

Sanction to prosecute a public servant under the Prevention of Corruption Act is not required if the public servant has already retired on the date of taking of cognizance by the Court, rules the Apex Court

The Supreme Court in State of Punjab v. Labh Singh (Criminal Appeal No. 2168 of 2010, decided on Decembr 16,2014) has clarified the position in law that sanction to prosecute a public servant for the offences under the Prevention of Corruption Act is not required if the public servant had already retired on the date of taking of cognizance by the Court.  The Apex Court held that in S.A.Venkataraman v. State, 1958 SCR 1040 while construing section 6(1) of the Prevention of Corruption Act, 1947 which provision is in pari materia with section 19(1) of the POC Act, it had held that no sanction was necessary in the case of a person who had ceased to be the public servant at the time the court was asked to take cognizance, and the  view taken in S. A. Venkataraman (supra) was adopted by this court in C.R. Bansi v. State of Maharashtra, (1970) 3 SCC 537, Kalicharan Mahapatra v. State of Orissa, (1998) 6 SCC 411 and by the Constitution Bench in K. Veeraswamy v. Union of India, (1977) 3 SCC 440. 

The Apex Court however said that as regards charges for the offences punishable under the IPC, unlike Section 19 of the Prevention of Corruption Act, the protection under section 197 of Cr.P.C. is available to the concerned public servant even after retirement.

Supreme Court of India

The Court was considering an appeal by special leave against the judgment and order dated 17.01.2006 passed by the High Court of Punjab and Haryana in Criminal Revision No.1743 of 2005 whereby it set aside the order of the Special Judge, Patiala dated 07.06.2005 framing charges against one Sikandar Singh and Labh Singh, the respondent.

The facts of the case were as follows : A FIR was lodged with Police Station, Vigilance Bureau, Patiala Range, Patiala on 13.08.1997 alleging that semi-Government letter dated 04.03.1994 had stated that pursuant to certain raids conducted at the site for checking the earth work done on Bhakra main line, it was found that as regards four projects cross sections/estimates were not prepared before doing any work and that it appeared that the estimates were actually prepared by the concerned Government servants after completion of work thereby violating provisions of PWD code and causing loss to the tune of Rs.3,69,603 to the exchequer. Pursuant to said FIR crime was registered and investigation was undertaken by the Vigilance Bureau.

When request was made for grant of sanction to prosecute the Government servants in question, it was refused by the department on 13.09.2000. Yet another attempt was made in the year 2003 requesting sanction to prosecute but such request was again rejected by the department on 24.09.2003. Despite such refusal for issuance of sanction, challan under section 173 of Criminal Procedure Code was filed on 09.11.2004 in the court of Additional Sessions Judge/Special Judge, Patiala against seven accused including 5 private individuals and 2 public servants namely, the aforesaid Sikandar Singh and Labh Singh, the respondent.

The Special Judge framed charges on 07.06.2005 against all seven accused for the offences under Sections 218/409/465/467/120B IPC and under section 13(1)(C) read with section 13(1)(2) of the Prevention of Corruption Act, 1988 

(‘POC’ Act, for short). Out of six charges framed, one pertained to the offence under section 13(1)(C) read with section 13(1)(2) of the Prevention of Corruption Act, while other five related to offences under the Indian Penal Code.

The public servants namely Sikandar Singh and Labh Singh challenged the aforesaid order dated 07.06.2005 by filing Criminal Revision No.1743 of 2005 in the High Court of Punjab and Haryana. The High Court took the view that the department had refused sanction to prosecute public servants and yet a challan was presented on the premise that no sanction was required after retirement of those public servants. The High Court observed; “These petitioners and others have been charged for offence under the Prevention of Corruption Act and also for offences under the Indian Penal Code. Section 197 Cr.P.C. bars cognizance by the Court of an offence by a public servant even after retirement. Even otherwise, it is discriminatory for the petitioners when other co-accused who are still in service, cannot be prosecuted for want of sanction and present petitioners are being prosecuted only because they have retired.” The High Court allowed the petition and set aside the order dated 07.06.2005 passed by the Special Judge, Patiala.

The appellant-State contended that the “order passed by Hon’ble High Court is erroneous in law as u/s 197 Cr.P.C. respondents can be convicted and no previous sanction is required as the respondents are no longer in service and have been retired in the years 1999/2000. Secondly, there was no discrimination as the other persons were in service and since respondents have been retired no previous sanction is required. It was also submitted that other persons will also be prosecuted as and when they are retired”

The Apex Court observed that in the present case the public servants in question had retired on 13.12.1999 and 30.04.2000. The sanction to prosecute them was rejected subsequent to their retirement i.e. first on 13.09.2000 and later on 24.09.2003. The public servants having retired from service there was no occasion to consider grant of sanction under section 19 of the Prevention of Corruption Act. “The law on the point is quite clear that sanction to prosecute the public servant for the offences under the POC Act is not required if the public servant had already retired on the date of cognizance by the court.”, said the Bench comprising of Dipak Misra and Uday Umesh Lalit JJ. 

The Court observed that the Apex Court held that in S.A.Venkataraman v. State, 1958 SCR 1040 while construing section 6(1) of the Prevention of Corruption Act, 1947 which provision is in pari materia with section 19(1) of the POC Act, it had held that no sanction was necessary in the case of a person who had ceased to be the public servant at the time the court was asked to take cognizance, and the  view taken in S. A. Venkataraman (supra) was adopted by this court in C.R. Bansi v. State of Maharashtra, (1970) 3 SCC 537, Kalicharan Mahapatra v. State of Orissa, (1998) 6 SCC 411 and by the Constitution Bench in K. Veeraswamy v. Union of India, (1977) 3 SCC 440

“The High Court was not therefore justified in setting aside the order passed by the Special Judge insofar as charge under the POC Act was concerned.”, the Court added

The Apex Court however said that as regards charges for the offences punishable under the IPC concerned the High Court was absolutely right in setting aside the order of the Special Judge. “Unlike section 19 of the POC Act, the protection under section 197 of Cr.P.C. is available to the concerned public servant even after retirement. Therefore, if the matter was considered by the sanctioning authority and the sanction to prosecute was rejected first on 13.09.2000 and secondly on 24.09.2003, the court could not have taken cognizance insofar as the offences punishable under the Indian Penal Code are concerned.”

Accordingly, the Bench held that the order passed by the High Court is correct insofar as charges under the IPC are concerned but must be set aside as regards charge under POC Act is concerned. The Court however disapproved of the stand taken by the appellant-State. “The prosecution cannot keep waiting till a public servant retires and then choose to file charge-sheet against him after his retirement, thereby setting at naught the protection available to him under Section 19 of the POC Act”, said the Bench while allowing the appeal in part.