Abraham Joseph v. State of Kerala & The Central Bureau of Investigation

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SUNIL THOMAS** **WEDNESDAY, THE 10[TH] DAY OF NOVEMBER 2021 / 19TH KARTHIKA, 1943** **CRL.REV.PET NO. 496 OF 2014** **AGAINST THE ORDER IN CRL.M.P.NO.20/2011 IN CC 7/2011(CRIME NO.RC15(A)/07/CBI/KER) DATED 25/2/2014 OF SPE/CBI COURT,** ## **TRIVANDRUM, THIRUVANANTHAPURAM** ## **PETITIONER/1ST ACCUSED:** ABRAHAM JOSEPH S/O.C.V.JOSEPH, CHERAYIL HOUASE, NEAR MUTTOM CHURCH, CHERTHALA, ALAPPUZHA BY ADVS. SRI.ANEESH JAMES SRI.AJIT JOY ## **RESPONDENT/STATE & COMPLAINANT:** 1 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, KOCVHI 682 031 2 THE CENTRAL BUREAU OF INVESTIGATIION REPRESENTED BY ITS PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI 682 031. BY ADV SHRI.P.VIJAYAKUMAR, ASG OF INDIA ## **OTHER PRESENT:** SRI.SUVIN R.MENON, CGC THIS CRIMINAL REVISION PETITION HAVING COME UP FOR ADMISSION ON 01.02.2021, THE COURT ON 10/11/2021 DELIVERED THE FOLLOWING: Crl.R.P.No.496/2014 2 ## **O R D E R** 1. The first accused In C.C.No.7/2011 on the files of the Special Judge(SPE/CBI/Thiruvananthapuram, aggrieved by the dismissal of Crl.M.P.No.20/2011 seeking discharge has preferred this revision. 2. The prosecution allegation is that, the first accused was the Branch Manager of the State Bank of India, Alappuzha Branch during the period March 2006. The second accused was the Deputy Branch Manager. The third and fourth accused were businessmen conducting various businesses. The 5[th] accused was a retired electrical engineer. The crux of the prosecution allegation against the accused was that, all the above accused, during the period March 2006 to August 2006 entered into a criminal conspiracy to cheat the State Bank of India and in furtherance of that conspiracy, the third and fourth accused approached persons who were heavily indebted, but had landed properties, offering them to purchase their properties, to save them from debt. Advances were paid and agreements for sale were entered into. Documents relating to the properties including the title deeds were procured by them. By mortgaging the above properties in the above said bank with the aid and connivance of the first and the second accused, they got 40 mortgage loans and three CC loans sanctioned, totaling to 4.33 Crores. It was alleged that, for the purpose of the loan, inflated valuation reports were prepared by the 5[th] respondent. Documents were forged, manipulated and on the basis of the above valuation reports and forged records, loans were sanctioned by the first and Crl.R.P.No.496/2014 3 the second accused. The entire loan amount was received by the 3[rd] and 4[th] accused. On the basis of the inputs received, crime was registered by the CBI as Crime No.RC 15(A)/7/CBI/KER. After investigation, final report was laid against all the above accused alleging offences punishable under sections 13 (2) read with section 13 (1)(a) of the Prevention of Corruption Act and sections 420 and 120B IPC. 3. The petitioner, claiming that even if all the allegations made in the final report are accepted as true, no offence can be made out against the petitioner on a trial on that material and that such a trial would be vexatious causing serious prejudice and injustice to the petitioner, application to discharge him was filed before the court below. The court below, by the impugned order dismissed the application, which is under challenge in the present proceedings. 4. Heard the learned counsel for the petitioner and the learned Central Government Standing Counsel on behalf of the CBI. 5. The learned counsel for the petitioner essentially advanced the arguments on three points. Firstly, that the sanction was improper and was not granted by the competent authority. Secondly, it was contended that the sanction was granted by the authority without proper application of mind and bias was patent on the face of the records. Thirdly, on merits , even if the entire materials are accepted as true, no offence is made out from the materials placed by the investigating agency. 6. The charge sheet discloses that several specific allegations were Crl.R.P.No.496/2014 4 raised against all the accused. The first charge related to the sanctioning of the loans and mortgaging of various items of property. Under each head of charge, separate items of properties were mortgaged. With respect to sub charge (a), property having an extent of 11.108 Acres in Kanjikode, Palakkad was mortgaged and 21 loans were got released by the accused using forged documents. Under sub charge B, property having an extent of 11 acres in Sholayur village and another item of property having an extent of 14 acres and 94 cents in the same village were mortgaged and five loans were created by all the accused. Under (C) two items of properties having an extent of 59.89 Acres and 42.90 acres that stood in the name of the third accused and his wife were mortgaged and six loans were sanctioned. Under (D), 57.46 Acres of land in Mulanthuruthi village was mortgaged and five loans were sanctioned on it. Under (E) an extent of land of One Hectar and 31.55 Acres in Kainagiri village was mortgaged and three loans were created. Under charge F, property having an extent of 9.06 Acres in Mullakkal village in Alleppey was mortgaged and two loans were sanctioned. Under (G), 3.4 Acres in 624/1-101/1 was mortgaged and one loan was created. The prosecution relied on several documents and also the statements of various witnesses questioned by them to establish the allegations against the accused. 7. The learned counsel for the petitioner, relying on the third ground of attack, vehemently contended there was no allegation of any specific overtact by the petitioner, in relation to any one of the criminal acts alleged. Crl.R.P.No.496/2014 5 It was contended that sanction for loan was ratified by the Regional Manager. At the relevant time, the petitioner was the Chief Manager of the Branch and what he did was only to examine the reports submitted by his subordinates, the legal officers, valuers and to forward them to the regional office for scrutiny and thereafter accorded conditional sanction for the loans. Sanctions for the loan were ratified by the regional manager, who had conducted the scrutiny. Hence, there cannot any charge of the conspiracy as admittedly, the petitioner has only granted a conditional sanction imposing several conditions. It was contended that, it was only a bona fide exercise of his duty, and no culpability, whatsoever, can be attributed to him. It was further contended that, the acts done by him in his capacity as the officer were strictly in accordance with D244 norms, prescribed by the Bank and the regional office did not find fault with him for recommending the application on insisting conditions. To substantiate the contention that the petitioner sanctioned conditionally, the revision petitioner relied on the document Nos.92, 93 and 94 etc. 8. The learned counsel for the petitioner generally referred to the above documents and vehemently contended that contentions were specifically advanced before the court below and detailed arguments based on the materials on record were advanced, the court below neither addressed the question involved nor answered it. By making general comments on the question of culpability, the discharge application was casually dismissed, it was contended. The counsel for the petitioner Crl.R.P.No.496/2014 6 specifically contended that, in spite of the specific arguments advanced by the learned counsel, the court below by a superficial exercise of jurisdiction and without delving into the main issues advanced and without considering whether a case worth trial was made out, casually disposed of the discharge application. 9. Reference to the impugned order shows that, substantial part of the order is utlised for reproducing the charges. Only two paragraphs of the order refer to the question whether the discharge application was liable to be considered. Both the above paragraph refer to general principles of conspiracy. The court did not refer to any materials placed on record to subjectively evaluate whether the prosecution has prima facie projected a case worth trial. Definitely, such a disposal of the application by general comments cannot be accepted. It seems that the court below did not go into the principles of law and did not discharge the duty vested on it as contemplated under law while considering an application for discharge under section 239 Cr.P.C. To that extent, the impugned order calls for interference. 10. The learned counsel for the petitioner further contended that the sanction order was not passed by a legally competent authority. The petitioner claims himself to be an officer of the senior management grade of Chief Manager rank, in the State Bank of India. The prosecution relied on the Ext.D1 document, which was a sanction for prosecution granted by an officer of the General Manager rank, officiating as CGM. Assailing this Crl.R.P.No.496/2014 7 sanction, the learned counsel for the petitioner contended that the sanction was invalid, as it was granted by an officer incompetent in Law to afford the sanction. 11. The learned counsel for the petitioner contended that the State Bank of India, General Regulations 1955 in Section 55 (1)(b) provides that no officer/employee of the Bank shall be dismissed, discharged, removed or retired from the service of the bank or reduced to a lower grade post or to a lower stage in a time scale, by an authority lower than the appointing authority. It was contended that, this stipulation in the regulation that no major penalty can be imposed by an authority lower to the appointing authority is reiterated in State Bank of India Officers' Service Rules 1992 in Rule 68 (1) (2), which also provides that when the disciplinary authoritiy is lower in rank than the appointing authority in respect of category of officer to which the officer belongs, no order imposing the specified penalties shall be made made except by the appointing authority or any authority higher than it on the recommendations of the disciplinary authority. It was contended .by the learned counsel for the petitioner that the authority, who sanctioned the prosecution in the case at hand, was an officer who was only officiating as CGM and not a full fledged CGM. According to him, sanction can be granted only by an officer in the rank of CGM. 12. Referring to the decision reported in _**State, Inspector of Police, Visakhapatnam v. Surya Sankaram Karri (2006 Crl. L.J.4598)**_ , _**State and another v. Dr.R.C.Anand and another (AIR 2004 Supreme Court**_ Crl.R.P.No.496/2014 8 _**3693).**_ The learned counsel vehemently contended that both the decisions referred to the significance of sanction and held that sanction granted by a person not authorised, was a nullity. In the former case, the sanctioning authority was the governing body. However, the President passed a provisional order, declining sanction subject to the ratification by the Governing body. This was considered by the Supreme Court in the above decision. In the later decision, it was held that only a statutory authority can accord sanction. In _**Mohd.Iqbal Ahmed v. State of AP(1979 KHC 667**_ ) it was held that, it was incumbent on the prosecution to prove that a valid sanction has been granted by the sanctioning authority after it was satisfied that a case for sanction has been made out. It was held that, it was well settled that a case instituted without a proper sanction must fail, because it was a manifest defect in the prosecution, and the entire proceedings are rendered void ab initio. To substantiate the contention of the sanctity of the sanction, the learned counsel further relied on the decision reported in _**Union of India and Others v. B.V.Gopinath & others (2013 KHC 4693)**_ wherein it was held that when charge sheet issued without approval of the Finance Minister, it can be held as without jurisdiction. 13. There is no dispute about the necessity of sanction as contemplated under section 19 (1)(c) of the PC Act. In the case at hand, the precise contention of the learned counsel for the petitioner was that, the officer who ought to have granted the sanction was the DGM since the petitioner belong to Grade 4 Senior management officer of Chief Manager Crl.R.P.No.496/2014 9 rank. The sanction can be granted only by the CGM and not by a officer subordinate to CGM who was officiating as the CGM. To buttress the above argument, the learned counsel relied on the decision reported in _**Steel Authority of India v. Presiding Officer, Labour Court ( AIR 1980 Supreme Court 2054)**_ . In that case, the personal manager of the company was the appointing authority. However, charge was framed and the enquiry committee was constituted by the Chief Medical Officer. It was claimed that the Chief Medical Officer exercised the power conferred on him. However, labour court rejecting that such power cannot be conferred on a subordinate authority rejected the contention. This was affirmed by the Supreme Court in the above decision. However, in _**State Bank of India v. Vijayakumar ( AIR 1991 Supreme Court 79**_ ), the competent authority in the case of the delinquent officers was the Executive Committee, they being the appointing authority. However, the delinquent officers were dismissed by the CGM. However, the Supreme Court found it to be valid as the Chief Manager at the relevant time has become the appointing authority in respect of the delinquent officers, under the amended regulations. However, that is not the case in this case. In Steel Authority of India's case (supra), it was also held that only an officer who was empowered under the statute can act as a disciplinary authority and there cannot be a delegation of such powers. 14. This court in _**Prince Mathew and Others v. State of Kerala & Others(2020 KHC 5391)**_ had occasion to consider the above issue. In that case, disciplinary action was initiated by an officiating officer. It was held Crl.R.P.No.496/2014 10 by this court that though executive and administrative functions can be exercised by the officer holding charge, the power in the nature of granting sanction, which was only to be exercised by the senior officer, cannot be exercised by officiating officer. 15. Vehemently opposing the above contentions, the learned Central Government Standing Counsel contended that the revision was not sustainable against an order of framing charge. It was contended by the learned counsel that the question of sanction ought to have been raised before the trial court at the earliest available opportunity. Since it was not raised before the trial court, the legality, propriety and correctness of such a finding cannot be raised before this court. It was also contended that the State Bank of India was not a party to the proceedings and it ought to have been there in the light of section 401(2) Cr.P.C. The learned CGSC contended that even assuming that the authority was incompetent , there cannot lead to failure of justice. Even if it was only an error, since it has not resulted in failure of justice, it cannot be interfered at this stage. It was contended that even the lack of sanction or even an irregularity, existing in the case of commission of very serious offences, is immaterial, if it has not caused any substantial prejudice. The learned Central Government Standing counsel placed reliance on _**Prakash Singh Badal & Others v. State of Punjab and Others(AIR 2007(SC) 1274)).**_ The learned counsel also relied on the decision in _**Asian Resurfacing of Road Agency Pvt.Ltd. And Ors. v. Central Bureau of Investigation ( AIR 2018 SC 2039)**_ to Crl.R.P.No.496/2014 11 contend that a revision challenging the framing of charge can only be accepted in exceptionally rare cases. 16. I am not inclined to accept the above contentions. The petitioner has challenged the rejection of application for discharge and not framing of charge though the rejection of that application may result in proceeding with the framing of charge. 17. An evaluation of the above stated decisions clearly show that the officer who had granted sanction, prima face, appears to be an officiating officer. However, there is some ground in the contentions set up by the learned CGSC that such a contention was not raised before the trial court. The grounds of revision also do not indicate that such a precise contention was taken up. Though it is settled law that the lack of sanction cannot be raised at a later stage , or an error of irregularity not affecting jurisdiction cannot be interfered in at the later stage , unless it has resulted in substantial prejudice, may not apply in this case since that applies only in a case where the parties have faced that trial and is agitated for the first time in an appeal. Such a contention seems to have been raised for the first time though at the time of revision, however, before the parties proceeded for trial. In the light of the above, I feel that it will not be fair on the part of this court to arrive at a finding on an issue that was not raised before the court below. 18. The Learned CGSE tried to salvage the contention regarding validity of sanction by producing Annexure R2 (a) dated 31/2/2020 which Crl.R.P.No.496/2014 12 was note issued by the Deputy General Manager to Vigilance clarifying that the administrative and financial powers of the Chief General Manager were delegated to the General Manager till the new Chief General Manager reported to the competent authority. It was stated that the officer who had granted sanction was officiating as CGM and could order the removal of the delinquent employee. The learned CGSC further relied on Annexure R2 (b) dated 9/1/2009, which was another note issued by the Deputy General Manager & Group Executive (National Banking),State Bank of India, wherein it was stated that the competent authority had delegated administrative and financial powers of the CGM to Niranjan Parsha posted as General Manager in the circle till new CGM reported . Sri.Niranjan Parsha was the officer who had granted sanction. I am afraid, whether these two documents will salvage the issue. Both seems to be self serving documents. 19. Though the learned counsel for the petitioner vehemently contended that the bias was patent on the record and that the sanctioning authority had not properly exercised his mind, I feel that these are maters which are to be established by cogent evidence at the time of trial. Hence, I feel that the above issue need not be considered at present. The learned counsel further argued that the sanction under section 197 Cr.P.C.was not obtained, though IPC offences were also involved. 20. This Court in paras supra had held that the court below has not adverted itself to the main issue involved on merits as to whether the charges were goundless. In the above circumstances, in revision, this court Crl.R.P.No.496/2014 13 may not be justified in substituting its own conclusion on the basis of the materials placed on record. I feel that the matter needs to be remanded to the court below for a fresh consideration after detailed examination. In the light of the above,the issue as to whether the sanction was proper in the light of the legal propositions referred to by this court above, has also to be considered. Having considered this, I am inclined to set aside the impugned order, remit the matter to the court below for fresh consideration of the discharge application on materials on record applying the principles involved in considering an application under section 239 Cr.P.C.and also precisely considering the question whether the officer who had granted sanction was officiating the during the relevant time and whether the sanction was proper or not. However, the questions regarding bias and that the lack of application of mind regarding sanction need not be considered at this stage since they are maters which require evidence. 21. The revision is allowed. The impugned order is set aside. The matter is remanded to the court below. The court below shall consider Cr.M.P.No.20/2011 on merits as expeditiously as possible, and pass orders on merits, at any rate within three months from the date of receipt of this order. Sd/- ## **SUNIL THOMAS** ## **Judge** dpk Crl.R.P.No.496/2014 14