Abraham Varghese v. Deputy Superintendent (VACB), Kottayam Unit & Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE K. BABU ``` ``` THURSDAY, THE 25[TH] DAY OF AUGUST 2022 / 3RD BHADRA, 1944 OP(CRL.) NO. 164 OF 2021 ``` ``` AGAINST THE ORDER/JUDGMENTCRMP 872/2017 OF ENQUIRY COMMISSIONER & SPECIAL JUDGE, KOTTAYAM / III ADDITIONAL DISTRICT COURT, KOTTAYAM ``` ## **`PETITIONER/S:`** ``` ABRAHAM VARGHESE AGED 51 YEARS S/O.A.ABRAHAM, PARUVAKKAL HOUSE, NATTAKOM P.O., KOTTAYAM. ``` ``` BY ADVS. LIJI.J.VADAKEDOM SMT.REXY ELIZABETH THOMAS SRI.RAJEEV JYOTHISH GEORGE ``` ## **`RESPONDENT/S:`** - `1 THE DEPUTY SUPERINTENDENT (VACB) KOTTAYAM UNIT, KOTTAYAM-686 002.` - `2 POLICE SUPERINTENDENT (INTELLIGENCE), VIGILANCE AND ANTI CORRUPTION BUREAU, THIRUVANANTHAPURAM-695 033.` - `3 THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU, THIRUVANANTHAPURAM-695 033.` - `4 WILSON JACOB S/O.JACOB, KARUCHIRA VADAKKETHIL, VILLA NO.3, PERCH VILLA, MOOLAVATTOM P.O., KOTTAYAM-686 012.` ``` BY ADVS. SPECIAL GOVERNMENT PLEADER SRI RAJESH A M.P.MADHAVANKUTTY MATHEW DEVASSI ``` ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 9] intentionally omitted <==** ``` THIS OP (CRIMINAL) HAVING COME UP FOR ADMISSION ON 25.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` OP(CRL.) NO. 164 OF 2021 ``` ..3.. ## **JUDGMENT** The prayers in this Original Petition filed under Article 227 of the Constitution of India read thus:- - (i) Call for the records leading to the passing of Exhibit - P10 and to quash the same. - (ii) Grant such other reliefs which this Honourable Court may deem fit and proper in the interest of justice. 2. The petitioner is the Director of a Private Limited Company namely ‘Kottayam Port and Container Terminal Services, Pvt. Ltd’ having its administrative office at Nattakom in Kottayam District. The major asset of the company is a property having an extent of 8.65 acres acquired by its promoters. The company had also availed a financial assistance of Rs.7.5 crores from the Central Government. Kerala Industrial Infrastructure Development Corporation (KINFRA for short), a Kerala Government undertaking has 48.6% share in the company. The Chairman of the Company is appointed by the KINFRA. Two directors are also nominated by ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 9] intentionally omitted <==** KINFRA. 3. Respondent No.4 was earlier the Managing Director of the company. He filed a complaint before the Court of Enquiry Commissioner and Special Judge, Vigilance, Kottayam as CMP No.872/2017 against the petitioner herein and ten others. 4. In the complaint, respondent No.4 alleged offences under Section 13(1)(d) of the Prevention of Corruption Act r/w Sections 168, 403, 406 and 420 of the Indian Penal Code. He raised the following allegations against the petitioner and others:- - (i) The Company had entered into an agreement for hiring a forklift owned by accused Nos. 8 to 11 by fixing a rent of Rs.60,000/-. The company also agreed to purchase the said forklift for an amount of Rs.10,48,480/-. The rate fixed as above is exorbitant since such forklifts are available for a lesser price in the market. Such an agreement was entered into by the Board of Directors of the company to favour accused Nos.8 to 11 who supplied the forklift. ``` OP(CRL.) NO. 164 OF 2021 ``` ..5.. - (ii) Without inviting quotations, the petitioner and the other accused sold out a trailer truck owned by the company for a sum of Rs.15,35,000/-. - (iii) A barge belongs to the company which was earlier let out for a rent of Rs.8,00,000/- per month is now being leased out for an amount of Rs.4,00,000/- 5. The Vigilance Court, as per order dated 05.07.2017, directed the Deputy Superintendent of VACB, Kottayam Unit (R1) to conduct a ‘quick verification’ and file a report. Respondent No.1 conducted quick verification in the matter and submitted Ext. P4 report. In Ext.P4 report, the VACB found that no offences as alleged were revealed. 6. Respondent No.4 challenged the report by filing objections before the Court below. After considering Ext.P4 report and the objections filed by respondent No.4, the Court below rejected Ext.P4 and directed respondent No.1 to conduct further enquiry, as per Ext.P6 order. Respondent No.4 thereafter approached this Court by ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 9] intentionally omitted <==** filing O.P.(Crl). No.47/2021 and sought for a direction to expedite the process of further enquriy. As per judgment dated 25.02.2021, this Court directed the VACB to submit report on or before 20.03.2021. Thereafter, the VACB submitted Ext.P8 series reports before the Court below. 7. On 19.03.2021, the Director of Vigilance, (respondent No.3) as per Ext.P9, directed respondent No.2 to submit report before the Trial Court to register a crime. Ext.P8 report dated 28.12.2000 was filed before the Court below after Ext.P9. Thereafter, the Court below passed Ext.P10 order dated 25.03.2021, directing respondent No.3 to register a case against the petitioner and others. 8. The petitioner is seeking to quash Ext.P10 order in this original petition. 9. Heard the learned counsel for the petitioner Shri. Liji J. Vadakkedom, the learned Special Government Pleader (Vigilance) Shri. A. Rajesh and Shri. M.P. Madhavankutty, the learned counsel appearing for ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 8] intentionally omitted <==** respondent No.4. 10. The learned counsel for the petitioner challenges Ext.P10 order on the following grounds:- - (i) No sanction under Section 19(1) of the PC Act was obtained by the complainant/respondent No.4. - (ii)The court below has not applied its mind while directing registration of a crime under Section 156(3) of Cr.P.C. - (iii)The various quick verification reports concluded that no cognizable offences were revealed on the allegations levelled against the petitioner and the other accused. - (iv)The petitioner and the other accused are not public servants as defined in Section 2(c) of the PC Act. 11. The learned counsel for respondent No.4 submitted the following:- - (i) The petitioner and the other accused fall ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 9] intentionally omitted <==** under the definition of ‘public servant’ under Section 2(c)(iii) and 2(c)(xii) of the PC Act. (ii) The Court below has exercised its discretion based on the available materials while passing Ext.P10. 12. The complaint filed by respondent No.4, [Ext.P3], alleges that the petitioner and the other accused are public servants. 13. It is submitted that on receipt of the complaint and after obtaining the preliminary enquiry report, the learned Special Judge should not have forwarded the complaint under Section 156(3) of the Cr.P.C. for registering FIR. It is also submitted that there is absence of sanction under Section 19(1) of the PC Act. 14. The learned counsel for the petitioner relied on **Anil Kumar v. M.K. Aiyappa** [2013 (10) SCC 705] and **Muhammed V.A. v. State of Kerala** [2019 (1) KLT 156] to substantiate his contentions. 15. Section 19(1) of the Act provides that no Court ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [20 x 9] intentionally omitted <==** shall take cognizance of offences punishable under Sections 7,11,13 and 15 alleged to have been committed by a public servant except with the previous sanction of the competent authority. 16. In **Anil Kumar v. M.K. Aiyappa** (Supra) while dealing with the requirement of sanction as a precondition for ordering investigation under Section 156(3) of the Cr.P.C., the Apex Court held thus:- “8. We may first examine whether the Magistrate, while exercising his powers under Section 156(3) CrPC, could act in a mechanical or casual manner and go on with the complaint after getting the report. The scope of the above mentioned provison came up for consideration before this Court in several cases. This Court in Maksud Saiyed case (Supra) examined the requirement of the application of mind by the Magistrate before exercising jurisdiction under Section 156(3) and held that where a jurisdiction is exercised on a complaint filed in terms of Section 156(3) or Section 200 CrPC, the Magistrate is required to apply his mind, in such a case, the Special Judge/Magistrate cannot refer the matter under Section 156(3) against a public servant without a valid sanction order. The application of mind by the Magistrate should be reflected in the order. The mere statement that he has gone through the complaint, documents and heard the complainant, as such, as reflected in the order, will not be sufficient. After going through the complaint, documents and hearing the complainant, what weighed with the Magistrate to order investigation under Section 156(3) CrPC, should be reflected in the order, though a detailed ``` OP(CRL.) NO. 164 OF 2021 ``` ..10.. expression of his views is neither required nor warranted. We have already extracted the order passed by the learned Special Judge which, in our view, has stated no reasons for ordering investigation. 9. xxxx ## 10. xxxx 11. A Special Judge is deemed to be a Magistrate under Section 5(4) of the PC Act and, therefore, clothed with all the Magisterial powers provided under the Code of Criminal Procedure. When a private complaint is filed before the Magistrate, he has two options: he may take cognizance of the offence under Section 190 CrPC or proceed further in enquiry or trial. A Magistrate, who is otherwise competent to take cognizance, without taking cognizance under Section 190, may direct an investigation under Section 156(3) CrPC. The Magistrate, who is empowered under Section 190 to take cognizance, alone has the power to refer a private complaint for police investigation under Section 156(3) CrPC. 12. xxxx 13. Learned Senior Counsel appearing for the appellants raised the contention that the requirement of sanction is only procedural in nature and hence, directory or else Section 19(3) would be rendered otiose. We find it difficult to accept that contention. Sub-section (3) of Section 19 has an object to achieve, which applies in circumstances where a Special Judge has already rendered a finding, sentence or order. In such an event, it shall not be reversed or altered by a Court in appeal, confirmation or revision on the ground of absence of sanction. That does not mean that the requirement to obtain sanction is not a mandatory requirement. Once it is noticed that there was no previous sanction, as already indicated in various judgments referred to hereinabove, the Magistrate cannot order ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [26 x 9] intentionally omitted <==** investigation against a public servant while invoking powers under Section 156(3) CrPC. The above legal position, as already indicated, has been clearly spelt out in Paras Nath Singh and Subramanian Swamy cases (supra).” 17. In **Manju Surana v. Sunil Arora** [2018 5 SCC 557], the Apex Court referred the question whether prior sanction for prosecution against a public servant was required before directing investigation under Section 156(3) of Cr.P.C. to be decided by a larger Bench. In **Muhammed V.A. v. State of Kerala** [2019(1) KLT 156], a Division Bench of this Court held that until a decision is taken in the reference in **Manju Surana** (supra), the law laid down in **Anil Kumar** (Supra) would hold the field. Admittedly, in the present case, no sanction under Section 19(1) of the PC Act was obtained by the complainant. Therefore, Ext.P10 order is liable to be set aside on the ground that no sanction was obtained. 18. Yet another aspect urged by the learned counsel for the petitioner to challenge the legality of Ext.P10 ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [26 x 9] intentionally omitted <==** order is that the learned Special Judge had not applied his mind while directing registration of FIR against the petitioner. The impugned order reads thus:- “The Director, Vigilance & Anti-Corruption Bureau, Thiruvananthapuram has sought for permission to register case and filed report to that effect as per the direction of the Hon’ble High Court. The Director, Vigilance & AntiCorruption Bureau shall register the case as per the procedure established by law and proceed further. Call on to 29.04.2021.” 19. The Apex Court has considered the scope of Section 156(3) of the Code of Criminal Procedure in several cases. In **Maksud Saiyed v. State of Gujarat and others** [(2008) 5 SCC 668], the Apex Court held that where a jurisdiction is exercised on a complaint filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. 20. The Apex Court in **Priyanka Srivastava v. State of UP** [(2015) 6 SCC 287] held that application of judicial mind is warranted while exercising the power under Section 156(3) Cr.P.C. ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [26 x 9] intentionally omitted <==** 21. In **Anil Kumar** (Supra) also, the Apex Court held that application of mind by the Magistrate should be reflected in the order directing investigation under Section 156(3) of Cr.P.C.. This Court in **Jibin Joseph K.A. v. Union Territoy of Lakshadweep** [2022 (4) KHC 458] following the various precedents in the subject held that the Magistrate/Court has a duty to protect the interest of the accused also since, at the time of conducting inquiry or forwarding of the complaint to the Police under Section 156(3) Cr.P.C., the accused does not get any right of hearing. 22. A perusal of Ext.P10 order shows that the Special Judge passed it mechanically without examining the facts of the case, the nature of the allegations and even without ascertaining whether the materials placed before it revealed the commission of any cognizable offence or not. It appears that the Special Judge was simply complying with the requirement in Ext.P9. Therefore, Ext.P10 order directing registration of FIR ``` OP(CRL.) NO. 164 OF 2021 ``` **==> picture [26 x 9] intentionally omitted <==** under Section 156(3) of the Code of Criminal Procedure is liable to be quashed in the absence of any sanction under Section 19(1) of the PC Act. It is made clear that this Court has not made any attempt to look into the merit of the allegations contained in Ext.P3 complaint. Quashing of Ext.P10 order results in restoration of Ext.P3 complaint on the file of the Court of the Enquiry Commissioner and Special Judge, Kottayam. 23. In the result, the Original Petition is allowed. Ext.P10 order passed by the Court of Enquiry Commissioner and Special Judge, Kottayam is set aside. Ext.P3 complaint shall stand restored to the file of the Court below. The learned Special Judge shall proceed with the complaint in accordance with law, after considering the entire materials placed before the Court. Sd/- **K. BABU, JUDGE** kkj ``` OP(CRL.) NO. 164 OF 2021 ``` ..15.. ## **`APPENDIX OF OP(CRL.) 164/2021`** ``` PETITIONER EXHIBITS ``` - `EXHIBIT P1 THE COPY OF THE CERTIFICATE OF INCORPORATION OF THE COMPANY.` - `EXHIBIT P2 THE COPY OF THE MINUTES BOOK WITH RESPECT TO THE BOARD MEETING HELD ON 04.06.2015 TO APPOINT A NEW MANAGING DIRECTOR.` - `EXHIBIT P3 THE COPY OF THE COMPLAINT DATED 11.08.2017 FILED BY THE 4TH RESPONDENT BEFORE THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, VIGILANCE KOTTAYAM.` - `EXHIBIT P4 A COPY OF THE QUICK VERIFICATION REPORT ALONG WITH THE CERTIFIED COPY DATED 18.04.2018 SUBMITTED BY THE 1ST RESPONDENT BEFORE THE ENQUYIRY COMMISSIONER AND SPECIAL JUDGE, VIGILANCE, KOTTAYAM.` - `EXHIBIT P5 THE COPY OF THE OBJECTION DATED NIL SUBMITTED BY THE 4TH RESPONDENT IN CMP NO.872/2017.` - `EXHIBIT P6 THE COPY OF THE ORDER DATED 15.07.2019 OF THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, KOTTAYAM.` - `EXHIBIT P7 THE COPY OF THE JUDGMENT DATED 25.02.2021 IN OP(CRL) NO.47/2021 BEFORE THIS HONOURABLE COURT.` - `EXHIBIT P8 A COPY OF THE QUICK VERIFICATION REPORT DATED 04.06.2020.` - `EXHIBIT P8 A A COPY OF THE CLARIFICATION REPORT DATED 03.11.2020.` - `EXHIBIT P8 B A COPY OF THE FURTHER CLARIFICATION REPORT DATED 28.12.2020.` - `EXHIBIT P9 THE COPY OF THE LETTER DATED 19.03.2021 ISSUED BY THE RESPONDENT NO.3 DIRECTOR.` - `EXHIBIT P10 THE CERTIFIED COPY OF THE ORDER DATED 25.03.2021 PASSED BY THE ENQUIRY COMMISSIONER AND SPECIAL JUDGE, VIGILANCE KOTTAYAM.` ``` OP(CRL.) NO. 164 OF 2021 ``` ..16.. ## `RESPONDENT EXHIBITS` ``` Exhibit R4(a) ``` ``` Exhibit R4(a)TRUE COPY OF THE JUDGMENT PASSED BY THE HON'BLE HIGH COURT DATED 25.02.2021 IN OP(CRL) NO.47/2021 Exhibit R4(b)TRUE COPY OF THE REPORT DATED 19.03.2021 OF THE DIRECTOR, VIGILANCE AND ANTI CORRUPTION BUREAU. ``` ``` Exhibit R4(c)TRUE COPY OF THE AGREEMENT 01-09-2016 EXECUTED BETWEEN BINU BAIJU AND FOUR OTHERS AND VARGHESE K CHERIYAN AND ANOTHER. ``` ``` Exhibit R4(d)THE COPY OF THE ORIGINAL COMPLAINT BEARING C.M.P.NO.872/2017 BEFORE THE COURT OF ENQUIRY COMMISSIONER AND SPECIAL JUDGE, KOTTAYAM ``` ``` Exhibit R4(e)TRUE COPY OF THE A COMPLAINT DATED 13.11.2921 TO THE REGISTRAR OF COMPANIES, ERNAKULAM. ```