B.G. Arasaraju vs The State of Karnataka

G. Narendra, J.—The above revision petition is directed against the order dated 4.12.2014 rendered in Special Case No. 134/2014 on the file of the Principal Sessions Judge and Special Judge Bangalore Rural District, Bangalore. The order is passed by the Court below on an application filed by the petitioner/accused under the provisions of Section 239 of Cr.P.C. seeking for discharge for want of valid sanction.

The Court below has passed a common order on applications filed by several employees of the Bangalore Electricity Supply Company. All of them are employed as Engineers in BESCOM.

The facts in brief are that the petitioner, who is accused No. 1 in Special Case No. 134/2013, has been charge-sheeted for the offences punishable under Sections 7 and 13(1)(d) r/w. Section 13(2) of the Prevention of Corruption Act. It is submitted by the petitioner that he along with one V.B. Krishnoji Rao Sindhya are alleged as accused in the said case. It is further submitted by the petitioner/accused that he is an employee of BESCOM and he is governed by the Karnataka Electricity Board Employees'' (Classification Disciplinary Control and Appeal) Regulations 1987 (for short hereinafter referred to as ''the Regulations'' and that the applicable and the relevant Regulation for the purposes of this case is 14-A(1)(a)(i) which reads as follows:-

"(1) The following provisions shall, notwithstanding anything contained in Regulations 10 to 11-A and 13 be applicable for purposes of proceeding against Board employees whose alleged misconduct has been investigated into by the Vigilance Commission/Lokayukta/Upalokayukta either suo motu or on a reference from the Board or from any other authority, viz.

(a) where on investigation into any allegation against-

(i) a member of the Board service Group-A, B, C or D in respect of an allegation of a serious nature, the Vigilance Commissioner/Lokayukta/Upa-Lokayukta or any officer of the Vigilance Commission/Lokayukta/Upa-Lokayukta authorized by him in writing under Sub-Rule 2 of Rule 5 of Karnataka State Vigilance Commission''s Rules 1980/Rule 12 of the Karnataka Lokayukta/Upa-Lokayukta Act 1984 is of the opinion that disciplinary proceedings shall be taken, he shall forward the record of investigation along with his recommendations to the Board, and the Board after examining such records, may either direct an inquiry into the case by the Vigilance Commission/Lokayukta/Upa-Lokayukta or direct the appropriate Disciplinary authority to take action in accordance with the Regulation 12".

It is the case that the petitioner has been arrayed as an accused on the allegation that the petitioner demanded and accepted bribe to show official favour in discharge of his duties. It is submitted that pursuant to the registration of the FIRs, the Company Secretary Sri. R. Sridhar who is a member of the Board of Directors has issued the sanction permitting prosecution of the petitioner.

It is contended before the Courts below and before this Court that the said R. Sridhar, who is a Company Secretary, is only an employee and he is neither authorized nor empowered to grant sanction for prosecution of the petitioner/accused. Aggrieved by the grant of sanction dated 16.8.2013, the application under Section 239 of Cr.P.C. r/w. Section 19 of the Prevention of Corruption Act came to be filed before the Special Court. The Court below after hearing the parties in detail was pleased to reject the application on the ground that the order granting sanction for prosecution of the accused is proper and legal. It has arrived at the conclusion on the basis of the material placed before the Trial Court. The Court below has rejected the application on the ground that the said Director Sri. R. Sridhar, who is a member of the Board of Directors has been authorized by a resolution of the Board empowering him to sign and issue the sanction orders. Aggrieved by the findings of the Courts below the petitioner has preferred the Revision Petition and the ground of contention which is vehemently put across is that the Court below erred in holding that delegation of powers by the Board to one of the member Directors is not good in law and cannot be sustained and is illegal.

The petitioner''s counsel would vehemently submit that issuance of the sanction order is contrary to the provisions of Regulation 14-A (e) of the Regulation wherein it has been said that if the accused/employee is an employee of a Board, his appointment or removal can only be done by the Board, thus a sanction for prosecution has to be given by the Board as a whole and the said power cannot be delegated. The petitioner would further submit that the delegation by the Board is wholly illegal and in the light of the provision of Regulation 14-A, the board as a whole (all the members or the majority of the members sitting together) ought to have considered the request for sanction and taken a decision. In the absence of a decision by the Board then, the grant of sanction is illegal and the same is liable to be interfered with. In sum and substance the proposition by the petitioner is that the Board cannot delegate its power granting sanction authorizing prosecution of the accused/official. In this regard the petitioner''s counsel would rely on that portion of Regulation 14A which reads as under:-

"A member of the Board service Group-A, B, C or D in respect of an allegation of a serious nature, the Vigilance Commissioner/Lokayukta/Upa-Lokayukta or any officer of the Vigilance Commission/Lokayukta/Upa-Lokayukta authorized by him in writing under Sub-Rule 2 of Rule 5 of Karnataka State Vigilance Commission''s Rules 1980/Rule 12 of the Karnataka Lokayukta/Upa-Lokayukta Act 1984 is of the opinion that disciplinary proceeds shall be taken, he shall forward the record of investigation along with his recommendations to the Board, and the Board after examining such records, may either direct an inquiry into the case by the Vigilance Commission/Lokayukta/Upa-Lokayukta or direct the appropriate Disciplinary authority to take action in accordance with the Regulation 12".

The petitioner would reiterate the contentions put forth before the Trial Court before this Court. He would assert that the order sanctioning prosecution (Annexure-D) is signed by one R. Sridhar, Director (Regulatory Affairs and Company Secretary). He would contend the order Annexure-D is bad as the said R. Sridhar is not competent either to appoint or remove from appointment any person much less the official like the petitioner. He would contend that it is the Board alone which could pass an order for appointment and removal from service and hence it is the Board alone which is competent to take a decision either to sanction or refuse to accord sanction for prosecution of its employees.

Per contra, the learned counsel for the respondent would draw my attention to the contents of Annexure-D where in the preamble and in paragraphs preceding the order, it has been noted that the Board in its 86th meeting held on 28.6.2013 was pleased to discuss the issue regarding grant of sanction for prosecution of not only the petitioner herein but also another official - Sri V.B. Krishnoji Rao Sindhya pertaining to the impugned order dated 16.8.2013 is hereunder extracted for the sake of convenience.

By the said resolution it was resolved by the Board of Directors that it is necessary to sanction the prosecution as they have indulged in corrupt practices and it is necessary to authorize Sri. R. Sridhar, who is a member of the Board of Directors and also the Company Secretary to issue sanction letter for and on behalf of the Board.

This delegation is contested by the petitioner''s counsel. The petitioner''s counsel seriously disputed the power of the Board to delegate or authorize any one of its constituents to discharge its function for and on behalf of the board.

Per contra, the respondent''s counsel would submit that under the Scheme of the Companies Act, the board of Directors of any Company, is the Supreme Authority and the resolutions of the Board of Directors is the law and last word in the affairs of the Company provided that the said resolutions are not contrary to any law, Act, Rule or Regulation. At this juncture this court posed a question to the petitioner''s counsel asking if the delegation of the power to issue sanction letter is contrary to the Articles of Association or Memorandum of Association or if it is in violation of any Act and Rules. The petitioner''s Counsel would only point out the provisions of Regulation 14A of the Regulation which have been perused earlier and in the opinion of this Court the provisions of Regulation 14A neither prohibit or bar the Board of Directors from delegating any authority vested in them. Hence, the contention of the petitioner that the Board has no power to delegate is negatived. The petitioner was also queried as to whether there is any other authority or person which is functioning under the Board and who or which is an employee of the Board, who or which could issue sanction authorizing the prosecution of the officers, to which the petitioner''s counsel would submit there is neither any such person or authority who is not an employee of the Board.

Admittedly, in the light of these admitted facts the Board being the Supreme Authority vested with the powers of day to day management and the Board being a public Sector Corporation is expected to and has acted in a responsible manner. The Board of Directors have in their 86th meeting resolved that the formal orders communicating the consent of the Board or order sanctioning of the prosecution of the officer shall be formally signed and issued by Sri. R. Sridhar who is not only a Company Secretary but also a Director and member of the Board of Directors. Further, a reading of the order would demonstrate that the Board is alive to the factors which have led to a situation forcing the authorities to seek sanction for prosecution of the official. The Board has discussed the pending cases before the various employees and has thereafter proceeded to resolve that the said persons required to be prosecuted in view of the fact that they have indulged in corruption. Hence the contention of the petitioner, that the impugned order is an order issued by the said R. Sridhar Company Secretary/Director is illegal, is misplaced and as a result of misconstruing the provision and also as a result of the misreading of the impugned proceedings Annexure-D.

The impugned proceeding is nothing but a mere communication signed by Sri. R. Sridhar intimating the decision of the Board. The learned counsel for the petitioner would rely on a judgment of the Apex Court rendered in the State of Goa vs. Babu Thomas (Crl. Appeal No. 215 of 2004 wherein sanction order dated 2.1.1995 was issued under the Signature of the Company Secretary but there was no resolution passed by the Board of Directors which resulted in the issuance of the sanction order dated 2.1.1995. But that is not the case in the present case on hand. Herein, Annexure-D clearly states that the Board in its meeting after discussions has arrived at a conclusion that the prosecution launched against the accused official ought to be continued and thereafter it was resolved that sanction ought to be granted and thereafter Sri. R. Sridhar has only communicated the will of the Board and hence the said citation is inapplicable to the facts of the case. The petitioner has also relied upon the unreported order of the Learned Principal District and Sessions Judge, Bangalore dated 22/05/2012 wherein the Court was pleased to hold that the sanction accorded by one of the Directors is not valid and liberty was granted to the prosecution to obtain fresh sanction and file chargesheet after obtaining sanction from the Competent Authority.

I do not see as to how the said judgment advances the case of the petitioner.

In the said case the contention taken was that as per the provisions of Schedule VI(A) Sl. No. 3 of the KEB''s (CDC & A) Regulation, the Director is empowered to issue the sanction letter and it has been negated by the Court in the said order. This order does not in any way advance the case of the petitioner.

The learned counsel for the petitioner would also rely on a another judgment of this Hon''ble Court reported in 2004 (2) KCCR 1223 and draws the attention of this Court to head note C, wherein it is held as follows:-

"C. Prevention of Corruption Act, 1988-Section 19 - *Sanction for Prosecution - Karnataka Electricity Board Employees (Classification, Disciplinary Control and Appeal) Regulations, 1987 - Regulation 14A, sub-clause(e) - Board alone is the competent authority to accord sanction to prosecute under the Prevention of Corruption Act, 1988 to all the Employees"*

The facts of the said case are that the learned counsel for the respondent/Board has been unable to place any material before the court to substantiate their pleading that Superintending Engineer is the Appointing Authority and also Sanctioning Authority for sanctioning prosecution and which is not the case in the present proceedings. It is also reiterated that as per the provisions of Regulation 14A, the Board is the Supreme Authority. In the instant case the view is that the Board by its resolution has approved sanction for prosecuting the accused/officers and it has only delegated its power regarding communication of its decision to one of its Directors. Hence, the said ruling does not aid the case of the petitioners in any manner.

*Inserted vide Chamber order dt. 14.05.2015

In view of the above discussion I am of the view that the above writ petition is wholly misconceived and is liable to be rejected as one devoid of merits.

Accordingly, the petition is rejected. In the facts and circumstances of the case there shall be no order as to costs.