Holding

The sanction for prosecution was valid; the High Court’s finding of a defect was unjustified, and the conviction under Section 7 stands.

Summary

The accused, an Assistant Commercial Manager in the Indian Railways, demanded and accepted a Rs 300 bribe from his subordinate, PW‑1, leading to a CBI investigation and charge‑sheet. The Special Judge convicted him under Section 7 of the Prevention of Corruption Act, 1988. The Andhra Pradesh High Court set aside the conviction, holding that the sanction for prosecution was defective because the entire record was not placed before the Railway Board or its President. On appeal, the Supreme Court observed that the trial court had already ruled the Secretary of the Railway Board had authority to issue the sanction and that no plea was raised about the records not being placed before the Board; the High Court’s conclusion was unsupported. The Court found no defect in the sanction, restored the trial court’s conviction, and allowed the appeal. The order of the High Court was set aside.

Issues considered

Whether the sanction for prosecution under the Prevention of Corruption Act was valid when issued by the Secretary/Railway Board Member (Traffic) without the entire Board sitting.
Whether the failure to place the entire record before the Railway Board renders the sanction defective and vitiates the trial.
Whether the High Court could overturn a conviction on the ground of a purported sanction defect absent proof of such defect.

Legislation cited

Prevention of Corruption Act, 1988s. 19(1), s. 19(3), s. 7

Subjects

Prevention of Corruption Actsanction for prosecutionRailway Board authoritybriberypublic servantprocedural defectCBI investigationconviction

Judgment

STATE, CBI, HYDERABAD A
......,.- v.
EDWIN DEVASAHA YAM

JULY 13, 2007

[DR. ARIJIT PASA YAT AND D.K. JAIN, JJ.] B

-·
>
Prevention of Corruption Act, 1988; Section 7:

Corruption-Demanding and accepting of bribe by an Officer of
Railways from his subordinate-Complaint to CBI-Investigation-Charge c
sheet-Trial Court found accused guilty of offence punishable uls. 7 of the
Act-Reversed by High Court observing that sanction for prosecution as
obtained was defective-On appeal, Held: Plea relating to lack of authority
of the secretary in granting the sanction for the prosecution of the accused
appears to have been given up before the High Court-Without indicating D
any reasons, High Court could not have drawn an adverse conclusion that
....
..,.... the relevant records not placed before the Railway Board for obtaining the
sanction-On the facts, no defects in the sanction for prosecution has been
shown-Under the circumstances, High Court was not justified in taking a
contrary view.
E
Accused working as an Assistant Commercial Manager in the Railways
allegedly demanded a sum of Rs. 300/- as bribe from his sub-ordinate PW-1,
a Travelling Ticket Examiner in South Central Railway and later accepted
the same. PW-1 in turn made a complaint to CBI. On the basis of the complaint
given by PW-1, a case was registered by CBI against the accused and PW-8,
an Inspector of CBI was entrusted with the task of conducting the F
----"
investigation. On completion of investigation, charge sheet was filed. Trial
Court found the respondent-accused guilty of the offence punishable under
Section 7 of the Prevention of Corruption Act. Aggrieved, the accused filed
an appeal before the High Court. The High Court observed that with reference
to the materials on record it was satisfied that the accused was guilty of G
accepting the bribe and was liable to be punished
.
for offence punishable
, under
Section 7 of the Act. However, in view of the fact that the entire record was
not placed before the Railway Board or its President before obtaining sanction
for prosecution of the respondent-employee, the sanction so obtained was held
to be defective and, therefore, directed acquittal of the respondent Hence the
333 II
334 SUPREME COURT REPORTS [2007) 8 S.C.R.

A present appeal '-y

Appellant-State contended that the High Court having accepted that
materials on record are sufficient to establish the accusations, should not
have interferred with the well- reasoned order of the trial court holding the
accused guilty; that the issue relating to sanction was examined at length by
B the trial court and it was held that the Secretary was authorized to sign/issue
the order; that the Board alone was competent to accord sanction for
prosecution; that PW-7 had in categorical terms stated that it was not f._

necessary for the entire Board to sit and take a decision and only the Member '(

(Traffic) was the competent authority who could have and had, in fact, accorded

c sanction for prosecution; and that one Member of the Board can sit as the
Board as per the Board's Rules; and that there was no material before the
High Court to come to the conclusion that the entire record was not placed
before the Board. On the contrary, with reference to the evidence of PW-7
and the materials on record the trial court had held that all relevant were
placed before the Board.
D ,).
Allowing the appeal, the Court
"'('
HELD: I.I. Before the trial Court the st~nd of the respondent was in
relation to the authority of the Secretary to sign the sanction order. The trial
court, after analyzing the materials on record, came to hold that the Secretary
E had the authority. Before the trial court there was no plea raised that the
relevant records were not placed before the Railway Board. The plea relating
to lack of authority of the Secretary appears to have been given up before the
High Court and what seems to have been urged is that the relevant records
~
were not placed before the Board. The trial court had categorically noted that
all the relevant records were placed by the Secretary before the Member
F ,., ,._,
(Traffic). Without indicating any basis for the conclusion that records were
not placed for consideration, the High Court could not drawn an adverse
conclusion that the relevant records were not produced before the Board.
[Para 5) (338-D-F)

G 1.2. On· facts of the present case, it has not been shown that there was
any defect in the sanction and the High Court was not justified in taking a
contrary \'iew. This being the position, the order of the High Court is
unsustainable and is set aside and that of the trial court is restored. (Para 61 ).
~'

Central Bureau of Investigation v. V.K Sehgal and Anr., (1999) 8 SCC
H 501; Shankerbhai Laljibhai Rot v. State of Gujarat, (20041 13 SCC 487 and
STATE,CBI,HYDERABADv. EDWINDEVASAHAYAM [PASAYAT,J.] 335
~

--.--
State Inspector of Police, Vishakhapatnam v. Surva Sankaram Karri, (2006] A·
7 sec 172, relied on.

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. l 009 of
2002.

From the Judgment & Order dated 25.07.2001 of the High Court of B
Judicature Andhra Pradesh at Hyderabad in Criminal Appeal No. 112of1997.
>.,
Ashok Bhan and Tufail A. Khan (for P. Panneswaran) for the Appellant.

D. Ramakrishna Reddy (for D. Bharathi Reddy) for the Respondent.

The Judgment of the Court was delivered by
c
DR. ARIJIT PASA YAT, J. 1. This appeal is directed against the judgment
rendered by a learned Single Judge of the Andhra Pradesh High Court,
directing acquittal of the respondent (hereinafter described as 'accused'). The
Trial Court, i.e., Special Judge for C.B.I. Cases, Hyderabad in Calendar Case D
No.80 of 1996, had held the respondent guilty of offence punishable under
.....- Section 7 of the Prevention of Corruption Act, 1988 (in short 'the Act'), whil.b
directing his acquittal in respect of the offence punishable under Section 13(2)
read with Section 13(l}(d) of~he Act. He was sentenced to undergo rigorous
imprisonment for six months and also to pay a fine of Rs.1,000/- with default
stipulation. E

2. The prosecution version, as unfolded during trial, is as follows:
'J

The accused herein is a public servant. He demanded a sum of
Rs.300/- from PW-1, a Traveling Ticket Examiner in South Central Railway ~n
...\ -.. 11.1.1995 and accepted the same on 16.1.1995 at 5.40 p.m.
F

PW-I was working as TTE in South Central Railway and the accused
was working as Assistant Commercial Manager, Ticket Checking Division. He
was the controlling authority of PW-1, who joined in Railway service in the
year 1981 as Clerk in Hubli Division. In the year 1989-1990 he was promoted
G·
as Ticket Collector. The performance of PW-1 was not satisfactory. Therefore,

.. ).
he was repatriated to Hubli Division. However, the accused cancelled those
orders. The accused was not granting leave to PW-1. During January 1995,
PW-I went to the accused with an application to grant leave for IO da)i's.
Then the accused asked whether he has taken the charge-sheet issued agaiJst
him. Thereupon, PW-I replied that it was not served on him but he collected H
336 SUPREME COURT REPORTS [2007] 8 S.C.R.

A the same from the Chief Ticket Inspector's office. Ex. P. I is the charge sheet ........... '
dated IO.l.1995.

After receiving the charge sheet, PW- I went to the office of the accused
and explained him orally about the charges leveled against him. The accused
told PW-I that he was prepared to grant leave if he gives explanation to the
B charges in writing immediately. PW-I refused to give explanation immediately.
The leave application given by PW- I was tom away by the accused stating
,,(
that he would pass the orders of repatriation.

On I 2. l.1995 PW- I met the accused and asked for cancellation of
repatriation orders and also for leave. Then the accused allegedly demanded
c a sum ofRs.300/- as consideration for the work. PW-I left the office of the
accused saying that he will get the money.

On 14.1.1995 PW- I was present at Sankranti Mela organized by Rail
Nilayam. The accused was also posted there. In the Mela the accused asked
PW-1 whether he brought full money. PW-1 replied that since the banks were
D r
closed, he could not get the money and that he would pay the money after
the banks reopen. ~,

On 16.1.1995 PW-1 went to PW-8, the CBI Inspector. On the basis of
the complaint given by PW-I, he registered the case in R.C. 2 (a)/95, Hyderabad
E against the accused. Ex. P.14 is the FIR. PW-8 took up further investigation.
He mobilized two persons to act as mediators for the trap. On 16.1.1995, he
prepared first mediators report Ex. P.5 in the presence of trap party which
'o
included the mediator P N-2 and other CBI officers. PW-2 was instructed to
accompany PW-I to give a signal by wiping the face when the accused
accepts the money.
F r ~

The trap party proceeded to the office of the accused at about 5 p.m.
At about 5.25 p.m., PWs. I and 2 entered into the office of the accused where
the other members of the trap party stood outside the office. At about 5.40
p.m. PW-2 came out of the office and gave pre-arranged signal. The entire trap
party entered into the office. PW-8 questioned the accused who told him that
G
money was kept in the left side shirt pocket. When questioned by the trap

-
party, the accused told them that the money was returned as hand loan taken
by PW-I from him on 15.1.1995 in the presence of PW-3. After complying with ,.I_

all formalities, the second mediator's report Ex. P-1was prepared. PW-8 seized
M.Os. I to 5 and other documents during the trap. PW-8 investigated into
H the matter and thus on completion of investigation, the charge sheet was
STATE.CBl,HYDERABADv. EDWINDEVASAHAYAM [PASAYAT.J.] 337
.... ....,,. filed . A
3. After investigation, charge sheet was filed. The defence of the accused
was of total denial and, therefore, the trial was conducted. On behalf of the
prosecution, 8 witnesses were examined and certain documents were exhibited
as exhibits P. I to P.14. On behalf of the accused one witness was examined.
On consideration of the evidence on record, the trial court, as noted above. B
found the respondent-accused guilty. The trial court did not find any
A
substance in the stand of the accused that there was defect in the sanction
accorded. It was urged that the Secretary Railway Board/Director could not
have signed/issued the order of sanction. The trial court held that the Secretary
was competent to sign/issue the order. It was also the stand of the accused
that since the Secretary was not examined to prove the sanction order, therefore.
c
it was fatal to the prosecution. This plea was also not accepted by the trial
court. It was noted that PW-7, who was well conversant with the Secretary's
signature, and had knowledge of the sanction order (Exhibit P.13) had been
examined. He was the then Joint Director (Vigilance) of the Railway Board. A
categorical finding was recorded that the Railway Board which was the D
... .....
authority to accord sanction had, in fact, accorded sanction under Section
19( l) of the Act for prosecution of the accused. The entire record along with
self-contained note was put up by the Secretary and the Member (Traffic)
Board approved the same. One Member of the Board was competent to give
sanction. The trial court noted that a reading of the sanction order prima facie
E
shows that there has been application of mind and all the relevant materials
have been examined by the concerned officer. The trial court also noted that
non-examination of the sanctioning authority is not fatal when the sanction
order contained details showing application of mind by the concerned
authority. The non-examination of the Secretary of the Railway Board was
-\ ...,_ held to be not vulnerable. On merits also, the trial court found that the F
accusations against the respondent have been established. In the appeal
filed, it was contended by the accused that the entire file had not been placed
before the Board and the evidence of PW-7 established the same. The High
Court noted that with reference to the materials on record it was satisfied that
the accused was guilty of accepting the bribe and was liable to be punished
G!I
for offence punishatle under Section 7 of the Act, but on technical ground
that the entire record was not placed before the Railway Board or its President,
~ >-. the sanction was held to be defective.

4. Learned counsel for the appellant submitted that the High Court
having accepted that materials on record are sufficient to establish the H
}-
338 SUPREME COURT REPORTS [2007) 8 S.C.R.
)
A accusations, should not have interfered with the well-reasoned order of the -....-
....
trial court holding the accused guilty. The issue relating to sanction was
examined at length by the trial court. It was held that the Secretary was
authorized to sign/issue the order. The Board alone was competent to accord
sanction. PW-7 had in categorical terms stated that it was not necessary for
the entire Board to sit and take a decision and only the Member (Traffic) was
B the competent authority who could have and had. in fact, accorded sanction
for prosecution. It was also specifically stated that one Member of the Board
can sit as the Board as per the Board's Rules. There was no material before ,A

the High Court to come to the conclusion that the entire record was not
placed before the Board. On the contrary, with reference to the evidence of
c PW-7 and the materials on record the trial court had hefd that all relevant
records were placed before the Board. Learned counsel for the respondent
submitted that PW-7 had accepted that he had not produced the rules
authorizing the Secretary to sign the sanction order. It was also submitted that
if the sanction itself is defective, the trial is vitiated.

D 5. It is to be noted that before the trial court the stand of the respondent
)-
was in relation to the authority of the Secretary to sign the sanction order.
The trial court, after analyzing the materials on record, came to hold that the '"'I!-

Secretary had the authority. Before the trial court there was no plea raised that
the relevant records were not placed before the Board. The plea relating to
lack of authority of the Secretary appears to have been given up before the
E
High Court and what seems to have been urged is that the relevant records
were not placed before the Board. The trial court had categorically noted that
all the relevant records were placed by the Secretary before the Member
(Traffic). Without indicating any basis for the conclusion that records were
not placed for consideration, the High Court could not have drawn an adverse
F conclusion that the relevant records were not produced before the Board. .,.
6. Though learned counsel for the respondent urged that nothing was
shown to substantiate the stand that Member (Traffic) could act as the Board,
the same has no substance. In the re-examination, PW-7 has categorically
stated that it was not necessary for the entire Board to sit and, as per the
G Board's Rules, the Member (Traffic) was authorized and competent to accord

-
sanction. There was no cross-examination. Provisions contained in Section
19(3) of the Act also need to be noted. The principles relating to alleged
defect in sanction have been highlighted by this Court in Central Bureau of ,)

Investigation v. V.K. Sehgal and Anr., [1999) 8 SCC 501 and Shankerbhai
H laljibhai Rot v. State of Gujarat. (2004] 13 SCC 487. Learned counsel for the
STATE,CBl,HYDERABADv. EDWINDEVASAHAYAM [PASAYAT,J.] 339

respondent has placed great. emphasis in State Inspector of Police, A
Vishakhapatnam v. Surva Sankaram Karri, (2006] 7 SCC 172 more particularly
in paragraphs 25 and 26 thereof. There is no quarrel with the principles laid
down in that decision. But, on facts of the present case, it has not been
shown that there was any defect in the sanction and the High Court was not
justified in taking a contrary view. This being the position, the order of the B
High Court is unsustainable and is set aside and that of the trial court is
restored.

7. The appeal is allowed accordingly.

S.K.S. Appeal allowed.