Holding

A sanction granted by an unauthorized officer is a nullity and an investigation conducted without the requisite written authorization is illegal, rendering the conviction unsustainable.

Summary

The respondent, a Chief Commercial Inspector of the South Eastern Railway, was convicted under Section 13(2) of the Prevention of Corruption Act, 1988 for possessing assets disproportionate to his known income. The conviction was set aside by the High Court on the ground that the sanction for prosecution was granted by a Senior Divisional Commercial Manager who lacked statutory authority, and that the investigation was conducted without a written order from a Superintendent of Police as required by Section 17 of the Act. The Supreme Court examined whether an oral sanction or an unauthorized investigation could sustain a conviction. It held that sanction must be given by a person not below the rank of Superintendent of Police and must be in writing; any sanction by an unauthorized officer is a nullity. The Court also found the investigation illegal and unfair, constituting a miscarriage of justice, and therefore affirmed the High Court’s order setting aside the conviction. Consequently, the appeal by the State was dismissed.

Issues considered

The validity of the sanction for prosecution when granted by an officer not authorized under the Prevention of Corruption Act, 1988.
Whether an investigation under Section 17 of the Act is valid without a written authorization from a Superintendent of Police.
Whether the absence of a valid sanction and illegal investigation amounts to a miscarriage of justice warranting quash of the conviction.
Whether oral directions can satisfy the statutory requirement for sanction under the Act.
Whether an adverse inference may be drawn when statutory documents are not produced.

Legislation cited

Prevention of Corruption Act, 1988s. 13(2), s. 13(e), s. 17, s. 26

Subjects

Prevention of Corruption Actsanction of prosecutioninvestigation authoritywritten ordermiscarriage of justiceadministrative lawpublic servantasset disproportionSection 13Section 17

Judgment

STATE INSPECTOR OF POLICE, VISAKHAPA TNAM A
v.
SURYA SAN KARAM KARRI

AUGUST 24, 2006

[S.B. SINHA AND DAL VEER BHANDARI, JJ.] B

Prevention of Corruption Act, 1988-Sections 13(2) and 17-
Conviction under, for possession of assets disproportionate to known sources
of income-Correctness of-Held: Sanction for prosecution of Chief C
Commercial Inspector was accorded by officer who was not authorized in
law, thus being without jurisdiction, is nullity-Investigation was carried out
by officers not under authorization of Superintendent of Police, thus wholly
illegal-Also investigation was not conducted in fair manner, as such Inspector
suffered miscarriage of justice-Thus, order of High Court setting aside the
conviction justified-Administrative Law. D
Administrative Law-Statutory fimctionaries-Authori::ing person to
investigate into an offence-Held: Such orders should be in writing and not
oral.

Respondent was a Chief Commercial Inspector. Raid was conducted in E
his house and also houses of his sons who had been working elsewhere and
some incriminating documents were recovered. Investigation officers carried
out investigation and recorded the statements of respondent his wife, and his
sons. Senior Divisional Commercial Manager accorded sanction for
prosecution. Respondent was prosecuted for possessing assets and pecuniary F
resources in his own name as also his wife disproportionate to his known
sources of income. He was convicted and sentenced under section 13(2) of
the Prevention of Corruption Act, 1988. High Court set aside the order. Hence,
the present appeal.

Dismissing the appeal, the Court G
HELD; 1. The investigation carried out by the Investigating Officers
was wholly unfair ard that the Senior Divisional Commercial Manager could
not be said to have been delegated with the power of according sanction of
prosecuting the respondent-Chief Commercial Inspector. (234-C)
229 H
230 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 2.1. Authorization by a Superintendent of Police in favour of an officer
so as to enable him to carry out investigation of offence under section 13(1)(e)
in terms of section 17 of the Prevention of Corruption Act, 1988 is a statutory
one. The power to grant such sanction has been conferred upon the authorities
not below the rank of Superintendent of Police. The proviso uses a negative
B expression. It also uses the expression "shall''. Ex-facie it is mandatory in
character. When the authority of a person to carry out investigation is
questioned on the ground that he did not fulfil the statutory requirements
laid down therefor in terms of the second proviso, the burden, undoubtedly, is
on the prosecution to prove the same. It has not been disputed that the
Investigating Officer did not produce any record to show that he had been so
C authorized. (235-A-Df

2.2. When a statutory functionary passes an order, authorizing a person
to carry out a public function like investigation into an offence, an order in
writing was required to be passed. A statutory functionary must act in a
manner laid down in the statute. Issuance of an oral direction is not
D contemplated under the Act. Such a concept is unknown in Administrative
Law. The statutory functionaries are enjoined with a duty to pass written
orders. [236-B-DI

2.3. When a document being in possession of a public functionary, who
is under a statutory obligation to produce the same before the court of law,
E fails and/or neglects to produce the same, an adverse inference may be drawn
against him. The Special Judge was enjoined with a duty to draw an adverse
inference. He did not consider the question from the point of view of statutory
requirements, but took into consideration irrelevant factors. f236-E-F)

F 2.4. Investigation apart from being illegal, the manner in which the
investigation was conducted is condemnable. The least that a court of law would
expect from the prosecution is that the investigation would be a fair one. It
would not only be carried out from the stand of the prosecution, but also the
defence, particularly, in view of the fact that the onus of proof may shift to the
accused at a later stage. The evidence of investigating officer raises doubts
G about his bonaflde. He did not examine important witnesses and did not take
into consideration the relevant documentary evidence and there was no
explanation for the same. He did not ascertain the correctness or otherwise
of the status of both of the respondent and his wife before the Income Tax
Department. Above all, he did not produce before che Court the statements
H made by the respondent, his wife and those of his sons, although they were
STATE INSPECTOR OF POLICE. VISAKHAPA TNAM ,., SURYA SAN KARAM KARRl[SINHA,J,) 23 J

relevant. 1236-F-H; 237-AI A
2.5. The courts are obliged to go into the question of prejudice of the
accused when the main investigation is concluded without a valid sanction. It
is true that only on the basis of the illegal investigation a proceeding may not
be quashed unless miscarriage of justice is shown. In the instant case, the
respondent had suffered miscarriage of justice as the investigation made by B
the investigating officer was not fair. 1237-C-DI

Andhra Pradesh v. P. V Narayana, 11971] 1 SCC 483: AIR (1971) SC
811, relied on.

2.6. When a sanction is granted by a person not authorized in law, the C
same being without jurisdiction, would be a nullity. Trial judge failed to take
into consideration that the Senior Divisional Operations Manager was not
competent to accord sanction for prosecution of the respondent. He accepted
in his evidence that under the Rules he was not the competent authority to
remove him from service. However, he stated that he had been delegated with D
power of removing the Chief Commercial Inspector. The purported delegation
of power had never seen the light of the day. No reliance thereupon could have
been placed to arrive at a finding that the said witness was authorized to accord
sanction. The Special Judge did not apply his mind to these aspects of the
matter at all. 1239-A-B; 237-D-E; 237-G-H; 238-A]
E
Sailendra Nath Bose v. State of Bihar, AIR (1968) SC 1292 and State of
Karnataka through CBI v. C Nagarajaswamy, [2005] 8 SCC 370, relied on.

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. I 335 of
2004.
F
From the Judgment and Order dated 31.10.2003 of the High Court of
Judicature, Andhra Pradesh at Hyderabad in Criminal Appeal No. 1447 of
1999.

A. Sharan, A.S.G., Amit Tiwari and W.A. Qadri for the Appellant.
G
A.T.M. Ranga Ramanujam, Gouri Kamna Das, Anu Gupta and Rajesh
Singh K. Uma Shanker (for Ms. Rani Jethmalani (N.P.)] for the Respondent.

The Judgment of the Court was delivered by

S.B. SINHA, J.
H
232 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A The State is in appeal before us impugning the judgment and order
dated 3 Ist October, 2003 passed in favour of the respondent herein by the
High Court of Judicature of Andhra Pradesh at Hyderabad whereby and
whereunder a judgment of conviction and sentence passed as against the
respondent under Section 13(2) of the Prevention of Corruption Act; 1988
B ('the Act', for short) and sentencing him to undergo Rigorous Imprisonment
for 3 years and to pay a fine of Rs.4 lakhs and in default to suffer Simple
Imprisonment for one year. was set aside.

The respondent was an Assistant Station Master. He was working in
the South Eastern Railway, Vizianagaram, Andhra Pradesh from 16.12.1961 to
C February, 1984. He was promoted to the post of Commercial Inspector and
was working in that capacity from February, 1984 to July, 1986 and as Senior
Commercial Inspector from July, 1986 to December, 1993. He was later promoted
as Chief Commercial Inspector and was working in the said capacity from
December, 1993. His wife, Smt. K.S. Satyeswari, who examined herself as
D. W.1, was an income tax assessee. All the three sons of the respondent had
D been working. A raid was conducted in his house and also in the houses of
his sons. Some incriminating documents were allegedly recovered.

During investigation, not only the statement of the respondent, but also
that of his wife and three sons were recorded by the Investigating Officer. The
investigation was admittedly carried on by P.W.41 - Shri K. Biswal and P.W.42
E Shri N. Vishnu. Sanction of prosecution was accorded by P.W. 37 - Shri
Debaraj Panda, the then Senior Divisional Commercial Manager, South-Eastern
Railway.

The check period under consideration was 1.1.1986 to 9.8.1994. The
F prosecution proceeded on the basis that whereas the total income of the
respondent and his family members was Rs.6, 73,203.69p. including loans and
advances during the aforesaid check period, the respondent and his family
members had expended Rs.3,31,068.75p.; and acquired assets both movable
and immovable worth Rs. l l ,66,873.84p. during the said period. It was also
alleged that respondent was in possession of assets and pecuniary resources
G in his own name as also in the name of his wife to the tune ofRs.6,54,738.90p.,
which was disproportionate to his known sources of income as on 9.8.1994.

Before the learned Special Judge the respondent examined defence
witnesses, including his wife (D. W. l), his three sons, namely, Shri Karri
Satyanarayana Sanna (D.W.2), Shri K. Srinivas (D.W.3), Shri K. Rama Sanna
H (D.W.4) and one Engineer, D.W.5 - Shri A. Sridhar, who submitted his report
STATE INSPECTOR OF POLICE, VISAKHAPATNAM 1·. SURYA SAN KARAM KARRI [SINHA, J.] 23 3

in regard to valuation of respondent's house. A
· The learned Special Judge in his judgment, inter alia, opined that the
sons of the respondent, other than his eldest son, did not make any
contribution from their salaries. Reliance was placed on the valuation report
submitted by the Engineer of the Income Tax Department, P.W.36 in ~reference
to the Valuer appointed by accused, i.e., D.W.5. The High Court, however, by B
reason of the impugned judgment, inter a/ia, held that keeping in view the
societal norms prevailing in India, vis-a-vis, the developed countries, the sons
of appellant presumably make substantial contribution from their income to
their parents.

The High Court also relied upon a large number of decisions of this C
Court in coming to the conclusion that if a reasonable margin of l 0% is
accorded, the respondent cannot be said to have failed to have proved in
showing means for acquiring assets held and poss~ssed by him as also by
his wife.
D
Mr. A. Sharan, learned Additional Solicitor General appearing on behalf
of the appellant in support of this appeal would submit that -

(i) The wife of the respondent-D. W. l, having categorically stated that
only the eldest son, namely, D.W.2 had been making contributions to the
family, the learned Special Judge must be held to have arrived at a correct E
finding of fact that other sons of the respondent having been residing
separately had not been making any such contribution.

(ii) The rental income of Rs.88,318/- disclosed in the income tax return
filed by D. W. l, was reckoned twice by the High Court and if the said sum
is taken into consideration towards the income of the respondent, the High F
Court must be held to have committed an error in holding that the assets held
by the respondent were marginally higher than the known sources of income.

(iii) The learned Special Judge having assigned sufficient and cogent
reasons to accept the report of the Engineer appointed by the prosecution,
the same should not have been reversed by the High Court. G
(iv) The High Court also committed an error in calculating the household
expenditure of the respondent.

Mr. A.T.M. Ranga Ramanujam, learned Senior Counsel appearing on
H
234 SUPREME COURT REPORTS (2006} SUPP. 5 S.C.R.

A behalf of the respondent, however, submitted :
(i) The learned Special Judge committed a manifest error in so far as he
failed to take into consideration that the investigation carried out by the
P. Ws. 41 and 42 was wholly illegal having not been carried out under the
authorization of the Superintendent of Police; and
B
(ii) No document having been brought on the records to show that
P.W.37-Shri Debaraj Panda was delegated with the power to accord sanction
of prosecution as against the respondent, the same was vitiated in law.

Although, we have strong reservation in regard to the manner in which
C the High Court dealt with the entire appeal, but we are satisfied that the
investigation carried out by the Investigating Officers was wholly unfair. We,
for the reasons stated hereinafter, are also of the opinion that the P. W.37
could not be said to have been delegated with the power of according
sanction of prosecuting the respondent.
D The Prevention of Corruption Act was enacted to consolidate and
amend the law relating to prevention of c:orruption and for matters connected
therewith. The Act is a Special statute. It contains special procedure not only
in regard to the manner in which the complaint is to be filed, but also the mode
and manner in which the investigation into an offence thereunder is required
E to be carried out. It provides for trial by Special Judges appointed for the said
purposes.

Section 26 of the Act lays down that the powers of the Special Judges.
He has a power to try summarily under Section 6. Section 13 provides for
criminal misconduct oy a public servant. The fact that respondent is a public
F servant is not in dispute. Section 13(e) specifies criminal misconduct of a
public servant where, an accused himself or any person on his behalf, is in
possession or has, at any time during the period of his office, been in
possession for which the public servant cannot satisfactorily account, of
pecuniary resources or property disproportionate to his known sources of
G income.

Provisions of the 1988 Act, no doubt, like the 1947 Act seek to protect
public servant from a vexatious prosecution. Section 17 provides for
investigation by a person authorized in this behalf. The said provision contains
a non-obstante clause. It makes investigation only by police officer of the
H ranks specified therein to be imperative in character.· The second proviso
STATE INSPECTOR OF POLICE, VISAKHAPATNAM 1'. SURYA SANKARAM KARRI [SINHA, J.] 23 5

appended to Section 17 of the Act provides that an offence referred to in A
clause (e) of sub-Section (1) of Section 13, shall not be investigated without
the order of a police officer not below the rank of a Superintendent of Police.
Authorization by a Superintendent of Police in favour of an officer so as to
enable him to carry out investigation in tenns of section 17 of the Act is a
statutory one. The power to grant such sanction has been conferred upon
the authorities not below the rank of Superintendent of Police. The proviso B
uses a negative expression. It also uses the expression "shall". Ex-facie it is
mandatory in character. When the authority of a person to carry out
investigation is questioned on the ground that he did not fulfil the statutory
requirements laid down therefor in terms of the second proviso, the burden,
undoubtedly, was on the prosecution to prove the same. It has not been C
disputed before us that the Investigating Officer, P. W.41, did not produce any
record to show that he had been so authorized. Shri K. Biswal, the Investigating
Officer, while examining himself as P.W.41, admitted that he had not filed any
authorization letter stating :

"I have received the specific authorisation from S.P., C.B.I., to D
register a case but I have not filed the said authorisation letter."

No explanation has been offered therefor. Even no attempt was made to
bring the said document on record at a later stage.

Although a specific contention was raised in that behalf on behalf of E
respondent, the learned Special Judge negatived the same holding :

"It is contended that P. Ws. 41 and 42 failed to produce orders of
the Superintendent of Police, C.B.I., Visakhapatnam which are
mandatory under the second proviso to section 17 of the Prevention
of Corruption Act, for any Inspector of Police to take up investigation · F
into an offence under Section 13( I)( e) of the Act. No doubt, the
prosecution did not file the orders of the Superintendent of Police,
C.B.I., Visakhapatnam in this regard. But, P.W.41 deposed that he
registered this case and issued Ex.P-54 F.l.R. on the instructions of
Superintendent of Police, C.B.I., Visakhapatnam. In the cross- G
examination, he deposed that he received specific authorization from
the Superintendent of Police, C.B.I, Visakhapatnam to register the
case. Ex.P-54 F.l.R. which was forwarded to this Court by the
Superintendent of Police, C.B.I./S.P.E., Visakhapatnam, shows that
P.W.41 deposed that as per the orders of the Superintendent of Police,
C.8.1., Visakhapatnam, he took up investigation in this case. Though. H
236 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A it is contended by the defence counsel that the orders of the
Superintendent of Police authorizing P.Ws. 41 and 42 to investigate
into this case were not filed into court, there is absolutely no cross-
examination of P. Ws. 41 and 42 to investigate into this case inspite
of there did not in fact give any such orders authorizing P.Ws. 41 and
42 to investigate into this case inspite of there being lengthy cross-
B examination of those witnesses."

The approach of the learned Special Judge, to say the least, was not
correct. When a statutory functionary passes an order, that too authorizing
a person to carry out a public function like investigation into an offence, an
C order in writing was required to be passed. A statutory functionary must act
in a manner laid down in the statute. Issuance of an oral direction is not
contemplated under the Act. Such a concept is unknown in Administrative
Law. The statutory functionaries are enjoined with a duty to pass written
orders.

D Submission of the learned Additional Solicitor General was that the
respondent did not further cross-examim: the said witnesses to the effect that
no such order in writing was passed, and thus, he cannot be said to have
been prejudiced in any manner whatsoever. We do not agree.

It is now well settled that when a document being in possession of a
E public functionary, who is under a statutory obligation to produce the same
before the court of law, fails and/or neglects to produce the same, an adverse
inference may be drawn against him. The learned Special Judge in the
aforementioned situation was enjoined with a duty to draw an adverse inference.
He did not consider the question from the point of view of statutory
requirements, but took into consideration factors, which were not germane.
F
Illegality apart, the manner in which the investigation was conducted,
is condemnable. The least that a court of law would expect from the prosecution
is that the investigation would be a fair one. It would not only be carried out
from the stand of the prosecution, but also the defence, particularly, in view
G of the fact that the onus of proof may shift to the accused at a later stage.
The evidence of P.W.41, raises doubts about his bonafide. Why he did not
examine important witnesses and as to why he had not taken into consideration
the relevant documentary evidence has not been explained. He did not even
care to ascertain the correctness or otherwise of the status of both of the
respondent and his wife before the Income Tax Department. Above all, he did
H not produce before the Court the statements made by the respondent, his wife
STATE INSPECTOR OF POLICE, VISAKHAPATNAM 1·. SURYA SANKARAM KARRI !SINHA, I.] 23 7
and those of his sons, although they were relevant. Had the statements of A
D.W.3 and D.W.4 been produced before, the learned Special Judge might not
have opined that the sons of the respondent, other than D.W.2, did not make
any contribution to their parents at all. If such statements were made by the
said witnesses before the Investigating Officer, omission on the part of D.W. l,
the wife of the respondent, to state the same before the Special Judge might B
have taken a back seat and the statements of other sons of the respondent,
namely, D.W.3 and D.W.4 might not have been ignored by the learned Special
Judge.

The courts are obliged to go into the question of prejudice of the
accused when the main investigation is concluded without a valid sanction. C
(See State ofAndhra Pradesh v. P. V Narayana, [ 1971] I SCC 4&3 : AIR 1971
SC 81 I).

It is true that only on the basis of the illegal investigation a proceeding
may not be quashed unless miscarriage of justice is shown, but, in this case,
as we have noticed hereinbefore, the respondent had suffered miscarriage of D
justice as the investigation made by P.W.41 was not fair.

The learned Trial Judge furthermore also committed a serious error in
so far as he failed to take into consideration that Shri Debaraj Panda, who
examined himself as P.W.37, being a Senior Divisional Operations Manager,
was not competent to accord sanction for prosecution of the respondent E
herein. He, in his evidence, accepted that under the Rules he was not the
competent authority to remove him from service. However, he stated that he
had been delegated with power of removing the Chief Commercial Inspector
of the Headquarter of South-Eastern Railway. He also stated :

"It is not true to suggest that only General Manager and Divisional F
Railway Manager are the competent persons to remove the accused
from service and also to accord sanction to prosecute him. It is not
true to suggest that I am not competent to remove the accused from
service and also accorded sanction to prosecute him. The delegation
of powers in respect of certain officers by the Head quarters, South G
Eastern Railway are available in a Booklet called as "Delegatic,n of
Powers" on Establishment matter."

The purported delegation of power had never seen the light of the day.
No reliance thereupon could have been placed to arrive at a finding that the
said witness was authorized to accord sanction. The learned Special Judge H
238 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A did not apply his mind to these aspects of the matter at all.
This question came for consideration before this Court in Sailendra
Nalh Bose v. Slate of Bihar, AIR (1968) SC 1292, wherein it was categorically
held:

B "P. W. I deposed that the appellant was a Class llI officer and that
he could have been appointed or dismissed by the Deputy Agent
Personnel who is subordinate to him. Therefore he (P.W. 1) was
competent to grant previous sanction under Section 6( 1) of the
Prevention of Corruption Act. P.W. l's assertion that the appellant
could have been removed from his office either by the Deputy Agent
c Personnel or by himself was challenged in his cross-examination. The
trial court as well as the High Court have relied on the oral evidence
of P.W. 1 in coming to the conclusion that the sanction granted is
valid. In our opinion those courts erred in relying on oral evidence in
deciding the validity of the sanction granted. Hence, we asked the
D learned counsel for the respondent to satisfy us with reference to the
rules on the subject that P. W. 1 was competent to remove the appellant
from his office. For this purpose we granted him several adjournments.
Though our attentior has now been invited to some rules, those rules
do not establish that P. W. I was competent to grant the sanction in
question.
E
As per Rule 134 of the Indian Railway Establishment Code,
published in 1959, authorities competent to make first appointment to
non-gazetted posts in the Indian Railways are the General Manager,
"
the Chief Administrative Officer or lower authority to whom he may
delegate power. There is no evidence to show that this power has
F been delegated to the heads of the department. No provision in the
Indian Railway Establishment Code, 1959 prescribing the authorities
competent to remove from office a class III officer was brought to our
notice. But the prefatory note to Vol. I of the Code says, "The revised
Chapter XVII and revised Appendices I and XII will be printed later
G for inclusion in this edition. Till such times these are printed, the rules
and provisions contained in Chapter XVII and Appendices IV and
XVIII in the 1951 Edition (Re-print) as amended from time to time shall
continue to apply."

In State of Karnataka through CBI v. C. Nagarajaswamy, [2005] 8 SCC
H 370, it was held :
STATE INSPECTOR OF POLICE, VISAKHAPATNAM r. SURYA SANKARAM KARRI [SINHA, J.] 239
"Grant of proper sanction by a competent authority is a sine qua A
non for taking cognizance of the offence. It is desirable that the
question as regard sanction may be determined at an early stage."

When a sanction is granted by a person not authorized in law, the same
being without jurisdiction, would be a nullity.
B
For the reasons aforementioned, we are of the opinion that the impugned
judgment need not be interfered with. The appeal is, accordingly, dismissed.

N.J. Appeal dismissed.