Page 1 REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1838 OF 2013

C.B.I. ...Appellant

Versus

Ashok Kumar Aggarwal ...Respondent

J U D G M E N T

Dr. B.S. Chauhan, J.

1.This appeal has been preferred against the impugned judgment

and order dated 3.10.2007 passed by the High Court of Delhi at New

Delhi allowing Crl. R.P. No. 589 of 2007, setting aside the order dated

28.7.2007 passed by the court of Special Judge, Central Bureau of

Investigation (hereinafter referred to as the ‘CBI’), by which and

whereunder the Special Judge rejected the application of the

respondent questioning the sanction granted by the competent

authority under Section 19 of the Prevention of Corruption Act, 1988

(hereinafter referred to as the ‘Act 1988’), observing that the issue

could be examined during trial.

Page 2 2.Facts and circumstances giving rise to this appeal are that:

A.The appellant, CBI registered a preliminary enquiry against the

respondent for disproportionate assets to the tune of Rs.8,38,456/- on

17.9.1999. After conclusion of the preliminary enquiry, a regular case

was registered on 7.12.1999 as FIR No. S19/E0006/99 in respect of

the same to the tune of Rs.40,42,23,478/-.

B.During the course of investigation, it came to light that

disproportionate assets were only to the tune of Rs.12,04,46,936/-,

which was 7615.45 times of his known sources of income. It further

surfaced that the respondent was involved in money laundering; and

for channelising his ill-gotten wealth, had established a number of

companies wherein his family members were the founding directors.

C.The CBI sent a letter to the Ministry of Finance dated 24.5.2002

for accord of sanction for prosecution of the respondent. The same

was accompanied by the Superintendent of Police’s (hereinafter

referred to as the ‘SP’) report of 163 pages containing a detailed gist

of the relevant statements and documents including the information on

income tax returns etc.

D.The Central Vigilance Commission after examining the said

case advised the Ministry of Finance to grant sanction for prosecution.

2

Page 3 The Investigating Officer visited the Directorate of Income Tax

(Vigilance) in September 2002 and placed necessary documents for

the perusal of the Additional Director, Income Tax (Vigilance) who

was seized of the matter pertaining to the sanction for prosecution of

the respondent. The Finance Minister accorded sanction vide order

dated 2.11.2002 and as a consequence thereof, the sanction order was

issued vide order dated 26.11.2002 under the seal and signature of the

Under Secretary (V&L), Ministry of Finance.

E.A charge sheet was filed by the CBI before the Court of Special

Judge on 5.12.2002 and on the basis of the same, the court took

cognizance and issued summon to the respondent on 10.1.2003.

F.The respondent challenged the validity of the sanction by filing

an application dated 1.5.2003 and a similar application was again filed

on 12.9.2005. The learned Special Judge heard the said applications

and dismissed the same vide order dated 28.7.2007, holding that it

was not the appropriate stage to decide as to whether sanction granted

by the competent authority was invalid.

G.The respondent filed a Revision Application under Sections

397, 401 r/w 482 of Code of Criminal Procedure, 1973 (hereinafter

referred to as the ‘Cr.P.C.’) for setting aside the said order of the

3

Page 4 Special Judge dated 28.7.2007. The said petition was contested by the

appellant. However, the High Court vide impugned judgment and

order set aside the order of the Special Judge and remanded the case

to record a finding on the question of any failure of justice in

according sanction and to examine the sanctioning authority, as a

witness even at pre-charge stage, if it deems fit.

Hence, this appeal.

3.Shri K.V. Vishwanathan, learned Additional Solicitor General

appearing for the appellant has submitted that the application

challenging the validity of the sanction at a stage anterior even to

framing of the charges is unheard of and is in contravention of the

settled legal propositions. In view of the fact that the sanction had

been granted by the competent authority, the only issue remains as to

whether the relevant material had been disclosed/placed before the

sanctioning authority and the said authority had considered the same.

The sanctioning authority can delegates its power to other officer or at

least can act on the advice or notes prepared by his subordinates.

However, such an issue can be agitated only during the trial.

Therefore, the High Court committed an error in setting aside the

order of the learned Special Judge and remanding the matter and also

4

Page 5 to examine, if necessary, the sanctioning authority i.e. the then

Hon’ble Finance Minister at a pre-charge stage. Thus, the appeal

deserves to be allowed.

4.Per contra, Shri Ram Jethmalani, learned senior counsel

appearing for the respondent has opposed the appeal contending that

the court is not permitted to take cognizance in the absence of valid

sanction granted by the competent authority in accordance with law.

In the instant case, the relevant material including the statement of the

witnesses recorded by the investigating officer under Section 161

Cr.P.C. and a large amount of documentary evidence collected during

the investigation were not placed before the Hon’ble Minister when

the sanction was granted. The sanctioning authority did not examine

the relevant documents which had been of an impeccable character

before granting the sanction. Statement of 13 witnesses had been

recorded between 10.5.2002 and 16.10.2002 out of which the

statement of 10 witnesses had been recorded only after sending the

SP’s report to the sanctioning authority for obtaining the sanction for

prosecution. Even if any officer of the CBI was present with the

record in the office of the Finance Minister, there is nothing on record

to show that the sanctioning authority was informed about this fact

5

Page 6 or that the sanctioning authority had examined any record so sent to

his office. In the earlier litigation, the High Court vide order dated

9.4.2002 had directed the Revenue Secretary to examine and consider

the record of the investigation fairly and objectively, by taking into

consideration all relevant facts and circumstances and then proceed

with the case. By the said order, the Director, CBI was also asked to

examine the investigation record of the case and to consider all

relevant aspects and factors in the light of the representation of the

respondent and to pass appropriate orders within a stipulated period of

two months. In such a fact-situation, the issue of sanction has to be

considered at a pre-charge stage and such a void sanction cannot be a

foundation for a valid trial. In pursuance of the impugned order, the

Special Judge has summoned the then sanctioning authority and the

latter filed an affidavit before the Special Judge that relevant material

was not placed before him at the relevant time. The appellant

suppressed all these facts and obtained the interim order from this

court. The conduct of the appellant disentitles it for any relief from

this court. Further placing reliance on the judgments of this court in

Costao Fernandes v. State, AIR 1996 SC 1383; and Center for PIL

& Anr. v. UOI & Ors., AIR 2001 SC 80, it is submitted that CBI is

6

Page 7 not a trustworthy investigating agency. Thus, no interference is

required with the impugned judgment and order. The appeal is liable

to be dismissed.

5.We have considered the rival submissions made by learned

counsel for the parties and perused the record.

6.In State of M.P. v. Dr. Krishna Chandra Saksena (1996) 11

SCC 439, while dealing with the issue this Court held :

“…the sanctioning authority was satisfied after

complete and conscious scrutiny of the records

produced in respect of the allegation against the

accused. Now the question whether all the relevant

evidence which would have tilted the balance in favour

of the accused if it was considered by the sanctioning

authority before granting sanction and which was

actually left out of consideration could be examined

only at the stage of trial when the sanctioning authority

comes forward as a prosecution witness to support the

sanction order if challenged during the trial. As that

stage was not reached the prosecution could not have

been quashed at the very inception on the supposition

that all relevant documents were not considered by the

sanctioning authority while granting the impugned

sanction.”

(Emphasis added)

7.The prosecution has to satisfy the court that at the time of

sending the matter for grant of sanction by the competent authority,

adequate material for such grant was made available to the said

7

Page 8 authority. This may also be evident from the sanction order, in case it

is extremely comprehensive, as all the facts and circumstances of the

case may be spelt out in the sanction order. However, in every

individual case, the court has to find out whether there has been an

application of mind on the part of the sanctioning authority concerned

on the material placed before it. It is so necessary for the reason that

there is an obligation on the sanctioning authority to discharge its duty

to give or withhold sanction only after having full knowledge of the

material facts of the case. Grant of sanction is not a mere formality.

Therefore, the provisions in regard to the sanction must be observed

with complete strictness keeping in mind the public interest and the

protection available to the accused against whom the sanction is

sought.

It is to be kept in mind that sanction lifts the bar for

prosecution. Therefore, it is not an acrimonious exercise but a solemn

and sacrosanct act which affords protection to the government servant

against frivolous prosecution. Further, it is a weapon to discourage

vexatious prosecution and is a safeguard for the innocent, though not a

shield for the guilty.

8

Page 9 Consideration of the material implies application of mind.

Therefore, the order of sanction must ex facie disclose that the

sanctioning authority had considered the evidence and other material

placed before it. In every individual case, the prosecution has to

establish and satisfy the court by leading evidence that those facts

were placed before the sanctioning authority and the authority had

applied its mind on the same. If the sanction order on its face indicates

that all relevant material i.e. FIR, disclosure statements, recovery

memos, draft charge sheet and other materials on record were placed

before the sanctioning authority and if it is further discernible from

the recital of the sanction order that the sanctioning authority perused

all the material, an inference may be drawn that the sanction had been

granted in accordance with law. This becomes necessary in case the

court is to examine the validity of the order of sanction inter-alia on

the ground that the order suffers from the vice of total non-

application of mind.

(Vide: Gokulchand Dwarkadas Morarka v. King, AlR 1949 PC 82;

Jaswant Singh v. State of Punjab, AIR 1958 SC 124; Mohd. Iqbal

Ahmed v. State of A.P., AIR 1979 SC 677; State through Anti-

Corruption Bureau, Govt. of Maharashtra v. Krishanchand

9

Page 10 Khushalchand Jagtiani, AIR 1996 SC 1910; State of Punjab v.

Mohd. Iqbal Bhatti, (2009) 17 SCC 92; Satyavir Singh Rathi,

ACP v. State, AIR 2011 SC 1748; and State of Maharashtra v.

Mahesh G. Jain, (2013) 8 SCC 119).

8.In view of the above, the legal propositions can be summarised

as under:

(a)The prosecution must send the entire relevant record to the

sanctioning authority including the FIR, disclosure statements,

statements of witnesses, recovery memos, draft charge sheet and all

other relevant material. The record so sent should also contain the

material/document, if any, which may tilt the balance in favour of the

accused and on the basis of which, the competent authority may refuse

sanction.

(b)The authority itself has to do complete and conscious scrutiny

of the whole record so produced by the prosecution independently

applying its mind and taking into consideration all the relevant facts

before grant of sanction while discharging its duty to give or withhold

the sanction.

10

Page 11 (c)The power to grant sanction is to be exercised strictly keeping

in mind the public interest and the protection available to the accused

against whom the sanction is sought.

(d)The order of sanction should make it evident that the authority

had been aware of all relevant facts/materials and had applied its mind

to all the relevant material.

(e)In every individual case, the prosecution has to establish and

satisfy the court by leading evidence that the entire relevant facts had

been placed before the sanctioning authority and the authority had

applied its mind on the same and that the sanction had been granted in

accordance with law.

9.In view of the above, we do not find force in the submissions

advanced by Shri Vishwanathan, learned ASG that the competent

authority can delegate its power to some other officer or authority, or

the Hon’ble Minister could grant sanction even on the basis of the

report of the SP. The ratio of the judgment relied upon for this

purpose, in A. Sanjeevi Naidu etc. v. State of Madras & Anr., AIR

1970 SC 1102, is not applicable as in the case of grant of sanction, the

statutory authority has to apply its mind and take a decision whether

to grant sanction or not.

11

Page 12 10.This Court in Ashok Tshering Bhutia v. State of Sikkim, AIR

2011 SC 1363, while dealing with the issue whether invalid sanction

goes to the root of jurisdiction of the Court which would vitiate the

trial and conviction, held that in the absence of anything to show that

any defect or irregularity therein caused a failure of justice, the

contention was without any substance. The failure of justice would be

relatable to error, omission or irregularity in the grant of sanction.

However, a mere error, omission or irregularity in sanction is not

considered to be fatal unless it has resulted in the failure of justice or

has been occasioned thereby.

11.The court must examine whether the issue raised regarding

failure of justice is actually a failure of justice in the true sense or

whether it is only a camouflage argument. The expression ‘failure of

justice’ is an extremely pliable or facile an expression which can be

made to fit into any case.

The court must endeavour to find out the truth. There would be

‘failure of justice’ not only by unjust conviction but also by acquittal

of the guilty as a result of unjust or negligent failure to produce

requisite evidence. Of course, the rights of the accused have to be kept

in mind and safeguarded but they should not be over emphasised to

12

Page 13 the extent of forgetting that the victims also have certain rights. It has

to be shown that the accused has suffered some disability or detriment

in the protections available to him under Indian Criminal

Jurisprudence. ‘Prejudice’ is incapable of being interpreted in its

generic sense and applied to criminal jurisprudence. The plea of

prejudice has to be in relation to investigation or trial and not matters

falling beyond their scope. Once the accused is able to show that there

has been serious prejudice caused to him with respect to either of

these aspects, and that the same has defeated the rights available to

him under legal jurisprudence, the accused can seek relief from the

Court. (Vide: Nageshwar Sh. Krishna Ghobe v. State of

Maharashtra, AIR 1973 SC 165; Shamnsaheb M. Multtani v. State

of Karnataka, AIR 2001 SC 921; State by Police Inspector v. T.

Venkatesh Murthy, AIR 2004 SC 5117; Rafiq Ahmed @ Rafi v.

State of U.P., AIR 2011 SC 3114; Rattiram & Ors. v. State of M.P.

through Inspector of Police, AIR 2012 SC 1485; Bhimanna v. State

of Karnataka, AIR 2012 SC 3026; Darbara Singh v. State of

Punjab, AIR 2013 SC 840; and Union of India & Ors. v. Ex-GNR

Ajeet Singh, (2013) 4 SCC 186).

13

Page 14 12.Be that as it may, in State of T.N. v. M.M. Rajendran, (1998)

9 SCC 268, this Court dealt with a case under the provisions of Act

1988, wherein the prosecuting agency had submitted a very detailed

report before the Asanctioning Authority and on consideration of the

same, the competent authority had accorded the sanction. This Court

found that though the report was a detailed one, however, such report

could not be held to be the complete records required to be

considered for sanction on application of mind to the relevant

material on record and thereby quashed the sanction.

13.In view thereof, the CBI - appellant herein, immediately issued

circular dated 6.5.1999 to give effect to the observations made in the

said judgment in M. M. Rajendran (Supra) and directed that all the

investigating officers to give strict adherence to the said observations

made by this Court. The CBI manual was amended accordingly,

adding paragraph 22.16, wherein it was directed that in view of the

said judgment in M. M. Rajendran (Supra), it was imperative that

alongwith SP’s report, the branches must send the copies of all the

relied upon relevant material “including the statements of witnesses

recorded by the investigating officers under Section 161 Cr.P.C. as

well as statements under Section 164 Cr.P.C. recorded by the

14

Page 15 Magistrate to the authority competent to grant sanction for

prosecution”. Further, the investigating officer concerned shall be

deputed to the competent authority to produce the relevant material

for perusal of the competent authority and this fact be recorded in the

case diary of the case concerned. Paragraph 22.16 of the CBI manual

reads as under:

“On completion of investigation in a case covered in

item 22.15.1 and 22.15.2, even the CBI shall send its

report to the administrative authority alongwith relevant

statements of witnesses recorded during investigation

and the documents. The judgment of the Supreme Court

in State of T.N. v. M.M. Rajendran reported in (1998) 9

SCC 268 and the Circular No. 21/33/98-PD dated

6.5.1999 issued by the Policy Division which also

referred to in this regard.”

14.A Three-Judge Bench of this Court in Vineet Narain & Ors. v.

Union of India & Anr., AIR 1998 SC 889 to prevent the erosion of

the rule of law, issued large number of directions to various

authorities. Relevant part of directions issued to CBI, reads:

“59(12). The CBI Manual based on statutory provisions

of the CrPC provides essential guidelines for the CBI’s

functioning. It is imperative that the CBI adheres

scrupulously to the provisions in the Manual in relation

to its investigative functions, like raids, seizure and

arrests. Any deviation from the established procedure

should be viewed seriously and severe disciplinary

action taken against the officials concerned.”

15

Page 16 15.Thus from the above, it is evident that the CBI manual, being

based on statutory provisions of the Cr.P.C., provides for guidelines

which require strict compliance. More so, in view of the fact that the

ratio of judgment of this Court in M.M. Rajendran (Supra) has been

incorporated in the CBI manual, the CBI manual itself is the best

authority to determine the issue at hand. The court has to read the

relevant provisions of the CBI manual alone and no judgment of this

Court can be a better guiding factor under such a scenario.

16.The sanction order runs into 27 pages. The relevant part thereof

reads as under:

"And whereas the Central Government, after fully and

carefully considering the material placed before him and

taking into account the available evidence, including the

case diaries and documents collected, by the

investigating officer during the course of investigation

and statements of witnesses including the statements of

witnesses recorded by the investigation officer U/s 161

Cr.P.C. and statements recorded before Magistrates

under u/s 164 Cr.P.C. with regard to the said

allegations and circumstances of the case, is satisfied

that Shri Ashok Kumar Aggarwal should be prosecuted

in the competent Court of Law for the abovementioned

offences and any other offences if made out on these

facts," (Emphasis added)

17.Before proceeding further, it may be pertinent to note that the

sanction order speaks of consideration of the entire material including

16

Page 17 the case diaries and documents collected during the course of

investigation and statements recorded under Section 161 Cr.P.C. and

statements recorded by the Magistrate under Section 164 Cr.P.C. The

learned Special Judge dealt with the issue in its order and brushed

aside the same observing that the same may be factually incorrect,

and there was a letter on record showing the true picture that the

relevant documents had not been sent to the sanctioning authority.

However, it is open to the prosecution during the course of trial to

examine the sanctioning authority where such a discrepancy can be

explained. The learned Special Judge has wrongly labeled such a fact

which goes to the root of jurisdiction and clearly shows that the extent

to which there could be application of mind was a mere discrepancy.

The relevant part of the order of the Special Judge reads:

“The contents of Para 27 of the sanction order dated

26

th

November, 2002 stating that the case diaries,

documents collected by the investigating officer during

the course of investigation, statements of witnesses under

Section 161 CrPC and under Section 164 CrPC were

considered by the sanctioning authority may be factually

incorrect in view of the letter dated 24

th

May, 2002,

written by the DIG of the CBI, which shows that this

document had not been sent. However, this statement by

itself at this stage cannot be construed s non-application

of mind by the sanctioning authority. If the charges are

framed against the accused and the case goes for trial

the sanctioning authority shall get an opportunity to

explain the discrepancy.” (Emphasis added)

17

Page 18 18.The High Court in the impugned judgment and order has taken

a prima facie view that:

a) The CBI had not sent the complete record to the

sanctioning authority.

b) The order dated 11.7.2007 passed by the

Special Judge made it evident that the learned counsel

appearing on behalf of the CBI had conceded before

the court that only SP’s report alongwith list of

evidence (oral) and list of evidence (documentary)

were sent to the sanctioning authority for the purpose

of according sanction.

c) The statement of witnesses and other relevant

documents were not sent to the sanctioning authority

as per the own case of CBI.

d) The observation in the sanction order dated

26.11.2002 that “the case diaries and documents

collected by the investigating officers during the

course of investigation, statements of witnesses under

Section 161 Cr.P.C. and under Section 164 Cr.P.C.

18

Page 19 were considered by the sanctioning authority” is

factually incorrect.

e) The aforesaid facts make it clear that the

sanctioning authority had not considered the entire

material available with the investigating agency.

19.The High Court further held:

“30. In the present case, petitioner has raised objections

to the validity of sanction at the very initial stage, i.e.

even before arguments on charge could be advanced.

However, the trial court has not recorded any finding in

terms of clause (b) of sub-section (3) and sub-section (4)

of Section 19 of the Act, that non-production of the

relevant material before the sanctioning authority at the

time of grant of sanction "has not resulted in a failure of

justice".

31. Under these circumstances, it would be appropriate

to require the trial court to record the findings in terms

of clause (b) of sub-section (3) and sub-section (4) of

Section 19 of the Act.

32. Hence, the impugned order, passed by the learned

Special Judge is set aside and the matter is remanded

back to the trial court with direction to record a finding

in terms of clause (b) of sub-section (3) and sub-section

(4) of Section 19 of the Act. The trial court, if it deems fit,

for this purpose, can examine the sanctioning authority

as a witness even before charge, keeping in view the

provisions of Section 311 Cr.PC.”

19

Page 20 20.The aforesaid concluding paragraphs of the judgment give rise

to questions as to what is the proper stage to examine the issue of

sanction; as well as relating to the applicability of the provisions of

Section 19(3)(b) and 19(4) of the Act 1988.

Section 19(1) reads as under:

“19. (1)No court shall take cognizance of an offence

punishable under sections 7, 10, 11, 13 and 15 alleged to

have been committed by a public servant, except with the

previous sanction --

(a) xx xx xx

(2) xx xx xx

(3) Notwithstanding anything contained in the Code of

Criminal Procedure, 1973 (2 of 1974)--

(a) no finding, sentence or order passed by a special

Judge shall be reversed or altered by a Court in appeal,

confirmation or revision on the ground of the absence of,

or any error, omission or irregularity in, the sanction

required under sub- section (1), unless in the opinion of

that court, a failure of justice has in fact been occasioned

thereby;

(b) no court shall stay the proceedings under this Act on

the ground of any error, omission or irregularity in the

sanction granted by the authority, unless it is satisfied

that such error, omission or irregularity has resulted in a

failure of justice”

(c) xx xx xx

(4) In determining under sub- section (3) whether the absence

of, or any error, omission or irregularity in, such sanction has

occasioned or resulted in a failure of justice the court shall have

regard to the fact whether the objection could and should have

been raised at any earlier stage in the proceedings.

Explanation.-- For the purposes of this section,--

20

Page 21 (a) error includes competency of the authority to grant sanction;

(b) a sanction required for prosecution includes reference to any

requirement that the prosecution shall be at the instance of a

specified authority or with the sanction of a specified person or

any requirement of a similar nature.”

Sub-section (4) thereof clearly provides that the question of

validity of sanction could be raised at an earlier stage of proceedings.

21.This Court considered the aforesaid statutory provisions in

Satya Narayan Sharma v. State of Rajasthan, AIR 2001 SC 2856

and held as under:

“3. The prohibition is couched in a language admitting

of no exception whatsoever, which is clear from the

provision itself. The prohibition is incorporated in sub-

section (3) of Section 19 of the Act. The sub-section

consists of three clauses. For all the three clauses the

controlling non obstante words are set out in the

commencing portion as:

“19. (3) Notwithstanding anything contained in

the Code of Criminal Procedure, 1973….”

Hence none of the provisions in the Code could be

invoked for circumventing any one of the bans

enumerated in the sub-section.”

22.The letter dated 17.5.2005 written by the Addl. DIT (Vigilance)

to DIG, CBI makes it clear that the documents relied upon were

voluminous and therefore, were not enclosed with the SP’s report. It

21

Page 22 further revealed that an order was passed by the High Court directing

the Revenue Secretary and the Director (CBI) to examine the

grievance of the respondent/accused and to dispose of his

representations in this regard.

23.In Commissioner of Police v. Gordhandas Bhanji, AIR 1952

SC 16, this Court held as under:

“We are clear that public orders, publicly made, in

exercise of a statutory authority cannot be construed in

the light of explanations subsequently given by the

officer making the order of what he meant, or of what

was in his mind, or what he intended to do. Public orders

made by public authorities are meant to have public

effect and are intended to affect the actings and conduct

of those to whom they are addressed and must be

construed objectively with reference to the language

used in the order itself….…..Public authorities cannot

play fast and loose with the powers vested in them, and

persons to whose detriment orders are made are entitled

to know with exactness and precision what they are

expected to do or forbear from doing and exactly what

authority is making the order.” (Emphasis added)

(See also: Mohinder Singh Gill & Anr. v. Chief Election

Commissioner, New Delhi & Ors., AIR 1978 SC 861; and

Chairman, All India Railway Recruitment Board & Anr. v. K.

Shyam Kumar & Ors., (2010) 6 SCC 614).

22

Page 23 24.The provisions of Sections 91 and 92 of the Evidence Act

provide that evidence may be led to invalidate a document itself. The

best evidence as to the contents of a document is the document itself

and it is the production of the document that is required by this section

in proof of its contents. Section 91 describes the “best evidence rule”,

while Section 92 comes into operation for the purpose of excluding

evidence of any oral agreement, statement etc., for the purpose of

contracting or adding or subtracting from its terms. However, these

sections differ in some material particulars.

25.Charge sheet filed by the appellant, CBI against the respondent

does not reveal that it had examined any witness to the effect that the

relevant documents had been produced before the sanctioning

authority or the authority had asked for a document and the same had

been shown to him.

26.In the counter affidavit it has been stated by the respondent that

there is no evidence on record to indicate that all material records had

been separately examined by the Vigilance Wing of the department as

permissible under Chapter VII of the Vigilance Manual. Clause 18 of

23

Page 24 the Manual enables the accused to make a representation to withdraw

the prosecution. The relevant part thereof reads as under:

“18.1. Once a case has been put in a court, it should be

allowed to take its normal course. Proposal for

withdrawal of prosecution may however, be initiated by

the S.P.E. on legal consideration. In such cases the

S.P.E. will forward its recommendations to the

Department of Personnel and Training in cases in which

sanction for prosecution was accorded by that Ministry

and to the administrative Ministry concerned in other

cases. The authority concerned will in all such cases

consult the Ministry of Law and accept their advice.

18.2. Requests for withdrawal of prosecution may also

come up from the accused. Such requests should not

generally be entertained except in very exceptional cases

where, for instance, attention is drawn to certain fresh,

established or accepted facts which might alter the whole

aspect of the case. In such cases also the administrative

Ministry concerned should consult the Ministry of Law

and accept their advice.”

27.The respondent had given a representation on 13.3.2003

making various averments, inter-alia, that there was no evidence to

indicate that the relevant material/record had been separately

examined by the Vigilance Wing of the department, and for the

verification of which the Finance Minister had requisitioned the

records. The appellant, CBI brushed aside the said representation on

the pretext that the issue of validity of sanction was sub-judice.

24

Page 25 28.It has further been averred therein that before the court, the

Special PP of CBI has stated that no relevant material had been placed

before the sanctioning authority except the SP’s report as is evident

from the order dated 11.7.2007. The relevant part of the order reads as

under:

“It is conceded by Shri N.K. Sharma, Ld. Special PP that

only SP’s report alongwith list of evidence oral and list

of evidence documentary were sent to the sanctioning

authority for the purpose of according sanction.”

29.The representation made by the respondent was considered at

various levels. The letter written by Shri Rakesh Singh, Joint

Secretary (Revenue) to the Director General of Income Tax

(Vigilance) with a copy of the same to the Chairman, CBDT stated

that in order to consider the representation of the respondent, it was

necessary that the concerned records including those of the Income

Tax Department for the relevant period be requisitioned from the CBI

and examined by the Vigilance Wing of the Income-Tax Department

and the finding of such examination be sent to him within 10 days,

based on which a final view could be taken on the representation of

the respondent.

25

Page 26 30.The letter dated 17.5.2004 by Shri B.P.S. Bisht, Additional

DIT(V) HQ, CBI revealed that as in the representation, the respondent

had averred that all relevant material had not been placed before the

sanctioning authority, it was necessary for the CBI to provide all

relied upon documents, as referred to in the letter dated 24.5.2002, as

also the relevant income tax records which were in the CBI custody to

enable compliance of the directions received from the Revenue

Secretary. In case it was not possible to provide the original records as

above, authenticated copies thereof be given, treating it to be a matter

of utmost urgency.

31.The DIG, CBI vide its letter dated 5.6.2004 informed Shri

B.P.S. Bisht that it was not possible to send the record. The matter

was pending consideration in the trial court and as such was sub-

judice.

32.The covering letter of the draft sanction dated 24.5.2007 does

not make it clear as to what had been sent to the sanctioning authority.

It reveals that alongwith the draft sanction order, a list of witnesses

and list of documents had been sent. The relevant part thereof reads as

under:

26

Page 27 “The SP’s report sent herewith may please be treated

as a secret document and no reference to it may be made

in the sanction order when issued. In case the

Ministry/Department, due to some reasons wants to

depart from the material placed on record for issuing

sanction, the matter may please be discussed with the

undersigned so that the sanction for prosecution so

accorded not found wanting legally.

Since the relied upon documents are very large in

quantity, they are not being enclosed. The Investigating

Officer of this case Shri V.K. Pandey, will show the

documents and also explain the evidence as and when

required. Further List of witnesses and List of

documents will be provided, if necessary.”

(Emphasis added)

Thus, it is evident that even on the date the draft sanction was

sent, the investigation was not complete.

33.It appears from the facts and figures given in the report,

particularly from the Income Tax returns/assessment orders of the

respondent and his family members, that there has not been a fair

assessment regarding the income of the respondent and other family

members as shown by them in their income-tax returns and it is far

from satisfaction, as is evident from the preliminary enquiry report

dated 17.9.1995. Same remained the position regarding the

assessment of the value of the apartments purchased by the respondent

27

Page 28 at Barakhamba Road, New Delhi, if compared with the property

purchased by the Indian Oil Corporation in the same locality.

34.The judgment delivered by the Delhi High Court in the case of

Vijay Aggarwal, brother of the respondent, in Writ Petition (Crl.) No.

675 of 2001 against the officers of the CBI impleading them by name,

make it evident that very serious allegations had been made against

the said officers of having acted with oblique motive to force him to

ensure that his brother Ashok Kumar Aggarwal withdraws the

complaint filed by him against them under Section 340 Cr.P.C. The

court ultimately held that investigation had not been conducted in a

fair manner. The order passed therein reads:

“33.In the result, the petition is partly allowed. The

Special Cell of Delhi Police is directed to register an

FIR on the basis of the allegations contained in the

present petition and the complaint of the petitioner dated

23.2.2004 addressed to the Commissioner of Police,

Delhi and take up the investigation of the case. The

investigation shall be conducted by an officer not below

the rank of Assistant Commissioner of Police in the said

Cell independently and uninfluenced by the findings and

observations contained in the report of enquiry dated

26.4.2005 conducted by the Joint Director, CBI and shall

endeavour to conclude the investigation expeditiously

within a period of two months from the date of this order

and shall file a status report in the court on 5

th

September, 2006.”

28

Page 29 35.Another Writ Petition (Crl.) No. 738 of 2001 was filed by Shish

Ram Saini, Chartered Accountant against the CBI and its officers

making allegations against them that he had been harassed by the

CBI’s officers as he was employed as an Accountant in the firms and

companies of respondent herein. The court held that the authorities

had proceeded with high-handedness and found substance in the

allegations made by the petitioner therein. The order runs as under:

“31.In view of the above discussion and in the result,

the present petition is partly allowed and the Special Cell

of Delhi Police is directed to register a case on the basis

of allegations contained in the complaint dated 5.7.2001

lodged by the petitioner with police station Lodhi Colony

and those contained in the present petition. The

investigation shall be conducted by an officer not below

the rank of Assistant Commissioner of Police in the said

Cell independently and uninfluenced by the findings and

observations contained in the report of enquiry dated

26.4.2005 conducted by the Joint Director, CBI.”

36.The record reveals that VIP reference was made by the Ministry

of Finance to the Law Ministry in respect of the case against the

respondent as the matter had been agitated by one Hon’ble Member of

the Parliament and the Law Ministry gave its opinion. The salient

features thereof are that the sanction had been accorded without

considering and examining the relevant material as the same had not

29

Page 30 been sent by the CBI and even thereafter despite being requested by

the Vigilance Department of CBDT, the Vigilance, CBI did not send

the relied upon documents to the authorities.

37.Similarly, it is also evident from the records that the Ministry of

Finance, Department of Revenue had written a letter dated 11.3.2011

to the Law Department seeking the said opinion and earlier the

Directorate General of Income Tax (Vigilance) had also sent a letter

to the Law Ministry seeking its opinion. Thus, the concerned

authorities had sought legal opinion of the Law Ministry on the issue.

38.The CVC Manual provides that opinion of the Law Ministry

was to be accepted by the other departments in such cases.

However, the respondent claims that the said legal opinion was

subsequently withdrawn. Whether the legal opinion could be validly

withdrawn or not can be considered by the trial court while

considering the validity of the sanction.

39.It may also be pointed out that after the impugned judgment

was passed, the Special Judge in order to ensure compliance thereof,

dealt with the case on 12.10.2007 and directed:

30

Page 31 “Let the sanctioning authority be produced on 3.11.2007.”

It was on the suggestion made by Special Public Prosecutor for

CBI that the court issued summon to the sanctioning authority. The

order sheet dated 3.11.2007 further reveals that after passing of the

order and signing the same, the matter was again taken up at 2.00

P.M., wherein the affidavit purported to have been given by the then

sanctioning authority was taken on record and it was directed that the

matter be listed on 20.11.2007.

40.The relevant part of the affidavit filed by the then sanctioning

authority dated 3.11.2007 reads as under:

“4. I confirm the statement of facts in Paragraphs 8 and

24 of the order of the Hon’ble High Court. No

statements of witnesses or the documents relied in the

charge-sheet are ordinarily forwarded to the Finance

Minister of the day. What is sent is a draft order,

whereafter sanctioning by the Minister in normally a

routine acceptance of that draft. What was considered

by me was only that which was sent or recommended to

me.

5.If the obligation was to consider more than which

was sent, then that has not been done, therefore,

unwittingly prejudice might have been caused and justice

miscarried. I leave it to the Court to decide the matter.”

41.The aforesaid affidavit, whatever may be its evidentiary value

and without going into technicalities such as the issue of whether it is

31

Page 32 admissible in evidence or not or whether it may be considered at a

later stage, one thing is clear that it is in consonance and confirmation

of the findings recorded by the High Court in paragraphs 8 and 24 of

the impugned judgment. Paragraph 8 of the judgment reads as under:

“8.Further, it is contended that the charge sheet

relies upon 366 witnesses, whereas the list annexed to

the SP’s report mention only 278 witnesses. 88

witnesses were not even mentioned in the list and the

statement of not even a single witness, out of 366

witnesses was sent to the sanctioning authority.

Moreover, the charge sheet refers to 1220 documents,

whereas the list attached to the SP’s report only mention

282 documents. Thus, 938 documents were withheld

from the sanctioning authority including documents

consisting of income tax record of the petitioner. The

Apex Court has held in DSP Chennai v. K.

Inbasagaran, (2006) 1 SCC 420 that:

“Income tax return and assessment orders

are relevant in a case of disproportionate

assets.”

Paragraph 24 mentioning relevant part of sanction order

has already been quoted hereinabove.”

42.Thus, it becomes crystal clear that the statements of 28

witnesses were not even mentioned in the SP’s report. Similarly, there

was no reference to the 938 documents in the said report and there had

been no reference to the income tax returns and assessment orders so

far the respondent and his family members were concerned therein.

32

Page 33 43.The present special leave petition was drawn/drafted on

20.11.2007 and filed thereafter. Interim order was granted by this

Court on 10.12.2007. In the special leave petition it has not been

disclosed that the Special Judge, after remand, entertained the matter

and issued summons to the then sanctioning authority i.e. Hon’ble

Finance Minister, and in response thereto, an affidavit dated

3.11.2007 had been filed by the then sanctioning authority, disclosing

that no material had been considered by him while granting sanction.

However, leaving the issue open as to what prejudice had been caused

to the respondent, it is apparent that all the material facts had not been

disclosed in the special leave petition. Thus, the appellant suppressed

some of the most material facts from this Court.

44.Section 19(3) of the Act, 1988 puts a complete embargo on the

court to grant stay of trial/proceedings.

In Selvi J. Jayalalithaa & Ors. v. State of Karnataka & Ors.,

JT 2013 (13) SC 176, this court while dealing with the scope of power

under Article 142 of the Constitution held that the court cannot pass

an order in contravention of the statutory provisions:

"28.1 The powers under Article 142 of the Constitution

stand on a wider footing than ordinary inherent powers

33

Page 34 of the court to prevent injustice. The constitutional

provision has been couched in a very wide compass that

it prevents "clogging or obstructing of the stream of

justice." However, such powers are used in consonance

with the statutory provisions.” (emphasis added)

(See also: Teri Oat Estates (P) Ltd. v. UT, Chandigarh & Ors.,

(2004) 2 SCC 130, Manish Goel v. Rohini Goel, AIR 2010 SC

1099, and State of Uttar Pradesh v. Sanjay Kumar, (2012) 8 SCC

537).

45. This court passed the interim order in contravention of the

provisions of Section 19 of the Act 1988. Though the appellant claims

that it did not ask for such order, the court itself granted the stay.

Even the respondent never applied for vacating the said interim order.

In such a fact-situation, it is not desirable to make any comment on

the issue.

46.The most relevant issue involved herein is as at what stage the

validity of sanction order can be raised. The issue is no more res-

integra. In Dinesh Kumar v. Chairman Airport Authority of India

& Anr., AIR 2012 SC 858, this Court dealt with an issue and placing

reliance upon the judgment in Parkash Singh Badal & Anr. v. State

34

Page 35 of Punjab & Ors., AIR 2007 SC 1274, came to the conclusion as

under:

“13. In our view, having regard to the facts of the

present case, now since cognizance has already been

taken against the appellant by the trial Judge, the High

Court cannot be said to have erred in leaving the

question of validity of sanction open for consideration by

the trial court and giving liberty to the appellant to raise

the issue concerning validity of sanction order in the

course of trial. Such course is in accord with the decision

of this Court in Parkash Singh Badal…”

47.Undoubtedly, the stage of examining the validity of sanction is

during the trial and we do not propose to say that the validity should

be examined during the stage of inquiry or at pretrial stage.

48. However, in the instant case, the fact-situation warrant a

different course altogether as the impugned order had already been

partly complied with before filing the petition before this Court. The

appellant admittedly did not disclose the material facts in this petition.

Had the said facts been disclosed perhaps this Court would not have

entertained this petition and the matter could have been concluded by

the Trial Court much earlier. The affidavit filed by the sanctioning

authority may tilt the balance in favour of the respondent if duly

supported by the deponent and not disclosing the material fact i.e.

35

Page 36 filing of such an affidavit by the sanctioning authority before the

Special Judge, indicates serious and substantial prejudice to the

respondent. The material on record reveals that it could be a case of

serious prejudice to the respondent so far as the decision making

process by the sanctioning authority is concerned. The benefit of

interim protection granted in favour of the appellant where the

appellant has not disclosed the material facts, should be neutralized.

49.We do not find any force in the submission made by Shri

Jethmalani, learned senior counsel that as the matter is about one and

a half decade old and the respondent has already suffered because of

protracted legal proceedings at various stages before different forums,

it is warranted that prosecution against him be closed altogether. This

Court has consistently held that no latitude can be given in the matter

of corruption. (Vide: C.S. Krishnamurthy v. State of Karnataka,

AIR 2005 SC 2790) wherein contrary view had been taken from

Mansukhlal Vithaldas Chauhan v. State of Gujarat, AIR 1997 SC

3400.

36

Page 37 50.In view of the above, we are of the considered opinion that the

peculiar facts and circumstances of the case do not warrant any

interference and the appeal is dismissed.

However, before parting with the case, we clarify that the trial

court will proceed without being influenced by any observation made

hereinabove as we have considered the facts of the case only to decide

this appeal. In the facts and circumstances of the case, as the matter

remained pending before the court for a long time, we request the

learned Special Judge to proceed with the matter from the stage when

the stay operated and conclude the same at the earliest.

.........................………………..J.

(DR. B.S. CHAUHAN)

.............………………………J.

(S.A. BOBDE)

New Delhi,

November 22, 2013

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