2025 INSC 539 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1527 OF 2025

CENTRAL BUREAU OF INVESTIGATION … APPELLANT

VS.

RAMESH CHANDER DIWAN … RESPONDENT

WITH

CRIMINAL APPEAL NO. 1528 OF 2025

ASHOK KUMAR MANUJA … APPELLANT

VS.

CENTRAL BUREAU OF

INVESTIGATION AND ANOTHER … RESPONDENTS

J U D G M E N T

DIPANKAR DATTA, J.

1. These two appeals, by special leave, are directed against a common

judgment and order dated 29

th

January, 2024

1

passed by the High

Court of Punjab and Haryana at Chandigarh. The impugned order of

the High Court partly allowed a revision petition

2

of the respondent,

1

impugned order

2

Crl. Revision Petition No.1388 of 2021

2

wherein an order of the Special Court (CBI) dated 29

th

October, 2021

dismissing the respondent’s application for discharge was under

challenge. While the High Court discharged the respondent in respect

of offences punishable under the Indian Penal Code, 1860

3

on the

ground that no sanction had been obtained as per the statutory

mandate contained in Section 197, Code of Criminal Procedure, 1973

4

,

the prayer of the respondent for discharge qua offences alleged against

him under the Prevention of Corruption Act, 1988

5

was spurned. The

High Court held that even though the respondent had retired from

service, the amended provisions of Section 19 of the PC Act would

have no retrospective application and, therefore, he was not entitled

to derive any benefit of such amendment.

2. Central Bureau of Investigation (CBI) is the appellant in the lead

appeal whereas the appellant in the connected appeal is the first

informant/complainant.

3. An FIR was registered on 9

th

December, 2014 at Police Station ACB,

CBI Chandigarh, under Sections 120B and 4 20 of the IPC and under

Section 13(2) read with Section 13(1)(d) of the PC Act against the

respondent. It was alleged in the FIR that while the respondent was

functioning as the Executive Engineer, Public Health, Municipal

Corporation, Chandigarh, in connivance and collusion with the co-

accused, M/s Selvel Media Services Pvt. Ltd., he caused wrongful loss

3

IPC

4

Cr. PC

5

PC Act

3

in excess of Rs.13.66 crore to the Government exchequer by changing

the terms and conditions of the Detailed Notice Inviting Tender. A

detailed investigation followed and on completion thereof, a charge-

sheet dated 10

th

October, 2016 under Section 173(2), Cr. PC was filed

in the Court of the Special Judge, CBI, Chandigarh

6

. Bare reading of

the charge-sheet reveals that the respondent, along with the co-

accused, had committed offences of the nature alleged in the FIR. The

Special Judge vide order dated 23

rd

November, 2021 was pleased to

frame charges against the accused persons.

4. The respondent had retired from service, having attained the age of

superannuation on 30

th

September, 2016. Sanction under Section 197

of the Cr. PC was not obtained by CBI. The respondent applied for

discharge on the ground of absence of sanction at any stage. He also

sought protection under the amended provisions of Section 19(1) of

the PC Act too, effective from 26

th

July, 2018, which mandated sanction

to be obtained even in respect of retired public servants. As noted

above, the Special Court dismissed the application for discharge

whereafter the High Court, on the respondent’s application under

Section 401 read with Section 482 of the Cr. PC, passed the impugned

order.

5. Appearing in support of the appeal, Mr. Suryaprakash V. Raju, learned

Additional Solicitor General contended that the respondent though was

a public servant removable from office by the Governor of Punjab but

6

Special Court

4

upon being sent to join his new assignment in the Municipal

Corporation, Chandigarh, on usual terms and conditions, he ceased to

be a public servant and the provisions of Section 197, Cr. PC had no

application to him. According to Mr. Raju, the High Court fell in error

in holding that without sanction under Section 197, Cr. PC, cognizance

of the offence could not have been taken. Reliance was placed by Mr.

Raju on several decisions of this Court in support of his prayer for

interference with the impugned order. The same are:

(i) S.S. Dhanoa v. Municipal Corporation Delhi and

Others

7

,

(ii) Mohd. Hadi Raja v. State of Bihar and Another

8

,

(iii) N.K. Sharma v. Abhimanyu

9

,

(iv) Punjab State Warehousing Corporation v.

Bhushan Chander and Another

10

,

(v) Bharat Sanchar Nigam Limited and Others v.

Pramod V. Sawant and Another

11

,

(vi) State of Kerala v. V. Padmanabhan Nair

12

; and

(vii) Inspector of Police v. Battenapatla Venkata

Ratnam

13

.

7

(1981) 3 SCC 431

8

(1998) 5 SCC 91

9

(2005) 13 SCC 213

10

(2016) 13 SCC 44

11

(2019) 16 SCC 63

12

(1999) 5 SCC 690

13

(2015) 13 SCC 87

5

6. We have heard Mr. Raju , at length. Except for seeking certain

clarifications, we have not felt it necessary to call upon learned counsel

for the respondent to argue.

7. The only question that has engaged our consideration is whether the

High Court was right in holding that sanction under Section 197, Cr.

PC not having been obtained, the respondent should be discharged for

the offences registered under Sections 120B and 420 of the IPC against

him.

8. Since a decision on these two appeals would depend entirely on how

we read and interpret Section 197, Cr. PC in the light of the deputation

assignment of the respondent, we prefer to commence our analysis by

noting the relevant positions held by the officers/employees who were

parties to the proceedings before this Court in the decisions cited by

Mr. Raju, what precisely were the questions which arose for

determination in such cases and how the same were answered .

9. In S.S. Dhanoa (supra), the appellant was a member of the Indian

Administrative Service. While the appellant was holding the office of

Joint Commissioner (State Liaison) in the Ministry of Agriculture,

(Department of Agriculture), his services were placed at the disposal

of the Department of Co-operation, for his appointment as the General

Manager, Super Bazar, Connaught Place, New Delhi. The short question

that fell for determination in the appeal was whether a member of the

Indian Administrative Service, whose services are placed at the

disposal of an organisation which is neither a local authority, nor a

6

corporation established by or under a Central, Provincial or State Act,

nor a Government Company, by the Central Government or the

Government of a State, can be treated to be a ‘public servant’ within

the meaning of clause Twelfth of Section 21 of the IPC for the purpose

of Section 197, Cr. PC. The question was answered in the negative.

10. Mohd. Hadi Raja (supra), however, did not involve a deputationist.

The common question of law arising for decision in that case was

whether the provisions of sanction under sub-section (1) of Section

197, Cr. PC are applicable for prosecuting officers of public sector

undertakings or government companies. Since such officers are

removable from service by authorities other than the Government, it

was held that they were not entitled to invoke Section 197 of the Cr.

PC.

11. Whether a Class 1 officer of the Government of Haryana deputed to

work as Managing Director of a cooperative society is entitled to

protection under sub-section (1) of Section 197, Cr. PC was the

question arising for decision in N.K. Sharma (supra). It was held that

no sanction was required in the case therein as the appellant’s salary

was not paid by the Government nor was he at the relevant time in

service of the State, thereby, not satisfying the requirements of being

a “public servant” within the meaning of Section 197, Cr. PC.

12. Punjab State Warehousing Corporation (supra) involved the

question as to whether the first respondent, an employee of the

appellant corporation, was a public servant and the trial in its entirety

7

stood invalid because sanction to prosecute under Section 197, Cr. PC

had not been obtained. It was held by this Court following the decision

in Mohd. Hadi Raja (supra) that the appellant being an employee of

the appellant corporation was not entitled to the benefit of Section

197, Cr. PC and he cannot put forth the claim that breach of trust is

connected with his official duty, thereby not necessitating sanction

under Section 197, Cr. PC.

13. In Bharat Sanchar Nigam Limited (supra), Bharat Sanchar Nigam

Limited was the first appellant whereas the other appellants were its

employees. The complainant was the respondent. The appeal before

this Court raised a short and pure question of law with regard to

protection under Section 197, Cr. PC being available to the employees

of a public sector corporation claiming the status of a ‘public servant’.

This happened to be a case where, except one of the appellants who

retired while on deputation, deputation of the other employees was

followed by absorption in the undertaking. Following Mohd. Hadi Raja

(supra), it was held that the employees of the first appellant were not

entitled to invoke Section 197, Cr. PC.

14. This Court in V. Padmanabhan Nair (supra) held that an accused

facing prosecution for offences under the PC Act cannot claim any

immunity on the ground of want of sanction, if he ceased to be a public

servant on the date when the court took cognizance of the offence.

15. Battenapatla Venkata Ratnam (supra) was cited for emphasizing

that protection under Section 197, Cr. PC from harassment is given in

8

public interest and the same cannot be treated as a shield to protect

corrupt officials.

16. Having considered the precedents cited by Mr. Raju, with which we

have no quarrel, and on consideration of the applicable statutory

provisions, we now proceed to assign reasons for our ultimate

conclusion.

17. The question arising for decision cannot but be decided without

keeping the concept of deputation in the field of public service law in

perspective. We, therefore, see the need to briefly touch upon such

concept.

18. The concept of deputation was explained by this Court in State of

Punjab v. Inder Singh

14

as follows:

18. The concept of “deputation” is well understood in service law and

has a recognised meaning. “Deputation” has a different connotation

in service law and the dictionary meaning of the word “deputation”

is of no help. In simple words “deputation” means service outside the

cadre or outside the parent department. Deputation is deputing or

transferring an employee to a post outside his cadre, that is to say,

to another department on a temporary basis. After the expiry period

of deputation the employee has to come back to his parent

department to occupy the same position unless in the meanwhile he

has earned promotion in his parent department as per the

Recruitment Rules. Whether the transfer is outside the normal field

of deployment or not is decided by the authority who controls the

service or post from which the employee is transferred. There can be

no deputation without the consent of the person so deputed and he

would, therefore, know his rights and privileges in the deputation

post. ...

(emphasis ours)

19. In Umapati Choudhary v. State of Bihar

15

, this Court had the

occasion to observe:

14

(1997) 8 SCC 372

15

(1999) 4 SCC 659

9

8. Deputation can be aptly described as an assignment of an

employee (commonly referred to as the deputationist) of one

department or cadre or even an organisation (commonly referred to

as the parent department or lending authority) to another

department or cadre or organisation (commonly referred to as the

borrowing authority). The necessity for sending on deputation arises

in public interest to meet the exigencies of public service. The

concept of deputation is consensual and involves a voluntary decision

of the employer to lend the services of his employee and a

corresponding acceptance of such services by the borrowing

employer. It also involves the consent of the employee to go on

deputation or not. ...

(emphasis ours)

20. Where exigency of public service requires the parent department

(lending authority) to send its employee on deputation to the receiving

department (borrowing authority) and such an arrangement is

preceded by a consensus among the three, i.e., the lending authority,

the borrowing authority and the officer/employee, the statutory rules

do normally provide for his repatriation. In such a case, there can be

no severance of relationship with the parent department. However,

during the period the officer/employee is sent on deputation to the

receiving department, the parent department may fill up the post

vacated by the deputationist in accordance with law under the category

of ‘deputation vacancy’, which also is not unknown in public service

law, but it is only for a limited period till the officer/employee is

repatriated.

21. Insofar as disciplinary control over a deputationist is concerned, such

control generally vests with the appropriate authority in the parent

department in which the substantive appointment is held. However, it

cannot be gainsaid that by statutory rules or by conditions contained

10

in the order of deputation, it can be provided that the deputationist,

for the period he is serving on deputation, will be subject to the

disciplinary control of the department to which he is deputed. Should

there be a provision in this behalf, the deputationist may be proceeded

against, if the occasion therefore arises, by the appropriate authority

in the receiving department. Although generally an employee is

supposed to have one master, in the context of deputation there could

be a plurality of masters. Nonetheless, it is the statutory rules which

would be the deciding factor. If the rules indicate that disciplinary

control is retained by the parent department, the receiving department

would have no jurisdiction to exercise such control.

22. Having noted the concept of assignment on deputation, a quick look

at the object that Section 197, Cr. PC seeks to achieve would suffice

for completeness of understanding. We may profitably refer to a

Constitution Bench decision of this Court in Matajog Dobey v. H.C.

Bhari

16

. While repelling a challenge that Section 197 of the Code of

Criminal Procedure, 1898 (pari materia with Section 197, Cr. PC)

offended Article 14 of the Constitution, this Court held:

15. ... Article 14 does not render Section 197 of the Criminal

Procedure Code ultra vires as the discrimination is based upon a

rational classification. Public servants have to be protected from

harassment in the discharge of official duties while ordinary citizens

not so engaged do not require this safeguard. It was argued that

Section 197 of the Criminal Procedure Code vested an absolutely

arbitrary power in the Government to grant or withhold sanction at

their sweet-will and pleasure, and the legislature did not lay down or

even indicate any guiding principles to control the exercise of the

discretion. There is no question of any discrimination between one

16

(1955) 2 SCR 925

11

person and another in the matter of taking proceedings against a

public servant for an act done or purporting to be done by the public

servant in the discharge of his official duties. No one can take such

proceedings without such sanction. If the Government gives sanction

against one public servant but declines to do so against another, then

the government servant against whom sanction is given may possibly

complain of discrimination. But the petitioners who are complainants

cannot be heard to say so, for there is no discrimination as against

any complainant. It has to be borne in mind that a discretionary

power is not necessarily a discriminatory power and that abuse of

power is not to be easily assumed where the discretion is vested in

the government and not in a minor official. Further, we are not now

concerned with any such question. We have merely to see whether

the court could take cognisance of the case without previous sanction

and for this purpose the court has to find out if the act complained

against was committed by the accused while acting or purporting to

act in the discharge of official duty. Once this is settled, the case

proceeds or is thrown out. Whether sanction is to be accorded or not

is a matter for the government to consider. The absolute power to

accord or withhold sanction conferred on the government is irrelevant

and foreign to the duty cast on the court, which is the ascertainment

of the true nature of the act.

(emphasis ours)

23. Turning to the words ‘public servant’ appearing in sub-section (1) of

Section 197, Cr. PC, it has not been defined in the Cr. PC; however,

what the words ‘public servant’ denote is found in Section 21, IPC and

by reason of Section 2(y) of the Cr. PC, the meaning of ‘public servant’

as appearing in Section 197 thereof has to be understood in the light

of its definition in Section 21, IPC. Section 21 of the IPC, to the extent

relevant, reads thus:

21. “Public servant”.—The words “public servant” denote a person

falling under any of the descriptions hereinafter following, namely:—

***

Twelfth.—Every person—

(a) in the service or pay of the Government or remunerated by fees

or commission for the performance of any public duty by the

Government;

(b) in the service or pay of a local authority, a corporation established

by or under a Central, Provincial or State Act or a Government

company as defined in Section 617 of the Companies Act, 1956 (1 of

1956).

12

24. Although the respondent’s initial appointment letter is not on record,

it has not been disputed before us (in view of the additional documents

placed on record by the respondent in terms of an order dated 18

th

March, 2025) that the respondent was initially appointed by the

Government of Punjab. If not a member of the State’s civil service, the

respondent was most certainly the holder of a civil post. It is further

undisputed that the respondent was sent on deputation to the Union

Territory, Chandigarh from the State of Punjab (P.W.D P.H Branch).

Also, it is not in dispute that vide an order of the Administrator, Union

Territory, Chandigarh

17

dated 25

th

February, 2005, the respondent was

relieved to join a new assignment in the Municipal Corporation,

Chandigarh. From time to time, the Governor of Punjab extended the

deputation period of the respondent with the Municipal Corporation,

Chandigarh. Orders dated 13

th

October, 2006 and 12

th

July, 2007

placed on record by the respondent evince extension of the deputation

period of the respondent with the Municipal Corporation, Chandigarh

by none other than the Governor of Punjab for specified periods.

Effectively, what these orders did was to temporarily place the

respondent’s service at the disposal of the Municipal Corporation,

Chandigarh. It has not been demonstrated before us by CBI that upon

assignment of the respondent on deputation with the Municipal

Corporation, Chandigarh, he was either absorbed in its services

17

Administrator

13

resulting in severance of relationship with the Government of Punjab

or that, by any order validly made, the respondent ceased to remain a

Government servant once he left the post under the Government he

was serving prior to his deputation.

25. Moreover, clause (1) of Article 311 of the Constitution ordains that no

authority subordinate to the appointing authority can dismiss or

remove a member of the civil service of the State or a civil post holder.

In case the respondent, while on deputation, were to commit a

misconduct warranting either dismissal or removal, it has not been

shown by referring to statutory rules that upon the respondent ’s

assignment on deputation, disciplinary control over him stood

transferred from any authority of the Government of Punjab to an

authority of equal rank in the Municipal Corporation, Chandigarh and

such authority had been empowered to take disciplinary action against

the respondent. In the absence thereof, neither the Board of the

Municipal Corporation, Chandigarh nor its Municipal Commissioner

would have the authority or jurisdiction to take disciplinary action

against the respondent had he misconducted himself while discharging

his duty under such corporation.

26. This legal position is fortified by a recent decision of this Court in A.

Sreenivasa Reddy v. Rakesh Sharma

18

where a coordinate Bench

has held that protection of sub-section (1) of Section 197, Cr. PC is

available only to such public servants whose appointing authority is

18

(2023) 8 SCC 711

14

the Central Government or the State Government and not to every

public servant.

27. We are of the considered opinion, having regard to the materials on

record, that the respondent while rendering service for the State of

Punjab as well as the administration of the Union Territory was a public

servant covered by clause (a) of the 12

th

description in Section 21, IPC

and despite his assignment on deputation to the Municipal Corporation,

Chandigarh, he continued to remain a public servant for the purposes

of sub-section (1) of Section 197, Cr. PC, being removable from office

by an appropriate authority in the Government of Punjab and none

else. We are afraid, no material which could persuade us to take a

contrary view has been shown.

28. For the foregoing reasons, we find no reason to accept Mr. Raju’s

contention that the respondent ceased to be a public servant upon

being sent on deputation first to the Union Territory, Chandigarh or

when he was relieved by the Administrator for joining a new

assignment in the Municipal Corporation, Chandigarh. The inevitable

result is that the lead appeal and the connected appeal ought to fail.

29. Mr. Raju, sensing the Court’s mind, requested for liberty being granted

to seek sanction under Section 218 of the Bharatiya Nagarik Suraksha

Sanhita, 2023, which has introduced the concept of deemed sanction.

30. In view of the provisions of Section 531 of the BNSS, the Cr. PC stands

repealed; yet, pending proceedings are to be continued under the

15

repealed law. We, therefore, decline Mr. Raju’s prayer. However, liberty

to seek sanction under the Cr. PC, if so advised, is reserved.

31. While holding the impugned order to be correct, these appeals stand

dismissed on the above terms.

………....................J.

(DIPANKAR DATTA )

………....................J.

(MANMOHAN )

NEW DELHI ;

APRIL 22, 2025.