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2013 DIGILAW 742 (CAL)

CHITTA RANJAN GHOSH v. UCO BANK

2013-09-27

SANJIB BANERJEE

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JUDGMENT SANJIB BANERJEE, J. 1. The legal issue canvassed by the petitioner, a former employee of the Uco Bank, is that the sanction granted by the chairman and managing director of the bank to prosecute the petitioner is illegal as there was a previous rejection of the sanction and the subsequent sanction has been obtained without any additional material being produced. The principle is beyond question that it is not permissible for the sanctioning authority to review its decision of refusal to grant sanction or reconsider the matter on the same material. The question that arises is as to whether the principle would be applicable to the case of the petitioner. 2. For the purpose of the present proceedings, the petitioner refers to a letter dated April 23, 2008 issued by the chief vigilance officer of the bank to the Central Bureau of Investigation; the note of April 16, 2008 appended to such letter; a memorandum issued by the general manager and deputy general manager of personnel services dated November 12, 2007 with the notings thereon; the sanction order of May 26, 2008 issued by the chairman and managing director; and, an unsigned sanction order dated May 31, 2007. 3. According to the petitioner, the memorandum to the board of directors issued by the personnel services department of the bank referred to the transaction in question and concluded that the petitioner “did not play any role in obtaining security for 95 lakhs.” The memorandum recorded that there were reports by two successive managers of the Kakurgachi branch of the bank that the initial disbursal in the account of the relevant constituent “was made under the directions of some other Bank functionary and not by (the petitioner).” It also referred to a recovery of Rs.80.76 lakh in the relevant account upon enforcement of securities. The memorandum concluded that “it appears that it is not a case of fraud” but a case of “irregular lending and injudicious use of discretion.” 4. On the basis of the recommendation in the memorandum of November 12, 2007 that the matter “can be handled through Regular Departmental Action and hence, permission to CBI for prosecution of (the petitioner) need not be given”, a note was prepared on April 16, 2008. On the basis of the recommendation in the memorandum of November 12, 2007 that the matter “can be handled through Regular Departmental Action and hence, permission to CBI for prosecution of (the petitioner) need not be given”, a note was prepared on April 16, 2008. The chief vigilance officer’s letter of April 23, 2008 to CBI appended the note of April 16, 2008 thereto and claimed that such note “has the approval of the CMD …” The note does not appear to bear the signature of the CMD nor does the petitioner attribute the initials at the foot of the note to be that of the CMD. The initials on each page of the note are on a stamp of the vigilance department of the bank. 5. It is the petitioner’s contention that the CMD had agreed with the memorandum prepared by the personnel services department of the bank and had concluded, as evident from the closing lines of the note of April 16, 2008, that the involvement of the petitioner in the transaction could be addressed in course of a departmental action initiated against the petitioner without a criminal complaint being launched. As a corollary, the petitioner asserts that since the bank has not disclosed any further material that may have been considered by the subsequent CMD of the bank in according sanction for the petitioner to be prosecuted, the sanction order should be annulled. 6. The petitioner has referred to a judgment reported at (2010) 14 SCC 527 (State of Himachal Pradesh v. Nishant Sareen) where the legal position in the matter of review or reconsideration of the original decision of refusal to grant sanction to prosecute a public servant was enunciated at paragraph 12 of the report: “12. It is true that the Government in the matter of grant or refusal to grant sanction exercises statutory power and that would not mean that power once exercised cannot be exercised again or at a subsequent stage in the absence of express power of review in no circumstance whatsoever. The power of review, however, is not unbridled or unrestricted. It is true that the Government in the matter of grant or refusal to grant sanction exercises statutory power and that would not mean that power once exercised cannot be exercised again or at a subsequent stage in the absence of express power of review in no circumstance whatsoever. The power of review, however, is not unbridled or unrestricted. It seems to us sound principle to follow that once the statutory power under Section 19 of the 1988 Act or Section 197 of the Code has been exercised by the Government or the competent authority, as the case may be, it is not permissible for the sanctioning authority to review or reconsider the matter on the same materials again. It is so because unrestricted power of review may not bring finality to such exercise and on change of the Government or change of the person authorised to exercise power of sanction, the matter concerning sanction may be reopened by such authority for the reasons best known to it and a different order may be passed. The opinion on the same materials, thus, may keep on changing and there may not be any end to such statutory exercise. In our opinion, a change of opinion per se on the same materials cannot be a ground for reviewing or reconsidering the earlier order refusing to grant sanction. However, in a case where fresh materials have been collected by the investigating agency subsequent to the earlier order and placed before the sanctioning authority and on that basis, the matter is reconsidered by the sanctioning authority and in light of the fresh materials an opinion is formed that sanction to prosecute the public servant may be granted, there may not be any impediment to adopt such course.” 7. What must not be missed is that in the case of Nishant Sareen the vigilance department of the relevant organisation sought sanction under Section 19 of the Prevention of Corruption Act, 1988 to prosecute the public servant, whereupon the competent authority examined the material placed in support of the sanction and found that there was no justification to grant the sanction. Such decision was express. However, the vigilance department took up the matter again with the competent authority on the basis of its opinion that sufficient evidence existed to prosecute the public servant. Such decision was express. However, the vigilance department took up the matter again with the competent authority on the basis of its opinion that sufficient evidence existed to prosecute the public servant. It was in such circumstances that the competent authority reconsidered the same material that had been originally placed and granted sanction to prosecute the public servant. 8. Before the legal principle as recognised in Nishant Sareen can be applied, it has first to be ascertained whether the sanction to prosecute the petitioner had earlier been refused. The review or reconsideration of the decision to refuse to grant sanction to prosecute would arise only upon there being a refusal in the first place. If it is evident that there was no previous refusal to accord sanction to prosecute a public servant, the principle would have no manner of application. 9. On the basis of the material carried by the petitioner and the documents relied upon, it does not appear that there was a previous decision by the CMD of the bank refusing to grant sanction for the petitioner to be prosecuted. For a start, there is no express order of refusal that the petitioner has been able to demonstrate. Secondly, even if the note of April 16, 2008 that is attributed by the chief vigilance officer in his letter of April 23, 2008 to the CBI to have had the approval of the CMD is accepted as such, there is nothing in the note that expressly or by necessary implication refuses to grant sanction for the petitioner to be prosecuted. Indeed, the penultimate paragraph of the note of April 16, 2008 records that the constituent had approached the bank to settle its dues and the bank had recovered more than Rs.1 crore from the sale of some of the mortgaged properties and equipment. At the very highest, the note of April 16, 2008, even if it is accepted to have been approved and signed by the CMD, may be regarded as a deferment of the decision on the sanction to prosecute the petitioner and not a refusal of the sanction. 10. There is a distinction between sanction not being granted and sanction being refused. The sanction to prosecute even if sought and if not granted may not necessarily imply that the sanction has been refused. 10. There is a distinction between sanction not being granted and sanction being refused. The sanction to prosecute even if sought and if not granted may not necessarily imply that the sanction has been refused. The note of April 16, 2013 would demonstrate that the sanction to prosecute the petitioner was not granted, but it would not amount to the sanction being refused. Refusal is an overt act and a reflection of the application of the mind to the matter and a conclusive decision thereon. It is only when there is a refusal by the appropriate authority to grant the sanction that such authority may not revisit the decision without further material relevant to the consideration being disclosed. When there is no overt act of refusal of the sanction to prosecute a public servant, merely because the matter was considered earlier and a conclusive decision whether to grant or to refuse the sanction to prosecute was not taken, there can be no implied or deemed refusal of the sanction to prosecute that may be gleaned therefrom. For the legal principle that the petitioner canvasses to apply, there needs first to be an express refusal to grant the sanction and a subsequent review or reconsideration of the decision without any further material being placed at the time of review or reconsideration. 11. Since the petitioner has not been able to demonstrate that the CMD of the bank had ever refused to grant – which is qualitatively and juridically distinct from not granted – the sanction to prosecute the petitioner, the impugned order of May 26, 2008 according such sanction is unassailable on the ground canvassed. WP No. 27088(W) of 2013 fails. 12. The petitioner will pay costs assessed at 20 GM to the respondent bank. 13. Certified website copies of this judgment, if applied for, be urgently made available to the parties, subject to compliance with all requisite formalities.