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2017 DIGILAW 509 (KAR)

G. Ramesh v. Surveyor General of India

2017-02-22

G.NARENDAR

body2017
ORDER : G. Narendar, J. Heard the learned counsel for the petitioners. 2. The petitioners are all employees of the 1st respondent-Authority and working as Group-B officers. 3. It is the case of the petitioners that they were functioning as Directors on the Board of the 3rd respondent-Society established under the Karnataka Co-operative Societies Act, 1959 (hereinafter referred to as the 'Act') and that in the year 2015 a Special officer came to be appointed to administer the Society, who by his proceedings dated 13.5.2015, had requested the Asst. Registrar of Co-operative Societies, i.e., the 2nd respondent herein, to conduct an enquiry into the financial affairs of the 3rd respondent Society and upon such request, the 2nd respondent initiated an enquiry under the provisions of Section 64 of the Act. Pursuant to the enquiry, certain financial irregularities, misappropriations etc., were detected and a report came to be submitted by the Enquiry officer on 19.12.2015. Thereafter, the 2nd respondent has passed orders under the provisions of Section 68 of the Act. Thereafter, the 2nd respondent has also ordered initiation of surcharge proceedings for recovery of loss occasioned to the 3rd respondent-Society on account of the illegalities committed by the petitioners. 4. It is contended by the learned counsel for the petitioners that in all there are about 19 Directors on the Board and that the proceedings have been initiated only against the present petitioners, that no justification is placed for excluding other Directors from the scope of the enquiry. He would submit that the petitioners are constrained to approach this Court on account of the order passed by the 1st respondent dated 31.5.2016 whereby the 1st respondent being, Appointing and Disciplinary Authority and as the Competent Authority, has accorded sanction for prosecution of the petitioners for the offences punishable under the Prevention of Corruption Act, 1988. 5. Learned counsel for the petitioners would contend that the impugned order is vitiated on account of non-application of mind. He would contend that the sanction is granted by merely accepting the recommendation of the 2nd respondent herein. He would contend that the 1st respondent as a Competent Sanctioning Authority is required to exercise its discretion in the matter of granting sanction after perusing the materials on record and after applying its mind to the same and thereafter it ought to conclude as to whether sanction has to be accorded or refused. He would contend that the 1st respondent as a Competent Sanctioning Authority is required to exercise its discretion in the matter of granting sanction after perusing the materials on record and after applying its mind to the same and thereafter it ought to conclude as to whether sanction has to be accorded or refused. He would contend that the 1st respondent has not assigned any reasons which would indicate an independent appreciation of the material. 6. Learned counsel would rely on the ruling of the Apex Court reported in the case of State of Tamil Nadu v. M. M. Rajendran, reported in (1998) 9 SCC 268 . The Hon'ble Apex Court while considering the issue of grant of sanction has arrived at the conclusion that no proper sanction as mandated by the statute was accorded by the Competent Authority. The Hon'ble Apex Court arrived at the said conclusion on the premise that all the relevant materials including the statements recorded by the Investigating officer were not placed before the Competent Authority prior to according sanction and hence it was pleased to hold that the sanction accorded is vitiated and is invalid. 7. Learned counsel for the petitioners would draw the attention of this Court to the impugned order at Annexure-E. He would submit that the Competent Authority has merely extracted a paragraph from the report submitted by the Enquiry officer under the provisions of Section 64(1) of the Act and has thereafter proceeded to accord sanction as recommended by the Asst. Registrar and hence he would contend there is no independent application of mind and that the ruling relied upon by the petitioners is applicable to the facts of the case. 8. In the case before the Apex Court, the Apex Court concluded that all the relevant materials which were required for the Competent Authority to arrive at a considered and informed decision were not placed before the Sanctioning Authority. 9. In the instant case on hand, such a case is not canvassed. On the contrary, it is submitted that there is no independent application of mind and the Competent Authority has merely looked into the Enquiry report and thereafter has proceeded to pass the impugned order according sanction. 10. A perusal of the impugned order would reveal otherwise. 9. In the instant case on hand, such a case is not canvassed. On the contrary, it is submitted that there is no independent application of mind and the Competent Authority has merely looked into the Enquiry report and thereafter has proceeded to pass the impugned order according sanction. 10. A perusal of the impugned order would reveal otherwise. The Competent Authority has not only looked into the enquiry report but has also prima facie satisfied itself that the petitioners and others have indulged in misuse of fixed deposit funds. It has also concluded that they have omitted to recover the loans from the members. Upon examination of material, the Competent Authority has further concluded that the petitioners have failed to maintain stock registers or separate schedules in respect of the financial transaction of the Society. It has also appreciated with the finding of the Enquiry officer that there has been misuse of funds. More importantly, it has also independently recorded the fact that none of the petitioners have made a statement rejecting the charge against them. It has also set out various amounts which it believes are prima facie misappropriated by the petitioners and hence had lastly concluded that the recommendation of the 2nd respondent for initiating criminal prosecution has to be accepted and hence has accorded sanction. 11. It is seen that the scope of enquiry with regard to accord of sanction is very limited as it is an Administrative function. The Sanctioning Authority is required to demonstrate subjective satisfaction and it is further required that the subjective satisfaction is arrived at after objective assessment of the material. It is necessary that the Authority must also look into the material which may come to the aid of the person against whom sanction is sought. The Authority is not required to deliver an order in the form of a judgment. As stated supra, it would suffice that the order by the Authority demonstrates a subjective satisfaction of the Authority concerned and further demonstrates the fact that the satisfaction is arrived at after objective appraisal of the material. 12. It is not the case of the petitioners that any particular material has been screened from the consideration of the Sanctioning Authority. It is not the case that the material which would otherwise demonstrate their innocence has not been considered by the Authority. 13. 12. It is not the case of the petitioners that any particular material has been screened from the consideration of the Sanctioning Authority. It is not the case that the material which would otherwise demonstrate their innocence has not been considered by the Authority. 13. The Hon'ble Apex Court in the case of Superintendent of Police (CBI) v. Deepak Chowdhary and others, reported in (1995) 6 SCC 225 : ( AIR 1996 SC 186 ) was pleased to hold that the grant of sanction is only an administrative function despite the fact that pursuant to the sanction the accused may be saddled with the liability to be prosecuted in a court of law and what is material for considering the validity of the sanction is to examine whether at the relevant time the necessary facts collected during the investigation and constituting the offence alleged, have been placed before the sanctioning authority and that the sanctioning authority has considered the material. The Hon'ble Apex Court has observed at paragraph 5 of the judgment as follows: '5. We find force in the contention. The grant of sanction is only an administrative function, though it is true that the accused may be saddled with the liability to be prosecuted in a court of law. What is material at that time is that the necessary facts collected during investigation constituting the offence have to be placed before the sanctioning authority and it has to consider the material. Prima facie, the authority is required to reach the satisfaction that the relevant facts would constitute the offence and then either grant or refuse to grant sanction. The grant of sanction, therefore, being administrative act the need to provide an opportunity of hearing to the accused before according sanction does not arise. The High Court, therefore was clearly in error in holding that the order of sanction is vitiated by violation of the principles of natural justice.' 14. In view of the above, this court is of the considered opinion that the writ petitions are devoid of merits. It is further seen that the order according sanction for prosecution does not suffer from any illegality nor is it vitiated on any other grounds. 15. Hence, the writ petitions stand rejected.