Case Note & Summary
The applicant, Narendra Dejoo Shetty, Executive Chairman of Haldyn Glass Limited and Managing Director of Haldyn Corporation Limited, filed a criminal application challenging a common judgment dated 16 October 2015 passed by the Additional Sessions Judge, Mumbai, in two Criminal Revision Applications. The dispute arose from FIR No. 716/PW/2012 registered at the instance of the applicant against two employees, including respondent No. 1, Saumyalata Shyama Shetty, who was the General Manager – Finance and Commerce cum Chief Financial Officer of Haldyn Glass Limited. The FIR alleged that the respondent, along with another employee, forged documents and used them as genuine to siphon off money from the company. After investigation, the Economic Offences Wing filed a charge-sheet in the Court of Metropolitan Magistrate, Mumbai, charging the respondent with offences under Sections 465, 467, 468, 471, and 408 of the Indian Penal Code (IPC). The Magistrate took cognizance and issued summons to the respondent. The respondent filed a Criminal Revision Application before the Sessions Court, which was allowed by the impugned judgment, quashing the summoning order on the ground that the respondent was a public servant and prior sanction under Section 197 of the Code of Criminal Procedure (CrPC) was required. The applicant challenged this order before the High Court. The legal issue was whether the respondent, as a General Manager and CFO of a government company, is a public servant entitled to protection under Section 197 CrPC, and whether the summoning order without sanction was sustainable. The applicant argued that the respondent was not a public servant and that the offences were not committed in discharge of official duty. The respondent contended that she was a public servant under Section 21 IPC and that the acts were committed in the course of employment. The High Court analyzed the definition of public servant under Section 21 IPC and held that the respondent, being an officer of a government company, falls within the definition. The court further held that the alleged acts of forgery and criminal breach of trust were committed in the course of her employment and in discharge of official duty, as she was entrusted with the company's funds and bank accounts. Therefore, prior sanction under Section 197 CrPC was mandatory before taking cognizance. The court found that the Magistrate had taken cognizance without sanction, which was a jurisdictional error. The High Court dismissed the applicant's criminal application, upholding the Sessions Court's order quashing the summoning order. The court directed that the proceedings before the Magistrate were quashed, but left it open to the applicant to seek sanction for prosecution if so advised.
Headnote
A) Criminal Procedure Code - Sanction for Prosecution - Section 197 CrPC - Public Servant - The respondent, a General Manager and CFO of a government company, is a public servant under Section 21 IPC. The alleged acts of forgery and criminal breach of trust were committed in the course of her employment and in discharge of official duty. Therefore, prior sanction under Section 197 CrPC is mandatory before taking cognizance. The summoning order without sanction is illegal and liable to be quashed. (Paras 4-10) B) Indian Penal Code - Offences of Forgery and Criminal Breach of Trust - Sections 408, 465, 467, 468, 471 IPC - The respondent was charged with forging documents and siphoning off company funds. The court held that the acts were committed in the course of employment and thus require sanction under Section 197 CrPC. (Paras 2-3) C) Criminal Procedure Code - Cognizance of Offence - Section 190 CrPC - The Magistrate took cognizance without sanction, which is a jurisdictional error. The revisional court's order upholding the summoning was set aside. (Paras 5-10)
Issue of Consideration
Whether the respondent, a General Manager and CFO of a government company, is a public servant entitled to protection under Section 197 CrPC, and whether the summoning order without sanction is sustainable.
Final Decision
The High Court dismissed the criminal application, upholding the Sessions Court's order quashing the summoning order. The court held that the respondent is a public servant and the alleged acts were committed in discharge of official duty, requiring prior sanction under Section 197 CrPC. The proceedings before the Magistrate were quashed, but the applicant may seek sanction if so advised.
Law Points
- Sanction under Section 197 CrPC is mandatory for prosecution of public servants for offences alleged to have been committed while acting in discharge of official duty
- even if the act is not strictly part of duty but is claimed to be done in good faith in the course of employment.
