Case Note & Summary
The petitioners, M/s. Bandekar Brothers Pvt. Ltd. and M/s. Vasantram Metha & Company Pvt. Ltd., filed criminal writ petitions under Article 226 of the Constitution of India read with Section 482 CrPC before the High Court of Bombay at Goa. The petitioners sought quashing of criminal complaints filed by the respondents under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of cheques. The respondents were the complainant and the State of Goa. The petitioners argued that they were Directors of a government company and thus public servants under Section 21 of the Indian Penal Code, 1860, and that the complaints were not maintainable without prior sanction under Section 197 of the Code of Criminal Procedure, 1973. The court examined the legal issue of whether Directors of a government company are public servants entitled to protection under Section 197 CrPC. The court held that Directors of a government company are public servants within the meaning of Section 21 IPC and Section 197 CrPC, and the alleged acts of issuing cheques were done in discharge of official duties. Therefore, prosecution without prior sanction from the competent authority is not maintainable. The court quashed the criminal complaints and all proceedings therein.
Headnote
A) Criminal Procedure Code - Sanction for Prosecution - Section 197 CrPC - Directors of Government Company as Public Servants - The court considered whether Directors of a government company are public servants entitled to protection under Section 197 CrPC. Held that Directors of a government company are public servants within the meaning of Section 21 IPC and Section 197 CrPC, and therefore, prosecution without prior sanction from the competent authority is not maintainable. (Paras 1-10) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 NI Act - Maintainability of Complaint - The court examined whether a complaint under Section 138 NI Act against Directors of a government company can proceed without sanction under Section 197 CrPC. Held that the complaint is not maintainable as the Directors are public servants and the alleged acts were done in discharge of official duties. (Paras 11-20) C) Criminal Procedure Code - Cognizance of Offence - Section 197 CrPC - Effect of Absence of Sanction - The court analyzed the effect of taking cognizance without prior sanction. Held that cognizance taken without sanction is void ab initio and the proceedings are liable to be quashed. (Paras 21-30)
Issue of Consideration
Whether criminal complaints under Section 138 of the Negotiable Instruments Act, 1881 against the petitioners, who are Directors of a government company, are maintainable without prior sanction under Section 197 of the Code of Criminal Procedure, 1973.
Final Decision
The court allowed the criminal writ petitions and quashed the criminal complaints and all proceedings therein.
Law Points
- Sanction under Section 197 CrPC is mandatory for prosecution of public servants
- Directors of government companies are public servants
- Cognizance without sanction is void ab initio
- Complaint under Section 138 NI Act requires valid sanction
