Dismissed

G. N. Krishna Swamy v. Karnataka Urban Water Supply and Drainage Board

Karnataka HC12 Oct 2023CRL.P/5946/2016

Case brief

AI extract

What is this about?

The High Court dismissed criminal petitions challenging prosecution under IPC. It held a contract appointee is a public servant removable by order, thus need no Section 197 sanction. Court also found complaint by Board Secretary valid and trial procedure correct, directing expedited trial within one year.

What did the court decide?

Petitions dismissed; Trial Court directed to complete trial within one year.

G. N. Krishna Swamy Vs Karnataka Urban Water Supply and… — Corruption | Karnataka HC (2023)

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1 - NC: 2023:KHC:37317 CRL.P No. 5946 of 2016 C/W CRL.P No. 6208 of 2013

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 12^TH DAY OF OCTOBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 5946 OF 2016 C/W CRIMINAL PETITION NO. 6208 OF 2013

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IN CRL.P NO. 5946/2016:

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BETWEEN:

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G.N. KRISHNA SWAMY AGED ABOUT 69 YEARS, S/O. G. NARASHIMAIAH, RESIDING AT NO.144, 12^TH MAIN, J.P. NAGAR, II PHASE, BANGALORE - 560 078. PRESENTLY AT NO.91, 7^TH MAIN, M.S. RAMAIAH CITY, J.P. NAGAR, 8^TH PHASE, BANGALORE - 560 076.

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…PETITIONER

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(BY SRI. CHANDRASHEKARA K, ADVOCATE)

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AND:

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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KARNATAKA URBAN WATER SUPPLY AND DRAINAGE BOARD, REPRESENTED BY ITS SECRETARY, NO.6, JALBHAVAN, I PHASE, I STAGE, BTM LAYOUT, BANNERGHATTA MAIN ROAD, BANGALORE - 560 029.

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…RESPONDENT (BY SMT. SINCHANA M.R, ADVOCATE)

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THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO SET ASIDE THE ORDER DATED 31.10.2015 PASSED IN C.C.NO.22097/2011 PASSED BY THE I ACMM, BANGALORE AND PURSUNT TO ORDER DATED 25.07.2016 IN CRL.R.P. No.940/2015 AND DISCHARGE THE PETITIONER.

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IN CRL.P NO. 6208/2013

BETWEEN:

…PETITIONER

(BY SRI. CHANDRASHEKARA K, ADVOCATE)

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AND:

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KARNATAKA URBAN WATER SUPPLY AND DRAINAGE BOARD, REPRESENTED BY ITS SECRETARY, NO.6, JALBHAVAN, I PHASE, I STAGE, BTM LAYOUT, BANNERGHATTA MAIN ROAD, BANGALORE - 560 029.

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…RESPONDENT

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(BY SMT. SINCHANA M.R, ADVOCATE)

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THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE ENTIRE PROCEEDINGS IN C.C.NO.22097/2011 ON THE FILE OF THE I ACMM, BANGALORE.

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THESE PETITIONS, COMING ON FOR DICTATING ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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Criminal Petition No.6208/2013 is filed by the accused challenging the proceedings initiated against him in C.C.No.22097/2011 pending trial before the I Additional Chief Metropolitan Magistrate, Bangalore, for the offences punishable

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under Section 464, 465, 467, 468 and 420 read with Section 34 of Indian Penal Code, 1860 (henceforth referred to as 'IPC' for short).

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Criminal Petition No.5946/2016 is filed by the accused challenging the order dated 31.10.2015 passed in C.C.No.22097/2011 by the I Additional Chief Metropolitan Magistrate, Bengaluru.

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The petitioner, who had retired as a Deputy Accountant General (Accounts), was appointed on contract basis as a Financial Advisor and Chief Accounts Officer on consolidated pay to the Karnataka Urban Water Supply and Drainage Board, Bangalore for a period of two years. A private complaint was filed by the respondent, contending that it had invited tenders for a supply of drinking water project to Chikkamagaluru and K.R.Nagar. One of the bidders, namely Supreme Chemiplast Piping Private Ltd., submitted the lowest bid, which was accepted, and the respondent/Board had entrusted two projects to the contractor.

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As per the terms and conditions of the contract, the

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contractor had to furnish a bank guarantee of a sum for

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Rs.78,24,000/- as performance guarantee and for a sum of Rs.1,30,40,000/- towards mobilization advance. The petitioner, who was then appointed as Financial Advisor, was required to verify the genuineness of the Bank guarantees furnished by the contractor and advise the Managing Director to release the payments to the contractor. Accordingly, the contractor had furnished four Bank guarantees issued by Oriental Bank of Commerce, Chennai, and claimed the mobilization advance. As per the practice in vogue, the petitioner got the Bank guarantees verified and as per his office note dated 15.02.1999 at paragraph No.4 he endorsed, "The above Bank guarantees have been confirmed by the bankers in their letter No.BG3/97 dated 10.02.1999. This was also got confirmed over the phone today from Mr.Devanathan, Manager, Oriental Bank of Commerce, Chennai, vide phone No.044-8223179". He also noted that the agreement with respect to the K.R.Nagar and Chikkamagaluru projects was signed by the representative of the contractor, as informed by the respective Executive Engineer. Therefore, he sought the opinion of the Managing Director as to whether the mobilization advance of Rs.30,50,000/- for the K.R.Nagar project and a sum of

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Rs.1,30,40,000/- for the Chikkamagaluru project could be released. On the advice of the petitioner, the Managing Director released the mobilization advance for the Chikkamagaluru project, but in respect of K.R.Nagar, he deferred the payment till the date the performance guarantee was extended.

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Later, on 18.02.1999, the petitioner put up a note to release the mobilization advance of Rs.30,50,000/- for the K.R.Nagar project to the firm. Accordingly, the Managing Director approved the payment. The contractor, after receiving the mobilization advance, purportedly did not complete the project but abandoned it midway. Therefore, the respondent terminated the contract and proposed to recover the money covered by invoking the Bank guarantees furnished by the contractor. The Board deputed its official to Chennai to encash the Bank guarantees on 02.02.2000. However, the official found that the Branch of Oriental Bank of Commerce in Chennai was fictitious as no such branch of the bank at the address mentioned in the bank guarantees was in existence. The official contacted the Branch of Oriental Bank of Commerce at Spencer Plaza, Chennai, and found that the Bank guarantees furnished were fake. The Oriental Bank of Commerce issued a letter

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dated 04.02.2000 stating that the signatures found on the Bank guarantees were not that of Mr.Devanathan and that they had no Branch at Spur Tank Road, Chennai. Therefore, the respondent alleged that the petitioner had misled the Board with an ulterior motive to cause loss to the Board and to facilitate the contractors to unjustly enrich themselves.

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The services of the petitioner was terminated and a complaint was lodged with the jurisdictional police on 07.07.2000, who registered Cr.No.845/2000 and Cr.No.846/2000 and filed two charge sheets against the contractor and his power of attorney holder for the offences punishable under Sections 464, 465, 467, 468, 471 and 420 read with Section 34 of Indian Penal Code. Later, the Government of Karnataka by its letter dated 22.01.2003, referred the case to the Lokayuktha for an enquiry and report. The Lokayuktha after enquiry recommended criminal action against the petitioner, as he was guilty of grave official misconduct and negligence. Therefore, the respondent prayed the Court to take cognizance of the offence committed by the petitioner under Sections 465, 467, 468 and 471 read with Section 109 and 420 of IPC.

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The Trial Court in terms of the order dated 08.04.2005 took cognizance and directed the registry of the Trial Court to register private complaint. However, realizing its mistake the Trial Court on 04.07.2011 ordered to register a criminal case against the accused and issued summons. This order was challenged by the petitioner before this Court in Crl.P. No.3775/2012 on the ground that the Magistrate without recording the sworn statement of the complainant or dispensing with the sworn statement, had proceeded to take cognizance. This Court in terms of the order dated 03.10.2012, held that a perusal of the entire order sheet did not disclose that the Magistrate had passed any order taking cognizance and therefore directed the Magistrate to pass appropriate orders by taking into consideration Section 200 of Criminal Procedure Code and to proceed in accordance with law.

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Following the above, the Trial Court in terms of the order dated 31.12.2012, held that the private complaint was filed by a Government Servant and therefore, there was no need to record the sworn statement of the complainant and hence dispensed with the requirement of recording the sworn statement. Since a criminal case was already registered, the

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Trial Court refrained from registering the case once again and hence issued process to the accused. The petitioner therefore is before this Court in this petition challenging the order taking cognizance on four grounds namely:

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i) that the petitioner was a public servant as defined under Section 21 of IPC and therefore, cognizance could not have been taken without the sanction of the State Government under Section 197 of Criminal Procedure Code.

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ii) that the private complaint was filed by the respondent without proper authorization.

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iii) that the Trial Court in terms of the order dated 04.07.2011 had directed the registration of a case against the petitioner and issued process without taking cognizance.

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iv) that the Board had already filed a civil suit for recovery of the amounts covered under the bank guarantee, therefore, prosecuting the petitioner for an offence was undesirable.

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The learned counsel for the petitioner has relied upon the judgment of Hon'ble Supreme Court in the case of State of Gujarat Vs. Mansukhbhai Kanjibhai Shah - (2020) 20 SCC 360 and Usha Chakraborty and Another Vs. State of West

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Bengal and Another - 2023 SCC Online SC 90 and also the judgment in the case of D.Devaraja Vs. Owais Sabeer Hussain - (2020) 7 SCC 695.

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During the pendency of the proceedings before the Trial Court, the petitioner filed an application under Section 245(2) of Cr.P.C., seeking discharge from the offences on two grounds namely:

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i) that the petitioner being a public servant could not have been prosecuted without the requisite sanction under Section 197 of Cr.P.C.

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ii) that the private complaint was entertained without there being authorization by the Board of the respondent.

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The Trial Court rejected the application in terms of the order dated 31.10.2015, which was challenged by the petitioner in Crl.R.P. No.940/2015 which too was rejected in terms of the order dated 25.07.2016. Being aggrieved by the same, Crl.P.No.5946/2016 is filed before this Court.

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Learned counsel for the petitioner vehemently contended that the petitioner was a public servant and the

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same is evident from Section 65 of the Karnataka Urban Water

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Supply and Drainage Board Act, 1973 which reads as follows:

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" 65. Officers and servants of the Board to

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be public servants.- All officers and servants of the Board, and any person entrusted with the execution of any function under this Act, shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code, 1860 (Central Act XLV of 1860)."

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He submitted that even a perusal of Section 21 of IPC, would indicate that the petitioner was a public servant. He therefore, contended that the cognizance of the offence against the petitioner could not have been taken, unless an appropriate sanction under Section 197 of Cr.P.C. was granted. He also contended that though the petitioner was appointed on contract basis, but yet, the order of appointment itself indicated that the petitioner shall be governed by the Karnataka Civil Services (Conduct) Rules, 1966. He therefore, contended that the petitioner was a public servant and the allegations contained in the private complaint were all during the stint of the petitioner as the financial advisor and therefore, all these activities were done in the exercise of his official duties and therefore, it is

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inevitable that a sanction under Section 197 of Cr.P.C. was obtained before taking cognizance. He further contended that the Board did not issue appropriate authorization to the officer to present the private complaint and therefore, on this ground too, the prosecution could not have been initiated against the petitioner. He also claimed that the Trial Court had committed an error of sorts in taking cognizance on 08.04.2005 and thereafter posting the case for sworn statement of the complainant on 23.07.2005 and thereafter held that it has no jurisdiction to entertain the complaint and then placed it before the VI Additional Chief Metropolitan Magistrate, Bengaluru who again, on 04.07.2011 registered the case against the petitioner and issued process and then again on 31.12.2012 dispensed with the requirement of the sworn statement of the complainant and thereafter took cognizance. He therefore contended that the entire process adopted by the Trial Court falls foul of Section 200 of Cr.P.C. and therefore prays that further proceedings in the case be halted. He also contended that a civil suit is filed against the contractor in O.S.No.423/2001 and therefore, the prosecution of the petitioner is unwarranted.

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Per contra, the learned counsel for the respondent submitted that the petitioner is not a public servant, as he was appointed on contract basis for a period of 02 years. She referred to Section 197 of the Cr.P.C., and contended that the requirement of a sanction under Section 197 of Cr.P.C., is required, only when a public servant "is not removable from his office, save by or with the sanction of the Government." She therefore, submitted that even if the petitioner was a public servant, the requirement of obtaining a sanction was only in respect of those public servants, who are not removable from their office, without the sanction of the Government and therefore, she contended that there was no requirement to take sanction to prosecute the petitioner under Section 197 of Cr.P.C. In this regard, she relied upon the judgment of Hon'ble Supreme Court in the case of Union Public Service Commission Vs. Girish Jayanti Lal Waghela and others -

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(2006) 2 SCC 482 and others where the Hon'ble Apex Court was considering the case of appointment of Drugs Inspector on contract basis and the Hon'ble Apex Court held that the respondent No.1 therein cannot be treated as a Government servant, as he was working on contract basis and therefore, he was not eligible for any relaxation in the upper age limit. She

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therefore contended that the petitioner cannot exploit Section 197 of Cr.P.C. to escape prosecution. In so far as, the other ground raised by the petitioner that there was no authorization, she contended that the complaint was filed by the Board itself and the Board was represented by Secretary of the Board and hence, there was an implied authority in favour of the Secretary of the Board to represent the Board. Hence, she contended that the ground urged by petitioner is not justified.

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In so far as the other contention of the petitioner that the cognizance was not taken properly by the Court or that the procedure adopted by the Court fell foul of Section 200 of Cr.P.C., she contended that the petitioner had challenged the order taking cognizance in Crl.P. No.3775/2012 and this Court had directed the Magistrate to take fresh steps in accordance with law and thereafter the Court had dispensed with the sworn statement and taken cognizance. Hence, she contended that there was no error in the procedure adopted by the Trial Court.

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I have considered the submissions of learned counsel for the petitioner as well as learned counsel for the respondent.

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Section 52 of the Karnataka Urban Water Supply and Drainage Board Act, 1973 which reads as follows:

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'52. Delegation of powers .- (1) The Government may, by notification authorise any authority or officer to exercise any of the powers vested in it by this Act except the power to make rules under section 68 and may in like manner withdraw such authority.

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(2) The Board may, by general or special order in writing delegate to the Chairman or Managing Director or any other director of the Board or the Secretary or any other officer of the Board such of its powers and functions under this Act except the power to acquire land under section 18 and to make regulations under section 69 as it may deem necessary and it may in like manner withdraw such authority.

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(3) The exercise of any power delegated under subsection (1) or sub-section (2) shall be subject to such restrictions and conditions as may be specified in the notification or order and also to control and revision by the Government or by such officer as may be empowered by the Government in this behalf or as the case may be, by the Board or such officer as may be empowered by the Board in this behalf.

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(4) The Government or the Board, as the case may be, shall also have the power to control and revise

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the acts or proceedings of any officer so empowered."

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The fact that after the petitioner retired as Deputy Accountant General, Accounts, he was appointed on contract basis for a period of 02 years, as Financial Advisor and Chief Accounts Officer is not much in dispute. Though, the petitioner was a public servant, in view of the definition under Section 21 of the IPC, he could be removed from office without the sanction of the Government. Therefore, the requirement of a sanction under Section 197 of Cr.P.C., did not arise and the contention urged by the learned counsel for the petitioner is liable to be rejected on this short ground.

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The judgment relied on by the learned counsel for

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the petitioner, in support of his claim that a sanction under Section 197 of Cr.P.C. was mandatory, relate to public servants who are in the service of the Government and not the person who was on contract basis and who could be removed by an administrative order, by the managing director of the respondent.

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In so far as the contention that the private complaint was filed without appropriate authorization, it is seen that under Section 52 of the Karnataka Urban Water Supply and Drainage Board Act, 1973 the authorization was only in respect of those offences which were committed under the said Act and not in respect of the offence under the Indian Penal Code. As a matter of fact, the private complaint was filed by the Board itself and the Board was represented by its secretary, who has an implied authority under Section 9 of the Karnataka Urban Water Supply and Drainage Board Act, 1973. Therefore, the ground urged by the petitioner that the private complaint is filed without appropriate authorization is liable to be rejected.

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In so far as the third contention that the procedure adopted by the Trial Court in dealing with the private complaint was erroneous, the order sheet of the Trial Court discloses that the private complaint was initially filed before the I Additional Chief Metropolitan Magistrate, Bengaluru. However, the Court after realizing that, it did not have jurisdiction to entertain the complaint, returned the file to the proper jurisdictional Court for further proceedings. Accordingly, the file was placed before the VI Additional Chief Metropolitan Magistrate, Bengaluru who

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issued notice to the complainant. In the meanwhile, a revision petition was filed in Crl.Misc. No.179/2006 filed by the respondent. Therefore, the proceedings went on before the Trial Court awaiting the orders passed by the Revisional Court. The VI Additional Chief Metropolitan Magistrate, Bengaluru, after disposal of the Crl.R.P.No.179/2006, ordered registration of the case and issued summons to the accused/petitioner. This was then challenged by the petitioner before this Court in Crl..P.No.3775/2012. After the disposal of the Crl.P.no.3775/2012, VI Additional Chief Metropolitan Magistrate, Bengaluru took cognizance and issued process to the petitioner. Therefore, there is no error apparent on the face of the order taking cognizance and the grounds urged by the petitioner is liable to the rejected.

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In so far as, the fourth contention is concerned, that a civil suit is already filed before the Civil Court, to recover the amounts covered under the bank guarantee, it is relevant to note that it is the allegation of the respondent that the petitioner had conspired with the contractor in furnishing a fake bank guarantee and therefore, this is an offence under Sections 468 and 471 of IPC, which deserves to be investigated

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and the petitioner has to be involved in the prosecution, as he was the person who is responsible for verification of bank guarantees.

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In that view of the matter, all the contentions urged by the petitioner to challenge the prosecution launched against him are liable to be rejected.

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In that view of the matter, these petitions lacks merits and are dismissed.

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Having regard to the fact that the prosecution was initiated against the petitioner in the year 2005, it is only appropriate to direct the Trial Court to expedite the trial of the case which shall not be later than one year from the date of receipt of certified copy of this order.

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It is needless to mention that the Trial Court shall not be influenced by any observations made in this order.

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Sd/JUDGE

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PK,HJ

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List No.: 1 Sl No.: 13

G. N. Krishna Swamy v. Karnataka Urban Water Supply and Drainage Board

Case brief

What is this about?

What did the court decide?

G. N. Krishna Swamy v. Karnataka Urban Water Supply and Drainage Board

Case brief

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