Deputation Does Not Sever Public Servant Status; Section 197 Sanction Remains Necessary for Prosecution

A bench of Justices Dipankar Datta and Manmohan heard appeals by the Central Bureau of Investigation and an informant challenging a Punjab & Haryana High Court order which had partly allowed a revision petition and discharged the accused from offences under the Indian Penal Code for want of sanction under Section 197, CrPC; the High Court had, however, refused discharge in respect of offences under the Prevention of Corruption Act.

The Supreme Court held that the accused, though sent on deputation to the Municipal Corporation, Chandigarh, continued to be a “public servant” for the purposes of Section 197, CrPC and therefore sanction was required before taking cognizance of the IPC offences. The Court rejected the appellant’s contention that deputation or subsequent assignment severed the relationship with the parent Government and that Section 197 did not apply. The Court relied on established principles concerning deputation and the protective object of Section 197, observing that “Article 14 does not render Section 197 of the Criminal Procedure Code ultra vires as the discrimination is based upon a rational classification.” The Court, in its reasoning, observed: “We are of the considered opinion, having regard to the materials on record, that the respondent while rendering service for the State of Punjab as well as the administration of the Union Territory was a public servant covered by clause (a) of the 12th description in Section 21, IPC and despite his assignment on deputation to the Municipal Corporation, Chandigarh, he continued to remain a public servant for the purposes of sub-section (1) of Section 197, Cr. PC, being removable from office by an appropriate authority in the Government of Punjab and none else. We are afraid, no material which could persuade us to take a contrary view has been shown.”

Background An FIR dated 9 December 2014 by the ACB, CBI Chandigarh alleged that while functioning as Executive Engineer (Public Health), the accused, in connivance with M/s Selvel Media Services Pvt. Ltd., caused wrongful loss of over Rs. 13.66 crore by altering tender terms. A charge-sheet followed and the Special Judge framed charges on 23 November 2021. The accused had retired on 30 September 2016 and no sanction under Section 197, CrPC was obtained. He moved for discharge on the ground of absence of sanction and invoked the amended Section 19(1) of the PC Act (effective 26 July 2018) claiming protection as a retired public servant; the Special Court dismissed the discharge plea. The High Court, exercising revision jurisdiction, discharged the accused of IPC offences for want of sanction but rejected his plea for discharge under the PC Act on the ground that the amendment to Section 19 had no retrospective effect.

CBI urged that upon deputation and subsequent assignment the accused ceased to be a public servant removable by the State and hence Section 197 did not apply, relying on several precedents. The Supreme Court examined the doctrine of deputation (noting that “Deputation is deputing or transferring an employee to a post outside his cadre…”), the statutory definition of “public servant” in Section 21 IPC and Article 311 constraints on subordinate authorities. The Court found documentary orders showing extensions of deputation by the Governor of Punjab and observed that there was no material to demonstrate absorption into Municipal Corporation service or valid severance of the relationship with the State. The Court noted prior authorities and held that protection under Section 197 was available where the appointing/removing authority remained the State. The Court dismissed the appeals, upheld the High Court’s order discharging the accused of the IPC offences for want of sanction, declined to allow invocation of the newly introduced deemed-scheme in the BNSS for pending matters, but reserved liberty to seek sanction under the CrPC if so advised.

Case Details: Case No.: Criminal Appeal No. 1527 of 2025; Criminal Appeal No. 1528 of 2025 Case Title: Central Bureau of Investigation v. Ramesh Chander Diwan; Ashok Kumar Manuja v. Central Bureau of Investigation and Another Appearances: For the Petitioner(s): Mr. Suryaprakash V. Raju, Additional Solicitor General For the Respondent(s): No separate counsel argued before this Court / not specifically recorded

New Delhi; April 22, 2025.