Calcutta HC Upholds Discharge: Subordinate Authority Cannot Grant Sanction for Prosecution of Public Servant – Defect Incurable Post Withdrawal of State Consent

Introduction

The Calcutta High Court recently addressed a critical issue concerning the validity of prosecution sanctions granted under the Prevention of Corruption Act, 1988, in the matter of Central Bureau of Investigation Vs Chandra Nath Kayal. The judgment underscores the constitutional and statutory requirements governing the prosecution of public servants and examines the interplay between administrative competence and federal limitations when state consent is withdrawn.

The case arose from a criminal revision petition filed by the CBI challenging the discharge of an Income Tax Officer who faced corruption allegations. The discharge was ordered on grounds that the sanctioning authority lacked competence, and the defect could not be remedied due to subsequent legal impediments.

Background and Factual Matrix

The Trap Operation and Initial Complaint

On May 2, 2012, the CBI conducted a trap operation based on a complaint alleging that an Income Tax Officer had demanded illegal gratification amounting to ₹2,000 for facilitating the processing of a tax refund claim. The trap was successful, and following investigative procedures, the agency gathered evidence against the accused officer.

Subsequently, after completing the investigation, the CBI filed a charge-sheet invoking Sections 7 and 13(2) read with 13(1)(d) of the PC Act against the opposite party, Shri Chandra Nath Kayal, who was serving as an Income Tax Officer at the relevant time.

The Appointment and Sanction Discrepancy

A crucial fact that later became the focal point of legal scrutiny was that the opposite party had been appointed to the post of Income Tax Officer by the Chief Commissioner of Income Tax (CCIT) through an order dated April 23, 2010. This established the CCIT as the appointing authority for the accused officer.

However, when the time came to obtain sanction for prosecution—a mandatory requirement under Section 19(1)(c) of the PC Act—the sanction was granted not by the CCIT, but by the Commissioner of Income Tax (CIT) through an order dated July 11, 2012. The CIT occupied a position subordinate to the CCIT within the departmental hierarchy.

Application for Discharge

After the trial proceedings had commenced and progressed partially, the accused officer filed an application before the Special Court seeking discharge from the charges. The primary ground advanced was that the sanction for prosecution was legally invalid because it was granted by an authority—the CIT—who was subordinate to the appointing authority—the CCIT.

The accused contended that under the constitutional framework established by Article 311(1) and the statutory provision of Section 19(1)(c) of the PC Act, only the appointing authority or an authority superior to it could competently grant sanction for prosecution. Since the CIT was subordinate to the CCIT, the sanction was fundamentally flawed.

Order of the Special Court

The Special Court, after hearing submissions, accepted the contention raised by the accused. The court held that the sanction granted by the CIT suffered from a jurisdictional defect as it violated the constitutional mandate. Finding the sanction invalid and incapable of rectification under the prevailing circumstances, the Special Judge passed an order dated April 5, 2019, discharging Shri Chandra Nath Kayal from all charges in Special Case No. 05/13.

Aggrieved by this discharge order, the CBI approached the Calcutta High Court by way of a criminal revision petition under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973.

Arguments Advanced Before the High Court

Submissions by the CBI

Mr. Anirban Mitra, appearing as Learned Counsel for the CBI, presented several arguments challenging the discharge order:

Competence Under Departmental Notification: The CBI contended that the CIT was competent to grant sanction by virtue of departmental notification GSR-977(E). It was argued that internal administrative arrangements and delegations could authorize subordinate authorities to exercise sanctioning powers.

Liberty to Obtain Fresh Sanction: Even assuming the original sanction was defective, the CBI submitted that the Special Court should have granted liberty to the prosecution to obtain a fresh sanction from the competent authority. Reliance was placed on the Supreme Court decision in Nanjappa vs. State of Karnataka (2015) 14 SCC 186, which recognized the principle that defective sanctions are generally curable.

Withdrawal of State Consent: The CBI argued that the withdrawal of general consent by the State of West Bengal under Section 6 of the DSPE Act on November 16, 2018, would not affect the present case because the case was registered prior to such withdrawal. Reference was made to Kazi Lhendup Dorji vs. CBI (1994 Supp (2) SCC 116) to support the contention that pending investigations remain unaffected by subsequent withdrawal of consent.

Submissions by the Opposite Party

Learned Counsel for the opposite party strongly contested the revision and defended the discharge order on the following grounds: