The Supreme Court has held that employees of government companies and public sector undertakings cannot claim protection under Section 197 CrPC merely because they are classified as public servants.

A bench of Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar reiterated that employees of government instrumentalities do not automatically become government servants entitled to protection from prosecution without prior sanction.

“An employee of a Government instrumentality, does not ipso facto becomes a Government servant so as to be entitled for protection under Section 197 of Cr.P.C. merely because an employee is a public servant.”, the Court observed, while setting aside a Rajasthan High Court order discharging three Jodhpur Discom employees from charges under the Electricity Act, 2003, on the ground that prior sanction under Section 197 CrPC had not been obtained.

The case arose from allegations that the employees had abetted electricity theft by Balim Steel Pvt. Ltd. through meter tampering. The prosecution alleged that the company had earned approximately ₹12.99 crore through the theft, of which ₹8.15 crore remained unpaid.

Upon investigation, a charge sheet was filed and charges were framed, and cognizance of the offence was taken, against which a revision was filed before the High Court, which ultimately allowed the Respondents' plea and set aside the cognizance order.

Challenging the High Court's order, an appeal was filed before the Supreme Court by the Jodhpur discoms.

Allowing the appeal, the Court noted that although the three employees were public servants under Section 169 of the Electricity Act, they were employees of Jodhpur Discoms and were neither appointed nor liable to be terminated by the State Government.

Relying on Mohd. Hadi Raja v. State of Bihar (1998) and Punjab State Warehousing Corporation v. Bhushan Chander (2016), the Court reiterated that officers of government companies and public undertakings are not entitled to Section 197 CrPC protection merely because their organisations qualify as 'State' under Article 12 of the Constitution.

“…the very basis of the impugned judgment rendered by the High Court in favour of the respondents…giving them protection under Section 197 of Cr.P.C, is flawed being contrary to the settled judicial precedent of this Court.”, the Court said.

Accordingly, the High Court's orders discharging the Executive Engineer, Assistant Engineer and Junior Engineer were set aside, and their revision petitions were remitted to the High Court for consideration on merits, including whether the chargesheet material justified framing charges against them.

Appearance:

For Petitioner(s) : Mr. S. Vallinayagam, Adv. Ms. Bhavya Arora, Adv. Ms. Durga Vallinayagam, Adv. Mr. Yashraj Singh Bundela- 3281, AOR

For Respondent(s) :Mr. Gagan Gupta, Sr. Adv. Mr. Anuj Tiwari- 4105, AOR Mr. Vaibhav Vats, Adv. Mr. Sameer Mishra, Adv. Mr. Shivendra Nath Mishra, Adv. Mr. V. Prasad Mishra, Adv. Mr. Saurabh Rajpal- 3577, AOR Mr. Vinay Kumar Singh, Adv. Mr. Aditya Shukla- 4081, AOR Mr. Shyam Singh Chauhan, Adv. Ms. Ginni Jain, Adv. Mr. Pankaj Kumar Singh, Adv. Mr. Rishab Panchal, Adv. Mr. Raj Singh Rana, AOR Mr. V.s.dubey, Adv. Ms. Kanika, Adv.