Chandrababu Naidu's Plea : Will Remand Order Be Valid If PC Act Offences Go Due To Lack Of Sec 17A Sanction? Supreme Court Asks AP CID

Awstika Das

10 Oct 2023 1:25 PM GMT

  • Chandrababu Naidus Plea : Will Remand Order Be Valid If PC Act Offences Go Due To Lack Of Sec 17A Sanction? Supreme Court Asks AP CID

    The Supreme Court on Tuesday, while hearing former Andhra Pradesh Chief Minister N Chandrababu Naidu's plea, asked the Andhra Pradesh Crime Investigation Department (AP CID) whether the order of a special court remanding the legislator to custody would be valid even if the offences under the Prevention of Corruption Act do not survive or are dropped on grounds of non-compliance with the...

    The Supreme Court on Tuesday, while hearing former Andhra Pradesh Chief Minister N Chandrababu Naidu's plea, asked the Andhra Pradesh Crime Investigation Department (AP CID) whether the order of a special court remanding the legislator to custody would be valid even if the offences under the Prevention of Corruption Act do not survive or are dropped on grounds of non-compliance with the prior sanction provision(Section 17A).

    A bench of Justices Aniruddha Bose and Bela M Trivedi was hearing Naidu’s special leave petition challenging an order passed by the Andhra Pradesh High Court last month declining to quash a first information report (FIR) arraigning the ex-chief minister as one of the accused in the scam. Naidu was arrested in connection with this case on September 9 by the state’s crime investigation department (CID) and has been in custody since.

    The hearing last week revolved mainly around the applicability of Section 17A of the Prevention of Corruption Act, 1988. Section 17A, inserted in July 2018 by way of an amendment, mandates that the competent authority's prior sanction must be obtained before launching an investigation against a public servant. It is this provision that Naidu has cited to challenge his arrest by the Andhra Pradesh police's CID. The thrust of his argument is that the department did not obtain the governor's sanction before arraigning him as the 37th accused in the skill development scam case. 

    On the first day of the hearing, the Justice Bose-led bench raised questions about whether the provision would apply to an offence predating the 2018 amendment that introduced it. The court also questioned whether Section 17A would be applicable when the FIR mentioned offences under both the Prevention of Corruption Act and the Indian Penal Code, 1860. A battery of lawyers - including senior advocates Harish Salve, Abhishek Manu Singhvi, and Sidharth Luthra - appearing for Naidu, argued that Section 17A should be applicable since the inquiry commenced after the 2018 amendment, notwithstanding the date of the offence. On the contrary, the State, represented by Senior Advocate Mukul Rohatgi, contended that the inquiry began before 2018. The hearing was finally adjourned with an instruction to the state government to provide the entire compilation of documents submitted to the high court.

    The debate over the interpretation of Section 17A of the Prevention of Corruption Act continued on the next date of the hearing, i.e., yesterday. During the hearing, Salve argued that Section 17A was introduced to prevent instances of "regime revenge." Maintaining that the inquiry against Naidu only began in 2021, the senior counsel asserted that Naidu would be entitled to the protective cover of Section 17A. In this connection, he relied on the union government's standard operating procedure on Section 17A to argue that prior approval was required at every stage, from inquiry to the investigation. In response to this, the court asked the senior counsel if it could adopt an interpretation of the section that would "defeat the objectives of the act". Salve countered this by saying that the interpretation would strengthen the legislation, allowing public servants to act freely and instituting a framework of accountability for the investigating agency.

    If PC Act is taken out, remand order by sessions court would be denuded of jurisdiction: Harish Salve

    Today, Salve reiterated that gubernatorial sanction was a prerequisite before even beginning the inquiry into the role of a public servant because of the operation of Section 17A of the Prevention of Corruption Act. Besides this, the senior counsel pointed out, "The remand report locates the period of the offence as between 2015 and 2019. Even the offence and the chain of events go beyond 2018."

    Salve further argued that the charges against the former chief minister under the Prevention of Corruption Act could not be separated from the criminal conspiracy, cheating, forgery, and other charges under the Indian Penal Code, 1860. This was in response to a question posed during the previous hearings about whether the criminal proceedings could continue against Naidu even if the offences under the PC Act were dropped or did not survive.

    In this connection, the senior counsel referred to the Supreme Court's ruling in Ebha Arjun Jadeja (2019), in which non-compliance with a provision mandating prior sanction was considered to be fatal to an inquiry under the Terrorist and Disruptive Activities (Prevention) Act or 'TADA'. At the same time, in this case, the court allowed the investigation under the Arms Act to proceed, after noting that the basic material for constituting an offence both under the Arms Act and the TADA was identical. Salve argued -

    "Today, the FIR has been challenged, which is one common, rumbled-up FIR involving offences under the Indian Penal Code and the Prevention of Corruption Act. But the Prevention of Corruption Act cannot really be taken out qua Naidu."

    If the Prevention of Corruption Act is 'taken out', Salve said, it is not a sessions judge, but a magistrate who can grant a remand. This would mean the order remanding the legislator to custody would be denuded of jurisdiction and liable to be set aside. "The special court comes in only because the Prevention of Corruption Act has been invoked. If their submission is that the PC Act must be taken out, then the remand order must go anyway. Then they have to go before a magistrate."

    "Are these all offences triable by the magistrate?" Justice Bose asked Salve.

    "These sections are triable by a magistrate. But the question of trying a case comes later," Salve replied. Luthra added that some of the offences included in the FIR are triable by a sessions court only in the State of Madhya Pradesh. At this juncture, Justice Trivedi pointed out that Section 193 of the Code of Criminal Procedure barred a sessions court from taking cognizance of offences as a court of original jurisdiction, unless specifically provided under the code or in any other law. In other words, normally, the case would have to be committed to the sessions court by a magistrate first.

    Special court to try other offences even if offences under PC Act are dropped : Mukul Rohatgi

    Rohatgi countered Salve's argument that the special judge's remand order would be denuded of jurisdiction if the charges under the Prevention of Corruption Act were either dropped or they did not survive. If the allegations involve an 'amalgam' of the PC Act and the Indian Penal Code, Section 4(3) of the former would empower a special court to try both sets of offences, Rohatgi said at the outset. "Not saying it will," he continued, "But if the PC Act goes out, what will happen?"

    "What they are saying, Mr Rohatgi, is if the PC Act goes, then Section 4(3) of the act would also not be applicable," Justice Trivedi told the senior counsel.

    Rohatgi replied, "It is settled law that if the PC Act goes in an amalgam, the special judge would still retain its jurisdiction to try all offences not under the Prevention of Corruption Act. This court has held that in multiple cases. Otherwise, the criminal proceedings would have to go back and forth and it will wreak havoc. Imagine that there are ten officers, to some of whom Section 17A applies; for others, it goes."

    "Their argument is that if the PC Act goes, then the very foundation of going to a special court, as well as its remand order, will go," Justice Trivedi reasoned.

    "It will create chaos," Rohatgi said, strongly disputing an interpretation of Section 4(3) of the Prevention of Corruption that would require a case to be transferred out of a special court if the anti-corruption legislation is found to not be applicable, particularly where there are multiple public servants against whom different charges are levelled. He promptly added, "In any case, I'm not conceding that the PC Act goes. I'm making an argument considering a situation where that conclusion is reached."

    "We are just stretching your argument along that line," Justice Trivedi admitted.

    Protective mechanism under Section 17A of PC Act cannot be parachuted back into time : Mukul Rohatgi

    Next, pointing to the 'wholesale' amendment of the legislation in 2018, Rohatgi said that the unamended provisions would apply in the present case since the allegations date back to incidents taking place before 2018. He argued -

    "Section 17A is part of the new package. The old package and offences relating to it will be governed by the old law that existed prior to 2018. Any offence occurring after 2018 will be governed by the amended sections. First, offences relate to the period before 2018 and will as such be governed by the old package. For instance, if I hit someone today, I will be charged under Section 323 of the Indian Penal Code. If this section is later removed, I will still be charged under it, notwithstanding any beneficial amendment in the future."

    In the context of Section 17A's prospectivity, Rohatgi conceded that the Parliament could, by an explicit direction, mandate the retrospective application of the provision, before quickly adding a caveat: "But in this case, the Parliament has not."

    To illustrate this, Rohatgi pointed out that Naidu has been booked, inter alia, under provisions omitted in 2018, namely, Clauses (c) and (d) of Section 13(1) of the Prevention of Corruption Act. When these provisions that have since been deleted from the text of the law apply, Section 17A cannot be 'parachuted' back into time, regardless of its legislative intent. On the question of statutory intendment, Rohatgi also insisted that Section 17A was not introduced to provide a roadblock or an umbrella allowing the corrupt to hide but to support honest officers scared to conduct their investigation freely. "It is part of the Parliament's effort to rule out corruption. Section 17A is not meant to be an umbrella for those who are corrupt, but to support those who are honest."

    Not only this, but Rohatgi also argued that Naidu would not be entitled to Section 17A's protective cloak since the offending acts did not form part of the official function of a chief minister. In any case, the question of the applicability of this section, the senior counsel added, could not be decided in a petition for quashing of an FIR under Section 482 of the Criminal Procedure Code -

    "His decisions or actions have resulted in immense corruption and loss to the State. Cases of such large-scale corruption and misappropriation ex facie - not prima facie - can never be a part of a recommendation or decision in the discharge of official function. No question of protection will arise in a case where misappropriation of public funds. In any case, these questions cannot be decided in Section 482. What is official duty? What is a recommendation? What is a decision? These will have to be decided based on evidence. These cannot be argued orally."

    In response to this, Justice Trivedi asked, "At what stage can these questions be decided?"

    "At the trial," came Rohatgi's prompt answer.

    The judge also asked him if an FIR could be registered for an offence which is no longer recognised under the act after an amendment. Referring to Article 20(1) of the Constitution, Section 468 of the Code of Criminal Procedure, and Section 6 of the General Clauses Act, Rohatgi replied, "If not hit by limitation, yes. Unless there's a limitation, an offence committed at a particular time is not wiped out. There is no bar in any law in registering an FIR in relation to an offence that existed, notwithstanding its subsequent deletion. If the offence prescribes punishment above three years of imprisonment, there's no limitation. This means there will have to be an FIR at some stage, investigation and charge-sheet, and then Section 468."

    With respect to Section 6 of the General Clauses Act, Justice Trivedi pointed out, "This does not involve inquiry."

    "That's true, but Your Lordships' query was whether an FIR could be registered," Rohatgi answered.

    After hearing these submissions, the court adjourned the proceedings until Friday at 2 PM, when Rohatgi is scheduled to resume his oral arguments. 


    Nara Chandrababu Naidu, Telugu Desam Party president and erstwhile Andhra Pradesh chief minister, has been arrested in connection with a skill development scam in the state, with the state crime investigation department claiming to have prime facie evidence of the former chief minister’s key role in the alleged embezzlement of around Rs 371 crore from the Andhra Pradesh Skill Development Corporation through fictitious companies during the TDP's rule between 2014 and 2019. He is the 37th accused in a 2021 FIR related to the multi-crore scam involving the state skill development corporation.

    The opposition Telugu Desam Party leader was arrested by the Andhra Pradesh CID on September 9 and has remained in custody since. Subsequently, a Vijayawada court remanded Naidu to police custody for September 23 and 24. On Sunday, Naidu’s judicial remand was extended till October 5.

    Last week, the Andhra Pradesh High Court dismissed Naidu’s plea for quashing of the FIR. In his petition, he argued that the trial court’s order remanding him to custody did not consider that the CID had failed to obtain prior approval from the governor, as required by Section 17A of the Prevention of Corruption Act. However, a bench of Justice K Sreenivas Reddy ruled that prior sanction from the competent authority was unnecessary for the investigation since the use of public funds, allegedly for personal gain, did not constitute an act in the discharge of official duties. The court also agreed that given the seriousness of economic offences, the investigation should not be hindered, especially at this early stage.

    Challenging this ruling, the TDP leader has approached the Supreme Court in a special leave petition.

    Case Details

    Nara Chandrababu Naidu v. State of Andhra Pradesh & Anr. | Special Leave Petition (Criminal) No. 12289 of 2023

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