CENTRAL BUREAU OF INVESTIGATION versus RAMESH CHANDER DIWAN (22/04/2025) — Supreme Court headnote

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Summary

An engineer appointed by the Government of Punjab, sent on deputation to the Union Territory of Chandigarh and then to the Municipal Corporation, Chandigarh, was prosecuted by the CBI for IPC and Prevention of Corruption Act offences without sanction under Section 197 CrPC. The Court upheld his discharge for the IPC offences: a deputationist who is neither absorbed nor divested of his status by any valid order remains a public servant under clause (a) of the Twelfth description in Section 21 IPC, removable only by the parent Government, so prior sanction was required. Liberty to seek sanction under Section 218 BNSS was refused because pending proceedings continue under the repealed CrPC.

Issues

Whether the High Court was right in holding that, sanction under Section 197 CrPC not having been obtained, the respondent should be discharged for the offences under Sections 120B and 420 IPC.
Whether a State Government servant sent on deputation to a Union Territory and then to a municipal corporation ceases to be a 'public servant' for the purposes of Section 197(1) CrPC.
Whether liberty could be granted to seek sanction under Section 218 of the Bharatiya Nagarik Suraksha Sanhita, 2023 in proceedings pending under the CrPC.

Provisions considered

Section 197(1), Code of Criminal Procedure, 1973The section bars cognizance of an offence allegedly committed by a public servant not removable from office save by or with the sanction of the Government, while acting or purporting to act in the discharge of official duty, without previous sanction. Following A. Sreenivasa Reddy, the protection is available to public servants whose appointing authority is the Central or State Government. The respondent, appointed by the Punjab Government and never absorbed in the Municipal Corporation, remained removable only by an authority of that Government and was entitled to the protection. (¶¶ 7, 8, 22, 26, 27, 28)
Section 21, Twelfth description, clause (a), Penal Code, 1860'Public servant' is not defined in the CrPC; by Section 2(y) CrPC it carries the meaning in Section 21 IPC. The respondent, while serving the State of Punjab and the Union Territory administration, was a person in the service or pay of the Government under clause (a) of the Twelfth description, and continued to be so despite deputation to the Municipal Corporation. (¶¶ 23, 27)
Section 2(y), Code of Criminal Procedure, 1973Words used but not defined in the CrPC which are defined in the IPC have the IPC meaning; hence 'public servant' in Section 197 is understood through Section 21 IPC. (¶ 23)
Article 311(1), Constitution of IndiaNo authority subordinate to the appointing authority can dismiss or remove a civil servant. CBI did not show any statutory rule transferring disciplinary control over the deputationist to an authority of equal rank in the Municipal Corporation; so neither the Corporation's Board nor its Commissioner could have removed him for misconduct, confirming that he remained removable only by the Punjab Government. (¶ 25)
Section 19 (as amended with effect from 26/07/2018), Prevention of Corruption Act, 1988The High Court had refused discharge for the PC Act offences, holding that the amended Section 19 requiring sanction for retired public servants has no retrospective application. The Court held the impugned order to be correct and dismissed the appeals. (¶¶ 1, 4, 31)
Sections 218 and 531, Bharatiya Nagarik Suraksha Sanhita, 2023The ASG sought liberty to obtain sanction under Section 218 BNSS, which introduces deemed sanction. Under Section 531 BNSS the CrPC stands repealed but pending proceedings continue under the repealed law; the prayer was declined, with liberty reserved to seek sanction under the CrPC. (¶¶ 29, 30)

Held

Deputation in service law means service outside the cadre or parent department on a temporary basis, by consensus of the lending authority, the borrowing authority and the employee; it involves no severance of the relationship with the parent department, to which the deputationist is to be repatriated. Disciplinary control over a deputationist generally remains with the parent department unless statutory rules or the terms of deputation provide that the borrowing department may exercise it; the statutory rules are the deciding factor. (¶¶ 18, 19, 20, 21)
The decisions cited by the CBI (S.S. Dhanoa, Mohd. Hadi Raja, N.K. Sharma, Punjab State Warehousing Corporation, BSNL, V. Padmanabhan Nair and Battenapatla Venkata Ratnam) concerned persons whose services were placed with bodies that were not the Government, employees of public sector undertakings or corporations removable by authorities other than the Government, or accused who had ceased to be public servants when cognizance was taken; the Court had no quarrel with them but they did not govern a Government servant on deputation. (¶¶ 9, 10, 11, 12, 13, 14, 15, 16)
'Public servant' in Section 197(1) CrPC, not being defined in the Code, must be understood through Section 21 IPC by reason of Section 2(y) CrPC. (¶ 23)
It was undisputed that the respondent was initially appointed by the Government of Punjab, was sent on deputation to the Union Territory of Chandigarh, was relieved by the Administrator in 2005 to join the Municipal Corporation, Chandigarh, and had his deputation extended from time to time by the Governor of Punjab. These orders merely placed his services temporarily at the Corporation's disposal; CBI did not show that he was absorbed in the Corporation or that any valid order ended his status as a Government servant. In the absence of statutory rules transferring disciplinary control, the Corporation could not have dismissed or removed him (Article 311(1)). (¶¶ 24, 25)
The protection of Section 197(1) CrPC is available to public servants whose appointing authority is the Central or State Government (A. Sreenivasa Reddy). The respondent, while serving the State of Punjab and the Union Territory administration, was a public servant under clause (a) of the Twelfth description in Section 21 IPC and, despite his deputation to the Municipal Corporation, remained one for the purposes of Section 197(1), being removable from office only by an appropriate authority in the Government of Punjab. The contention that he ceased to be a public servant on deputation was rejected and the High Court's discharge for want of sanction was upheld. (¶¶ 26, 27, 28, 31)
Liberty to seek sanction under Section 218 BNSS (deemed sanction) was declined: by Section 531 BNSS the CrPC is repealed, but pending proceedings are to be continued under the repealed law. Liberty to seek sanction under the CrPC, if so advised, was reserved. (¶¶ 29, 30)

Result

Both appeals (by the CBI and by the complainant) dismissed; the High Court's order discharging the respondent for the IPC offences for want of sanction under Section 197 CrPC, while refusing discharge for the Prevention of Corruption Act offences, held correct; liberty reserved to seek sanction under the CrPC.