Case Note & Summary
The case arises from an FIR registered on 09.12.2009 regarding a MSME Receivable Finance Scheme operated by SIDBI. It was discovered that 12 RTGS payments amounting to Rs.1,64,17,551/- meant for Ranflex India Pvt. Ltd. (vendor) were diverted to a fraudulent account with Federal Bank, Thriupporur, instead of the vendor's actual account with Central Bank, Bangalore. The appellant, Ashoo Surendranath Tewari, was Accused No. 9 in the FIR. He was a Deputy General Manager at SIDBI. The charge-sheet alleged that on 25.05.2009, the appellant received an email containing RTGS details for the Federal Bank account, which he forwarded to Accused No. 5 (Muthukumar), the alleged kingpin who is absconding. Based on Muthukumar's approval, the appellant signed cheques. The Special Judge, CBI (ACB), Pune, by order dated 27.06.2012, discharged the appellant under the Prevention of Corruption Act for want of sanction but refused to discharge him under the IPC, finding a prima facie case. The High Court, by judgment dated 11.07.2014, upheld the refusal of sanction under Section 197 Cr.P.C. and rejected the appellant's reliance on a CVC report dated 22.12.2011, which had exonerated the appellant on merits, finding him to be a victim of Muthukumar's fraud and only negligent. The Supreme Court considered the CVC report, which noted that the appellant had forwarded the email to Muthukumar for verification as per procedure, had proactively frozen the fraudulent account to prevent withdrawal of Rs. 34 lakhs, and had arranged dispatch of payment advices to the correct address, indicating non-involvement. The Court held that the standard of proof in criminal proceedings is higher than in departmental proceedings, and where the CVC report exonerated the appellant on the same charge, the criminal proceedings cannot be pursued. Relying on P.S. Rajya v. State of Bihar and Radheshyam Kejriwal v. State of West Bengal, the Court quashed the criminal proceedings against the appellant.
Headnote
A) Criminal Law - Standard of Proof - Departmental vs. Criminal Proceedings - The standard of proof in a criminal case is beyond reasonable doubt, higher than the preponderance of probability standard in departmental proceedings - Where the CVC report exonerated the appellant on the same charge in departmental proceedings, the criminal proceedings on identical facts cannot be pursued - Held that the CVC report, which found the appellant to be a victim of fraud and only negligent, is relevant and the High Court erred in brushing it aside (Paras 7-8). B) Prevention of Corruption Act - Sanction for Prosecution - Section 19 - The Special Judge discharged the appellant under the Prevention of Corruption Act for want of sanction - The High Court upheld the refusal of sanction under Section 197 Cr.P.C. but allowed prosecution under IPC - The Supreme Court quashed the IPC proceedings based on the CVC report (Paras 5-8).
Issue of Consideration
Whether criminal proceedings against the appellant under the Indian Penal Code should be quashed in light of the CVC report exonerating him on the same set of facts in departmental proceedings.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court, and quashed the criminal proceedings against the appellant.
Law Points
- Standard of proof in criminal proceedings is higher than in departmental proceedings
- Exoneration in departmental proceedings on same charge can be relevant in criminal proceedings
- CVC report exonerating accused on merits can be considered for quashing criminal proceedings
