Prosecution of a serving public servant for official acts requires prior sanction under Section 197 CrPC.

Karnataka Housing Board (KHB) had allotted a civic amenity site to Adarsh Educational and Social Service Trust. After the Trust defaulted on a loan secured over the site, the lender auctioned it; KHB later executed a sale deed in favour of the original allottee.

Respondent No. 2, which claimed rights through the auction, filed a private complaint alleging cheating and other offences. Following investigation, a charge sheet was filed against the petitioner, a KHB officer, and two others under Sections 420 read with 34 IPC. The Magistrate took cognizance on 15 November 2018.

The petitioner sought to quash the cognizance order and proceedings, contending, among other things, that he executed the deed after his predecessor had approved the draft and that sanction under Section 197 CrPC had not been obtained. The complainant had also filed a writ petition seeking a direction to KHB to execute a sale deed in its favour.

1. Whether the Magistrate erred in taking cognizance against the petitioner for an offence under Section 420 read with Section 34 IPC.

2. Whether the criminal proceedings against the petitioner should be quashed in light of the circumstances surrounding the sale deed, the pending civil proceedings, and the asserted absence of sanction.

Section 420 IPC requires dishonest or fraudulent intention to cheat; the Court stated that such intention must exist at the inception.

Section 34 IPC concerns joint liability for acts done in furtherance of common intention.

The Court considered Section 197 CrPC, treating sanction as required in the petitioner’s circumstances because he had been re-inducted into service and was in service when cognizance was taken.

It also considered Section 82 of the Karnataka Housing Board Act, 1962, which protects acts done or purportedly done in good faith under the Act.

In discussing sanction, the Court referred to Parkash Singh Badal v. State of Punjab and C.R. Bansi v. State of Maharashtra, concerning the relevance of whether an accused remains a public servant when cognizance is taken.

The Court also cited Bharat Sanchar Nigam Ltd. v. Pramod V. Sawant in addressing the scope of Section 197 CrPC.

The Court found that the charge sheet invoked only Sections 420 read with 34 IPC and that the material showed the petitioner executed the sale deed after his predecessor had approved the draft.

The dispute concerned competing claims to the site and the execution of the sale deed; respondent No. 2 had already sought relief against KHB in a writ petition. In those circumstances, the Court found no sufficient basis to infer that the petitioner had an intention to cheat at the inception, and viewed the criminal case as giving a criminal colour to a civil dispute.

It further noted that the petitioner was in service when cognizance was taken and that no sanction had been obtained. Taken together, these circumstances warranted quashing the proceedings as an abuse of process.

The Court allowed the petition, set aside the Magistrate’s order dated 15 November 2018, and quashed the proceedings against the petitioner, arrayed as accused No. 3, under Section 420 read with Section 34 IPC.