Purchasing Shares By Public Servant As Benami In Name Of Third Person Is Not Within Domain Of Section 17A PC Act: Kerala High Court
The Kerala High Court said that purchasing public property under a benami would not come within the purview of Section 17A of the Prevention of Corruption Act.
Justice A. Badharudeen, Kerala High Court
The Kerala High Court held that purchasing shares by the public servant as benami in the name of a third person is not within the domain of Section 17A of Prevention of Corruption Act, 2018 (PC Act).
The Court held thus in a criminal miscellaneous case filed under Section 482 of the Criminal Procedure Code, 1973 (CrPC), seeking to quash the Order of the Enquiry Commissioner and Special Judge (Vigilance).
A Single Bench of Justice A. Badharudeen observed, “Section 17A of the PC Act, 2018 would apply only when an offence alleged to have been committed by the public servant under the PC Act where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties, without the previous approval. Purchasing shares by the public servant as benami in the name of a third person is not within the domain of Section 17A of PC Act, 2018.”
The Bench said that purchasing public property under a benami would not come within the purview of Section 17A of the PC Act.
Senior Advocate P. Vijaya Bhanu appeared for the Petitioner while Senior Public Prosecutor (Sr. PP) Rekha S. appeared for the Respondents.
Brief Facts
The senior counsel for the Petitioner submitted that the quick verification order is unwarranted since the entire allegations are baseless. The allegation was that during 2004, the Petitioner allotted 1,20,000 shares of Cochin International Airport Ltd. (CIAL) to a person who was a non-employee of CIAL, which was meant for the employees of CIAL under the Employees Stock Ownership Plan (ESOP). Allegedly, no such scheme was implemented and further, the allotment of shares was in accordance with the decision of the Director Board and the Petitioner has no individual role. Hence, it was contended that the quick verification order is liable to be quashed.
Reasoning
The High Court in view of the above facts, noted, “… the provisions of the Prohibition of Benami Property Transactions Act, 1988 (hereinafter referred to as ‘the Benami Prohibition Act’) have significance. As per Section 3 of the Benami Prohibition Act, no person shall enter into any benami transaction and whoever enters into any benami transaction shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.”
The Court added that as per Section 5 of the Benami Prohibition Act, any property, which is subject matter of benami transaction, shall be liable to be confiscated by the Central Government and Section 4 of the Benami Prohibition Act prohibits the right to recover the property held as benami.
“It is true that in August 2022, a three-judge bench of the Hon’ble Supreme Court declared that Section 3(2) of the Benami Prohibition Act (jail provision for benami transactions) was unconstitutional, calling it "manifestly arbitrary". The Court also held that the stricter provisions under the 2016 Amendment were ruled not to be retrospectively applicable, meaning that prosecutions and confiscations for benami transactions that took place before 25.10.2016 were quashed”, it further noted.
The Court said that as per Section 17A of the PC Act, conduct of enquiry or inquiry or investigation by a police officer for any offence alleged to have been committed by a public servant under the PC Act, where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties, without the previous approval.
“In this case, an investigation as to commission of offences punishable under the benami Prohibition Act also steps in, where offences under the PC Act, 2018 also involved”, it also observed.
The Court concluded that there is no necessity to interfere with the Order impugned and the further steps as per the Order can be proceeded on getting approval under Section 17A of the PC Act, 2018, sought for.
Accordingly, the High Court disposed of the Petition, vacated the interim order, and directed the Registry to forward a copy of the Order to the Special Court forthwith.
Cause Title- V.J. Kurian v. State of Kerala & Anr. (Neutral Citation: 2025:KER:69617)
Appearance:
Petitioner: Senior Advocate P. Vijaya Bhanu, Advocates Thomas J. Anakkallunkal, Jayaraman S., Nirmal Cheriyan Varghese, Litty Peter, and Anupa Anna Jose Kandoth.
Respondents: Sr. PP Rekha S., Special PP Rajesh A., Advocates Dinoop P.D., K.P. Prasanth, T.S. Krishnendu, Archana Suresh, Sunitha K.G., C. Unnikrishnan (Kollam), Ananda Padmanabhan, Uthara A.S, Goutham Krishna U.B., Nidhi Balachandran, and Vijaykrishnan S. Menon.
