The Supreme Court delivered split verdict in the petition filed by former Andhra Pradesh Chief Minister N Chandrababu Naidu seeking quashing of FIR against him in Andhra Pradesh skill development program scam case.

The bench gave different interpretation of Section 17A of the Prevention of Corruption Act 1988 and thus the matter stands referred to the Chief Justice of India.

The bench of Justice Aniruddha Bose and Justice Bela M Trivedi had reserved the judgment on October 17, 2023.

The plea was filed by TDM Chief and former Andhra Pradesh Chief Minister N Chandrababu Naidu challenging the High Court's decision rejecting Naidu's request for the quashing of the First Information Report (FIR) filed against him in the Andhra Pradesh skill development program scam case, As per the SLP, Naidu was suddenly named in the FIR registered over twenty-one months ago, arrested in an illegal manner and deprived of his liberty motivated only by political reasons. It has also been submitted in the SLP that both the initiation of the enquiry and the registration of the FIR is non est as both have been initiated and investigation continue till date without a mandatory approval under Section 17-A of the Prevention of Corruption Act, 1988.

In his judgment, Justice Bose observed, "If an enquiry is intended on a public servant, previous approval of the authority under Section 17 under the Act has to be obtained...The appellant cannot be proceeded against. I decline to interfere with the remand order. Non-compliance of Section 17A would not render the remand order non est in its entirety". Justice Bose further clarified that it would not render the entire remand order non est.

However, Justice Trivedi in the dissenting opinion observed, "There cannot be any assumption of retrospectivity. The intention of the legislature was to make the amendments prospectively and not retrospectively...Only to the new offences and not the offences which existed prior the Amendments. Absence of approval before conducting an enquiry into the offence cannot be a ground for quashing an FIR against the public servant...Repeal of an Act would not affect the investigation powers of the investigating agency. Section 17A would be applicable to the offences under Amendments of 2018 and not to the offences under 1988 Act. The Special Court was absolutely within the jurisdiction to pass the remand order".

By the impugned order, the Andhra Pradesh High Court had held that the alleged actions by Naidu could not be considered as being carried out in good faith or in the execution of his official duties as Chief Minister. The Court stated, “Section 17A of the PC Act cannot be made applicable in those cases where the act of the public servant that amounts to an offence appears on the face of it lacking in good faith. Issuing public building license and no objection certificates cannot be said to be acts done in good faith.”

As a result, the High Court had ruled that prior approval from the competent authority was not required for the investigation into the alleged offences. Naidu had argued that Section 17A of the Prevention of Corruption (PC) Act had not been followed, as the required permission from the competent authority had not been obtained.

While the State Criminal Investigation Department (CID), argued that the proceedings should not be dismissed as the investigation was in its early stages. It was contended that Section 17A did not apply because Naidu, as the head of the executive government, was allegedly involved in a deliberate scam that misappropriated Rs.370 crores of public funds.

However, the High Court Court found that Naidu's actions could not be considered to have been carried out in good faith or in the performance of his official duties.

The High Court said that “this Court is of the opinion that in respect of the disputed questions of fact, a mini trial cannot be conducted by this Court in a petition filed under Section 482 CrPC. The investigating agency, pursuant to the registration of the crime in the year 2021, examined as many as more than 140 witnesses and collected documents to the tune of more than 4000. Profligacy is such an esoteric subject, where investigation has to be carried with utmost proficiency by the professionals. At this stage, where the investigation is on fulcrum of attaining finalty, this Court is not inclined to interfere with the impugned proceedings”.

Justice Aniruddha Bose's Judgment:

It was observed that the point of time Section 17A of 1988 Act would become applicable is the starting point of enquiry, inquiry, or investigation and not the time of the commission of the alleged offence.

It was further noted that the wording of Section 17A restricts the power of a police officer to conduct any of the three acts into any offence by a public servant “under this act”. In furtherance of the same, it was observed that, "if the process of enquiry commences at a time attracting specific provisions of the 1988 Act which stand deleted by the Amendment Act of 2018, the restrictive protection in form of Section 17A ought to be granted. The phrase “under this act”, on such construction ought to include offences which were in the statue book at the time the subject ­offences are alleged to have been committed."

Notably, it was stressed that a restrictive interpretation could not be given to the expression "under this Act" to give an isolated retrospective operation to the said phrase, detaching it from the rest of the provisions of Section 17A of the Act and removing the protective shield in a situation where an enquiry has started after the introduction of the said provision but relates to an offence committed prior to its introduction in 2018. In that context, it was further said that, "The said phrase ought to be relatable to the date of starting of the enquiry, inquiry or investigation and not to the time or date of commission of offence."

Justice Bela M Trivedi's Judgment:

It was observed that if any enquiry or inquiry or investigation carried out by a police officer in respect of the offence committed by a public servant is held to be non est or infructuous by making Section 17A retrospectively or retroactively applicable, the same would not only frustrate the object of the PC Act but also would be counter-productive. In that context, it was also said that, "the very object of the PC Act is to combat the corruption, and the object of Section 17A is to protect the honest and innocent public servants from undergoing the harassment by the police for the recommendations made or decisions taken in discharge of official functions or duties. It cannot be the object of Section 17A to give benefit to the dishonest and corrupt public servants."

It was stressed that the Courts should also take into consideration the other provisions of the Act while interpreting a particular provision and should avoid such interpretation as would lead to an anomalous situation or frustration of the object of the Act.

It was moreover observed that the "absence of approval before conducting any enquiry or inquiry or investigation into an offence alleged to have been committed by a public servant, as contemplated in Section 17A could never be the ground for quashing the FIR registered against the public servant or the proceedings conducted against him, more particularly when he is also charged for the other offences under the IPC in respect of the same set of allegations."

Considering the different contours of Section 17A, the considered view taken was that Section 17A would be applicable to the offences under the PC Act as amended by the Amendment Act, 2018, and not to the offences existing prior to the said amendment.

Cause Title: Nara Chandrababu Naidu v. The State Of Andhra Pradesh And Anr. (Neutral Citation: 2024 INSC 41)

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