Validity Of Sanction Must Be Challenged At Earliest Instance Available Before Trial Court: SC Dismisses Plea Of PLFI Member In UAPA Case

The Supreme Court held that the validity of a sanction must be challenged at the earliest instance available before the Trial Court.

The Court dismissed the appeal of Fuleshwar Gope, an associate of the People’s Liberation Front of India (PLFI) being alleged to have criminally conspired and formed an unlawful association.

The two-Judge Bench comprising Justice C.T. Ravikumar and Justice Sanjay Karol observed, “The validity of sanction should be challenged at the earliest instance available, before the Trial Court. If such a challenge is raised at an appellate stage it would be for the person raising the challenge to justify the reasons for bringing the same at a belated stage. Such reasons would have to be considered independently so as to ensure that there is no misuse of the right of challenge with the aim to stall or delay proceedings.”

Advocate-on-Record (AOR) Balaji Srinivasan appeared for the appellant while Additional Solicitor General (ASG) Vikramjit Banerjee and Senior Advocate Swarupama Chaturvedi appeared for the respondents.

Facts of the Case -

It was alleged that the appellant/accused formed a company M/s. Shiv Shakti Samridhi Infra Pvt. Ltd. along with another person which was more in the nature of a partnership. The company’s bank account was allegedly used to directly/indirectly collect funds from legitimate or illegitimate sources for the use of activities of PLFI on the directions of Dinesh Gope @ Kuldeep Yadav @ Banku, a terrorist and chief of PLFI. In 2016, an FIR was registered against six persons under Sections 212, 213, 34, and 414 of the Indian Penal Code (IPC) and Sections 13, 17, and 40 of the Unlawful Activities (Prevention) Act, 1967 (UAPA) and Section 17 of the Criminal Law Amendment Act, 1908 on the allegation that Rs. 25.83 lakhs of demonetized currency were brought to the concerned branch of the State Bank of India by the PLFI chief.

Thereafter, the Judicial Magistrate took cognizance of the case and the Deputy Commissioner sought sanction to prosecute. The sanction was granted by the Principal Secretary, Department of Home, Prisons & Disaster Management, however, subsequently, the Ministry of Home Affairs (MHA), Government of India issued a transfer order in respect thereto and the FIR was re-registered as a case under the National Investigation Agency (NIA). MHA further initiated suo-motu sanction in 2019 against twelve accused persons. Subsequently, the appellant was arrested in 2020 and hence, he filed a writ petition before the High Court seeking quashing of the sanction order. The High Court refused to quash the same and therefore, the appellant approached the Apex Court.

The Supreme Court in view of the above facts noted, “… we are of the view that a joint trial, if held, after having considered the two factors given above, cannot be said to be ipso facto prejudicial to the parties.”

The Court further said that as per the allegations, Dinesh Gope, who is the Chief of PLFI, extorts money from various persons and that the company (A-20) of which the appellant is a director, used to legitimise the proceeds of such unlawful actions.

“The appellant, however, contends that there is no connection between the charges levied on A-6 and the transactions because of which he has been made an accused, whereas the Prosecution submits that both A-6 and A-17 are part of the same, continuing, ongoing transactions. Whether or not actually the case is a question to be decided on the basis of evidence adduced at trial, and not at this stage, by this Court.”, it added.

Moreover, the Court referred to the judgment of the Supreme Court in the case of State of U.P. v. Paras Nath Singh (2009) 6 SCC 372 in which it was observed that, as the provision (Section 223 of the Criminal Procedure Code i.e., CrPC) itself mandates that no finding, sanction or order by a court of competent jurisdiction becomes invalid unless it is so that a failure of justice has in fact been occasioned because of any error, omission or irregularity in the charge including in misjoinder of charge, the burden is on the accused to show that in fact a failure of justice has been occasioned.

“Therefore, we leave it to the appellants to raise this issue before the Trial Judge, who shall, if such a question is raised, decide it promptly at the appropriate stage. … For Section 22A to apply :- (a) offence has to committed by a company; (b) all persons who at the time of the offence were in control of, or responsible for, the company’s affairs shall be deemed guilty; (c) such person would be saved from guilt as under (b) if they can demonstrate that such act was (i) not in their knowledge; (ii) they had taken reasonable care to prevent such offence from taking place”, it noted.

The Court enunciated that as per Section 22A of UAPA, if it can be proved that the offence committed by the company was (1) with consent; (2) in connivance of; (3) attributable to neglect on the part of any promoter, director, manager, secretary or any other officer of the company, then they shall be held guilty.

“… this Court cannot, at this stage, decide whether Section 22A applies to the appellant or not. This is once again a matter for evidence. … The timelines mentioned in Rules 3 & 4 of the 2008 Rules are couched in mandatory language and, therefore, have to be strictly followed. This is keeping in view that UAPA being a penal legislation, strict construction must be accorded to it”, it said.

The Court also emphasised that the timelines imposed by way of statutory Rules are a way to keep a check on executive power which is a necessary position to protect the rights of accused persons and the independent review by both the authority recommending sanction and the authority granting sanction, are necessary aspects of compliance with Section 45 of the UAPA.

“Sections 218-222, CrPC, are not violated. In respect of Section 223, the position of law is the one taken in Paras Nath Singh (supra). Therefore, this Court prudently leaves it for the Trial Court to decide, if such an issue is raised before it”, it said.

The Court remarked that, whether or not the exemption under Section 22A of UAPA applies is a matter to be established by the way of evidence for the person claiming such exemption has to demonstrate that either he was not in charge of the affairs of the company which has allegedly committed the offence, or that he had made reasonable efforts to prevent the commission of the offence.

“This, once again, is a matter for the Trial Court to consider and not for this Court to decide at this stage, keeping in view that the trial is underway and proceeded substantially”, it concluded.

Accordingly, the Apex Court dismissed the appeal.

Cause Title- Fuleshwar Gope v. Union of India & Ors. (Neutral Citation: 2024 INSC 718)

Appearance:

Appellant: AOR Balaji Srinivasan, Advocates Rohan Dewan, Aakriti Priya, Lakshmi Rao, Harsha Tripathi, Vishwaditya Sharma, Aditya Nath, Shreyas Ranjan, and Shiva Krishnamurti.

Respondents: ASG Vikramjit Banerjee, Senior Advocate Swarupama Chaturvedi, AOR Arvind Kumar Sharma, Advocates Rukhmini Bobde, Raghav Sharma, Madhav Singhal, and Zeenat Malick.

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