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SC Sets Aside Bombay HC Order To Continue Criminal Case After Refusal Of Sanction By CVC SC Sets Aside Bombay HC Order To Continue Criminal Case After Refusal Of Sanction By CVC

Bronze medal Reporter Names Posted 15 Sep 2020
SC Sets Aside Bombay HC Order To Continue Criminal Case After Refusal Of Sanction By CVC

In a significant judgment, the Supreme Court this week quashed a cheating and fraud case of 2009 against a banker, faulting Bombay high court for not applying a key test which bars continuation of criminal prosecution on the same set of facts after a departmental proceeding has exonerated the person on merits.

A three-judge bench of the SC on September 8, set aside a 2014 judgment of Bombay HC that had permitted prosecution to continue against Ashoo Tewari then deputy general manager at Small Industries Development Bank of India (SIDBI) in Pune, despite a 2011 finding by the Central Vigilance Commission (CVC) that he was a ‘victim’’ and there in fact was no fraud case made out against him on merit.

Tewari had appealed against the HC ruling. The HC had agreed with a 2012 order of a special CBI court of no sanction being necessary to prosecute him under Indian Penal Code for a cheating case. His counsel Subhash Jha pointed out that the CVC had on merits concurred with refusal of prosecution sanction.

The SC said the important yardstick to be applied is in a departmental proceeding “In case of exoneration, on merits’’ where the person is held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.’’

The bench of Justices Rohinton Nariman, Navin Sinha and Indira Banerjee said “if the High Court had bothered to apply this parameter, then on a reading of the CVC report on the same facts, the appellant should have been exonerated.’’

The case was of alleged diversion under a MSME Receivable finance scheme operated by the bank, of funds worth Rs 1.6 crore meant for a vendor, to a co-accused—another bank official, since absconding.
In June 2012, the special CBI court had dropped the corruption charge against Tewari as there was no sanction to prosecute him under Prevention of Corruption Act. But the court had continued with IPC offences.

The CVC had termed Tewari and another accused Shasheel Karade as “victims of conspiracy’’. It has also observed that Tewari had “done due diligence but in the process got duped’’ and yet later had “proactively’’ taken steps to prevent Rs 34 lakh from being withdrawn.

The SC also heard additional solicitor general Vikramjit Banerjee for the CBI, before delving into the CVC report and holding “at the highest, Tewari may be negligent without any criminal culpability.’’

“In fact, the positive finding of the CVC’’ that he appears to be “a victim’’ “is of some importance,’’ said the SC adding “in view of detailed CVC order…chances of conviction in a criminal trial involving the same facts appear bleak,’’ said the SC discharging him from offences under IPC.

A number of SC judgments have held that “the standard of proof in a departmental proceeding… is somewhat lower than the standard of proof in a criminal proceeding where the case has to be proved beyond reasonable doubt.’’

The SC bench now reiterated that if on merit, during departmental adjudication, no contravention of the law is found, “the trial of the person shall be an abuse of process of the court.’’

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