Supreme Court clarifies: No Sanction Needed to Prosecute Bank Managers for Forgery: S.K. Miglani vs. State NCT of Delhi (2019)

Date of the Judgment: 30 April 2019

Citation: (2019) INSC 412

Judges: Ashok Bhushan, J., K.M. Joseph, J.

Can a bank manager be prosecuted for forgery without prior government sanction? The Supreme Court addressed this critical question in a case involving a bank manager accused of forging signatures to open a fraudulent account. This judgment clarifies the circumstances under which a public servant, specifically a bank manager, can be prosecuted for criminal offenses without needing prior government approval.

The Supreme Court bench, comprising Justices Ashok Bhushan and K.M. Joseph, delivered the judgment. The opinion was unanimous, with Justice Ashok Bhushan authoring the decision.

Case Background

The case revolves around S.K. Miglani, a manager at a Bank of Baroda branch in Faridabad. He was implicated in a case involving fraudulent activities related to a housing scheme by the Delhi Development Authority (DDA). The prosecution alleged that Miglani, in collusion with other individuals, facilitated the encashment of a refund cheque by opening a fictitious bank account using forged signatures. The original allottee, Gautam Dhar, was supposed to receive a refund, but the funds were allegedly misappropriated through this fraudulent account.

The initial complaint was filed on 14 November 2000, leading to an FIR being lodged on 15 November 2000. The investigation revealed that a refund cheque of Rs. 2,22,263 was fraudulently withdrawn using a savings account opened in the name of Gautam Dhar at the Bank of Baroda, Faridabad. The account was allegedly opened with forged signatures of the allottee.

A charge sheet was filed against several DDA officials and property dealers. A supplementary charge sheet later included Miglani’s name, alleging his involvement in opening the fictitious account. The prosecution claimed that Miglani conspired with Praveen Kumar, the attorney of Gautam Dhar, and Rajinder, to encash the cheque. The prosecution obtained a report from the Forensic Science Laboratory (FSL) regarding the handwriting and signatures on the account opening form.

Timeline

Course of Proceedings

The appellant, S.K. Miglani, filed an application before the Additional Chief Metropolitan Magistrate (ACMM), Saket Court, New Delhi, seeking discharge from the case. He argued that as a public servant, he required prior sanction under Section 197 of the Code of Criminal Procedure (CrPC) for prosecution. The ACMM rejected this application on 3 December 2014, stating that the alleged act of forgery could not be considered as part of his official duties. Subsequently, on 13 December 2014, charges were framed against Miglani under Section 465 (forgery) and Section 120-B (criminal conspiracy) of the Indian Penal Code (IPC).

Miglani then filed an application under Section 482 of the CrPC before the High Court of Delhi, seeking to quash the FIR, the charge sheet, and the orders of the CMM. The High Court dismissed this application on 6 August 2018, upholding the CMM’s order and the framing of charges. The High Court also relied on the judgment of the Supreme Court in Parkash Singh Badal vs. State of Punjab (2007) 1 SCC 1, which held that offenses like forgery cannot be considered as acts done in the discharge of official duties.

Legal Framework

The core legal provision in this case is Section 197 of the Code of Criminal Procedure (CrPC). This section mandates that prior sanction from the government is required to prosecute a public servant for offenses committed while acting or purporting to act in the discharge of their official duties. The provision reads:

“197. Prosecution of Judges and public servants. –(1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction…”

The key aspect here is whether the bank manager, S.K. Miglani, falls under the category of a public servant whose removal from office requires government sanction. Also, whether the alleged act of forgery can be considered as an act done in the discharge of his official duty.

The relevant sections of the Indian Penal Code (IPC) under which the charges were framed against S.K. Miglani include:

• Section 465, IPC: This section deals with the punishment for forgery.
• Section 120-B, IPC: This section deals with the punishment for criminal conspiracy.

Arguments

Appellant’s Submissions:

• The appellant, S.K. Miglani, argued that as a Branch Manager at Bank of Baroda, he was a public servant, and therefore, prior sanction under Section 197 of the CrPC was required for his prosecution.
• He contended that opening the savings account was part of his official duty, and thus, any alleged offense related to it should necessitate prior sanction.
• Miglani also challenged the reliance on the second forensic report, which concluded that the signatures on the account opening form matched his specimen signatures. He argued that the initial report did not provide a definite opinion, and the second report should not have been given more weight.
• He argued that the CMM had prematurely concluded that he had committed forgery, even before the trial had commenced.
• The appellant argued that the opinion of a handwriting expert is a weak form of evidence and cannot be the sole basis for rejecting his claim that he was acting in his official capacity.

Respondent’s Submissions:

• The respondent, the State, argued that the alleged acts of forgery by the appellant could not be considered as acts performed in the discharge of his official duty.
• The respondent relied on the Supreme Court’s judgment in Parkash Singh Badal vs. State of Punjab (2007) 1 SCC 1, which stated that offenses like forgery and cheating cannot be considered as acts done in the discharge of official duty.
• The State contended that the appellant could not claim the protection of Section 197 CrPC because his actions were not part of his official duties.

Innovative Argument: The appellant’s argument that the second forensic report should not be relied upon due to the lack of a conclusive opinion in the first report is somewhat innovative. It challenges the weight given to the second report and questions the process of obtaining it. However, this argument was not ultimately successful as the court focused on the applicability of Section 197 CrPC.

Submissions by Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section of the judgment. However, the primary issue that the court addressed was:

1. Whether a bank manager, who is a public servant, requires prior sanction under Section 197 of the CrPC for prosecution of offenses like forgery allegedly committed while opening a bank account.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities in its judgment:

• K.CH. Prasad Vs. Smt. J. Vanalatha Devi and Others, (1987) 2 SCC 52 (Supreme Court of India): This case held that a person working in a nationalized bank, even if a public servant, does not attract the provisions of Section 197 of the CrPC because they are not removable from service only by or with the sanction of the government.
• Parkash Singh Badal and Another Vs. State of Punjab and Others, (2007) 1 SCC 1 (Supreme Court of India): This case held that offenses like cheating, forgery, and criminal conspiracy cannot be considered as acts done in the discharge of official duty.
• S.P.S. Rathore Vs. Central Bureau of Investigation and Another, (2017) 5 SCC 817 (Supreme Court of India): This case discussed the evidentiary value of a handwriting expert’s opinion, stating that it is only opinion evidence and not conclusive.
• Inspector of Police and Another Vs. Battenapatla Venkata Ratnam and Another, (2015) 13 SCC 87 (Supreme Court of India): This case reiterated the proposition laid down in Parkash Singh Badal.
• Devinder Singh and Others Vs. State of Punjab, (2016) 12 SCC 87 (Supreme Court of India): This case also reiterated the proposition laid down in Parkash Singh Badal.
• N.K. Ganguly Vs. Central Bureau of Investigation, (2016) 2 SCC 143 (Supreme Court of India): This case clarified that for obtaining prior sanction under Section 197 CrPC, the alleged offence must be committed in the discharge of official duty.

Legal Provisions Considered:

• Section 197 of the Code of Criminal Procedure (CrPC): This section deals with the requirement of prior sanction for prosecuting public servants.
• Section 465 of the Indian Penal Code (IPC): This section deals with the punishment for forgery.
• Section 120-B of the Indian Penal Code (IPC): This section deals with the punishment for criminal conspiracy.

Authorities Considered by the Court

Judgment

The Supreme Court upheld the High Court’s decision, stating that the appellant, S.K. Miglani, did not require prior sanction under Section 197 of the CrPC for prosecution. The court reasoned that a bank manager is not a public servant who cannot be removed from office without government sanction. Additionally, the court held that the act of forgery cannot be considered as an act done in the discharge of official duty.

The court relied on its earlier judgment in K.CH. Prasad vs. Smt. J. Vanalatha Devi (1987) 2 SCC 52, which held that employees of nationalized banks do not fall under the ambit of Section 197 CrPC. The court also reaffirmed its stance in Parkash Singh Badal vs. State of Punjab (2007) 1 SCC 1, stating that offenses like forgery cannot be considered as part of official duties.

The court, however, deleted certain observations made by the CMM, which had prematurely concluded that the appellant had committed forgery. The court clarified that the FSL report was just one piece of evidence and its evidentiary value was to be determined during the trial.

How Submissions Were Treated by the Court

How Authorities Were Viewed by the Court

What Weighed in the Mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Interpretation of Section 197 CrPC: The court focused on the specific language of Section 197, which requires that the public servant must be one who is not removable from office save by or with the sanction of the government. The court held that a bank manager does not meet this criterion.
• Nature of the Offense: The court emphasized that the act of forgery, by its very nature, cannot be considered as an act performed in the discharge of official duty. This was based on the precedent set in Parkash Singh Badal.
• Precedent: The court heavily relied on the precedent set in K.CH. Prasad and Parkash Singh Badal, which clearly laid down the law regarding the applicability of Section 197 CrPC to bank employees and the nature of offenses like forgery.
• Avoiding Premature Conclusions: The court also emphasized that the CMM should not have made conclusive observations about the appellant committing forgery before the trial had commenced.

Sentiment Analysis of Reasons

Fact:Law Ratio

Logical Reasoning

Key Takeaways

• Bank managers do not require prior sanction: Bank managers in nationalized banks do not require prior sanction under Section 197 of the CrPC for prosecution in cases of offenses like forgery.
• Forgery is not part of official duty: Offenses like forgery, cheating, and criminal conspiracy are not considered as acts done in the discharge of official duty.
• Importance of Precedent: The Supreme Court’s decision was heavily influenced by existing precedents, particularly the K.CH. Prasad and Parkash Singh Badal cases.
• Evidentiary Value: The court reiterated that the opinion of a handwriting expert is not conclusive evidence and should be corroborated by other evidence.
• Avoiding Premature Conclusions: Lower courts should refrain from making conclusive observations about the guilt of an accused before the trial.

Directions

The Supreme Court did not issue any specific directions in this case, other than deleting certain observations made by the CMM in its order dated 03.12.2014. The court deleted the following observations:

“From the FSL report, it is clear that accused S.K. Mighlani forged the signatures of Sh. Gautam Dhar on account opening form and moreover, the introducer Rajender Kr. is absconding. In view of this Court, an act of forgery done by public servant cannot be considered an act done in discharge of his official duties…”

Specific Amendments Analysis

There was no discussion of specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that a bank manager in a nationalized bank does not require prior sanction under Section 197 of the CrPC for prosecution of offenses like forgery. This judgment reinforces the existing legal position as laid down in K.CH. Prasad and Parkash Singh Badal and does not introduce any new legal principles. It clarifies that offenses such as forgery cannot be considered as acts done in the discharge of official duty for the purpose of Section 197 CrPC. The judgment does not change the previous positions of law but reiterates and applies them to the specific facts of the case.

Conclusion

In conclusion, the Supreme Court’s judgment in S.K. Miglani vs. State NCT of Delhi clarifies that bank managers in nationalized banks do not require prior government sanction under Section 197 of the CrPC to be prosecuted for offenses like forgery. The court emphasized that forgery is not an act performed in the discharge of official duty. This decision reinforces the existing legal framework and provides clarity on the applicability of Section 197 in such cases.