The Manager called upon to initiate action against vigilance cases needs to not only to comply with the internal procedures of the organization, but has also to adhere to legal requirements, in particular the requirements under the Indian Penal Code, Code of Criminal Procedure and in respect of Public Servants, the Prevention of Corruption Act. Filing F.I.R. with the police is compulsory, when the misconduct is recognized as a Fraud and infringes provisions of Indian Penal Code or Prevention of Corruption Act. Corruption is an internal virus, while fraud emanates from both within and outside.

In case of an offence committed by the officer employee/workman employee (public servant) under IPC or any other enactment other than Prevention of Corruption Act, for which he is prosecuted and convicted by a competent court, the disciplinary authority can dismiss the officer employee /employee or inflict other punishments considered justified. There will be no need for conducting a regular inquiry in this case.

In case of prosecution under Prevention of Corruption Act, it refers to an offence relating to his service. In case the offence first comes to the notice of the employer, it is necessary to conduct a preliminary investigation to collect quickly materials for lodging a F.I.R. with the CBI/Police. No more action, excepting placing the officer under suspension can be done when the investigation is pending and not completed by the Police/CBI. The employer (Govt. Department or statutory corporation) should not conduct parallel investigation, but should render all assistance to the investigating officer of the Police/CBI.

After completion of the investigation, if it is decided to prosecute the employee, under Section 19 of the Prevention of Corruption Act, 1988, it is necessary for the prosecuting authority to have the previous sanction of the appropriate administrative authority for launching prosecution against a public servant.

CVC has given the following guidelines with reference to sanction of prosecution of public servants (Chapter VII of CVC Manual paragraphs 2 to 5)

1. The requirement of previous sanction is intended to afford a reasonable protection to a public servant, who in the course of strict and impartial discharge of his duties may offend persons and create enemies, from frivolous, malicious or vexations prosecution and to save him from unnecessary harassment or undue hardship which may result from an inadequate appreciation by police authorities of the technicalities of the working of a department. The prosecution of a Government servant for an offence challenging his honesty and integrity has also a bearing on the morale of the pubic services. The administrative authority alone is in a position to assess and weigh the accusation against the background of their own intimate knowledge of the work and conduct of the public servant and the overall administrative interest of the State.

2. The sanctioning authority has an absolute discretion to grant or to withhold sanction after satisfying itself whether the material placed before it discloses a prima facie case against the person sought to be prosecuted. It is the sole judge of the material that is placed before it. If the facts placed before it are not sufficient to enable to exercise its discretion properly, it may ask for more particulars. It may refuse sanction on any ground, which commends itself to it, if it considers prosecution as inexpedient.

3. However, a public servant who is alleged to have committed an offence should be allowed to be proceeded against in a court of law, unless on the basis of the facts placed before it the sanctioning authority considers that there is no case for launching a prosecution. That a case might lead to an acquittal will not be enough reason for withholding sanction. Whether the evidence available is adequate or not is a matter for the court to consider and decide. For the sanctioning authority to be guided by such considerations will not be proper and may lead to suspicion of partiality and protection of the guilty person. Therefore, normally sanction for prosecution should be accorded even if there is some doubt about its result.

4. The protection of previous sanction is available to a public servant even if he has ceased to be so by the time the court is asked to take cognizance of the offence committed by him when he was a public servant while acting or purporting to act in the discharge of his official duties Under Section 197 of the Criminal Procedure Code as amended in 1974 (Act 2 of 1974), when a person who is or was a public servant, and removable from office save with the sanction of the Government, is accused of an offence committed by him while acting or purporting to act in the discharge of his official duties, then no court can taken cognizance of an offence without the previous sanction of the Government which was competent to remove him from office at the time of commission of the offence. Thus if a public servant is to be prosecuted after retirement in respect of an offence committed by him while in service in the course of his official duties, then sanction of the authority which was competent to remove him from office at that time should be obtained.

5. If the prior sanction of the competent authority is not obtained, the trial would be ab initio void and if commenced will have to be set aside. A fresh prosecution would be necessary after a proper sanction has been obtained and a charge-sheet against the accused will need to be filed afresh for his trial for offence covered by the sanction.

1. Under section 19(1) of the Prevention of Corruption Act, 1988, the authority competent to sanction prosecution will normally be: -

   1. in the case of a Central Government servant who is employed in connection with the affairs of the Union and is removable from his office by the Central Government - Central Government;

   2. in the case of a State Government servant who is employed in connection with the affairs of the State and is removable from his office by the State Government - State Government;

   3. in the case of any other public servant - authority competent to remove him from his office. The words, 'is employed' used in section 19(1) and 'is removable' in clauses (a) and (b) and 'competent to remove him from his office' used in clause (c) are significant and clearly show that the authority contemplated in section 19 is the one competent to remove the public servant holding the office on the date when the court is asked to take cognizance of the offence and not any public servant holding the office held by the accused.

2. Clauses (a) and (b) above will apply to persons who are employed in connection with the affairs of the Union or in connection with the affairs of a State and are removable from office by the Central Government or by the State Government, respectively. Government employees or other public servants who do not fall in these two categories, for example, a Government servant who is removable from his office by an authority lower than the Central or the State Government will fall under clause (c) and the authority competent to remove him from service will be authority competent to sanction prosecution. The case of a Government servant whose services have been lent by one Government to another will also fall under clause (c) and the authority competent to sanction the prosecution will be the authority competent to remove such Government servant from service, which may be either the Central Government or the State Government or an authority lower than the Central or the State Government as the case may be. The expression 'Central Government' by virtue of Sec. 3(8) of the General Clauses Act, 1897 means the 'President'.

3. Sub-section (2) of section 19 of the Prevention of Corruption Act, 1988 further provides that where for any reason whatsoever any doubt arises as to whose previous sanction should be obtained under sub-section (1), the sanction shall be given by the authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed.

4. Normally, sanction should be accorded by the competent authority. However, if in any case sanction has been accorded by an authority higher than the competent authority, such a sanction will not be invalid. In State Vs. Yash Pal (AIR 1957 Punjab 91), while the Assistant Inspector General, who ranked with a Superintendent of Police, was the authority who appointed the accused and sanction for prosecution was given by the Deputy Inspector General, an authority higher in the rank than the Superintendent of Police, it was held that sanction did not contravene the provisions of Sec. 6(1)(c) of the Prevention of Corruption Act, 1947, which is analogous to Section 19(1)(c) of the Prevention of Corruption Act, 1988.

1. In the Prevention of Corruption Act, 1988 no particular form or set of words has been prescribed in which the sanction for prosecution need be set out. The sanction, however, represents a deliberate decision of the competent sanctioning authority. The courts expect that a sanction, for which no particular form has been prescribed by law, should ex facie indicate that the sanctioning authority had before it all the relevant facts on the basis of which prosecution was proposed to be launched and had applied its mind to all the facts and circumstances of the case before according its sanction.

2. It is no doubt permissible to prove by evidence that the competent authority had applied its mind to the facts of the case. However, to avoid delays and expense and for the sake of convenience and uniformity of practice, two standard forms have been drawn up for the purpose. The form E-7 is to be used in cases where Central Government is required to sanction prosecution and the form E-8 in other cases where sanction to prosecution is to be given by an authority other than the Central Government.

A sanction for prosecution given on the basis of the material collected during an investigation will not be rendered void if the investigation was later found to be invalid. However, if the reinvestigation reveals any new facts, it is desirable that sanctioning authority should consider afresh whether the public servant should be prosecuted after taking into account all the facts revealed by fresh investigation. If the fresh investigation does not reveal any new facts and there is no change in the nature of the offence for which sanction for prosecution was accorded earlier, the previous sanction will hold good and it will not be necessary for the competent authority to grant a fresh sanction after valid reinvestigation (AIR 1962 Bombay 205)."

CVC has issued various other guidelines with reference to sanction of prosecution in chapter vii of its manual available on its website. As we are concerned with officer employees of Nationalized banks only, relevant other extracts of the chapter are reproduced below:

1. In cases in which the order of sanction for prosecution is to be issued by an authority other than the Central Government, the Central Bureau of Investigation will forward the final report of its investigation to such authority who will decide whether or not prosecution should be sanctioned. Delays in issuing the sanction hold up the launching of prosecution leading to delay in conclusion of the proceedings. Such delays also adversely affect the morale of public servants. The competent authorities may therefore take expeditious action in cases in which CBI recommend prosecution against public servants, and issue the sanction within a period of 2 months from the receipt of report of the Central Bureau of Investigation.

2. If in any case, the competent authority does not propose to accord the sanction sought for by the SPE, action may be taken as under:-

   1. In the case of government servants, the competent authority may refer the case to its Administrative Ministry/Department which may after considering the matter, either direct that prosecution should be sanctioned by the competent authority or by an authority next higher to the competent authority; or in support of the view of the competent authority, forward the case to the Central Vigilance Commission along with its own comments and all relevant material for resolving the difference of opinion between the competent authority and the CBI. If the Commission also advises grant of sanction for prosecution but the Ministry/Department concerned proposes not to accept such advice, the case should be referred to the Department of Personnel & Training for a final decision.

   2. In the case of public servants other than government servants (i.e. employees of local bodies, autonomous bodies, public sector organisations, nationalised banks, insurance companies etc.) the competent authority may communicate its views to the Chief Executive of the Organisation who may either direct that sanction for prosecution should be given, or in support of the views of the competent authority have the case forwarded to the Central Vigilance Commission for resolving the differences of opinion between the competent authority and the CBI"

As soon as the judgment is pronounced a report about conviction/ acquitted/discharge of the accused public servant will be sent by the S.P.E. to the administrative Ministry concerned. The S.P.E. will also take immediate steps to obtain a copy of the judgement and to forward copies of it to the concerned authorities. While doing the so, the S.P.E. may give their comments, if any, on any matters arising out of the judgement.

1. As soon as the report about the conviction is received from the S.P.E., and if it happens that the Government servant convicted had not been placed under suspension, the appropriate disciplinary authority should decide whether he should now be suspended. In cases where the conviction is for a term of imprisonment exceeding 48 hours, the Government servant shall be deemed to have been suspended under Rule 10(2)(b) of Central Civil Services (Classification, Control and Appeal) Rules, 1965 [Corresponding PNB DA Regulation No.12(2)(b)]. A formal order about such deemed suspension will be issued by the disciplinary authority for purpose of administrative record.

2. Having come to know of the conviction of a Government servant on a criminal charge, the disciplinary authority must consider whether his conduct, which had led to his conviction, was such as warrants the imposition of a penalty and if so, what that penalty should be. In considering the matter the disciplinary authority should take into account the entire conduct of the delinquent employee, the gravity of the misconduct committed by him, the impact which his misconduct is likely have on the administration and other extenuating circumstances or redeeming features. Once the disciplinary authority reaches the conclusion that the government servant's conduct was blameworthy and punishable, it must decide upon the penalty that should be imposed on the Government servant keeping in mind that the penalty imposed is not grossly excessive or out of all proportion to the offence committed, or one not warranted by the facts and circumstances of the case.

3. If the disciplinary authority comes to the conclusion that the offence for which the public servant has been convicted was such as to render his retention in the public service prima facie undesirable, it can impose upon him under Rule 19(i) of the C.C.S. (C.C.A.) Rules, 1965, the penalty of dismissal or removal or compulsory retirement from service, as may be considered appropriate, with reference to the gravity of the office, without holding any enquiry, referred to in the proviso to article 311 (2) of the constitution.

4. In a case in which the offence for which a Government servant has been convicted is not considered such as to render his retention in public service prima facie undesirable, the appropriate disciplinary authority may impose any of the penalties, other than those of dismissal, removal or compulsory retirement from the service, specified in Rule 11of the C.C.S. (C.C.A.) Rules, 1965, as may be considered appropriate under Rule 19(i) of the rules without holding any further enquiry.

1. In cases in which a public servant is acquitted by the trial court, the judgement will be examined by the S.P.E. to consider whether an appeal or an application for revision should be filed in the first court of appeal. If the S.P.E. come to the conclusion that such an appeal or an application for revision should be filed, a copy of the judgment together with the copy of the comments of the S.P.E. will be forwarded by them to the concerned administrative Department. If that Department agree with the recommendation of the S.P.E., a certified copy of the judgment and of the comments of the S.P.E. will be forwarded by them to the State counsel for filing an appeal or application for revision, as the case may be. A copy of such reference will be endorsed by the Department to the Central Bureau of Investigation

2. In the case of a Government servant who was under suspension and against whose acquittal an appeal or a revision application is filed, it may be considered whether it is necessary to continue him under suspension. If not, the order of suspension may be revoked immediately.

3. If the Government servant is acquitted by the first appellate court, the S.P.E. will decide whether the acquittal should be challenged in a still higher court, and if it is so decided, action to institute proper proceedings will be taken by the S.P.E.

1. If the Government servant is acquitted by trial or appellate court and if it is decided that the acquittal should not be challenged in a higher court, the competent authority should decide whether or not despite the acquittal, the facts and circumstances of the case are such as to call for a departmental enquiry on the basis of the allegations on which he was previously charged and convicted. According to the ruling of the Supreme Court in Nagpur City Corporation vs. Ram Chandra and other [SC 396 of 1980-SLR 1981 (2)], even where the accused public servant is acquitted and exonerated of an offence, such acquittal does not bar a departmental authority from holding or continuing disciplinary proceedings against the accused public servant.

2. On identical set of facts and allegations may constitute a criminal offence as well as misconduct punishable under the C.C.S. (C.C.A.) Rules or other corresponding rules. If the facts or allegations had been examined by a court of competent jurisdiction and if the court held that the allegations were not true, it will not be permissible to hold a departmental enquiry in respect of a charge based on the same facts or allegations.

3. If, on the other hand, the court has merely expressed a doubt about the correctness of the allegations, a departmental enquiry may be held into the same allegations, if better proof than what was produced before the court is forthcoming.

4. If the court has held that the allegations are proved but do not constitute the criminal offence with which the Government servant was charged, a departmental enquiry could be held on the basis of the same allegations if they are considered good and sufficient ground for departmental action. Departmental action could also be taken if the allegations were not examined by court, e.g., the discharge of the accused on technical grounds without going into the merits of the allegations, but if the allegations are considered good and sufficient for departmental action.

5. A departmental enquiry may be held after acquittal in respect of a charge, which is not identical with or similar to the charge in the criminal case and is not based on any allegations, which have been negatived by the criminal court.

6. If it is decided that a departmental enquiry should be held in any of the circumstances mentioned above, further action should be taken in accordance with the procedure described in Chapters X to XII.

If an appeal or application for revision filed by a Government servant against his conviction in a court higher than the first court of appeal succeeds, the order imposing any penalty which may have been passed on the basis of earlier conviction (vide para 14) should be set aside, if it is decided not to challenge the acquittal in a still higher court. Such penalty should be set aside even in cases where it is decided to start disciplinary proceedings against such a Government servant (vide para 16). Order setting aside the penalty may be made in the standard form.

1. Once a case has been put in a court, it should be allowed to take its normal course. Proposal for withdrawal of prosecution may however, be initiated by the S.P.E. on legal consideration. In such cases the S.P.E. will forward its recommendations to the Department of Personnel and Training in cases in which sanction for prosecution was accorded by that Ministry and to the administrative Ministry concerned in other cases. The authority concerned will in all such cases consult the Ministry of Law and accept their advice.

2. Requests for withdrawal of prosecution may also come up from the accused. Such requests should not generally be entertained except in very exceptional cases where, for instance, attention is drawn to certain fresh, established or accepted facts, which might alter the whole aspect of the case. In such cases also the administrative Ministry concerned should consult the Ministry of Law and accept their advice."