Section 17A PCA sanction: Bombay High Court to decide on maintainability of Rana Kapoor plea before single-judge

The Bombay High Court will examine whether a plea filed by Yes Bank founder Rana Kapoor against the alleged improper sanction obtained by the Central Bureau of Investigation (CBI) to prosecute him under the Prevention of Corruption Act (PCA), will lie before a single-judge or a Division Bench.

. Kapoor had filed the petition raising a grievance that the Special CBI Court had rejected his application seeking directions to the CBI to not proceed with the matter in light of non-compliance with the mandate under Section 17A of the PCA to obtain prior approval.

He prayed for a consequent declaration that the investigation against Kapoor, including his custody is illegal and void.

. Advocate Vijay Aggarwal, appearing for Kapoor, contended that he was deemed to be a public servant as per the Section 46A of the Banking Regulation Act and hence his alleged acts came under the ambit of the PCA.

After the PCA was amended in 2018, there is now statutory protection to public servants against investigations conducted without proper sanctions of a competent authority. Due to this reason, a prior sanction was mandatory in the instant matter, it was submitted.

He informed the Court that the FIR was registered in March 12, 2020, and the sanction to prosecute had been obtained by the CBI subsequently on March 16, 2020. He argued that the subsequent sanction was bad in law.

Aggarwal further contended that the alleged sanction issued by Managing Director Prashant Kumar was cryptic, prospective and was without application of mind. There was also no Board Resolution which authorised Kumar to take decisions unilaterally, Aggarwal submitted.

. Advocate Hiten Venegaokar informed the Court that the permission in the present case had been properly granted and the Special Court had considered the same before passing the order.

He argued that the offences under PCA were already known to the investigating agency at the time of the registration of the case, and accordingly approval of the competent authority was obtained.

“The fact that Kapoor has committed the offence of criminal misconduct was revealed subsequently after registration of case and immediately thereafter the permission under section 17(A) of the PCA was sought and obtained,” Venegaokar submitted.

He informed the Court that the CBI had obtained sanction under Section 17A against Kapoor, which was granted by the administrator of Yes Bank Ltd with the approval of the board of directors.

. Justice SK Shinde deduced that granting this plea may consequently imply that the entire proceeding against Kapoor is quashed and asked whether plea should be heard by a Division Bench.

Venegaokar submitted that the prayers in the plea indirectly amounted to quashing of the FIR and the complaint against him, which should ideally be heard by a Division Bench.

Aggarwal, however, said that what he was challenging was a judicial order of the issuance of process on a chargesheet. He relied upon the Justice Shinde’s order discharging Dewan Housing & Finance Limited in a criminal case.

He further pointed out that assuming the plea is allowed, the entire proceeding against him will not end, as the proceedings under Indian Penal Code will continue.

“I am not seeking quashing of FIR or chargesheet, even though that may amount to some proceeding ending against me… But if for dropping a single section I cannot come before this Court, then that will be travesty” Aggarwal said.

. After hearing the parties at length, the Court reserved its verdict on the aspect of whether the plea was maintainable before a single-judge or whether it should be sent to a Division Bench. The order will be pronounced on Thursday.

. The CBI had booked Kapoor, along with his wife, Bindu Kapoor, and Gautam Thapar for allegedly obtaining illegal gratification in the form of a bungalow by paying only ₹378 crores which was much lesser than the market price under Section 420 (cheating) and 120 (criminal conspiracy) of the Indian Penal Code and Sections 7, 11 and 12 of PCA.

The allegations were that the property belonged to Avantha Realty and the illegal gratification was allegedly paid to get loan to the tune of ₹1,900 crores by misusing Kapoor’s official position.

Section 17A PCA sanction: Bombay High Court to decide on maintainability of Rana Kapoor plea before single-judge

Neha Joshi

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