Supreme Court rejects plea by N Chandrababu Naidu to quash FIR in Skill Development scam but delivers split verdict on Section 17A PC Act

The Supreme Court on Tuesday rejected a plea filed by former Andhra Pradesh Chief Minister N Chandrababu Naidu seeking quashing of the first information report (FIR) registered against him in the Andhra Pradesh skill development programme scam case [Nara Chandrababu Naidu vs State of Andhra Pradesh and Anr]..A bench of Justices Aniruddha Bose and Bela M Trivedi upheld the remand order passed by the Magistrate and the Andhra Pradesh High Court decision to dismiss the quashing plea. However, importantly both judges differed on the interpretation of Section 17A of the Prevention of Corruption Act which makes prior sanction of government mandatory to prosecute public servant in relation to an act done in discharge of his official functions or duties. Justice Aniruddha Bose said that complying with the requirement of prior sanction under Section 17A is necessary and such sanction has to be obtained even for acts prior to 2018 when Section 17A was inserted."Previous approval of authorities postulated as under section 17A has to be obtained. In absence of such approval, the action under 1988 shall be illegal," he ruled.However, he stated that the same will not foreclose the option to obtain approval and it is only a curable defect.Hence, he ruled that absence of such approval will not render the remand order passed by the Magistrate non-est. Justice Bela M Trivedi said that Section 17A which was inserted in 2018 is prospective in its application and cannot be used as a ground to protect dishonest public servants."I disagree on the interpretation of Section 17A. It should be made applicable to only amended offences and it is required to be treated as a substantive amendment and thus cannot be made applicable retrospectively," she said.The object of the act is to combat corruption and the goal of Section 17A is to protect honest public servants from harassment, she opined."The object cannot be to give benefit to dishonest public servants and making it retrospectively applicable will frustrate the object of the PC Act. Absence of approval would never the ground to quash the FIR especially when he is charged under other PC Act offences as well.." she said.Hence, the matter was referred to a larger bench on the aspect of interpretation of Section 17A..The reference order reads thus:"As we have expressed opinions taking different views on the interpretation of Section 17A of the Prevention of Corruption Act, 1988 as also its applicability to the appellant in the subject-case, we refer the matter to the Hon’ble the Chief Justice of India. The Registry to place the papers before the Hon’ble the Chief Justice of India so that appropriate decision can be taken for the constitution of a Larger Bench in this case for adjudication on the point on which contrary opinions have been expressed by us.".The investigation against Naidu centers around a scheme that allegedly diverted government funds intended for a skill development project into various shell companies through fraudulent invoices.The Telegu Desam Party (TDP) leader was arrested and later remanded to judicial custody in the matter on September 10.The Andhra Pradesh High Court had, on September 22, dismissed his quashing plea leading to the instant appeal before the apex court.Justice Trivedi had during the hearings expressed her reservations about liberal interpretation of the provision on requirement of prior sanction to probe a public servant under the Prevention of Corruption Act..Meanwhile, the High Court had on October 31 granted interim bail to Naidu on medical grounds. Later, it had granted regular bail to Naidu on November 20.The appeal filed by the State government against the same is pending before the apex court..A battery of senior lawyers represented Naidu before the apex court in the matter, including Senior Advocates Abhishek Manu Singhvi, Harish Salve, and Sidharth Luthra. Senior Advocates Ranjit Kumar and Mukul Rohatgi appeared for the Andhra Pradesh government..[Read judgment]