Bombay High Court reserves verdict in plea by Rana Kapoor challenging sanction under Section 17A PCA

The Bombay High Court on Tuesday reserved its order in the 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). .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. They were charged for offences under Sections 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..He had initially moved the special CBI court seeking to restrict the investigating agency from proceeding in the matter due to non-compliance with the mandate under Section 17A of the PCA to obtain prior approval.The same came to be rejected after which he moved the High Court.He prayed for a declaration that the investigation against Kapoor, including his custody is illegal and void..Advocate Vijay Aggarwal appearing for Kapoor, made the following submissions: Kapoor 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;The FIR was registered in March 12, 2020, and the sanction to prosecute had been obtained by the CBI subsequently on March 16, 2020 which made the subsequent sanction bad in law;The alleged sanction issued by Managing Director Prashant Kumar was cryptic, prospective and was without application of mind; Additionally, there was also no Board Resolution which authorised Kumar to take decisions unilaterally, Aggarwal submitted..Advocate Hiten Venegaokar appearing for CBI made the following submissions:Permission in the present case had been properly granted which was considered by the Special Court before passing the order under challenge;The offence of criminal misconduct under Section 13(1)(D) of the PCA was revealed after registration of complaint and accordingly approval was sought from the competent authority; Argument about taking permission prior to adding of Section 13(1)(D) is untenable and liable to be rejected;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;Yes Bank being a public company had a Board of Directors which was competent authority to grant sanction as per provisions of the Companies Act. In view of this, the Reserve Bank of India (as contended by Aggarwal) was not the competent authority..After hearing the parties at length, Justice PD Naik reserved the plea for orders. .Before being heard at length, another singe-judge Bench of the High Court had ruled that the plea could be heard before the single-judge and not by the division bench as was contended by CBI.