Employees of PSUs not entitled to protection under Section 197 CrPC as ‘public servant’, Supreme Court

The Supreme Court has reiterated that employees of public sector corporations are not entitled to the protection under Section 197 CrPC as ‘public servant’..A Bench of Justices Navin Sinha and AS Bopanna held the same in an appeal filed by Bharat Sanchar Nigam Limited (BSNL) and its employees against a judgment of Bombay High Court..By way of background, a criminal complaint was filed by respondent before the Additional Chief Metropolitan Magistrate under clauses 26(2)(3) and 39 read with clause 27 of the Private Security Guards (Regulation of Employment and Welfare) Scheme, 1981 read with Section 3(3) of Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 (Act)..The complaint stated that the appellant, BSNL was registered with the respondent Security Guards Board. BSNL was under an obligation to engage security guards registered with respondent no.1 only. However, an inspection revealed the engagement of unregistered guards..The Magistrate issued process against the appellants in 2003. The appellants prayed for recall of the process, which was rejected. After various rounds of litigation, the appellants filed a writ petition before the High Court solely on the ground that issuance of process was bad due to the absence of sanction under Section 197 CrPC since appellant nos. 2 to 4 were ‘public servants’..The High Court relying on Mohd. Hadi Raja vs. State of Bihar and another [(1998) 5 SCC 91], held that the protection of sanction under Section 197 CrPC was not available to officers of Government companies or public undertakings even if it fell within the definition of ‘State’ under Article 12 of the Constitution. This led to the current appeal..Senior Counsel RD Agarwal, appearing on behalf of the appellants, submitted that appellant nos. 2 to 4 fell within the definition of ‘public servant’ as they were discharging public duty in pursuance of the policy of the Central Government. Appellants nos. 2 to 4, belonged to the Central Civil Service – Class I. They were appointed by the President of India to the Indian Telecommunication Service and were removable by orders of the President only. The fact that they may have been sent on deputation to BSNL is inconsequential and sanction under Section 197 of CrPC is mandatory before their prosecution, it was argued..Counsel for the respondents acknowledged the original appointment of appellant nos. 2 to 4 in Central Civil Services Class 1. It was, however, submitted that BSNL was established in 2000. Appellant nos. 2 to 4 were sent to BSNL on deputation initially. An option was given to them for absorption in BSNL. Appellants 3 and 4 opted for absorption and thus became employees of BSNL and ceased to be government employees in the Central Civil Services Class 1. Appellant no. 2 appeared to have retired from BSNL while on deputation, but his status was not clear, the counsel pointed out..The court noted that the appeal raises a short and pure question of law – whether protection under Section 197, CrPC is available to employees of public sector corporation claiming the status of a ‘public servant’..At the very outset, the Court stated the settled law in this regard – employees of public sector corporations are not entitled to the protection under Section 197 CrPC as ‘public servant’..That being the case, that the question for grant of sanction for prosecution under Section 197, CrPC on the ground of being a ‘public servant’ is not available to appellant nos. 3 and 4. This was because they ceased to be employees of the Indian Telecommunication Service after their absorption in BSNL prior to the complaint. The fact that their past service may count for purposes of pension in case of removal or dismissal by BSNL or that administrative approval of the concerned ministry may be formally required before any punitive action, will not confer on them the status of ‘public servant’ under the CrPC, the Court made it clear..The Court, therefore, said that the issue of whether the status of ‘public servant’ is available or not was only with respect to appellant no. 2 since he was on deputation..In the case of appellant no. 2, there was no sufficient evidence on record to determine his status. The Court, therefore left it open to the trial court to consider his case after necessary evidence is available..“With regard to appellant no.2, considering his status as on deputation to the appellant corporation at the relevant point of time and in the absence of necessary evidence with regard to his status in the appellant Corporation throughout the litigation being ambiguous, we leave that question open for consideration in the trial after necessary evidence is available.”.It, therefore, dismissed the appeal..[Read Judgment]