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Case Analysis : NARA CHANDRABABU NAIDU VS STATE OF ANDHRA PRADESH

KUPPARAJU AMRUTHA,

KONERU LAKSHMAIAH EDUCATION FOUNDATION, COLLEGE OF LAW, GUNTUR.

CITATION

[Criminal Appeal No._______ of 2024 arising out of SLP (Crl) No. 12289 of 2023] 

DATE OF JUDGEMENT

16-01-2024

COURT

SUPREME COURT OF INDIA

APPELLANT

 NARA CHANDRABABU NAIDU

RESPONDENT

STATE OF ANDHRA PRADESH

BENCH

(Aniruddha Bose and Bela M. Trivedi, JJ.) 

INTRODUCTION:

The case involves Nara Chandrababu Naidu, the former Chief Minister of Andhra Pradesh and leader of the Telugu Desam Party (TDP). Naidu has filed an appeal challenging the Andhra Pradesh High Court's decision to dismiss his petition under Section 482 of the Code of Criminal Procedure, seeking to quash the First Information Report (FIR) against him in the Skill Development Scam. The Skill Development Scam pertains to the alleged misappropriation of funds from the Andhra Pradesh State Skill Deve

lopment Corporation (APSSDC) during Naidu's tenure as Chief Minister. The matter reached the Supreme Court, where a Division Bench, comprising Justices Aniruddha Bose and Bela M. Trivedi, delivered a split verdict on the interpretation and application of Section 17-A of the Prevention of Corruption Act, 1988. The differing opinions on key legal aspects led to the referral of the case to the Chief Justice of India for the constitution of a larger bench, emphasizing the need for clarity on the legal issues involved.

FACTS OF THE CASE:

The case involves Nara Chandrababu Naidu, the appellant, who was the Chief Minister of the State of Andhra Pradesh between 2015 and 2019. The respondent state through its Crime Investigation Department (CID) initiated criminal proceedings against Nara Chandrababu Naidu, accusing him of various offenses under the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988. 

The allegations revolve around the siphoning of public funds, particularly in connection with the Andhra Pradesh State Skill Development Corporation (APSSDC) project. The APSSDC was established to set up skill development centers in Andhra Pradesh, and it entered into an agreement with corporate entities Siemens Industry Software India Pvt. Ltd. (SIEMENS) and Design Tech India Pvt. Ltd. The prosecution claims that there were irregularities in the project, leading to the diversion of funds.

The state alleges that Nara Chandrababu Naidu, as the Chief Minister, facilitated the diversion of public money amounting to approximately Rs. 370 crores. The charges include offenses related to criminal breach of trust, cheating, and corruption. The prosecution contends that Naidu, by abusing his official position, allowed the diversion of APSSDC funds through fake invoices and shell companies, causing wrongful loss to the government exchequer. The investigation revealed that SIEMENS and Design Tech subcontracted part of their work to Skillar Enterprises India Pvt. Ltd., involving financial irregularities. The prosecution argues that Naidu played a crucial role in approving the appointment of key officials in the APSSDC without proper authorization, fasttracking the project, and approving cost estimations with criminal intent. Nara Chandrababu Naidu challenged the criminal proceedings and his detention, arguing, among other things, that Section 17A of the Prevention of Corruption Act, 1988, introduced in 2018, was not complied with, and therefore, the investigation against him was not valid. Section 17A requires prior approval for the investigation of offenses committed by public servants in the discharge of their official functions.

The High Court dismissed Naidu's petition, stating that Section 17A cannot be applied retrospectively and that the provision was not applicable to offenses committed before its introduction in 2018. The court also noted that regular inquiries had already been ordered in 2018 regarding corruption allegations against APSSDC officials. The appeal before the Supreme Court revolves around the interpretation of Section 17A and its applicability to offenses committed before its introduction. The state argues that protective measures introduced by the Amendment Act, including Section 17A, cannot extend to offenses committed before the amendment. The court's decision will impact the continuation of the criminal proceedings against Nara Chandrababu Naidu.

ISSUES OF THE CASE:

1.Whether Section 17A of the Prevention of Corruption Act applies retrospectively to offenses committed before its introduction in 2018? 

2.               Whether Nara Chandrababu Naidu, the former Chief Minister, is liable for alleged financial irregularities and misuse of authority in the APSSDC project during his tenure? 

3.               Whether the regular inquiry initiated in 2018 concerning corruption allegations against APSSDC officials affects the applicability of Section 17A in the present case? 

CONTENTIONS OF THE APPELLANT:

The appellant strongly contends that the Prevention of Corruption Act, 1988 (PC Act 1988) is a crucial legislative tool for prosecuting corrupt individuals, emphasizing its role in combating corruption and promoting ethical conduct. The appellant underscores the objectives of the PC Act 1988, highlighting its focus on transparency, accountability, and strict penalties to deter corruption. The significance of the 2018 Amendment Act, especially Section 17A, is emphasized, with the appellant arguing that the provision serves as a safeguard for honest public servants, protecting them from unwarranted harassment during inquiries or investigations related to official duties.

Four main facets of Section 17A are highlighted by the appellant, including its application to inquiries or investigations under the PC Act, the necessity for offenses to be linked to decisions made by a public servant, the requirement for such decisions to be in the discharge of official duties, and the need for prior approval. The appellant, relying on Standard Operating Procedures (SOPs) for the definition of "enquiry," argues against retroactive application of Section 17A, asserting that it should apply prospectively to amended or newly inserted offenses.

The appellant rebuts the argument for retroactive application, contending that it contradicts the express effective date mentioned in the Amendment Act 2018. Emphasizing the legislative intent to shield honest public servants, the appellant argues against a retroactive interpretation, citing legal precedents and distinguishing between retrospective and prospective statutes. In response to concerns about pending proceedings, the appellant relies on the General Clauses Act, asserting that investigations can proceed unless a different intention appears in the new Act. The appellant concludes by asserting that the absence of approval under Section 17A should not vitiate proceedings, and the provision's protection should not extend to acts outside the discharge of official duties, avoiding impediments to early-stage investigations.

CONTENTIONS OF THE RESPONDENT:

The respondent strongly asserts the pivotal role of the Prevention of Corruption Act, 1988 (PC Act 1988) as a cornerstone legislative framework in prosecuting corrupt individuals and fostering ethical conduct. Emphasizing its focus on accountability and transparency, the respondent highlights the Act's objectives of combating corruption, ensuring accountability in public administration, and imposing deterrent penalties. The significance of the 2018 Amendment Act, particularly Section 17A, is underscored, aiming to enhance the legal framework against corruption. Central to the respondent's argument is the interpretation of Section 17A, emphasizing its role in shielding honest public servants from unwarranted harassment during inquiries or investigations related to legitimate actions in their official capacity. The respondent contends that Section 17A, requiring prior approval for such proceedings, safeguards public servants from malicious prosecution, addressing concerns about the lack of specificity in defining "enquiry."

The respondent challenges the appellant's perspective on Section 17A's prospective application, advocating for its retroactive implementation to align with the legislative intent. Defending the provision as procedural and protective, the respondent insists on its broad scope to shield public servants from harassment for actions taken in the discharge of their duties. Concerns about the impact on pending proceedings are addressed, with the respondent arguing that Section 17A's protective shield should extend to ongoing investigations, ensuring continuous protection for public servants at all stages of legal processes. In conclusion, the respondent maintains that Section 17A plays a vital role in safeguarding public servants, and its retroactive application aligns with the overarching legislative goal of preventing corruption and ensuring fair treatment for honest officials.

 JUDGEMENT: 

1.  Justice Aniruddha Bose's Decision: 

The commencement of the inquiry was questioned, and Justice Bose disagreed with the High Court's finding that a regular inquiry had started before the introduction of Section 17-A of the Prevention of Corruption Act (PC Act) on July 25, 2018.

Justice Bose emphasized that Section 17-A applies prospectively from the starting point of the inquiry, and it became operational when the actual search commenced in 2021.

He concluded that the protection of Section 17-A is applicable, and the steps taken against Naidu under the PC Act should be invalidated for not commencing with prior approval of the government.

2.  Justice Bela M. Trivedi’s Decision: 

Justice Trivedi focused on the prospective application of Section 17-A, stating that it is substantive and not merely procedural. She emphasized that it does not apply retrospectively to offenses deleted by the Amendment Act in 2018.

Referring to the legislative intent, she highlighted that the amendments were specifically made applicable on July 26, 2018.

Justice Trivedi held that the absence of approval under Section 17-A would not vitiate the proceedings, and its protection does not extend to acts not performed in the discharge of official duties.

She agreed with Justice Bose on the jurisdiction of the Special Court and found no jurisdictional error in the remand order.

3.  Referral to Larger Bench: 

Due to the differing views between Justice Bose and Justice Trivedi, the matter has been referred to the Chief Justice of India for the constitution of a larger bench to resolve the interpretational issues surrounding Section 17-A of the PC Act.

The final decision on Nara Chandrababu Naidu's plea is pending, and the case will be further adjudicated by a larger bench.

CONCLUSION:

In conclusion, the case involving Nara Chandrababu Naidu revolves around the interpretation and application of Section 17-A of the Prevention of Corruption Act, 1988. The two judges, Justice Aniruddha Bose and Justice Bela M. Trivedi, presented differing opinions on critical aspects of the case. Justice Bose emphasized the prospective application of Section 17-A, considering the starting point of the inquiry, and invalidated the steps taken against Naidu for lack of prior approval. On the other hand, Justice Trivedi highlighted the substantive nature of Section 17-A and its non-retrospective application to offenses deleted by the Amendment Act in 2018.

Due to the conflicting views, the matter has been referred to the Chief Justice of India for the constitution of a larger bench to provide clarity on the interpretational issues surrounding Section 17-A. The final decision on Nara Chandrababu Naidu's plea is pending further adjudication by the Larger Bench, and the case underscores the significance of a uniform understanding of legal provisions to ensure consistent application in corruption-related matters.

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