In K.M. Philip and Ors. vs. State of Kerala, [2021:KER:4920], the High Court of Kerala adjudicated a key legal issue: whether the State Government is the competent authority to grant sanction for the prosecution of employees of a service cooperative bank, registered under the Kerala Co-operative Societies Act, 1969.
The High Court observed that pursuant to Rule 198(3) of the Kerala Co-operative Societies Rules, the authority competent to impose the penalty of dismissal from service upon such employees is the bank’s Board of Directors. Consequently, under Section 19 (1) (c) of the Prevention of Corruption Act, 1988, it is the Board of Directors, and not the State Government, that is the competent authority to grant sanction for their prosecution.
In the above case, the bank’s Board of Directors had declined to grant sanction for prosecution. The State Government, however, proceeded to grant the sanction, upon which the trial court took cognizance of the alleged offences.
The High Court held that a sanction for prosecution granted by an authority that lacks the legal competence to do so, is invalid and a nullity in law. Because the sanction was granted by an incompetent authority, the High Court quashed the criminal proceedings initiated against the employees.
The Court reasoned that since cognizance of the offences was taken without a valid prior sanction from the competent authority, the entire proceedings were vitiated.
