Recently, the Madhya Pradesh High Court quashed a sanction for prosecution under the Prevention of Corruption Act, 1988, holding that the sanctioning authority had acted mechanically and without due application of mind. The Court categorically observed that income duly disclosed through Income Tax Returns and departmental declarations constitutes ‘known sources of income’ and cannot be ignored merely because the earning spouse is married to a public servant.
Brief Facts:
The writ petition was instituted under Article 226 of the Constitution challenging the sanction order dated 04.04.2025 issued under Sections 19(1)(b) and (c) of the Prevention of Corruption Act, 1988, permitting prosecution of petitioner, a senior State Excise officer, in Crime No. 238/2019 registered for offences under Sections 13(1)(b) and 13(2) of the PC Act read with Section 120-B IPC. The case originated from a complaint dated 20.06.2018, followed by search operations conducted by the Lokayukt on 15.10.2019, covering a check period from 04.09.1998 to 15.10.2019. The Lokayukt alleged that the petitioners possessed assets disproportionate to known sources of income to the extent of 88.20%. Central to the dispute was the exclusion of petitioner's professional income as an advocate and her agricultural income, both duly reflected in Income Tax Returns, from the computation of lawful income, leading to the grant of sanction for prosecution.
Contentions of the Petitioner:
Counsel for the petitioners contended that petitioner was an independently practicing advocate with a long-standing professional career predating her marriage and a consistent history of filing Income Tax Returns. It was argued that her agricultural income, derived from land purchased through lawful sources including registered gifts, professional savings, and bank loans, had been duly verified by the Investigating Agency without any discrepancy.
Reliance was placed on the Excise Commissioner’s report, which categorically concluded that substantial portions of her professional and agricultural income were wrongly excluded, and that after correct computation, no disproportionate assets existed warranting sanction. It was further submitted that denial of her income merely due to non availability of client details ignored Rule 6F of the Income Tax Rules and amounted to negating her independent professional identity, rendering the sanction arbitrary and non-speaking
Contentions of the Respondent:
Counsel appearing for the State and the Lokayukt opposed the writ petition, asserting that the sanctioning authority had examined the entire investigation record and independently applied its mind before granting sanction. It was argued that the adequacy or sufficiency of material forming the basis of sanction could not be scrutinised at the writ stage and that such objections must be raised during trial. Reliance was placed on precedents including State of Madhya Pradesh v. Virender Kumar Tripathi and CBI v. Ashok Kumar Agrawal, contending that judicial interference with sanction orders at a pre-trial stage is impermissible unless there is patent illegality
Observations of the Court:
The High Court undertook an exhaustive examination of Section 19 of the Prevention of Corruption Act, 1988, and the jurisprudence governing sanction for prosecution. Relying on authoritative Supreme Court precedents, including Robert Lalchungnunga Chongthu v. State of Bihar and Nanjappa v. State of Karnataka, the Court reiterated that sanction is a “solemn and sacrosanct act ” requiring independent application of mind and cannot be reduced to a ritualistic approval of investigative conclusions.
The Court found it “quite discernible” that the sanctioning authority had ignored material evidence establishing petitioner No.1’s professional and agricultural income, despite such income being duly disclosed under Rule 19 of the Madhya Pradesh Civil Service (Conduct) Rules, 1965 and supported by Income Tax Returns. Emphasising that “known sources of income” include income formally intimated to statutory and departmental authorities, the Court held that denial of such income amounted to treating the spouse of a public servant as having no independent legal identity. The Court further observed that had this lawful income been considered, “the sanctioning authority ought not to have granted sanction and nipped the matter in the bud itself,” thereby exposing the non-application of mind vitiating the impugned order
The decision of the Court:
Concluding that the sanction order dated 04.04.2025 suffered from arbitrariness and mechanical exercise of power, the Madhya Pradesh High Court allowed the writ petition and set aside the impugned sanction for prosecution. The Court crystallised the ratio that income lawfully disclosed through Income Tax Returns and departmental declarations constitutes “known sources of income” under the PC Act, and failure to account for an earning spouse’s independent income renders the sanction invalid for want of proper application of mind
Case Title: Meenakshi Khare And Anr Vs. The State Of Madhya Pradesh and Ors.
Case No.: Writ Petition No.33484 Of 2025
Coram: Hon’ble Justice Vivek Kumar Singh, Hon’ble Justice Ajay Kumar Nirankari
Advocate for the Petitioner: Senior Adv. Prakash Upadhyay, Adv. Siddharth Sharma, Adv. Shubham Manchani, Adv. Devendra Prajapati, Adv. Mayank Upadhyay, Adv. Satyam Shukla and Adv. Lavkush Rathore
Advocate for the Respondent: Adv. Abhinav Shrivastava, Adv. Yash Soni
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