Indian Oil Corporation Limited vs State Of West Bengal & Anr
2021 Latest Caselaw 4006 Cal

                 IN THE HIGH COURT AT CALCUTTA
                CRIMINAL REVISIONAL JURISDICTION
                          APPELLATE SIDE


The Hon'ble JUSTICE BIBEK CHAUDHURI


                            CRR 234 of 2018

                     Indian Oil Corporation Limited
                                   -Vs-
                       State of West Bengal & Anr.

      For the petitioner:     Mr. Sabyasachi Banerjee,
                              Mr. Anirban Dutta,
                              Mrs. Sharmistha Ghosh,
                              Mr. Swarbhanu Bhattacharya,
                              Mr. Victor Chatterjee,
                              Mr. Barnamoy Basak.

      For the Opposite Party: Mr. Abhirup Chakraborty,
                              Mr. U.S. Menon.


Heard on: June 24, 2021
Judgment on: July 30, 2021.

BIBEK CHAUDHURI, J. : -


1.    A short question involved in the instant criminal revision is as to

whether a trial court while acquitting an accused can pass an order of

compensation against the employer of the said accused under any of the

provisions of Section 357 of the Code of Criminal Procedure.
                                       2



2.    Opposite party No.2 PBK Menon was the Deputy Manager (Systems)

of Indian Oil Corporation Ltd, a Government company. On 18th December,

1993, the Central Bureau Investigation (hereafter referred to as CBI for

short) registered a suo moto a FIR on the basis of source information

against one Zenith Electronic and Power Systems and its proprietor N.V

Pravakarn alleging, inter alia, that the said N.V Pravakarn had entered

into a criminal conspiracy with some unknown persons inducing the

Indian Oil Corporation, the petitioner herein to place an order for certain

electronic gazettes and get payment for the same without the goods being

supplied. The investigation of this case culminated in filing charge-sheet

against the said N.V Pravakarn and others including the opposite party

No.2 under various provisions of the Indian Penal Code as well as

Prevention of Corruption Act, 1988.

3.    It will be not be out of place to mention here that after receiving the

information of initiation of criminal case against opposite party No.2, a

disciplinary proceeding was drawn up against him by the petitioner on

25th March, 1994. The said disciplinary proceeding was however not

conducted because of the written request placed by the CBI on 4th

August, 1995. Finally by an order dated 30th October, 1997 the

disciplinary authority held that the charge against the opposite party No.2

was not proved.

4.    During the pendency of the said criminal case and the disciplinary

proceeding, the opposite party No.2 stopped attending his duties since

29th May, 1997. Finally, by an order dated 16th July, 2001 the competent
                                       3



authority of the petitioner company considering the long unauthorized

absence of the opposite party No.2 held that he has abandoned his service

under the petitioner company.

5.    The above referred criminal case being Special Case No.11 of 1996

was disposed by the learned Special Judge, CBI Court, Alipore, South 24

Parganas. In the said judgment the learned trial judge held as follows:-

            "From the evidence on record it has transpired that Material
      Manager had the responsibility to place order, check bill and to issue
      certificate for payment. But CBI did not array the material manager
      as accused rather picked up an innocent man.
            IOC failed to protect P.B.K. Menon, as admitted by PW-29 who
      accorded sanction for his prosecution, though he knew that nothing
      wrong was there on the part of said employee of IOC. PW-29 did not
      apply his mind and preferred to lend his signature on the paper
      placed by Manager, Vigilance.
            Because of such mechanical response of PW-29 to the request
      of CBI to accord sanction, the accused P.B.K. Menon lost precious 24
      years of his life, which was painted with tar. He lost his face in
      society. IOC officials cannot give him back those 24 years of his life
      but there should be some atonement on the part of IOC.
            True it is a victim of crime is entitled to compensation u/s. 357
      and 357A of the Cr.P.C. Law has not yet prescribed any such
      provision for an accused, implicated in a criminal case without any
      cogent reason, practically by force, at the cost of his precious right to
      a dignified life. "The time then has arrived, Glaucon, when like
      huntsmen we should surround the cover, and look sharp that justice
      does not slip away and pass out of sight and get lost..."(The
      Republic)
                                   4



      Do Judges of trial courts have an obligation to protect human
rights?
      In order to find out the answer I would like to quote following
paragraph from the Hand book on Human Rights for Judicial
Officers(NIHR) :-
      "Judicial Obligation to Protection of Human Rights"
      Do Judges have an obligation to protect human rights?
      The higher courts in India, lead by Apex Court, always
answered, through numerous Court decisions and also in public
discussion by senior Judges and Chief Justices, in emphatic
affirmative terms.
      While such enlightened reiterations from the highest judiciary
may indicate the growing recognition of the crucial role of Judge in
the substantive realization of human rights, there exists a reasonable
level of skepticism-both among the people at large and among the
lower level judiciary - about the availability of such "space" for
judiciary at the trial courts level.
      It may not far from truth to suggest that the common people
continue to perceive judiciary at the trial courts level more as "dispute
adjudicators" than officers vested with the responsibility of human
rights protection, or 'justice' in a broader sense.
      While it may be difficult to find out as to why such popular
perceptions continue, it may be necessary to recognize that even the
Judges at the trial courts level themselves have a tendency to
perceive that their role in protection of human rights is rather limited.
      This point was repeatedly raised by many judicial officers in
the Continuing Education Programmes in Human Rights. Hon'ble
Justice J.S. Verma, the Chairperson of NHRC, in his valedictory
address in Bangalore programme, while responding to such
questions from the officers, emphatically observed that first of all the
Judge must have the conviction to protect human rights, then he/she
                                  5



would be able to read in human rights norms into many existing
provisions of Criminal or other laws. Elsewhere (*) he reiterated this
point when he observe that,
      Law has to be interpreted according to the current societal
standards. The law when enacted, in spite of the best efforts and
capacity of the legislators cannot visualize all situations in future to
which that law requires application. New situations develop and the
law has got to be interpreted for the purpose of application of them,
for the purpose of finding a solution to the new problems. This is how
the law advances. That is the area of field of judicial creativity to fill
in the gap between the existing law and the law as it ought to be
(emphasis added)."
      That apart WE THE PEOPLE of India have resolved to secure to
all its citizens JUSTICE social, economic and political.
      Though there is no such explicit provision under law that
empowers a court to award compensation to accused but as a
member of judiciary, I do consider it expedient to send a message to
the innocent accused, that he has not been forgotten in the Criminal
administration of justice by directing the IOC to pay Mr. P.B.K Menon,
whatever he was entitled to as an employee in the management
cadre of IOC with interest @12% p.a from the date of according
sanction on 14.12.1995 till his attaining 60 years of age and
Rs.10,00,000.00 as compensation, within 3 months from this day.
         It is,
                                     Ordered,

      the accused M.V. Pravakaran and P.B.K. Menon are found not
guilty to the charge u/s. 120B/420/468/471/477A IPC and 13(2)
r/w 13(1)(d) of the Prevention of Corruption Act,1988. They are
acquitted U/s. 248(1) Cr.P.C. They be set at liberty and be released
from bail bonds. Seized alamats, if any, be returned from whom
                                      6



      seized and/or destroyed as the case may be, after the period of
      appeal is over.
            IOC is directed to pay Mr. P.B.K. Menon, whatever he was
      entitled to as an employee in the management cadre of IOC with
      interest @12% p.a from the date of according sanction for his
      prosecution till his attaining 60 years of age and Rs. 10,00,000.00 as
      compensation, within 3 months from this day."


6.    The petitioner has challenged the above quoted part of the order

directing the Indian Oil Corporation to pay the opposite party No.2,

whatever he was entitled to as an employee in the management cadre of

IOC with interest @12% p.a from the date according to the sanction for

prosecution till his attaining 60 years of age and Rs.10 lakh as

compensation, within three months from this day.

7.    It is vehemently urged by Mr. Sabyasachi Banerjee, learned Counsel

for the petitioner that Indian Oil Corporation is not the complainant in the

case, investigation of which was taken up by the CBI. The CBI alleged suo

moto FIR on the basis of source information against a proprietorship firm,

namely, Zenith Electronic and Power System and its proprietor Mr. N.V

Pravakarn on the allegation that the said Pravakaran did not supply

certain numbers of UPS and Batteries of a particular make to Indian Oil

Corporation and issued false invoice and received the payment from the

petitioner company. During investigation the opposite party No.2 was

made an accused by the CBI. Since the opposite party No.2 was posted as

Deputy Manager (Systems) of Indian Oil Corporation at the relevant point

of time CBI needed sanction for prosecution. One Mr. P.S Krishnan being
                                         7



the sanctioning authority issued the sanction order on the basis of the

report submitted by the Vigilance Officer.

8.       According to Mr. Banerjee even assuming that the opposite party

No.2 was falsely implicated in a criminal case, such implication was made

by the CBI. Sanction for prosecution in a criminal case is more of an

administrative    order   issued   by   the   sanctioning   authority   to   the

prosecuting agency. Even assuming that the order of sanction was

subsequently proved to be wrong and issued without considering the

materials on record, employer cannot be held to be liable and cannot be

asked to make payment of the dues on salary from the date of issuance of

sanction order till the employee attains the age of 60 years with interest

plus compensation. Mr. Banerjee further submits that the accused was

terminated from service not on the ground of a criminal case being

initiated against him or that a disciplinary proceeding was going on. He

was terminated vide order dated 16th July, 2001 by Indian Oil Corporation

on clear finding that the opposite party No.2 stopped coming to the office

since 29th May, 1997. In view of such circumstances the order passed by

the learned trial judge in favour of opposite party No.2 to pay is dues on

salary with interest 12% p.a and compensation of Rs.10 lakhs is illegal,

inoperative, perverse and passed beyond jurisdiction of the learned trial

court.

9.       Learned Advocate for the opposite party No.2, on the other hand,

submits that in the judgment passed in Special Case No.11 of 1996 by the

learned trial judge it has been established that the opposite party No.2
                                       8



was subjected to malicious prosecution. Not only he faced trial in a

criminal case, he also subjected to a departmental proceeding. He lost

about 20 years of his service life as a result of false allegation made by the

petitioner against him. It is true that the criminal case was initiated on

the basis of a suo moto complaint alleged by the CBI. But prosecution

could not have been lodged if sanction order was not issued by the PW29,

P.S Krishnan. The role of the opposite party No.2 as Deputy Manager

(Systems) was limited to sending requisition to material department. He

accordingly sent requisition. It was the duty of the Manager (Material) to

pass order for procurement of the materials. It was not the duty of

opposite party No.2 to examine as to whether actual goods and materials

were supplied by a vendor or not. If the prosecution case is believed, it

was the Manager (Materials) who should be held liable because he placed

the order and passed four bills of M/s Zenith Electronic and Power

System. Learned Advocate for the opposite party also draws my attention

to the second paragraph of page 13 of the impugned judgment where the

learned trial judge observed that the sanctioning authority issued the

sanction order for prosecution against the petitioner without applying his

mind, mechanically. Since the Vigilance Officer is an employee of the

petitioner company, the company is liable to pay compensation to the

opposite party No.2. In support of his contention learned Advocate for the

opposite party refers to a three Judges Bench decision of the Hon'ble

Supreme Court in the case of S. Nambi Narayanan vs. Siby Mathews &
                                     9



Ors. reported in (2018) 10 SCC 804. In the said report the Hon'ble

Supreme Court held and observed in paragraph 34 as follows:

           "The criminal law was set in motion without any basis. It was

           initiated, if one is allowed to say, on some kind of fancy or

           notion. The liberty and dignity of the appellant which are

           basic to his human rights were jeopardized as he was taken

           into custody and, eventually, despite all the glory of the past,

           he was compelled to face cynical abhorrence. This situation

           invites the public law remedy for grant of compensation for

           violation of the fundamental right envisaged under Article

           21 of the Constitution. In such a situation, it springs to life

           with immediacy. It is because life commands self-respect and

           dignity."

10.   In paragraph 43 of the said report, it was held and observed as

under:-

           "43. In the instant case, keeping in view the report of the CBI

           and   the   judgment     rendered   by   this   Court    in   K.

           Chandrasekhar, suitable compensation has to be awarded,

           without any trace of doubt, to compensate the suffering,

           anxiety and the treatment by which the quintessence of life

           and liberty under Article 21 of the Constitution withers away.

           We think it appropriate to direct the State of Kerala to pay a

           sum of Rs. 50 lakhs towards compensation to the appellant

           and, accordingly, it is so ordered. The said amount shall be
                                        10



               paid within eight weeks by the State. We hasten to clarify that

               the appellant, if so advised, may proceed with the civil suit

               wherein he has claimed more compensation. We have not

               expressed any opinion on the merits of the suit."

11.      Learned Advocate for the opposite party also refers to another

decision of the Hon'ble Supreme Court in the case of Ram Lakhan Singh

vs. State of Uttar Pradesh through Chief Secretary reported in (2015)

16 SCC 715. In the aforesaid reported decision a member of Indian Forest

Service faced false vigilance cases at the instances of the then Chief

Minister of the respondent State and thereby lost his professional career,

reputation and heavy financial loss. He experienced great agony and

defamation. The Hon'ble Supreme Court under Article 32 of the

Constitution granted compensation to the petitioner to the tune of Rs.10

lakhs.

12. Coming to the instant case, it is submitted by the learned Advocate

for the opposite party No.2 that the learned trial court rightly passed the

order directing the petitioner to pay the dues of the opposite party No.2

towards his salary with interest and compensation.

13. Having heard the learned Counsel for the petitioner and the

opposite party No.2 and on careful perusal of the impugned judgment as

well as the facts and circumstances of the case and the decision of the

Hon'ble Supreme Court, I like to state at the outset that the decision of

the Hon'ble Supreme Court in S. Nambi Narayanan (Supra) was passed

under Article 136 of the Constitution. The appellant preferred WP (C)

No.30918 of 2012 before the Kerala High Court for certain reliefs

including compensation. The Hon'ble Single Judge of Kerala High Court

allowed the writ petition. The State of Kerala preferred an appeal before

the Division Bench. The Division Bench reversed the order passed by the

learned Single Judge. The appellant went in appeal before under Article

136 of the Constitution before the Hon'ble Supreme Court. While

disposing of the appeal the Hon'ble Supreme Court was pleased to grant

compensation in favour of the appellant under Article 141 of the

Constitution. Similarly, the decision in the case Ram Lakhan Singh

(supra) was passed under Article 32 of the Constitution. In both the

decisions the Hon'ble Supreme Court was pleased to consider the prayer

of the appellant/petitioner on the touchstone of law of torts and public

law remedy.

14. In the Code of Criminal Procedure, there is no provision for granting

compensation to an accused for malicious prosecution. The accused will

either be convicted or acquitted on conclusion of trial. There is absolutely

no provision in the Code of Criminal Procedure for granting compensation

to an accused. Chapter XXVII of the Code of Criminal Procedure deals

with the judgment. Section 357 of the Code states-

357. Order to pay compensation.- (1) When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recovered to be applied-

(a) in defraying the expenses properly incurred in the prosecution;

(b) in the payment to any person of compensation for any loss or injury caused by the offence, when compensation is, in the opinion of the Court, recoverable by such person in a Civil Court;

(c) when any person is convicted of any offence for having caused the death of another person or of having abetted the commission of such an offence, in paying compensation to the persons who are, under the Fatal Accidents Act, 1855 (13 of 1855), entitled to recover damages from the person sentenced for the loss resulting to them from such death;

(d) when any person is convicted of any offence which includes theft, criminal misappropriation, criminal breach of trust, or cheating, or of having dishonestly received or retained, or of having voluntarily assisted in disposing of, stolen property knowing or having reason to believe the same to be stolen, in compensating any bona fide purchaser of such property for the loss of the same if such property is restored to the possession of the person entitled thereto.

(2) If the fine is imposed in a case which is subject to appeal, no such payment shall be made before the period allowed for presenting the appeal has elapsed, or, if an appeal be presented, before the decision of the appeal.

(3) When a Court imposes a sentence, of which fine does not form a part, the Court may, when passing judgment, order the accused person to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced.

(4) An order under this section may also be made by an Appellate Court or by the High Court or Court of Session when exercising its powers of revision.

(5) At the time of awarding compensation in any subsequent civil suit relating to the same matter, the Court shall take into account any sum paid or recovered as compensation under this section.

15. Sub-section 1 of Section 357 has been amended by WB Act 33 of

1985 and the provision in Section 357(1) is substituted by the West

Bengal Amended Act:-

West Bengal

(a) In sub-sec. (1), for -

"when a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, when passing judgment, order the whole or any part of the fine recorded to be applied -", Substitute "When a Court imposes a sentence of fine or a sentence (including a sentence of death) of which fine forms a part, the Court may, and where the person against whom an offence has been committed belongs to Scheduled Castes or Scheduled Tribes, except when both the accused person and the person against whom an offence has been committed belong either to Scheduled Castes or to Scheduled Tribes, shall, when passing judgment, order the whole or any part of the fine recovered to be applied -",

(b) For sub-sec. (3), the following sub-section shall be substituted:

"(3) When a Court imposes a sentence, of which fine does not form a part, the Court may, and where the person against whom an offence has been committed belongs to Scheduled Castes or Scheduled Tribes, shall, when passing judgment, order the accused person to pay, by way of compensation, such amount as may be specified in the order to the person who has suffered any loss or injury by reason of the act for which the accused person has been so sentenced:

Provided that the Court may not order the accused person to pay by way of compensation, any amount if both the accused person and the person against whom an offence

has been committed belong either to Scheduled Castes or Scheduled Tribes.";

And

(c) insert the following Explanation after sub-sec.(5):

"Explanation.- For the purpose of this section, the expressions "Scheduled Castes" and "Scheduled Tribes" shall have the meanings respectively assigned to them in clauses (24) and (25) of Article 366 of the Constitution of India."- W.B. Act 33 of 1985, sec.3.

16. Section 357A deals with victim compensation scheme.

17. Plain reading of the above provisions shows that imposition of a

substantive sentence of fine is a sine qua non for an order of

compensation under Section 357 of the Code of Criminal Procedure.

Sentence of imprisonment and fine to be imposed should be independent

of any claim for compensation that may have been filed. Determination of

the right measure of punishment is often a point of great difficulty and no

hard and fast rule can be laid down, it being a matter of discretion which

is to be guided by a variety of consideration, but the court must always

bear in mind the necessity of maintain a proposition between an offence

and penalty proposed for it. Section 357A on the other hand has been

incorporated in the Code vide Act 5 of 2009 and the amendment duly

came into force vide notification dated 31st December, 2009. The object

and purpose of the provision is to enable the court to direct the state to

pay compensation to the victim where the compensation under Section

357 was not adequate or where the case ended acquittal or discharge and

the victim was required to be rehabilitated. In both the cases the

compensation is payable to the victim.

18. The only provision where compensation can be given to persons

groundlessly arrested is led down in Section 358. Section 358 runs thus:

"358 Compensation to persons groundlessly arrested.- (1) Whenever any person causes a police officer to arrest another person, if it appears to the Magistrate by whom the case is heard that there was no sufficient ground for causing such arrest, the Magistrate may award such compensation, not exceeding one hundred rupees, to be paid by the person so causing the arrest to the person so arrested, for his loss of time and expenses in the matter, as the Magistrate thinks fit.

(2) In such cases, if more persons than one are arrested, the Magistrate may, in like manner, award to each of them such compensation, not exceeding one hundred rupees, as such Magistrate thinks fit.

(3) All compensation awarded under this section may be recovered as if it were a fine, and, if it cannot be so recovered, the person by whom it is payable shall be sentenced to simple imprisonment for such term not exceeding thirty days as the Magistrate directs, unless such sum is sooner paid.

19. Groundless arrest of a person amounts to violation of Article 21 of

the Constitution. In Anita Thakur vs. Jammu and Kashmir reported in

(2016) 15 SCC 525, the Hon'ble Supreme Court while discussing the

scope of Section 358 held as follows:-

"It is apparent that to that extent, the respondents misused their power. To that extent, fundamental right of the petitioners, due to police excess, has been violated. In such circumstances, in exercise of its power under Article 32 of the

Constitution, this Court can award compensation to the petitioners."

20. The ratio of the above precedents can be explained thus:

First, it is clear that a violation of fundamental rights due to

police misconduct can give rise to a liability under public law,

apart from criminal and tort law. Secondly, that pecuniary

compensation can be awarded for such a violation of

fundamental rights. Thirdly, it is the state that he is held

liable and, therefore, the compensation is borne by the state

and not the individual police officers found guilty of

misconduct. Fourthly, this Court has held that the standard

of proof required for proving police misconduct such as

brutality, torture, custodial violence and for holding the State

accountable for the same, is high. It is only for patent and

incontrovertible violation of fundamental rights that such

remedy can be made available. Fifthly, the doctrine of

sovereign immunity does not apply to cases of fundamental

rights violation and hence, cannot be used as a defence in

public law.

21. In the instant case the learned trial judge passed the order of

compensation to be payable to the opposite party No.2 by the petitioner

while disposing of a criminal case under Indian Penal Code and

Prevention of Corruption Act. As a trial judge he is guided by the Code of

Criminal Procedure. He is not a constitutional court. Even the High Court

sitting in criminal jurisdiction cannot pass any such order of granting

compensation to an accused after his acquittal dehors the provision of

Section 358 of the Code of Criminal Procedure. Section 358 does not

empower any court to pay compensation to make good of the financial

loss which an accused incurred on termination of his service. It will not

be out of place to mention that his termination from service was not due

to the charge established in disciplinary proceeding or pendency of a

criminal case. He stopped attending his office for about three years which

compelled the petitioner company to abandon his service.

22. The learned trial judge has not only failed to exercise his

jurisdiction but exceeded his limit in excess of his jurisdiction. No

criminal court including the High Court created under the provision of

Section 2e read with Section 6 of the Code of Criminal Procedure can pass

such order as impugned before this court.

23. While setting aside the relevant part of the judgment passed by the

learned Special Judge CBI, Alipore in Special Case No.11 of 1996 relating

to payment of amount equivalent to his salary from the date of issuance of

the sanction order for prosecution till his attainment of 60 years 12%

interest thereon and compensation amounting to Rs.10 lakhs, this Court

permits the opposite party No.2 to take appropriate step for compensation

in accordance with law, if so advised.

24. This court finds that of late a tendency is noticed amongst the

members of subordinate judiciary that they are trying to overreach their

jurisdiction in the name of dispensation of justice. This tendency is highly

condemnable. Therefore, this Court is of the opinion that a copy of the

judgment be circulated through the learned Registrar General, High

Court, Calcutta to the learned District Judges with a request to circulate

the same to the members of the subordinate judiciary under their

respective judgeship so that they should perform their judicial function

within statutory limit and should not embark upon extraneous

considerations.

25. The instant revision is accordingly disposed of on contest.

26. There shall, however, no order as to cost.

(Bibek Chaudhuri, J.)