A) ABSTRACT / HEADNOTE

The appeal challenges the High Court of Punjab & Haryana’s order quashing the Sanction Order dated 19.11.2018 and setting aside consequent criminal proceedings under Sections 7 and 13(2) of the Prevention of Corruption Act, 1988, in FIR No. 02 dated 10.01.2024 (Vigilance Bureau, Patiala Range). The Supreme Court reversed the High Court, restoring proceedings and holding that interference with a Special Judge’s order on sanction is barred by Section 19(3) of the Act unless the appellate/revisional court records that a failure of justice has in fact occurred.

The Court relied heavily on State of Karnataka, Lokayukta Police v. S. Subbegowda (2023) and emphasised that competency of the authority to grant sanction is an “error” under the Explanation to Section 19(4), but that competency is ordinarily a matter of evidence for trial. Because the High Court neither recorded how any error occasioned a failure of justice nor addressed why the objection could not have been raised earlier, its quashing of the sanction and proceedings after the trial had commenced (several prosecution witnesses examined) amounted to a gross error. The Supreme Court accordingly set aside the High Court order and restored proceedings before the Special Court from the stage they were stopped, leaving open all contentions on merit to be raised during trial.

Keywords: Sanction under Prevention of Corruption Act; Section 19(3) & (4); failure of justice; competency to grant sanction; interference after trial commenced.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGMENT

The appeal arises from a High Court order (dated 20.05.2019) quashing a government Sanction Order dated 19.11.2018 permitting prosecution under the Prevention of Corruption Act, 1988. The respondent (accused) moved the High Court during trial seeking quashing on the ground that the officer who issued the sanction lacked competency. By the time the High Court entertained the petition, the Special Court had framed charges and the prosecution had examined multiple witnesses. The High Court allowed the petition and set aside the sanction and consequent proceedings. The State challenged that interference before the Supreme Court, asserting that once the Special Court had proceeded with the trial and evidence had been led, the High Court should not have intervened except where failure of justice was shown.

The Supreme Court framed the narrow legal question of whether the High Court could quash the sanction and proceedings when trial had commenced and several prosecution witnesses had been examined. Central to resolution were the dual limbs of Section 19 — the bar against appellate/revisional interference contained in Section 19(3) and the inquiry permitted by Section 19(4) which allows interference only when the appellate or revisional court concludes that a failure of justice has occurred. The Explanation to Section 19(4) explicitly includes “competency of the authority to grant sanction” within the meaning of “error”, but the Court highlighted that competency often requires evidence and thus is ordinarily to be considered in the trial. The Court relied on the earlier authoritative pronouncement in State of Karnataka v. S. Subbegowda (2023), which interpreted Section 19 in similar circumstances and warned against appellate interference absent a recorded finding that failure of justice followed from the defect. Applying that reasoning, the Supreme Court found the High Court’s order lacked any opinion on failure of justice and therefore set it aside, restoring the criminal proceedings.

D) FACTS OF THE CASE

The facts, as recited in the reported judgment, are concise and procedurally focused. An FIR (No. 02 dated 10.01.2024) was registered at the Vigilance Bureau, Patiala Range, Patiala, alleging offences under Sections 7 and 13(2) of the Prevention of Corruption Act, 1988 against the respondent. A Sanction Order dated 19.11.2018 authorised prosecution. The Special Court framed charges and trial commenced; the prosecution had examined between five and seven witnesses by the time the respondent filed a petition in the High Court seeking quashing of the sanction on grounds including the issuing authority’s alleged lack of competency.

The High Court allowed the petition and set aside the sanction and proceedings. The State challenged that decision before the Supreme Court. On appeal, the State argued that the High Court improperly intervened once the Special Court had advanced the trial and evidence had been led; the respondent maintained that the sanction itself was invalid because the officer who signed it lacked competence. The Supreme Court focused on statutory interpretation and earlier precedent rather than the trial evidence, concluding that competency to grant sanction is a question of fact/evidence and not ordinarily a ground for quashing after trial has progressed unless a failure of justice is demonstrated.

E) LEGAL ISSUES RAISED

i. Whether the High Court was justified in quashing the Sanction Order after the Special Court had framed charges and the prosecution had examined witnesses?

ii. Whether Section 19(3) of the Prevention of Corruption Act, 1988 bars appellate/revisional courts from interfering with a Special Judge’s order on sanction except where a failure of justice is shown?

iii. Whether competency of the authority to grant sanction is an “error” permitting interference under the Explanation to Section 19(4) and, if so, whether competency must be proved at trial or can be squared away by quashing at interim stage?

F) PETITIONER / APPELLANT’S ARGUMENTS

The State’s counsel argued that the High Court erred in quashing the sanction and setting aside proceedings after trial had begun and witnesses were examined. Reliance was placed on State of Karnataka v. S. Subbegowda (2023) for the proposition that Section 19(3) forbids appellate interference with Special Judge orders on sanction except where failure of justice is recorded by the appellate/revisional court. The Appellant emphasised procedural finality and that issues such as competency are matters of evidence to be tested in the trial rather than grounds for mid-trial quashing absent demonstrable failure of justice.

G) RESPONDENT’S ARGUMENTS

The respondent contended the High Court rightly quashed the sanction because the officer who issued it lacked competence, making the sanction void ab initio. Counsel urged that competency is fundamental: an unauthorized authority cannot authorize prosecution. On that basis, interference by the High Court before trial’s end was necessary to prevent a continuing nullity. The respondent maintained that the defect could not wait for trial since proceedings founded on a void sanction would be legally unsustainable.

H) RELATED LEGAL PROVISIONS 

i. Section 19(1), (3) & (4), Prevention of Corruption Act, 1988 — sanction requirement and bar on interference in appeal/revision except where failure of justice is found.

ii. Explanation to Section 19(4) — includes “competency of the authority to grant sanction” within the meaning of “error”.

iii. Code of Criminal Procedure, 1973 — procedural backdrop; interplay with special legislation.

I) JUDGMENT

The Supreme Court allowed the State’s appeal, setting aside the High Court’s order and restoring the trial before the Special Court from the stage it had been stopped. The Court anchored its reasoning on the clear text of Section 19(3) and the interpretative guidance in S. Subbegowda (2023). It reiterated that Section 19(3) precludes appellate/revisional interference with a Special Judge’s order on sanction on grounds of absence, error, omission or irregularity in sanction unless the interfering court is satisfied that such defect caused a failure of justice.

The Court stressed that the Explanation to Section 19(4) lists competency as an example of “error”, but competency is usually a fact question for trial and must be proved by evidence. The High Court’s order was faulted primarily because it did not record any opinion as to how a failure of justice had in fact occurred as a result of any supposed error in the sanction; neither did the respondent plead or the High Court consider the requisite nexus between error and failure of justice.

Given that the Special Court had proceeded with trial and multiple witnesses had been examined, interfering at that stage without the required finding contravened the legislative balance. The Supreme Court therefore restored the proceedings and clarified that it expressed no view on merits; the respondent was free to raise all contentions at trial. The Court’s order ensures that inquiry into competency remains an evidentiary matter unless a clear failure of justice is established at appellate/revisional stage.

a. RATIO DECIDENDI

The decisive legal principle is that Section 19(3) of the Prevention of Corruption Act, 1988 places a strict bar on appellate or revisional courts interfering with a Special Judge’s order on sanction on grounds of absence, error, omission or irregularity, except where the appellate or revisional court records that a failure of justice has in fact occurred as a result. The Explanation to Section 19(4) shows that competency is an “error” but ordinarily competency must be proved by evidence during trial; it is not a freestanding basis for quashing sanction mid-trial absent demonstration of failure of justice. Thus, finality and procedural economy are preserved while leaving substantive challenges to trial evidence.

b. OBITER DICTA

The Court observed (without deciding merits) that competency to sanction and similar defects are matters that frequently require evidentiary resolution and that appellate courts should be cautious about substituting trial processes by quashing proceedings post facto. The Court reiterated that objections capable of being raised earlier in proceedings ought to have been raised at an earlier stage, consistent with Section 19(4). The Supreme Court also clarified procedural posture: restoration of proceedings does not prejudice the accused’s legal rights to raise all permissible contentions at trial.

c. GUIDELINES 

i. Appellate/revisional courts must not quash sanctions granted by competent authority unless they record a specific finding that a failure of justice has occurred due to the defect.

ii. Competency to grant sanction is included in the Explanation to Section 19(4) as an “error”, but competency is primarily a question of evidence and should ordinarily be tested at trial.

iii. Where trial has progressed and prosecution witnesses have been examined, High Courts should exercise restraint in interfering with sanctions; absence of any reasoning linking the identified defect to a failure of justice makes interference impermissible.

iv. If an accused believes the sanction is vitiated, the preferred course is to raise the challenge at the earliest stage in proceedings, failing which the appellate/revisional forum must consider why the delay does not preclude relief under Section 19(4).

v. Restoration of proceedings is appropriate where the appellate/revisional interference is found to be erroneous; meanwhile, all substantive and procedural defenses remain open for trial.

J) CONCLUSION & COMMENTS

This judgment reinforces the legislative scheme under the Prevention of Corruption Act, 1988 that balances the need to prevent frivolous or mala fide prosecutions with preserving the integrity of trial processes. By applying S. Subbegowda (2023) and insisting on a demonstrable failure of justice before appellate interference with sanction orders, the Court curtails opportunistic mid-trial interventions and protects evidentiary fact-finding by the trial court.

Practically, the ruling signals that challenges to the competency of sanctioning authority should be raised promptly and, where contested, decided at trial with evidence rather than by collateral attack after significant trial progress. Defence counsel retain the ability to litigate competency and related objections at trial; however, courts below and appellate benches must respect the statutory bar unless concretely satisfied that justice has failed. The decision therefore advances procedural finality, preserves statutory intent, and clarifies the evidentiary posture for competency disputes under Section 19.

K) REFERENCES

a. Important Cases Referred

i. State of Karnataka, Lokayukta Police v. S. Subbegowda, (2023) 11 SCR 19 : 2023 SCC Online SC 911. (Relied upon in judgment).

ii. The State of Punjab v. Hari Kesh, Criminal Appeal No. 104 of 2025, Supreme Court of India, judgment dated 07 January 2025. Reported: [2025] 1 S.C.R. 651 : 2025 INSC 50.

b. Important Statutes Referred

i. Prevention of Corruption Act, 1988, Section 19(1), Section 19(3), Section 19(4) and Explanation to Section 19(4).

ii. Code of Criminal Procedure, 1973 (procedural interplay considerations).