The Allahabad High Court, Lucknow Bench, has quashed the prosecution sanction order and discharge rejection order in a case involving alleged fraudulent transactions of over ₹22 crore from the account of SHIATS (Sam Higginbottom Institute of Agriculture, Technology and Sciences) maintained at Axis Bank. The Court observed that the sanctioning authority acted as a “mere rubber stamp,” showing “total non-application of mind.”
The judgment was delivered by Justice Subhash Vidyarthi on May 27, 2025, in Application under Section 482 Cr.P.C. No. 12048 of 2023, filed by Sri Sushant Gupta and five others, all Axis Bank officials.
Background
An FIR was registered by the Central Bureau of Investigation (CBI) on February 3, 2021, against two individuals—Kamal Ahsan, an Axis Bank employee, and Rajesh Kumar, an accountant at SHIATS—accusing them of committing fraudulent transactions amounting to ₹22.39 crore. Subsequently, the CBI filed a chargesheet on December 30, 2021, implicating 26 individuals including the applicants, all of whom were serving in managerial positions at Axis Bank.
The trial court took cognizance on March 8, 2022, under Sections 120-B read with 409, 418, 419, 420, 467, 468, 471, 477A IPC, and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. However, in an earlier application under Section 482 Cr.P.C., the High Court had quashed the cognizance order on the ground that no prosecution sanction had been obtained under Section 19 of the Prevention of Corruption Act and Section 197 Cr.P.C.
Arguments
Counsel for the Applicants, Sri Rishad Murtaza and Ms. Aishwarya Mishra, argued that the sanction dated February 2, 2023, issued by the President and Head of Corporate Affairs of Axis Bank was legally flawed. They contended that the sanction was granted only under Section 19 of the Prevention of Corruption Act and not under Section 197 Cr.P.C., and further argued that Axis Bank officials, being private employees, were not public servants under the IPC provisions. It was asserted that the sanctioning authority overstepped by granting sanction for offences under IPC and “any other offence(s)” without legal authority or specific request.
On the other hand, Sri Anurag Kumar Singh, representing the CBI, maintained that the sanctioning authority had exercised independent judgment based on the investigative material, and a mere reference to IPC offences did not invalidate the sanction under the Prevention of Corruption Act.
Court’s Analysis
The Court examined the sanction order and observed that it was an 11-page document that purported to grant prosecution sanction for offences under the IPC and the Prevention of Corruption Act. However, the Court found that the authority was not legally competent to grant sanction for offences under the IPC and no such sanction had been sought.
Justice Vidyarthi noted:
“The sanction of prosecution ‘for the said offences and for any other offence(s) punishable under any other provisions of law in respect of the said acts’ for which no sanction was obtained, indicates a total non-application of mind to the facts of the case and the law applicable. It indicates that the sanctioning authority has acted as a mere rubber stamp.”
The Court emphasized that a sanction order must reflect application of mind and proper legal authority, particularly when it serves as a safeguard against frivolous prosecutions.
Decision
In view of these findings, the High Court allowed the application under Section 482 Cr.P.C., quashed the sanction order dated February 2, 2023, and also set aside the trial court’s order dated July 28, 2023, which had rejected the applicants’ discharge application.
The Court held that:
“The order of sanction after a proper application of mind to the relevant facts and circumstances of the case and the material on record is a prerequisite for prosecution of a public servant… This safeguard cannot be dealt with in a casual and mechanical manner.”
Case Details
- Case Title: Sri Sushant Gupta and 5 Others vs. Central Bureau of Investigation, SCB, Lucknow
- Case No.: Application U/S 482 No. 12048 of 2023
