Source: Indian Express

Introduction

• Recently, the Supreme Court in the matter of Nara Chandrababu Naidu v. State of Andhra Pradesh & Anr. (2023), heard appellant Chandrababu Naidu, aggrieved by the initiation of a criminal proceeding against him and his detention in connection with the same by the respondent State through its CID.

What was the Case on the Appellant?

• Misappropriation of Public Funds:
  • The appellant is accused primarily of facilitating the misappropriation of approximately Rs. 370 crores in public funds intended for the establishment of six skill development clusters in Andhra Pradesh.
• Andhra Pradesh State Skill Development Corporation:
  • The Andhra Pradesh State Skill Development Corporation (APSSDC) was created through a memorandum issued by the Higher Education Department.
  • APSSDC entered into an agreement with two corporate entities, Siemens Industry Software India Pvt. Ltd. (SIEMENS) and Design Tech India Pvt. Ltd. (Design Tech).
• Project:
  • Originally, the objective was to set up six clusters, each comprising a Centre of Excellence and five Technical Skill Development Institutions and Skill Development Centres in Andhra Pradesh, with a total project cost of Rs. 3281.05 crores.
  • The government's contribution was limited to 10% of the cost (Rs. 55 crores), with SIEMENS and Design Tech providing 90% grant-in-aid (Rs. 491.84 crores).
• State’s Allegation:
  • The state alleged that the corporate entities' required contribution, which was overlooked, resulted in an outflow of Rs. 330 crores from the state to Design Tech in the final agreement, as indicated in the state's counter-affidavit.
  • The APSSDC had conducted a forensic audit in the year 2020 and the audit found flaws and irregularities in the systems and in utilisation of funds between the financial years 2014-­2015 and 2018­-2019.
  • As per the investigating authorities a sum of Rs.370/­ crores from the government funds of the APSSDC has been siphoned off.

What was the Main Argument of the Appellant?

• Non-compliance:
  • The Appellant argued against non-compliance of Section 17A of the Prevention of Corruption Act, 1988 (PC Act).
  • The Appellant was heard by a Special judge under PC Act who remanded him into judicial custody.
  • The accused said that Section 17A was introduced to the 1988 Act with effect from 26^th July 2018.
• Illegal Proceeding Before Special Judge:
  • The appellant said that if a flaw is detected in implicating the appellant under the 1988 Act, the entire proceedings before the Special Judge would collapse.
  • This is because, in such a scenario, the Special Judge would have exceeded jurisdiction under the PC Act, rendering the remand order null and void.
• No Retrospective Application:
  • The High Court ruled, among other things, that the provisions in question cannot be applied to offences committed before 26th July 2018.
  • It emphasized that Section 13 (1) (c) & (d) offences were removed by the PC (Amendment) Act, 2018, and Section 17A was introduced.
  • The argument was made that protective measures in the Amendment Act do not apply to offences committed before the inclusion of such safeguards in the statutory scheme, as per the state's representation.
  • The High Court's primary decision rested on the non-retrospective application of Section 17A.

What is the Conclusion Drawn by the Supreme Court?

• No Application on Prior Offences:
  • The court said that Section 17A would be applicable to the offences under the PC Act as amended by the Amendment Act, 2018, and not to the offences existing prior to the said amendment.
• Denial to Quash First Information Report (FIR) Against Appellant:
  • The court said that even otherwise, absence of an approval as contemplated in Section 17A for conducting enquiry, inquiry or investigation of the offences alleged to have been committed by a public servant in purported exercise of his official functions or duties, would neither vitiate the proceedings nor would be a ground to quash the proceedings or the FIR registered against such public servant.
• Valid Remand by Special Judge:
  • The court said that the Appellant having been implicated for the other offences under Indian Penal Code, 1860 (IPC) also, the Special Court was completely within its jurisdiction to pass the remand order in view of the powers conferred upon it under Section 4 and 5 of the PC Act.
  • There was no jurisdictional error committed by the Special Court in passing the impugned order of remand.
  • The impugned judgment and order passed by the High Court also does not suffer from any illegality or infirmity which would warrant interference of this Court.
• Referred to Supreme Court:
  • The court expressed opinions taking different views on the interpretation of Section 17A of the PC Act, 1988 and also examined its applicability to the appellant in the subject case.
  • The court referred the matter to the Hon’ble the Chief Justice of India.