Madhya Pradesh High Court quashed prosecution sanction against a senior State Excise officer in a disproportionate assets case, holding authorities ignored the independently declared professional and agricultural income of his advocate spouse. The Division Bench set aside the sanction.
MADHYA PRADESH: The Madhya Pradesh High Court has annulled the sanction granted for the prosecution of a senior State Excise officer in a case concerning disproportionate assets. The court determined that the sanctioning authority did not adequately consider the independently disclosed professional and agricultural income of the officer’s spouse, a practicing advocate.
A Division Bench comprising Justice Vivek Kumar Singh and Justice Ajay Kumar Nirankari accepted the writ petition and invalidated the sanction order dated April 4, 2025, along with all related proceedings.
The Court found that the sanctioning authority acted without properly applying its mind and overlooked essential information indicating that substantial portions of income were lawfully disclosed through Income Tax Returns and departmental declarations.
The Court noted,
“It is quite discernible that since the petitioner No.1 has clearly justified the amount claimed as the income from her professional work, the Income Tax Returns as well as income from farm, receipt from respective Mandi justifying sales and the agricultural equipment unearthed during the raid, all of it points towards only one conclusion that if the professional and subsequent agricultural income of petitioner No.1 is taken into account in that case, the sanctioning authority ought not to have granted sanction and nipped the matter in the bud itself. The case stemmed from a Lokayukt investigation initiated after a complaint in 2018, which led to searches in 2019 at both the residential and official premises of the officer. During the investigation period from 1998 to 2019, the authorities concluded that the petitioners held assets disproportionate to their known income sources by approximately 88.20%, resulting in the sanction for prosecution under the Prevention of Corruption Act in conjunction with Section 120-B of the IPC,”
In their arguments before the Court, the petitioners claimed that the sanction order exhibited a lack of application of mind as it ignored the spouse’s independent professional and agricultural income, despite being substantiated by Income Tax Returns, agricultural sale records, and departmental disclosures. They pointed out that the wife had been practicing law prior to their marriage and had consistently filed tax returns reflecting her earnings.
The petitioners also referenced an internal report from the Excise Commissioner, which concluded that significant amounts of professional and agricultural income had been mistakenly excluded and that the case was not appropriate for sanction. The Court observed that this recommendation was disregarded without justification. The State and Lokayukt contested the petition, arguing that the sanctioning authority had taken the material into account and that the adequacy of that material could not be evaluated at this stage.
Additionally, the State argued that during the investigation, the spouse had not presented sufficient documentation to fully establish her income. However, the Court dismissed these claims, reiterating that a prosecution sanction is not a mere formality but requires an independent application of mind.
The Bench highlighted that such sanctions must be based on a comprehensive evaluation of all material and cannot overlook legally disclosed income. The Court stated that “known sources of income” include income appropriately disclosed under service conduct rules and detailed in Income Tax Returns, and highlighted that income formally reported to tax authorities and communicated to the department is considered legitimate income by law.
Notably, the Court determined that once the spouse’s professional and agricultural income was taken into account, the alleged disproportionate assets fell within acceptable limits, thus failing to justify criminal prosecution. The Court criticized the perspective of regarding a professionally qualified spouse merely as an extension of a government employee, asserting that excluding independent income in this manner was unreasonable and legally indefensible.
Ultimately, the Court ruled that the sanction order had been issued mechanically and without proper consideration of the relevant material, quashing the sanction order and all related proceedings, stating that continuing the prosecution under these circumstances would constitute an abuse of the legal process.
Case Title: Meenakshi Khare & Anr. v. State of Madhya Pradesh & Ors.
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