"Sanction Not a Mere Formality," Says MP High Court While Overturning Corruption Conviction

The Madhya Pradesh High Court's Indore Bench has set aside the conviction of a former Chief Executive Officer of Janpad Panchayat, Ujjain, in a fifteen-year-old corruption case, holding that the prosecution failed to prove she dishonestly caused loss to the exchequer or entered into a criminal conspiracy with co-accused.

Justice Jai Kumar Pillai, hearing Criminal Appeal No. 2011 of 2018, allowed the appeal by Sabeena Ninama against her conviction under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988, and Section 120-B of the Indian Penal Code, 1860. The trial court, by its judgment dated February 27, 2018, had convicted her on three counts relating to 110 missing transit passbooks, non-execution of auction agreements for 26 mines, and excess payments towards advertisement charges during her tenure as CEO between September 2002 and October 2003.

Senior counsel Prakash Upadhyaya, assisted by Aditya Singh and Kinjal Shrivastava, argued for the appellant that she was never the custodian of the transit passbooks and that the relevant records were maintained by two accountants, Babulal Sharma and Anant Singh Bains, who had actual custody of the registers. Counsel pointed out that the prosecution's own witness, Ashok Neem, had admitted that issuing and maintaining transit passbook records was "the sole responsibility of the accountants," and that no material was found to show the appellant had requested or possessed any disputed passbooks.

On the auction agreements, the defence submitted that the responsibility to get contracts executed rested with the successful bidders, not the CEO, and that cancellation proceedings could only have begun after the prescribed three-month deposit period lapsed. The court noted the appellant had already been transferred out of the post before that period expired for two of the three auctions in question. Counsel for the state, Lokendra Joshi, countered that the appellant, as administrative head of the establishment, could not seek refuge behind subordinate officials, and that financial records produced before the trial court clearly established her misconduct.

Examining the evidence, the High Court found that witness after witness had, on record, contradicted the prosecution's own case. The investigating officer admitted he found no misuse of the transit passbooks and that no document showed the appellant had sought their issuance. The officer who conducted the departmental inquiry testified that the alleged loss figure was "an assumed figure with no concrete evidence as to how it was determined," and that no loss was caused to the exchequer.

The court also examined the sanction for prosecution, observing that neither the official who signed the sanction letter nor the officer who granted it was examined at trial to show application of mind to the material placed before them. Calling sanction "not a mere formality but a solemn and sacrosanct act," the bench held the prosecution had not discharged this burden.

The judgment further noted the appellant had been exonerated in a parallel departmental enquiry over the same allegations and was later promoted, a circumstance the trial court had failed to weigh. "This circumstance supports the defense that the matter, at most, discloses administrative irregularity and not criminal misconduct," the court observed, adding that departmental findings, while not binding on a criminal court, could not be ignored where the prosecution's own evidence fell short of proving dishonest intention.

On the conspiracy charge, the court held there was no cogent material showing any prior meeting of minds between the appellant and her co-accused, one of whom had already been acquitted and another who died before the trial could pronounce on his guilt. "A criminal court cannot convict a person merely because she held office during the period when irregularities came to light," the bench observed, holding the burden of proof never shifts to the accused.

Setting aside the trial court's order of February 27, 2018, the High Court acquitted Ninama of all charges, directed refund of any fine deposited by her, and discharged her bail bonds.

Case Title: Smt. Sabeena Ninama v. The State of Madhya Pradesh

Date of Order: August 18, 2026

Bench: Justice Jai Kumar Pillai