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2015 DIGILAW 295 (RAJ)

Hanuman Prasad Kachhawa v. State of Rajasthan

2015-02-02

PRASHANT KUMAR AGARWAL

body2015
JUDGMENT 1. - The accused-petitioner, who at the relevant time was working as Managing Director in the Ajmer Urban Cooperative Bank, Ajmer, has preferred this criminal revision petition under Section 397 read with Section 401 Cr.RC. against the order dated 30.10.2013 passed by the Special Judge, Anti Corruption Cases, Ajmer in Criminal Case No.3/2012 whereby the learned Court below has ordered to frame charge against the petitioner for the offence under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988 (hereinafter to be referred as the Act) mainly on the ground that the petitioner is not a "public servant" within the meaning of Section 2(c) of the Act. 2. The petitioner has been prosecuted and charge-sheet has been filed against him for the aforesaid offence on the premise that the petitioner in his entire service period earned an amount of Rs. 41,63,777/- by way of salary out of which an amount of Rs. 13,31,272/- was expended by him, but at the relevant time assets of the value of Rs. 1,18,76,954/-were found in his possession and thus, the petitioner had in his possession properties valuing more than Rs. 90,44,449/- which is disproportionate to his known source of income for which no satisfactory explanation or account could be furnished by the petitioner. At the time of framing of the charge also it was submitted on behalf of the petitioner before the learned trial Court that the petitioner is not a "public servant" and, therefore, he cannot be charged under the provisions of the Act, but the same was negatived by the learned trial Court on the basis of provisions of the Rajasthan Co-operative Societies Act as well as certain clauses of the bye-laws framed by the Ajmer Urban Cooperative Bank Limited and it was held that prima facie the petitioner is a public servant. 3. 3. In support of the petition, learned counsel for the petitioner raised the following grounds:- (1) As per sub-clause (ix) of clause (c) of Section 2 of the Act, an office-bearer of a registered co-operative society engaged in banking business can be treated to be a "public servant" only when such cooperative society was receiving or had received any financial aid from the Central Government or State Government or from any corporation established by or under a Central, Provincial or State Act, or any authority or body owned or controlled or aided by the Government or a Government company as defined in Section 617 of the Companies Act, 1956, but it is an admitted fact that Ajmer Urban Cooperative Bank of which the petitioner was Managing Director at the relevant time never received any financial aid from any Government or corporation or any authority or body as mentioned in the aforesaid provision. For this attention was also invited to a certificate dated 27.5.1998 issued by the Deputy Registrar, Cooperative Societies, Ajmer. (2) The petitioner cannot be said to be a "public servant" within the meaning of sub-clause (iii) of clause (c) of Section 2 of the Act also as the petitioner was never in the service or pay of a corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in Section 617 of the Companies Act, 1956. The Ajmer Urban Cooperative Bank by any stretch of imagination can neither be said to be a corporation established by or under a Central, Provincial or State Act nor an authority or a body owned or controlled or aided by the Government or a Government company. Merely because the bank is a co-operative society within the meaning of the Rajasthan Co-operative Societies Act 1965 (hereinafter referred to be the Act of 1965) and is registered under the provisions of that Act, it cannot be said that it is an authority or a body owned or controlled by the Government of Rajasthan. Merely because the bank is a co-operative society within the meaning of the Rajasthan Co-operative Societies Act 1965 (hereinafter referred to be the Act of 1965) and is registered under the provisions of that Act, it cannot be said that it is an authority or a body owned or controlled by the Government of Rajasthan. (3) It can not also be said that as a Managing Director of the aforesaid bank the petitioner was holding an office by virtue of which he was authorised or required to perform any public duty within the meaning of sub-clause (vii) of clause (c) of Section 2 of the Act. (4) At the most it can be said that the aforesaid bank is a private body dealing in business of banking and merely because the day to day affairs of the bank are regulated by the provisions of the Banking Regulation Act, 1949 and/or The Reserve Bank of India Act, 1934, it cannot be said that the aforesaid bank is a body controlled by the Government. The relevant provisions of the aforesaid Acts are of regulatory measures to keep the check and provide guidelines and the main consideration beyond such regulation is that the bank itself may not sink because of its own mismanagement or the interest of the shareholders or people generally may not be jeopardised for that reason and apart from that there is no other interest of the Government in controlling affairs and management of the cooperative banks including that of Ajmer Urban Cooperative Bank and merely on that premise it cannot be said that the Managing Director of the aforesaid bank is a "public servant" within the meaning of clause (c) of Section 2 of the Act. 4. In support of his submissions, learned counsel for the petitioner relied upon the case of Federal Bank Ltd. v. Sagar Thomas & ors. reported in 2004(1) WLC (SC) Civil 1 : (2003) 10 SCC 733 . 5. 4. In support of his submissions, learned counsel for the petitioner relied upon the case of Federal Bank Ltd. v. Sagar Thomas & ors. reported in 2004(1) WLC (SC) Civil 1 : (2003) 10 SCC 733 . 5. On the other hand learned Public Prosecutor controverting the submissions made on behalf of the petitioner submitted that as the aforesaid bank is a co-operative society within the meaning of the Act of 1965 and it was also registered under the provisions of this Act and as per the bye-laws framed by the bank itself it was discharging public functions by granting loans on interest to general public and also receiving deposits of money from the same, the petitioner was holding a public office as Managing Director of the bank and was discharging public duties as defined under clause (b) of Section 2 of the Act, prima facie there was sufficient ground to frame charge against the petitioner for an offence punishable under the provisions of the Act. It was further submitted that the provisions of the Act of 1965 clearly shows that almost each and every affair of a registered co-operative society is controlled by the Registrar who is an officer appointed by the State Government, it must be held that a co-operative society is an authority or a body controlled by the State Government. 6. I have considered the submissions made on behalf of the respective parties and also gone through the relevant legal provision and the case law. 7. The word `public servant' is defined under clause (c) of Section 2 of the Act and this provision contains as many as 12 sub-clauses. For our purpose sub-clauses (iii) (viii) and (ix) are relevant. As per explanation persons falling under any of these sub-clauses are "public servants" whether appointed by the Government or not. It is thus clear that even if the petitioner was not appointed by the Government as Managing Director in the aforesaid bank even then he can be treated to be a "public servant" if he is otherwise found to be a "public servant" within the meaning of one or more of the aforesaid three sub-clauses. It is thus clear that even if the petitioner was not appointed by the Government as Managing Director in the aforesaid bank even then he can be treated to be a "public servant" if he is otherwise found to be a "public servant" within the meaning of one or more of the aforesaid three sub-clauses. So far as sub-clause (ix) is concerned, it is more than clear that an office-bearer of a registered Cooperative Society engaged in banking business can be treated to be a "public servant" only when it is found that such co-operative society was receiving or has received any financial aid from the Central Government or State Government or from any corporation established by or under a Central, Provincial or State Act or any authority or body owned or controlled or aided by the Government or a Government company. From the side of the respondent-State of Rajasthan it has not been disputed that the aforesaid bank never received any financial aid from the Government. Otherwise also, as per certificate dated 27.5.1998 issued by the Deputy Registrar, Rajasthan Cooperative Societies, Ajmer, the bank never received any financial aid from the Government. Therefore, the petitioner cannot be held to be a "public servant" as per provisions of sub-clause (ix) of clause (c) of Section 2 of the Act. 8. Hon'ble Supreme Court in the case of State of Maharashtra & anr. v. Prabhakar Rao & anr. reported in 2002(2) WLC (SC) Cri. 82 : (2002) 7 SCC 636 , has held that to determine whether an office-bearer of a Co-operative Society is a "public servant" within the meaning of clause (c) of Section 2 of the Act, enquiry into facts relating to the management, control and funding of the society is necessary to be ascertained. 9. As per clause (aa) of Section 2 of the Act of 1965 "Chief Executive Officer" means an individual who, subject to the superintendence, control and directions of the Committee is entrusted with the management of the whole or substantially the whole of the affairs of a society and includes any other person occupying the position of a Chief Executive Officer by whatever name called. According to clause (aaa), "Executive Officer" means an officer who, subject to the superintendence, control and directions of the Committee, is appointed under section 35-B to assist the Chief Executive Officer in the management of the affairs of a society. It is not in dispute that the Managing Director of the aforesaid bank is a Chief Executive Officer within the meaning of clause (aa) of Section 2 of the Act of 1965. As per clause (I), "Registrar" means a person appointed to perform the functions of the Registrar of co-operative societies under this Act, and includes any persons appointed to assist the Registrar when exercising all or any of the powers of the Registrar. Sub-section (1) of Section 3 of the Act of 1965 authorizes and empowers the Government to appoint a person to be the Registrar of Co-operative Societies. Section 10 provides that the registration of a co-operative society shall render it a ; body corporate by the name under which it is registered, having perpetual succession and a common seal, and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purpose for which it was constituted. Thus, it is clear that as per this provision a co-operative society is a body corporate. Various provisions of this Act like Sections 4, 8, 13, 14, 16, 17, 18, 19, 30 to 34, 36, 37, 68, 69, 70, 71, 74, 75, 78, 79 and 83 show how the affairs of a co-operative society are controlled by the Registrar, Clause (5) of the bye-laws framed by the aforesaid bank provides for the objects for which the bank has been constituted and established. Apart from others, it o provides that the bank can accept deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise, for the purpose of lending or investment. It also provides that the bank can lend or advance money either upon or without security to members and other as decided by the General Body. It further 5 provides that the bank can open branches and pay offices with the permission of the Reserve Bank of India within the area of operation of the Bank so as to provide banking service to the public. It further 5 provides that the bank can open branches and pay offices with the permission of the Reserve Bank of India within the area of operation of the Bank so as to provide banking service to the public. Clause (6) of the bye-laws provides for the funds that can be raised by the bank. It provides that the funds may be raised from deposits also. It is thus clear that the bank was entitled to accept deposits of money from the public and to lend or advance money not only to its members but also to the general public. Clause (36) of the bye-laws provides for the powers and duties of the Chief Executive Officer. Apart from others, such officer was authorised to receive applications for loans and to place them for consideration before the Board of Directors, to accept deposits of all kinds and types and to arrange the issue of receipts, statements and pass book, to disburse moneys on behalf of the Bank, to be the custodian of cash on hand, property both movable and immovable, documents, securities and bonds and to seek orders from staff committee for appointment of staff subordinate to him within the sanctioned strength on such scales of pay and allowances as may have been sanctioned by the Board of Directors from time to time. As per sub-clause (iii) of clause (4) of the bye-laws "Chief Executive Officer" means the Managing Director appointed by the Board of Directors. 10. A close look at sub-clause (iii) of clause (c) of Section 2 of the Act shows that any person in the service or pay of a body controlled by the Government is also a public servant. 11. I am of the considered view that when the affairs of a co-operative society are controlled by the Registrar of Co-operative Societies as indicated under the various provisions of the Act of 1965, a co-operative bank should be treated to be a body controlled by the State Government within the meaning of sub-clause (iii) of clause (c) more particularly in view of the fact that as per Section 10 of this Act, a Co-operative Society is a body corporate. 12. Apart from that, the Managing Director of a co- operative bank can be held to be a person holding an office by virtue of which he is authorised or required to perform a public duty. 12. Apart from that, the Managing Director of a co- operative bank can be held to be a person holding an office by virtue of which he is authorised or required to perform a public duty. According to clause (b) of Section 2 of the Act "public duty" means the duty in the discharge of which the State, the public or the community at large has an interest. The aforesaid bank can be said to be discharging a public duty by providing loan to public at large as well as by accepting deposits of money from the same and this is an activity which is regulated under the provisions of the relevant statutes. 13. The Constitution Bench of Hon'ble Supreme Court in the case of P.V. Narsimha Rao v. State (CBI/SPE) etc., reported in AIR 1998 SC 2120 has held that the word `office' is normally understood to mean "a position to which certain duties are attached, especially a place of trust, authority or service under constituted authority." The function and duties assigned to the Chief Executive Officer i.e. Managing Director of the bank under bye-laws are clear indication of the fact that the petitioner as Managing Director was holding an office at the relevant time and by virtue of that position he was authorised or required to perform public duty as provided under the bye-laws. 14. It is thus clear that the petitioner as Managing Director of the bank at the relevant time was a person in the service or pay of a body controlled by the Government of Rajasthan and was also holding an office by virtue of which he was authorised or required to perform a public duty and thus, he was a "public servant" within the meaning of clause (c) of Section 2 of the Act. 15. In the case of Govt. of Andhra Pradesh & ors. v. P. Venku Reddy, reported in (2002) 7 SCC 631 , the question before the Hon'ble Supreme Court was whether a person working as supervisor in District Co-operative Central Bank Limited, Nellore can be said to be a "public servant" within the meaning of clause (c) of Section 2 of the Act. Hon'ole Court held that employees or servants of a co-operative society which is controlled or aided by the Government, are covered by sub-clause (iii) of clause (c) of Section 2 of the Act. Hon'ole Court held that employees or servants of a co-operative society which is controlled or aided by the Government, are covered by sub-clause (iii) of clause (c) of Section 2 of the Act. It was further held that in construing the definition of "public servant" in clause (c) of Section 2 of the Act, the Court is required to adopt a purposive approach as would give effect to the intention of legislature. It was also held that the Act with a much wider definition of "public servant", was brought in force to purify public administration. When the legislature has used such comprehensive definition of "public servant" to achieve the purpose of punishing and curbing growing corruption in Government and semi-Government departments, it would be appropriate not to limit the contents of definition clause by construction which would be against the spirit of the statute. It was further held that the definition of "public servant", therefore, deserves a wider construction. With these observations, the Hon'ble Court set aside the order passed by the High Court and held that the accused, who was working as Supervisor of the bank, is a public servant. Relying upon the aforesaid decision, the Chhatisgarh High Court in the case of M.S. Rajput v. State of Chhatisgarh reported in 2005 Cr.L.J. 3284 has held that persons employed in a co-operative society are public servants. 16. In view of the above, the definition of the word `public servant' is to be construed widely and even if the aforesaid bank was not receiving or ever received any financial aid from any Government etc. even then as the petitioner as Managing Director was holding an office by virtue of which he was authorised or required to discharge public duties and the bank was controlled by die Registrar of Co-operative Societies and he was in the service and pay of the bank, he must be held to be a "public servant" for the purpose of framing of charge against him and to face trial for the offence for which he has been charged. 17. So far as the case relied upon on behalf of the petitioner is concerned, it being based on entirely different facts, it is no help to the petitioner for the purpose of holding whether the petitioner is a "public servant" or not within the meaning of clause (c) of Section 2 of the Act. 18. 17. So far as the case relied upon on behalf of the petitioner is concerned, it being based on entirely different facts, it is no help to the petitioner for the purpose of holding whether the petitioner is a "public servant" or not within the meaning of clause (c) of Section 2 of the Act. 18. The question in the aforesaid case was whether writ petition under Article 226 of the Constitution of India is maintainable against a private bank. 19. Consequently, the revision petition being without any merit is, hereby, dismissed.Revision Dismissed. *******