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2019 DIGILAW 674 (KER)

Sivadasan Pillai S/o Parameswaran Pillai v. State of Kerala Rep. by Secretary to Government, Home Department

2019-08-20

P.UBAID

body2019
ORDER : 1. The petitioners in these proceedings are the different accused in two prosecutions, one pending before the Special Court (Vigilance), Kozhikode and the other pending before the Judicial First Class Magistrate Court-III, Punalur. Common questions of law are involved in all these petitions and so, all these petitions were heard together, and are being disposed of by this common judgment. The petitioner in Crl. M.C. No. 9110/2016 is the 4th accused in C.C. No. 16/2008 of the Special Court (Vigilance), Kozhikode and the petitioner in Crl. M.C. No. 8548/2016 is the 8th accused therein. The petitioner in W.P. (C) No. 3612/2017 is the 2nd accused in C.C. No. 880/2015 of the Judicial First Class Magistrate Court-III, Punalur and the petitioner in Crl. M.C. No. 5155/2013 is the 3rd accused therein. All the petitioners, including the writ petitioner seek orders quashing the prosecution as against them on factual as well as legal grounds. The common legal grounds involved in the four matters are:- (a) Whether the cognizance is barred under sub-section (4) of Section 95 of the Co-operative Societies Act. (b) Whether there is total immunity from prosecution under Section 106 of the Co-operative Societies Act. Though factual grounds are also alleged to obtain relief quashing the whole prosecution, I find, on a perusal of the materials, that, on factual aspects, there are prima facie materials to proceed and I do not find any reason or ground to allow the request. Before going to the legal aspects, let me see the factual allegations in the two cases. 2. In C.C. No. 16/2008 of the Special Court (Vigilance), Kozhikode, the trial court has already framed charge against the accused. The accused Nos. 1 to 3 therein are respectively the President, the Secretary and the Senior Clerk of the Keezhariyor Service Co-operative Bank Limited, and the accused Nos. 5 to 8 are the Director Board Members of the Cooperative Bank. The 4th accused is the person appointed and authorised by the Co-operative Bank as per a resolution passed by the Board of Directors, for procuring copra for the Co-operative Bank under the "Support Price Scheme" for the period from 3.5.2000 to 7.8.2000. 5 to 8 are the Director Board Members of the Cooperative Bank. The 4th accused is the person appointed and authorised by the Co-operative Bank as per a resolution passed by the Board of Directors, for procuring copra for the Co-operative Bank under the "Support Price Scheme" for the period from 3.5.2000 to 7.8.2000. The case of the Vigilance and Anti Corruption Bureau (VACB), Kozhikode Unit in C.C. No. 16/2008 of the Special Court is that, as part of a criminal design hatched by the office bearers of the Keezhariyor Service Co-operative Bank with the 4th accused, with the object of making unlawful pecuniary gain out of the transactions of the Co-operative Bank, the 4th accused was appointed by the Board of Directors to procure copra for the Co-operative Bank, and as part of the said conspiracy, the accused Nos. 2 and 3, with the knowledge and connivance of the others, including the President, made false documents, short accounted huge quantity of copra worth Rs. 1,21,420/- purchased 435.45 quintals of copra worth Rs. 15,82,456.75 from the open market under false bills, they thus cheated the farmers, committed criminal misappropriation and breach of trust by making an unlawful pecuniary gain of Rs. 3,21,572/- by abusing their position as public servants and they also caused corresponding loss to the Co-operative Bank. The 4th accused is a nonpublic servant, but he is being roped in under Section 120B IPC as the person, who had active participation and complicity with the President and the other office bearers of the Co-operative Bank. 3. The prosecution in C.C. No. 880/2015 of the Judicial First Class Magistrate Court-III, Punalur relates to some mal practices and misappropriation of funds of the Pathanapuram Service Co-operative Bank. The 1st accused therein was the Secretary of the said Co-operative Bank, the 2nd accused was the Pharmacist-cum-Manager of a Neethi Medical Store under the Cooperative Bank, and the 3rd accused was the President of the said Co-operative Bank. The prosecution case in the final report submitted by the Additional Sub Inspector of the Pathanapuram Police Station is that, during the relevant period, the accused jointly committed criminal misappropriation of a huge amount of Rs. 25,31,281/- without accounting the sale of medicines, and they also caused another wrongful loss of Rs. 9,17,683/- to the Co-operative Bank without returning the huge quantity of medicines before the date of expiry. 25,31,281/- without accounting the sale of medicines, and they also caused another wrongful loss of Rs. 9,17,683/- to the Co-operative Bank without returning the huge quantity of medicines before the date of expiry. The offences alleged therein are under Section 409 IPC and also under Section 94(8) of the Kerala Co-operative Societies Act (for short, the Act). What is punishable under sub-section (8) of Section 94 of the Act is criminal misappropriation, or unauthorised or illegal keeping of money of any Co-operative Society by any officer, employee or agent or servant of a Co-operative Society. Section 409 IPC deals with criminal breach of trust generally and sub-section (8) of Section 94 of the Act deals with specific instances of misappropriation by any officer or employee or agent or servant of a Co-operative Society. 4. In both the cases, the prosecution has produced materials substantiating the allegations under the IPC and also under the PC Act. In C.C. No. 880/2015 of the Judicial First Class Magistrate Court-III, Punalur, the prosecution has produced all the available records to prove non-accounting of the medicines purchased, and there are documents to prove misappropriation and breach of trust in such manner, prima facie. At this stage, the Court's concern is not fool proof material or evidence. The reliability, or admissibility, or acceptability of any piece of evidence can be decided only during trial. At the preliminary stage, when prosecution is sought to be quashed under Section 482 Cr.P.C. or when the accused seek discharge, the Court's concern must be whether there are prima facie materials for a judicious opinion as against the accused. I find that in C.C. No. 880/2015, the prosecution has produced the relevant materials and documents to make out a prima facie case of criminal breach of trust and misappropriation. Whether those materials will conclusively prove the allegations of breach of trust and misappropriation beyond reasonable doubt, is not a matter for examination at this stage. Such process can be undertaken only during trial. When prima facie materials are there to come to a judicious opinion against the accused, the prosecution cannot be quashed on factual grounds under Section 482 Cr.P.C. or under Article 226 of the Constitution of India. Criminal prosecution must be normally regulated and controlled by the Code of Criminal Procedure (Cr.P.C.). Such process can be undertaken only during trial. When prima facie materials are there to come to a judicious opinion against the accused, the prosecution cannot be quashed on factual grounds under Section 482 Cr.P.C. or under Article 226 of the Constitution of India. Criminal prosecution must be normally regulated and controlled by the Code of Criminal Procedure (Cr.P.C.). The extreme step of quashing a prosecution by invoking the extra ordinary powers under Article 226 of the Constitution of India can be resorted to only in cases, where the Court finds clear instance of any illegality in prosecution. 5. Now, let me come to C.C. No. 16/2008 of the Special Court (Vigilance), Kozhikode. Here also the main allegation is one of breach of trust, and criminal misappropriation from the funds of a Cooperative Bank by the office bearers of the said Bank, including the President, the Secretary, the clerical staff, and also the members of the Board of Directors by abusing their official position as public servants. On the basis of the materials furnished by the prosecution along with the final report, the trial court has already framed charge against the accused. What is under challenge in Crl. M.C. No. 8548/2016 or in Crl. M.C. No. 9110/2016 is not the court charge as such, and the attack therein is not that there is anything illegal or irregular in the charge framed by the trial court. The two accused seek orders quashing the whole prosecution under Section 482 Cr.P.C. The case of the 8th accused on factual aspects is that, he was only a member of the Board of Directors, and that he had no direct dealings or complicity or involvement in the transactions of the Co-operative Bank made by the President and the Secretary. The case of the 4th accused is that he had no vicious role or involvement in the transactions by which, he was appointed and authorised to procure copra for the Co-operative Bank, that he had not done anything illegal or unlawful in the matter of procuring copra, and that he had not done anything dishonestly, or derived any illegal benefit. In this case also, the prosecution has furnished prima facie materials to substantiate the allegations in the final report. In this case also, the prosecution has furnished prima facie materials to substantiate the allegations in the final report. Once the stage of framing charge is over, the High Court must be slow to act under Section 482 Cr.P.C. when the Court is called upon to quash the prosecution. On a perusal of the proceedings, I find that the two petitioners seek orders mainly on legal grounds, and that the factual grounds projected by them for getting orders are not very serious. Here also, I find some documents and registers to substantiate the allegations of the prosecution prima facie, and to form a judicious opinion against the accused that the allegations must be probable, or that there is reason to believe prima facie that the accused must have committed the offences alleged. Whether these materials are really acceptable, or whether these materials will prove the allegations beyond reasonable doubt, or whether these materials are sufficient to prove the guilt of the accused beyond reasonable doubt, are all matters for examination during trial. I find that prima facie materials are there to proceed against the accused, and to form a judicious opinion as against them. Let the case go to trial, and let the trial court decide, on an appreciation and examination of the entire evidence, whether the materials produced by the prosecution are sufficient to find them guilty. I find no reason at this stage to quash the prosecution in C.C. No. 16/2008 of the Special Court under Section 482 Cr.P.C. 6. Now let me see, whether the legal objections raised by the petitioners are sustainable. In C.C. No. 16/2008 of the Special Court (Vigilance), Kozhikode, the main allegation is under Section 13(1) (d) of the Prevention of Corruption Act (PC Act), and there are allegations under Sections 409, 420, 468, 471, 477(A) read with Section 120B IPC also. As regards the prosecution sanction, the case of the petitioners is that merely on the basis of a prosecution sanction obtained by the VACB under Section 19 of the PC Act, the office bearers of a Cooperative Society cannot be prosecuted under the PC Act, because they are given double protection against prosecution under the Co-operative Societies Act. As regards the prosecution sanction, the case of the petitioners is that merely on the basis of a prosecution sanction obtained by the VACB under Section 19 of the PC Act, the office bearers of a Cooperative Society cannot be prosecuted under the PC Act, because they are given double protection against prosecution under the Co-operative Societies Act. One protection claimed by the accused is the immunity from prosecution under Section 106 of the Act, and the other is, the bar of cognizance provided under sub-section (4) of Section 95 of the Act. Before discussing the issue as regards the immunity under Section 106 of the Act, let me see what is the protection under sub-section (4) of Section 95 of the Act. Section 94 of the Act contains a general prohibition with penal consequences, that no person other than a society shall carry on any trade or business under a title or banner of which the word “co-operative” will form a part in any Indian language, without the sanction of the Government. Sub-section (2) provides punishment for violation of the general provisions in sub-section (1) by any person other than a society. The other sub-sections deal with commission of offences by members of Cooperative Societies, or even non-members. In C.C. No. 880/2015, the offence alleged by the prosecution under the Act is under Section 94(8). Sub-section (8) of Section 94 of the Act provides that, if any officer or employee or agent or servant of a society, or any other person dealing with the society, misappropriates or unauthorisedly or illegally keeps any money belonging to that society, he shall be punishable with imprisonment for a term which may extend to three years and with fine which may extend to twice the amount of money involved in the offence. The final report in this case shows that what is practically alleged against the accused is criminal misappropriation of the funds of a cooperative society, and this comes specifically under sub-section (8) of Section 94 of the Act, though such allegations may come under Section 409 IPC also. Anyway, sub-section (4) of Section 95 of the Act provides that no prosecution shall be instituted under sub-sections (2), (3), (4), (5), (6) and (7) of Section 94 of the Act without the previous sanction of the Registrar. The Registrar meant therein is the Registrar of Co-operative Societies. Anyway, sub-section (4) of Section 95 of the Act provides that no prosecution shall be instituted under sub-sections (2), (3), (4), (5), (6) and (7) of Section 94 of the Act without the previous sanction of the Registrar. The Registrar meant therein is the Registrar of Co-operative Societies. Thus, the prohibition as regards institution of prosecution is not applicable to the offence made punishable under sub-section (8) of Section 94 of the Act. The legislature has specifically excluded the offence punishable under sub-section (8) of Section 94 of the Act, from the purview of sub-section (4) of Section 95 of the Act. The members of a Co-operative Society will get protection from prosecution under sub-section (4) of Section 95 of the Act only if the offence alleged against them is under sub-section (2), or (3), or (4), or (5), or (6) or (7) of Section 94 of the Act. No such protection can be availed when the offence alleged is under sub-section (8) of Section 94 of the Act. Thus, I find that the prosecution under Section 94(8) of the Act in C.C. No. 880/2015 of the Judicial First Class Magistrate Court-III, Punalur, cannot be said to be barred under sub-section (4) of Section 95 of the Act. As regards prosecution under any other law, the members or office bearers of the Co-operative Society cannot avail the protection under sub-section (4) of Section 95 of the Act. Of course, in C.C. No. 16/2008 of the Special Court, what the petitioners seek is total immunity from prosecution under Section 106 of the Act. The protection given to the members or office bearers of any Co-operative Society under sub-section (4) of Section 95 of the Act cannot be extended to other prosecutions than those under sub-section (2), (3), (4), (5), (6) or (7) of Section 94 of the Act. Thus, I find that the contention raised by the petitioners, or the legal objection raised by them, that the prosecution against them in C.C. No. 880/2015 is barred under sub-section (4) of Section 95 of the Act, is quite unsustainable. 7. Now let me see whether Section 106 of the Act gives total immunity from prosecution. In C.C. No. 16/2008 of the Special Court, the prosecution has obtained the required sanction under Section 19 of the PC Act. 7. Now let me see whether Section 106 of the Act gives total immunity from prosecution. In C.C. No. 16/2008 of the Special Court, the prosecution has obtained the required sanction under Section 19 of the PC Act. The learned senior counsel argued on this aspect that the said prosecution sanction obtained under Section 19 of the PC Act will have no value at all, when there is total immunity from prosecution, under Section 106 of the Act. Section 106 of the Act reads as follows: “No suit, prosecution or legal proceedings shall lie against any officer or the Government for anything which is in good faith done or purporting to be done under the provisions of this Act or rules or bye-laws.” The immunity from prosecution, or from any sort of legal action, provided under Section 106 of the Act is only in respect of anything done in good faith, or purporting to be done in good faith, under the provisions of the Act or the Rules or the bye-laws made thereunder. Such a protection or immunity cannot be used as a shield when a prosecution is initiated under the PC Act or any other law. In C.C. No. 16/2008 of the Special Court, what is alleged by the VACB is that by abusing their official position as public servants, the accused committed criminal misappropriation amounting to breach of trust, and thereby, made unlawful financial gain for themselves and also for the 4th accused. Abusing official position as a public servant, and thereby making unlawful gain or pecuniary advantage for the public servant or for somebody else, is an act of criminal misconduct punishable under the PC Act. It cannot at all be said to be an act done or purported to be done in good faith under the provisions of the Act, or in discharge of the functions under the provisions of the Act or the Rules, or the bye-laws thereunder. The protection or immunity granted under Section 106 of the Act cannot override the provisions of the PC Act. The PC Act is a Central Act, but, the Kerala Co-operative Societies Act is a State law. The extent of the legislative powers of the Union and the States is dealt with under Part XI of the Constitution of India. The protection or immunity granted under Section 106 of the Act cannot override the provisions of the PC Act. The PC Act is a Central Act, but, the Kerala Co-operative Societies Act is a State law. The extent of the legislative powers of the Union and the States is dealt with under Part XI of the Constitution of India. In the VIIth Schedule of the Constitution of India, we have different lists dealing with different subjects for legislation. Clause 1 of Article 245 of the Constitution empowers the Parliament to make laws for the whole or any part of the territory of India, subject to the other provisions of the Constitution. This clause also provides that the legislature of a State may make laws for the whole or any part of the State. Article 246 of the Constitution deals with the legislative powers of the Centre and the State on the different matters enumerated in the three lists in the VIIth Schedule of the Constitution. Clause (3) of Article 246 provides that subject to the Clauses (1) and (2) dealing with the legislative powers regarding matters in the union list and the concurrent list, the legislature of any State has exclusive power to make laws for such State, or any part thereof with respect to any of the matters enumerated in List II in the VIIth schedule. The legislative powers of a State cannot extend beyond the territorial limits of the State and beyond the scope of the subject matter in the State list or in the concurrent list as the case may be, or beyond the scope of the object of the legislation. Even in the case of any subject in the concurrent list, the State legislature cannot transgress into the legislative province of the Centre, and in such cases of conflict between a Central law and the State law, the Central law will prevail, as provided under Article 251 of the Constitution. 8. The PC Act is a Central law exclusively dealing with instances of corruption and criminal misconduct on the part of public servants. This law is applicable to every public servant irrespective of whether he/she is a member of the State service or the Central service. 8. The PC Act is a Central law exclusively dealing with instances of corruption and criminal misconduct on the part of public servants. This law is applicable to every public servant irrespective of whether he/she is a member of the State service or the Central service. Section 19 of the PC Act gives a protection to public servants, that cognizance under some specified provisions of the PC Act shall not be taken against any public servant without the previous sanction obtained from the Government concerned, or from the authority competent to remove the public servant from service. When such a protection is there, and when the PC act exclusively deals with corruption and misconduct on the part of members of public service there cannot be any other conflicting provision in a State law in view of Article 251 of the Constitution. No State law can give any protection or immunity from prosecution under the PC Act, when the PC Act is the general Central law dealing with the subject of eradication of corruption from the whole public service, including State and Central service, and any provision of any State law or local law in conflict with the provisions of the PC Act, cannot have any validity, or overriding effect over the Central law in view of Article 251 of the Constitution. Thus, I find that prosecutions under the provisions of the PC Act must be governed by the PC Act itself, and such a prosecution cannot be, in any manner, controlled by the provisions of any special or local law by way of protection from prosecution, or immunity from prosecution. A public servant facing proceedings or prosecution under the PC Act cannot avail any other protection under any special or local law than what is provided to him under the PC Act. Thus, I find that the immunity granted under Section 106 of the Kerala Co-operative Societies Act will have no overriding effect over the provisions of the PC Act, and under the guise of such an immunity granted only in respect of the acts done or purported to be done under the Co-operative Societies Act, or during the discharge of the functions under the said Act, a public servant cannot resist or defeat a prosecution under the PC Act. 9. 9. Even otherwise, it can be seen that the immunity granted under Section 106 of the Act is not a total immunity. The protection or immunity granted therein is only in respect of any act done or purported to be done in good faith, under the provisions of the Act or the Rules or the bye-laws thereunder. First of all, the act of the public servant, or the act of any member of a Co-operative Society, to claim immunity under Section 106 of the Co-operative Societies Act, must be an act done or purported to be done in the discharge of functions under the Act, or the said act must have direct nexus with the official functions under the Act. Secondly, the said act must have been done in good faith. The concept of good faith protected under Section 106 of the Act must have direct nexus with the discharge of functions under the Act. Such a nexus cannot be linked with any other criminal activity or criminal offence. A specific act of offence cannot find any excuse of good faith or bona fide. In the two cases, the allegations are not with respect to anything done or purported to be done bona fide or in good faith in the discharge of functions under the Co-operative Societies Act. In one prosecution, the main allegation is one of criminal misconduct amounting to act of corruption under the PC Act and in the other, the main allegation is criminal breach of trust punishable under Section 409 IPC, and also under Section 94(8) of the Act. Such acts of offence amounting to criminal misappropriation or breach of trust, or act of corruption or misconduct, will never get the protection or immunity under Section 106 of the Act. In short, what is protected by way of immunity under Section 106 of the Act is not criminal act or criminal offence made punishable otherwise by any Central or State law. So, I find that the immunity claimed by the petitioners under Section 106 of the Act is also quite unacceptable and unsustainable. 10. In short, what is protected by way of immunity under Section 106 of the Act is not criminal act or criminal offence made punishable otherwise by any Central or State law. So, I find that the immunity claimed by the petitioners under Section 106 of the Act is also quite unacceptable and unsustainable. 10. On factual as well as legal grounds urged by the petitioners to claim orders quashing the prosecution under Section 482 Cr.P.C. and also under Article 226 of the Constitution of India, I have come to a finding that prima facie materials are there on facts to proceed against the petitioners, and that the legal objections raised by them are quite unsustainable. I find that the prosecution against the petitioners in C.C. No. 16/2008 of the Special Court (Vigilance), Kozhikode, or in C.C. No. 880/2015 of the Judicial First Class Magistrate Court-III, Punalur, cannot be quashed on factual or legal grounds under Section 482 Cr.P.C. or under Article 226 of the Constitution of India. 11. Hence, all the petitions, including the writ petition, are dismissed.