Public servant status of nationalised bank employees upheld for corruption law purposes under a harmonious statutory reading.

Employees of nationalised banks were treated as public servants under clause (12)(b) of section 21 of the Indian Penal Code, 1860 for purposes of the Prevention of Corruption Act, 1947. The analysis read section 2 of the Corruption Act with the Banking Regulation Act, including sections 46A and 51, and held that the limited deeming provision for Chapter IX of the Penal Code did not exclude the wider statutory definition. A harmonious construction of the banking statutes and the Penal Code avoided an anomalous difference between Penal Code liability and corruption prosecution, so the challenge to prosecution failed.

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Issues: Whether employees of nationalised banks are public servants within clause (12)(b) of section 21 of the Indian Penal Code, 1860, and consequently amenable to prosecution for criminal misconduct under the Prevention of Corruption Act, 1947.

Analysis: Section 2 of the Prevention of Corruption Act, 1947 adopts the definition of public servant in section 21 of the Indian Penal Code, 1860. Section 46A of the Banking Regulation Act, 1949 deems employees of a banking company to be public servants for Chapter IX of the Penal Code, and section 51 extends relevant provisions to corresponding new banks constituted under the nationalisation enactments. The nationalised banks were treated as bodies corporate established under Central enactments and as Government companies for the purposes of section 617 of the Companies Act, 1956. A harmonious reading of the banking statutes and the Penal Code showed that the limited deeming provision for Chapter IX did not exclude the wider definition in section 21(12)(b). The contrary view would produce an anomalous distinction between liability under the Penal Code and liability under the Prevention of Corruption Act.

Conclusion: Employees of nationalised banks are public servants within clause (12)(b) of section 21 of the Indian Penal Code, 1860, and the challenge to their prosecution failed.

Ratio Decidendi: Where a nationalised bank is a body corporate established under a Central Act and its employees are brought within the statutory scheme governing public servants, the definition in section 21(12)(b) of the Indian Penal Code, 1860 applies to them for the purposes of the Prevention of Corruption Act, 1947.

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