TaxTMI 
TaxTMI 
2016 (2) TMI 1296
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....ntion of Corruption Act, 1988 (hereinafter referred to as 'the PC Act'), particularly, those contained in Section 2(c)(viii), which is extracted below. 2. Definitions.-In this Act, unless the context otherwise requires,- (c) "Public Servant" means,- (i) xxx (ii) xxx (iii) xxx (iv) xxx (v) xxx (vi) xxx (vii) xxx (viii) any person who holds an office by virtue of which he is authorized or required to perform any public duty; (ix) xxx (x) xxx (xi) xxx (xii) xxx 3. While understanding the true purport and effect of the aforesaid provision of the PC Act, the meaning of the expression "office" appearing therein as well as "public duty" which is defined by Section 2(b) has also to be understood. 4. A reference to Section 2(b) of the PC Act which defines "public duty" may at this stage be appropriate to be made. 2.(b) "public duty" means a duty in discharge of which the State, the public or the community at large has an interest. Explanation.-In this clause "State" includes a corporation established by or under a Central, Provincial o....
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....a public office which, in my considered view, ought to be maintained. Therefore, according to me, it would be more reasonable to understand the expression "public servant" by reference to the office and the duties performed in connection therewith to be of a public character. 8. Coming to the next limb of the case, namely, the applicability of the provisions of Section 46A of the Banking Regulation Act, 1949 (hereinafter referred to as the 'BR Act') what is to be found is that a chairman appointed on a whole time basis, managing director, director, auditor, liquidator, manager and any other employee of a banking company is deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code. Section 46A, was amended by Act 20 of 1994 to bring within its fold a larger category of functionaries of a banking company. Earlier, only the chairman, director and auditor had come within the purview of the aforesaid Section 46A. 9. Sections 161 to 165A contained in Chapter IX of the Indian Penal Code have been repealed by Section 31 of the Prevention of Corruption Act, 1947 and the said offences have been engrafted in Sections 7, 8, 9, 10, 11 and 12 of the Prev....
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....of the statute, but also from a consideration of the social conditions which gave rise to it, and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give "force and life" to the intention of the legislature.....A judge should ask himself the question, how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out? He must then do as they would have done. A judge must not alter the material of which the Act is woven, but he can and should iron out the creases. In Magor and St. Mellons Rural District Council v. Newport Corporation (1950) 2 AllER 1226 the learned judge restated the above principles in a somewhat different form to the following effect: We sit here to find out the intention of Parliament and of ministers and carry it out, and we do this better by filling in the gaps and making sense of the enactment than by opening it up to destructive analysis. 11. Though the above observations of Lord Denning had invited sharp criticism in his own country we find reference to the same and implicit approval thereof in the judicial quest to define the expression....
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.... judicial precedents for the view that I have preferred to take and reach the same eventual conclusion that my learned brother Prafulla C. Pant, J. has reached. I would like to refer to only one of them specifically, namely, the decision of a Constitution Bench of this Court in Dadi Jagannadham v. Jammulu Ramulu and Ors. (2001) 7 SCC 71. Order XXI Rule 89 read with Rule 92(2) of the Code of Civil Procedure provided for filing of an application to set aside a sale. Such an application was required to be made after deposit of the amounts specified within 30 days from the date of the sale. While the said provision did not undergo any amendment, Article 127 of the Limitation Act, 1963 providing a time limit of 30 days for filing of the application to set aside the sale was amended and the time was extended from 30 days to 60 days. Taking note of the objects and reasons for the amendment of the Limitation Act, namely, that the period needed to be enlarged from 30 to 60 days as the period of 30 days was considered to be too short, a Constitution Bench of this Court in Dadi Jagannadham (supra) harmonised the situation by understanding Order XXI Rule 89 to be casting an obligation on th....
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.... been dismissed, and Criminal Writ Petition Nos. 2400, 2401, 2402 and 2403 of 2008, filed by the accused/Respondent are allowed in part, and upheld the order dated 05.02.2007 passed by the trial court i.e. Special Judge/Additional Sessions Judge, Mumbai. The courts below have held that cognizance cannot be taken against the accused namely Ramesh Gelli Chairman and Managing Director, and Sridhar Subasri, Executive Director of Global Trust Bank, on the ground that they are not public servants. 16. Writ Petition (Criminal) No. 167 of 2015 has been filed before this Court by accused Ramesh Gelli praying quashing of charge sheet filed by CBI in connection with FIR No. RC BD.1/2005/E/0003 dated 31.03.2005 relating to offences punishable Under Section 120B read with Sections 420, 467, 468, 471 of Indian Penal Code (Indian Penal Code) and offence punishable Under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short "the P.C. Act, 1988"), pending before Special Judge, CBI, Patiala House Courts, New Delhi. 17. Briefly stated prosecution case is that the Global Trust Bank (hereinafter referred as "GTB") was incorporated on 29.10.1993 as banking c....
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.... On 14.08.2004 GTB merged/amalgamated with Oriental Bank of Commerce (for brevity "OBC"). An FIR dated 31.03.2005 in respect of offences punishable Under Sections 420, 467, 468, 471 Indian Penal Code and Under Section 13(2) read with Section 13(1)(d) of the P.C. Act of 1988 was registered by C.B.I on the complaint made by the Chief Vigilance Officer, OBC, wherein the allegations were made that Ramesh Gelli and Ors., including Directors of M/s. World Tex Limited (for short "WTL") entered into a criminal conspiracy to cheat GTB causing wrongful loss to the tune of Rs. 17.46 crores, and thereby earned corresponding wrongful gain. After investigation, charge sheet was filed in said matter before the Special Judge, CBI, Patiala House Courts, New Delhi. 19. Another First Information Report No. RC.12(E)/2005/CBI/BS & FC/Mumbai was registered by C.B.I. on 09.08.2005 for offences punishable Under Section 120B read with Sections 409 and 420 Indian Penal Code, initially against two employees of GTB and two private persons Rajesh Mehta and Prashant Mehta on the complaint dated 26.07.2005 lodged by the Chief Vigilance Officer, OBC. It is relevant to mention here that GTB was a private sector....
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....ng under banking licence dated 06.09.1994, issued by RBI under Banking Regulation Act, 1949. It is also not disputed that on 14.08.2004 GTB merged/amalgamated with OBC. The transactions of alleged fraud, cheating, misappropriation and corruption relate to the period between 1994 to 2001, i.e. prior to amalgamation with public sector bank (OBC). The dispute relates as to whether the then Chairman-cum-Managing Director and Executive Director of GTB come under definition of 'public servant' or not, for the purposes of the P.C. Act, 1988. 23. It is vehemently argued by Shri Mohan Parasaran and Shri Sidharth Luthra, senior advocates appearing for the accused that the accused are not public servants, and cognizance cannot be taken against the writ Petitioner Ramesh Gelli and accused/Respondent Sridhar Subasri, who were said to be the Chairman-cum-Managing Director and Executive Director respectively of GTB before its amalgamation. It is further argued that a person cannot be said to have been performing a public duty unless he holds some public office, and in this connection it is submitted that the accused did not hold any public office during the period offences said to have....
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....n the Criminal Law Amendment Ordinance, 1944, to enable attachment of ill-gotten wealth obtained through corrupt means, including from transferees of such wealth. The bill seeks to incorporate all these provisions with modifications so as to make the provisions more effective in combating corruption among public servants. 3. The bill, inter alia, envisages widening the scope of the definition of the expression 'public servant', incorporation of offences Under Sections 161 to 165A of the Indian Penal Code, enhancement of penalties provided for these offences and incorporation of a provision that the order of the trial court upholding the grant of sanction for prosecution would be final if it has not already been challenged and the trial has commenced. In order to expedite the proceedings, provisions for day-to-day trial of cases and prohibitory provisions with regard to grant of stay and exercise of powers of revision or interlocutory orders have also been included. 4. Since the provisions of Section 161A are incorporated in the proposed legislation with an enhanced punishment, it is not necessary to retain those sections in the Indian Penal Code. Consequen....
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.... an election or part of an election; (viii) any person who holds an office by virtue of which he is authorised or required to perform any public duty; (ix) any person who is the president, secretary or other office-bearer of a registered cooperative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central Government or a 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; (x) any person who is a chairman, member or employee of any Service Commission or Board, by whatever name called, or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on behalf of such Commission or Board; (xi) any person who is a Vice-Chancellor or member of any governing body, professor, reader, lecturer or any other teacher or employee, by whatever designation called, of any University and any person whose services have been availed ....
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....fect from 31.01.1994 in place of "every chairman, director, auditor". As such managing director of a banking company is also deemed to be a public servant. In the present case transactions in question relate to the period subsequent to 31.01.1994. 32. In Federal Bank Ltd. v. Sagar Thomas and Ors. (supra) this Court has held that a private company carrying banking business as a scheduled bank cannot be termed as a company carrying any statutory or public duty. However, in said case the Court was examining as to whether writ can be issued Under Article 226 of the Constitution of India against a scheduled bank or not. There was no issue before the Court relating to deeming fiction contained in Section 46A of Banking Regulation Act, 1949 in respect of a chairman/managing director or director of a banking company against whom a crime relating to anti-corruption was registered. 33. In a recent case of State of Maharashtra and Ors. v. Brijlal Sadasukh, this Court has observed as under: 21. As we notice, the High Court has really been swayed by the concept of Article 12 of the Constitution, the provisions contained in the 1949 Act and in a mercurial manner taking note of the....
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....nd general words. This case is of little help to the accused in the present case as managing director and director are specifically mentioned in Section 46A of Banking Regulation Act, 1949. 36. In Manish Trivedi v. State of Rajasthan (2014) 14 SCC 420, which pertains to a case registered against a councillor under Prevention of Corruption Act, 1988, this Court, while interpreting the word "public servant", made following observations: 14. Section 87 of the Rajasthan Municipalities Act, 1959 makes every Member to be public servant within the meaning of Section 21 of the Penal Code, 1860 and the same reads as follows: 87. Members, etc. to be deemed public servants.--(1) Every member, officer or servant, and every lessee of the levy of any municipal tax, and every servant or other employee of any such lessee shall be deemed to be a public servant within the meaning of Section 21 of the Penal Code, 1860 (Central Act 45 of 1860). (2) The word 'Government' in the definition of legal remuneration' in Section 161 of that Code shall, for the purposes of Sub-section (1) of this section, be deemed to include a Municipal Board. From a plain re....
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.... Municipalities Act. xxx 19. The present Act (the 1988 Act) envisages widening of the scope of the definition of the expression "public servant". It was brought in force to purify public administration. The legislature has used a comprehensive definition of "public servant" to achieve the purpose of punishing and curbing corruption among public servants. Hence, it would be inappropriate to limit the contents of the definition clause by a construction which would be against the spirit of the statute. Bearing in mind this principle, when we consider the case of the Appellant, we have no doubt that he is a public servant within the meaning of Section 2(c) of the Act. Clause (viii) of Section 2(c) of the present Act makes any person, who holds an office by virtue of which he is authorised or required to perform any public duty, to be a public servant. The word "office" is of indefinite connotation and, in the present context, it would mean a position or place to which certain duties are attached and has an existence which is independent of the persons who fill it. Councillors and Members of the Board are positions which exist under the Rajasthan Municipalities Act. It....
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....ten is Section 46A of Banking Regulation Act, 1949 and merely for the reason that Sections 161 to 165A of Indian Penal Code have been repealed by the P.C. Act, 1988, relevance of Section 46A of Banking Regulation Act, 1949, is not lost. 39. Be it noted that when Prevention of Corruption Act, 1988 came into force, Section 46 of Banking Regulation Act, 1949 was already in place, and since the scope of P.C. Act, 1988 was to widen the definition of "public servant". As such, merely for the reason that in 1994, while clarifying the word "chairman", legislature did not substitute words "for the purposes of Prevention of Corruption Act, 1988" for the expression "for the purposes of Chapter IX of the Indian Penal Code (45 of 1860)" in Section 46A of Banking Regulation Act, 1949, it cannot be said, that the legislature had intention to make Section 46A inapplicable for the purposes of P.C. Act, 1988, by which Sections 161 to 165A of Indian Penal Code were omitted, and the offences stood replaced by Sections 7 to 13 of P.C. Act, 1988. 40. A law which is not shown ultra-vires must be given proper meaning. Section 46-A of Banking Regulation Act, 1949, cannot be left meaningless and requi....