Gujarat High Court
Devendraprasad Bhagwanji Pandya vs State Of Gujarat on 5 August, 2016
Author: K.S.Jhaveri
Bench: Ks Jhaveri
R/SCR.A/864/2012 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CRIMINAL APPLICATION NO. 864 of 2012
TO
SPECIAL CRIMINAL APPLICATION NO. 904 of 2012
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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DEVENDRAPRASAD BHAGWANJI PANDYA....Applicant(s)
Versus
STATE OF GUJARAT....Respondent(s)
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Appearance:
MR KB ANANDJIWALA, SR. ADVOCATE WITH MR RUSHABH R SHAH,
ADVOCATE for the Applicant(s) No. 1
MR MITESH AMIN, PUBLIC PROSECUTOR for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
Date : 05/08/2016
ORAL JUDGMENT
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1. These petitions have been filed under Articles 226 & 227 of the Constitution of India r/w. Section 482 of the Code of Criminal Procedure seeking issuance of appropriate Writ, order of direction for quashing and setting aside the common order dated 31.01.2012 passed by the learned Sessions Judge, City Civil and Sessions Court (Evening Court), Ahmedabad in Criminal Revision Application Nos.319/2011 & group matters whereby, the common order dated 04.08.2011 passed by the learned Metropolitan Magistrate, Court No.7, Ahmedabad in Criminal Case Nos.2045/2010 & group matters were confirmed. For the purpose of this judgment, Special Criminal Application No.864/2012 is taken as the lead matter.
2. The facts in brief are that the petitioner herein joined the service of Madhupura Mercantile Cooperative Bank Ltd. before about 37 years and was serving as the M.D. and C.E.O. of the Bank at the time when the alleged offence was committed. In the year 2001, on account of financial irregularites and misappropriation of funds of the Bank, the Reserve Bank of India took over control of the said Bank. Thereafter, on 21.04.2001, an FIR being IC.R. No.67/2001 was filed against the Chairman and other officials of the Bank, including the petitioner. Subsequently, Page 2 of 16 HC-NIC Page 2 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT 72 different FIRs were registered against the petitioner and other persons.
3. It is the case of petitioner that no material progress was made in the proceedings pending before the trial Court and therefore, he had preferred Special Criminal Application No.524/2010 before this Court seeking the relief that all cases filed against the petitioner may be transferred to one Court and that they may directed to be disposed of expeditiously. The said petition was disposed of vide order dated 30.11.2010.
4. It appears that on 12.01.2011 the prosecution submitted an application before the trial Court seeking further investigation u/s.173(8) of Cr.P.C. The said application was allowed vide order dated 12.01.2011 whereby, the Investigating Officer was directed to carry out further investigation into the alleged offences and to submit a Report thereof.
5. In pursuance of the order dated 12.01.2011, the Investigating Officer submitted a Report stating that offences under the Prevention of Corruption Act, 1988 [for short, "the P.C. Act"] were made out against the petitioner. Based on the said Report, the trial Court passed the order Page 3 of 16 HC-NIC Page 3 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT dated 25.04.2011 holding that provisions of the P.C. Act applied to the cases and accordingly, directed to add charges under the said Act. The said order dated 25.04.2011 was challenged before the Sessions Court by filing Criminal Revision Application No.319/2011 & allied matters, which came to be dismissed by impugned common order dated 31.01.2012. Hence, these writ petitions.
6. Mr. K.B. Anandjiwala learned Senior Advocate appearing with Mr. Rushabh Shah for the petitioner submitted that the Courts below committed serious in holding that the petitioner herein falls within the purview of "public servant", as defined under Section 2(c)(ix) of the P.C. Act. It was submitted that for attracting the provisions of Section 2(c)(ix) of the P.C. Act, the registered cooperative society should have been receiving or had received financial aid from the Government or any other Institution as mentioned in the said Section. In this case, the Bank in question never received any financial aid, as provided under the said Section. Therefore, the revisional Court committed serious error in law in holding that the petitioner is a "public servant" under the provisions of the P.C. Act.
6.1 It was further submitted that the revisional Page 4 of 16 HC-NIC Page 4 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT Court failed to appreciate the provision of Section 46A of the Banking Regulation Act, 1949 in its proper perspective. Under the said provision, a person would be termed as "public servant" only for the purpose of ChapterIX of IPC and for the purpose of any other Act. Therefore, the revisional Court ought not to have treated the petitioner a "public servant" under the provisions of P.C. Act.
6.2 Learned Senior Advocate drew our attention to the order dated 08.07.2009 passed by the learned single Judge of this Court in Criminal Revision Application No.838/2006 and more particularly, on the observations made in Para Nos.5 & 6 of the said judgment, which reads as under;
"5. Having regard to the submissions advanced by the learned advocates for the parties and upon perusal of the record of the case, it may be noticed that it is not disputed that the Registrar, Cooperative Societies is the sanctioning authority for the purpose of granting sanction to prosecute office bearers of cooperative societies. The Registrar, Cooperative Societies has declined to grant sanction to prosecute the office bearers of the Charotar Nagrik Co operative Bank Ltd. on the ground that though under the provisions of Section 2[c][ix] of the Act, office bearers of a registered co operative society engaged in agriculture, industry, trade or banking, are included within the definition of public servant, Page 5 of 16 HC-NIC Page 5 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT however, the said provision also provides that to bring the office bearers of the concerned society within the ambit of public servant, the said society should be receiving or have received any financial aid from the Central Government or State Government or any authority or body owned or controlled by the Government or a Government Company as defined in Section 617 of the Companies Act, 1956. That according to the information received by him, the Charotar Nagrik Cooperative Bank Ltd., Anand has till date not received any kind of financial aid, grant, subsidy or shares from Government or Semi Government organizations, hence, the said bank has not received any financial aid in terms of the said provision and as such, the office bearers of the said bank cannot be said to be public servants as defined under the Act. Accordingly, the Registrar, Cooperative Societies had stated that as the office bearers of the said Bank do not fall within the ambit of the definition of public servant as defined under Section 2[c] [ix] of the Act, there is no question of granting sanction to prosecute in this case.
6. In the aforesaid back ground of facts, it is an admitted position that the office bearers of the Charotar Nagrik Cooperative Bank Ltd., Anand do not fall within the purview of the expression public servant as defined under Section 2[c][ix] of the Act, hence, the provisions of the said Act would not be applicable to them. As a necessary corollary, it goes without saying that the charge under Section 13[1][d] of the Act would not be attracted insofar as the office bearers of the said bank are concerned. In the circumstances, without going into the merits of the other contentions raised in this application, the impugned order dated Page 6 of 16 HC-NIC Page 6 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT 13th December, 2006 is required to be set aside and the charge under Section 13[1][d] of the Prevention of Corruption Act, 1988 is required to be deleted."
6.3 Learned Senior Advocate, therefore, submitted that the petitioner could not be treated as "public servant" under the provisions of the P.C. Act. and the revisional Court committed serious error in rejecting the Revision Applications of the petitioner.
7. Mr. Mitesh Amin, learned Public Prosecutor, submitted that the learned single Judge of this Court was not appraised about the provision of Section 46A of the Banking Regulations Act while it was considering the Criminal Revision Application filed by the office bearers of "Charotar Nagrik Cooperative Bank Ltd.". It was submitted that a conjoint reading of the provisions of Section 2(c)(ix) of the P.C. Act and Section 46A of the Banking Regulations Act would make it clear that the petitioner is a "public servant" within the provisions of the P.C. Act.
7.1 Learned PP placed reliance upon a decision of the Apex Court in the case of State of Madhya Pradesh v. Rameshwar, 2009 (11) SCC 424 wherein, Page 7 of 16 HC-NIC Page 7 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT it has been observed in Para Nos.36 & 37 as under;
"36. While it is no doubt true that in the Inquiry Report of the District Vigilance Committee the role attributed to the respondents in sanctioning loans was shown to be purely managerial where the groundwork had been completed by the Branch offices and that as members of the Loan Sanctioning Committee, they had acted inefficiently, it has also been suggested that the Chairman and the Executive Officer of the Bank had connived with the other accused in defrauding the Bank. In the Inquiry Report it was stated that the respondents had in conspiracy with Shri Hem Joshi, the Public Contact Officer of the Bank, whose son, Himanshu Joshi, maintained a current acount of a fictitious firm - Indore Motor and Agro Machinery in the Kila Maidan Branch of the Bank at Indore encashed the various Demand Drafts issued on account of the loans, by using the said account without purchase of any vehicle for which the loans had been sanctioned.
37. The High Court also did not, while considering the definition of the expression "public servant", take into account the fact that the decision in Laljit Rajshi Shah & Ors.'s case (supra) was no longer applicable in view of the amended provisions of Sec. 2(c) of the Prevention of Corruption Act, 1988, defining the said expression. Prima facie, it appears to us that the respondent nos.1 & 3, in their capacity as the Chairman and Executive Officer of the Bank, come within the definition of "public servant"
u/s.2(c)(ix) of the 1988 Act, which reads as follows: Page 8 of 16 HC-NIC Page 8 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT "Public servant" means - any person who is the President, Secretary or other officebearer of a registered co operative 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 Sec. 617 of the Companies Act, 1956."
8. We have heard learned counsel for both the sides and perused the documents on record. It appears from the record that during the pendency of cases before the trial Court, the prosecution submitted an application on 12.01.2011 requesting the trial Court for ordering further investigation u/s.173(8) Cr.P.C. in connection with the offences under the provisions of the P.C. Act. The said application was allowed vide order dated 10.02.2011 whereby, the Investigating Officer was directed to carry out further investigation and to submit Report as to whether offences under the provisions of P.C. Act were made out or not. On the basis of the said order, the Assistant Commissioner of Police, 'L' Division, Ahmedabad submitted a report on 28.03.2011 stating that the alleged offences fall within the purview of Section 46A of the Banking Page 9 of 16 HC-NIC Page 9 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT Regulation Act, 1949 and therefore, the Chairman, M.D., Manager and other office bearers of the Banking Company are "public servants" for the purpose of ChapterIX of Indian Penal Code. It was further stated that since the petitioner herein is a "public servant", the offence u/s.2(ix) of the P.C. Act has been committed.
9. Admittedly, the petitioner herein was the Managing Director and C.E.O. of the Bank at the relevant time. It is pertinent to note that the petitioner herein had never challenged the order dated 10.02.2011 passed by the trial Court ordering further investigation u/s.173(8) of Cr.P.C. In fact, on the basis of the very order, similar Reports came to be submitted by different Investigating Officers. On the basis of the Report submitted by the Investigating Officer, the trial Court passed the order on 25.04.2011 holding that provisions of the P.C. Act applied to the cases and directed to add charges under the said Act.
10. In my opinion, when the petitioner had not challenged the order dated 10.02.2011, it was not open to him to challenge the subsequent order dated 25.04.2011 by which the Report came to be accepted. In the banking sector, it is the duty of Chairman, Managing Director and other office Page 10 of 16 HC-NIC Page 10 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT bearers to verify the forms and documents submitted in support of the borrowing of loans. Any lapses or shortfalls in the eligibility of borrowers would lead to huge financial loss to the Bank. Being the Managing Director and C.E.O. of the Bank in question, the petitioner was duty bound to scrutinize each and every documents submitted by borrowers seeking loans. The fact that the scam took place while the petitioner was serving as such is not in dispute. At this stage, a reference to the provision of Section 46A of the Banking Regulation Act, 1949, is apposite. It reads as under;
"Section 46A : Chairman, Director, etc. to be public servants, for the purpose of Chapter IX of the Indian Penal Code. [Every Chairman, who is appointed on a wholetime basis, Managing Director, Director, Auditor] liquidator, Manager and any other employee of a banking company shall be deemed to be a public servant for the purpose of Chapter IX of the Indian Penal Code (45 of 1860)]."
10.1 The above provision makes it clear that the Chairman, Managing Director, Auditor and any other employee of a banking company shall be deemed to be a public servant. It is not in Page 11 of 16 HC-NIC Page 11 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT dispute that Madhupura Mercantile Cooperative Bank Ltd. was a banking company within the provisions of the Banking Regulation Act, 1949 at the relevant time. Therefore, the Chairman, Managing Director and employees of the said Bank are deemed to be "public servants" in view of the provisions of Section 46A of the Banking Regulation Act, 1949.
11. A specific contention was raised on behalf of petitioner that Madhupura Mercantile Cooperative Bank Ltd. had neither received nor been receiving any financial aid either from the Government or any other body, which is one of the criteria prescribed u/s.2(c)(ix) of the P.C. Act, for holding any official of the bank a "public servant" under the P.C. Act and therefore, the petitioner herein could not be deemed as "public servant" for the purpose of the P.C. Act. Every banking institution, including the Bank in question, works under the control and supervision of the Reserve Bank of India. Whether or not the Bank has received some or even a sprinkling of financial aid from the Government or other authorities for its employees to qualify as "public servant" under the P.C. Act is a matter to be determined at trial and not u/s.482 Cr.P.C.
12. In State of Madhya Pradesh v. Rameshwar Page 12 of 16 HC-NIC Page 12 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT (supra), the Apex Court held that Chairman and Executive Officer of Bank come within the definition of "public servant" as defined u/s. 2(c)(ix) of the P.C. Act. No doubt, in that case, the M.P. Cooperative Societies Act, 1960 itself declares the authorities as public servant. The issue that arises for consideration in the present case is whether a multiState society which handles crores of rupees and the persons who handle such huge amounts of money should be allowed to escape the rigour of corruption charges under the P.C. Act on the ground that they do not come under the ambit and sweep of Article 12 of the Constitution or solely because of construction placed u/s.2(c)(ix) of the P.C. Act. This issue was answered in a recent of the Apex Court in the case of State of Maharashtra and others v. Brijlal Sadasukh Modani, (2016) 4 SCC 417 wherein, it has been held that concept of "public servant" as defined u/s.2(c) of the P.C. Act has to be understood in entirety in the backdrop of corruption. Considering the facts and circumstances of the case and in view of the principle rendered by the Apex Court in the above decisions, I find no merit in the submissions canvassed by learned Senior Advocate Mr. Anandjiwala.
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R/SCR.A/864/2012 JUDGMENT
13. The conduct of the petitioner also deserves to be noted. Having accepted the order passed by the trial Court dated 10.02.2011 directing further investigation u/s.173(8) of Cr.P.C., it is not open to the petitioner to challenge the subsequent order dated 25.04.2011 of the trial Court whereby, it was held that offence under the provisions of the P.C. Act were made out against the petitioner. The petitioner could have opposed the application filed by the prosecution seeking further investigation u/s.173(8) Cr.P.C. However, it was not done. Only after the Investigating Officer had submitted the Report in pursuance of the order dated 10.02.2011 and the subsequent order dated 25.04.2011 was passed that the petitioner filed the Revision Applications before the revisional Court. The impugned order of the revisional Court was passed on 31.01.2012. Chargesheets in connection with the alleged offences were filed some where in the year 2004 2005. By drawing my attention to the order passed by this Court in Special Criminal Application No.524/2010, the petitioner attempted to project that he is in favour of a speedy completion of the trial proceedings. If that had been so, then he should not have challenged the order dated 25.04.2011 passed by the trial Court and should have proceeded with the trial. If the petitioner was really aggrieved, then he should have Page 14 of 16 HC-NIC Page 14 of 16 Created On Tue Aug 09 02:26:29 IST 2016 R/SCR.A/864/2012 JUDGMENT challenged the initial order dated 10.02.2011 of the trial Court by which further investigation u/s.173(8) of Cr.P.C. was ordered. The fact that the petitioner is not in favour of early completion of trial and is attempting to prolong the proceedings is established from the fact that the petitioner has not taken any pain to see that the present petitions, which were filed in 2012, are disposed of expeditiously. Therefore, there is a clear attempt on the part of the petitioner to delay the proceedings pending before the trial Court.
14. Insofar as the decision rendered in Criminal Revision Application No.838/2006 is concerned, it appears to me that the learned single Judge was not appraised about the provisions of Section 46A of the Banking Regulation Act, 1949 or the decision of Apex Court in State of Madhya Pradesh v. Rameshwar's case (supra). Be that as it may, a conjoint reading of the provisions of Section 2(c)(ix) of the P.C. Act and Section 46A of the Banking Regulation Act, 1949 make it clear that the petitioner herein is a "public servant" under the provisions of the P.C. Act. I am in complete agreement with the reasonings given by the revisional Court in the impugned judgment and hence, find no reasons to entertain these petitions.
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R/SCR.A/864/2012 JUDGMENT
15. For the foregoing reasons, the petitions are dismissed. Rule is discharged. Considering the fact that crores of public money have been siphoned off and trial proceedings have been held up for a long period, a cost of Rs.1000/ each [Rupees one thousand only] is imposed for each of the petitions. The said amount of cost shall be deposited with the Legal Aid Committee of the District Court concerned within a period of one month from today. Since the trial proceedings have come to a standstill since a long period, the learned Metropolitan Magistrate concerned is directed to forward all the casepapers, including the committal order, to the Sessions Court concerned on or before 09th August 2016 so that the proceedings could commence further and to report back the compliance thereof forthwith.
(K.S.JHAVERI, J.) Pravin/* Page 16 of 16 HC-NIC Page 16 of 16 Created On Tue Aug 09 02:26:29 IST 2016