Bombay High Court
Pralhad Shamburao Newale And Ors. vs State Of Maharashtra And Ors. on 19 November, 1987
Equivalent citations: 1988(1)BOMCR566
JUDGMENT A.D. Tated, J.
1. Criminal Writ Petition No. 601 of 1987 has been filed by Pralhad Shamburao Newale who is one of the accused in Special Case No. 4 of 1986 pending against him and others in the Court of the Special Judge, Pune. He has prayed for a declaration that section 161 read with section 2(20) of the Maharashtra Co-operative Societies Act, 1960, be declared as unconstitutional on the ground that they amount to a colourable exercise of the legislative amending powers by the Maharashtra Legislature amending the Central Act, namely I.P.C. (Act No. XLV of 1860). He has also sought a writ of certiorari, or a writ in the nature of certiorari, directing, under Articles 226 and 227 of the Constitution of India or the revisional powers of the Court under section 482 Cri.P.C. to quash and set aside the criminal proceedings in Special Case No. 4 of 1986. Criminal Application No. 1749 of 1986 has been filed by Arvind Ganesh Bhopatkar for quashing the proceedings in Special Case No. 4 of 1986. Criminal Appeals Nos. 714 of 1986, 735 of 1986 and 826 of 1986 have been filed by Pralhad Newale and Shireeshkumar Newale-his son, Shriram Chintaman Mahajan and Arvind Bhopatkar respectively for an ad interim stay of the execution and/or operation of the judgment and order dated 7th August, 1986 passed by the District Judge, Pune, in Miscellaneous Applications Nos. 1865 of 1985, 1862 of 1985 and 1861 of 1985.
2. The Anti-Corruption Bureau, Pune, has prosecuted Arvind Bhopatkar and Pralhad Newale and others in the Court of the Special Judge, Pune, for the offences punishable under sections 120B, 409, 109, 420, 467, 471 and 477A I.P.C. and under section 5(2) read with section 5(l)(d) of the Prevention of Corruption Act, 1947, and section 147(o) and section 147(p) of the Maharashtra Co-operative Societies Act, 1960, on the allegations that during the relevant period Arvind Bhopatkar was the Director of the Sampada Sahakari Bank Ltd. and Pralhad Newale was the Secretary of the said bank. Arvind Bhopatkar and Pralhad Newale along with other officers of the bank conspired with the members of the family of one Chhabriya and with their active participation and help a large amount running into crores of rupees of the said bank has been defalcated.
3. Arvind Bhopatkar and Pralhad Newale had challenged the validity of the (Criminal Law Amendment Ordinance 1944 (Ordinance No. XXXVIII of 1944) but in view of the decision of the Supreme Court in Hansraj Moolji v. The State of Bombay, , their learned Counsel did not press this ground. Their case is that they are not "public servants" as defined in section 21 I.P.C. and as such no proceedings under the Prevention of Corruption Act, 1947, could be launched against them before the Special Judge, Pune. Pralhad Newale has challenged the vires of section 161 of the Maharashtra Co-operative Societies Act, 1960. According to him, the Penal Code being a Central legislation, section 21 of the Code could not be amended by the State Legislature. According to him, section 161 of the Maharashtra Co-operative Societies Act, as amended by Act No. XXVII of 1969, has the effect of encroaching on the provisions of section 21 I.P.C. which is a Central Act. According to him, the provisions of section 161 of the Maharashtra Co-operative Societies Act are repugnant to the provisions of section 21 1 P.C. and as such to the extent of repugnancy they are void. According to him, there has been no amendment to the prevention of Corruption Act and "public servant" under section 2 of the said Act means a "public servant" as defined in section 21 I.P.C. He being not a "public servant" within the definition of that term appearing in section 21 I.P.C., could not be prosecuted for the offences under section 5 of the Prevention of Corruption Act, 1947, before the Special Judge.
4. The learned Counsel appearing for the petitioner, applicant and appellants contends that the Maharashtra Co-operative Societies Act, l960, has been enacted by the Legislature of the Maharashtra State and President's assent was obtained to that Act on 4th May, 1961. He submits that co-operative societies fall within Item 32 appearing in State List to the Constitution of India and, therefore, the State Legislature was competent to enact law in respect of co -operative societies, but it could not enact the provisions which would encroach on the laws enacted by the Central Government and to avoid any repugnancy the State Government obtained assent of the President to the principal Act. The learned Counsel further points out that while amending section 161 of the Maharashtra Co-operative Societies Act by Act No. XXVI I of 1969 the assent of the Governor alone was obtained. The assent of the President had not been obtained and as such the amended portion of the said Act was void to the extent of repugnancy with the Central law, that is, section 21 I.P.C. It is not disputed before me that the assent of the President was not obtained to the amendment effected to the Maharashtra Co-operative Societies Act by Act No. XXVI I of 1969. Section 161 of the Maharashtra Co-operative Societies Act, after amendment by Act No. XXVII 1969, reads as follows :---
"161. The Registrar, a person exercising the powers of the Registrar, an officer as defined in Clause (20) of section 2, or a person appointed as an Official Assignee under sub-section (2) of section 21A, or as an administrator under section 77-A or 78, or a person authorised to seize books records or funds of a society under sub-section (3) of section 80, or to audit the accounts of a society under section 81 or to hold an inquiry under section 83, or to make an inspection under section 84, or 89-A or to make an order under section 88, or a person appointed as a member constituting a Co-operative Court under section 91-A or the Co-operative Appellate Court under section 149 or a Liquidator under section 103, or an officer as defined in Clause (20) of section 2 shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code."
The portion of section 161 of the Maharashtra Co-operative Societies Act on which emphasis has been supplied by me has been inserted by the Amending Act XXVII of 1969. The effect of the amendment was that the officers defined in Clause (20) of section 2 of the Maharashtra Co-operative Societies Act were brought within the fold of "public servants": within the meaning of section 21 I.P.C. Section 2(20) of the Maharashtra Co-operative Societies Act reads as follows "2. In this Act, unless the context otherwise requires,---
(20) ''officer", means a person elected or appointed by a society to any office of such society according to its by-laws; and includes a chairman, vice-chairman, president, vice-president, managing director, manager, secretary, treasurer, member of the committee and any other person elected or appointed under this Act, the rules or the by-laws, to give directions in, regard to the business of such society;
In view of the above definition of 'officer', both Arvind Bhopatkar and Pralhad Newale are 'officers' within the meaning of section 2(20) and in view of the amendment of section 161 they will be deemed to be "public servants" within the meaning of section 21 I.P.C.
5. As stated earlier, the subject "co-operative societies" falls within Entry 32 of State List and, therefore, the State Legislature is fully competent to enact the law. When the State Legislature enacts laws on the subject enumerated in the State List, it is not necessary for the State to reserve them for the assent of the President and to obtain the assent of the President. The assent of the Governor of the State is sufficient for enacting the laws on the subjects falling within State List. The learned Counsel for the petitioner, appellants contends that the portion inserted by the Amending Act XXVII of 1969 has the effect of amending section 21 I.P.C. and thereby more categories of public servants are included and such provision could not be given effect to, unless the assent of the President is obtained to the amendment. According to the learned Counsel, there is repugnancy in the State law enacted by Act XXVII of 1969 and the law, that is, the I.P.C., which has been enacted by the Central Legislature, the subject being in Entry 1 of the Concurrent List. The learned Counsel contends that section 21 I.P.C. is an exhaustive provision and the State Legislature could not add further categories of servants therein and thus there was repugnancy between the Central law and the State law and as such the State law to that extent is void. He next submits that as per section 2 of the Prevention of Corruption Act, 1947, "public servant" means a public servant as defined in section 21 I.P.C. Arvind Bhopatkar and Pralhad Newale, who are officers of the co-operative society, do not fall within section 21 I.P.C. "Public sevants" within the meaning of section 161 of the Maharashtra Co-operative Societies Act, 1960, do not fall within the provisions of section 2 of the Prevention of Corruption Act and as such the prosecution of Arvind Bhopatkar and Pralhad Newale for the offences punishable under the provisions of the Prevention of Corruption Act is not tenable.
6. The Maharashtra Co-operative Societies Act, 1960, has been enacted by the State Legislature. The subject "Co-operative societies" falls in Entry 32 of State List and, therefore, the State Legislature is competent to enact laws in respect of co-operative societies. While enacting such law, in view of Entry 64 appearing in State List the State Legislature could enact provisions for dealing with the offences against the law dealing with co-operative societies. While exercising the powers the State Legislature, under Article 26(3) of the Constitution and Entries 32 and 64 appearing in the State List in the Seventh Schedule to the Constitution of India, enacted the Maharashtra Co-operative Societies Act. The offences against the co-operative law are dealt with in Chapter XII which consists of sections 145 to 148A. Section 161 declares some persons conducting the business of those societies or working in those societies as public servants. I have already reproduced section 161 of the Maharashtra Co-operative Societies Act as it stood before it was substituted by section 161 of the Maharashtra Act No. XX of 1966. As stated earlier, the State Legislature is competent to enact the provisions .relating to co-operative societies and could also provide for the offences concerning those co-operative societies.
7. The learned Counsel for the petitioner, applicant and appellants contends that the provisions of section 161 of the Maharashtra Co-operative Societies Act, 1960, are repugnant to the provisions of section 21 I.P.C. and as such they are void. The subject of repugnancy in the laws is dealt with by Article 254 of the Constitution. The said Article 254 reads as follows :-
"254. Inconsistency between laws made by Parliament and laws made by the Legislatures of States.
(i) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact or to any provision of any existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent list contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State :
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by Legislature of the State.
The learned Counsel submits that Act XXVII of 1969, which amended section 161 of the Maharashtra Co-operative Societies Act and thereby made officers of co-operative societies "public servants" within the meaning of section 21 I.P.C. has not been assented by the President and, therefore, Clause (2) of Article 254 of the Constitution reproduced above is not attracted. He submits that as per Clause (1) of Article 254, the State Act, that is, section 161 of the Maharashtra Co-operative Societies Act, impinges on section 21 I.P.C., which is a Central Act, and, the State Act to the extent of the repugnancy is void. It is well settled that for the application of Clause (1) of Article 254 of the Constitution two conditions must be fulfilled; (1) the provisions of the State law and those of the Central legislation must both be in respect of a matter which is enumerated in the Concurrent List, and (2) they must be repugnant to each other. It is only when both these requirements are satisfied that the State law, to the extent of the repugnancy, becomes void. In this connection, a reference may be made to the decision of the Supreme Court in Kerala State Electricity Board and another v. The Indian Aluminium Co. Ltd. and others, . At page 478 of the report their Lordships of the Supreme Court referred to the decision in Prem Nath Kaul for sell and on behalf of other members of the Kashmir Agriculturist Association, Srinagar v. The State of Jammu and Kashmir, and also the decision in State of Jammu and Kashmir v. M.S. Farooqi and others, . Those decisions are to the similar effect. In the present case the subject "co-operative societies" falls in State List and the criminal law falls in Entry 1 of the Concurrent List. As the subjects covered by the two decisions do not fall in the Concurrent List, the question of repugnancy does not arise. The provisions of Clause (2) of Article 254 of the Constitution are also not attracted because the subject "co-operative societies" does not fall in the Concurrent List. As stated earlier, the offences dealt with under the Maharashtra Co-operative Societies Act are in respect of the affairs of co-operative societies. The Indian Penal Code, which is a Central Legislation falling in Entry 1 of the Concurrent List, deals with the offences in general. The provisions relating to the offences dealt with in the Maharashtra Co-operative Societies Act are not repugnant to the provisions contained in the Indian Penal Code. They are either supplementary or complimentary but not repugnant to the provisions of the Indian Penal Code. While considering whether the provisions of the two Acts are repugnant the attempt must always be to find out whether the provisions in one law are so different from another that the two laws cannot co-exist because of the conflict it the two laws occupy different areas, though under the same field, or are to apply for different periods, or deal with different subjects, no question of conflict can arise and, therefore, there will be no repugnancy. On applying such test, it cannot be said that the provisions of section 161 of the Maharashtra Co-operative Societies Act are repugnant to the provisions of section 21 I.P.C. Consequently, I am unable to accept the contention of the learned Counsel that the provision of the said section 161 are void, being repugnant to the provisions of section 21 I.P.C.
8. The next contention of the learned Counsel for the petitioner, applicant and appellants that the provisions of section 21 I.P.C. are exhaustive and, therefore, the provisions of section 161 of the Maharashtra Co-operative Societies Act, 1960, which have the effect of adding to the provisions of section 21 I.P.C., are void on account of repugnancy. I am unable to agree with the learned Counsel. By no stretch of imagination can it be said that the provisions of section 21 I.P.C. cannot be amended and extended to some other categories of servants or officers. It may be mentioned that section 21 I.P.C. was amended by Criminal Law Amendment (II) Act, 1958, and thereby Clause (12) was added. The law is an never growing subject and, therefore, it has to be amended from time to time, taking into consideration the requirements of society at the time. Consequently, because section 161 of the Maharashtra Co-operative Societies Act adds to the list of public servants mentioned in section 21 I.P.C., it cannot be said that it is bad on account of repugnancy.
9. The last contention of the learned Counsel for the petitioner, applicant and appellants is that section 2 of the Prevention of Corruption Act, 1947, recognises only those persons as public servants who fall in the definition of that term as given in section 21 I.P.C. and as officers of Co-operative Societies do not fall within the provisions of section 21 I.P.C., the provisions of the Prevention of Corruption Act could not be applied to those persons. It is true that if the provisions of section 161 of the Maharashtra Co-operative Societies Act, 1960, are not taken into consideration, officers of Co-operative Societies, as defined in Clause (20) of section 2 of that Act, do not fall within any of the 12 clauses of section 21 I.P.C. and, therefore, those officers, without the aid of the said section 161, cannot be prosecuted for the offences punishable under the provisions of the Prevention of Corruption Act. Section 161 of the Maharashtra Co-operative Societies Act, as amended by Act XXVII of 1969, provides that the 'officer' defined in Clause (20) of section 2 of the said Act shall be deemed to be a "public servant" within the meaning of section 21 I.P.C. In view of those provisions, in the State of Maharashtra officers of co-operative societies failing within section 2(20) of the Maharashtra Co-operative Societies Act are public servants within the meaning of section 21 I.P.C. Section 2 of the Prevention of Corruption Act reads as follows ---
"2. Interpretation.---For the purposes of this Act, 'Public servant' as defined in section 21 of the, Indian Penal Code (45 of 1 860)".
In view of the amended section 161 of the Maharashtra Co-operative, Societies Act, officers failing within section 2(20) of that Act are deemed to be "public servants" within the meaning of section 21 I.P.C. Therefore, the provisions of the Prevention of Corruption Act will be applicable to the officers of Co-operative Societies falling within section 2(20) of the Maharashtra Co-operative Societies Act. Section 161 of the Maharashtra Co-operative Societies Act, as amended, is a validly enacted State law and, as already held by me, it is not void on account of repugnancy and, therefore, these provisions have to be given effect to. Therefore, all the officers of Co-operative Societies who fall under section 2(20) of the Maharashtra Co-operative Societies Act must be deemed to be "public servants" within the meaning of section 21 I.P.C. for all purposes. In this view of the matter, I am unable to agree with the learned Counsel for the petitioner, applicant and appellants that as they do not fall within section 21 I.P.C. they cannot be prosecuted for the offences punishable under the provisions of the Prevention of Corruption Act. As stated earlier, the officers of Co-operative Societies falling within section 2(20) of the Maharashtra Co-operative Societies Act, must be deemed to be "public servants" as defined in section 21 I.P.C. and, therefore, the provisions of the Prevention of Corruption Act would apply to them also.
10. In the result, the criminal writ petition and the criminal application must fail. Consequently, the rules in both those matters stand discharged.
11. It takes me to Criminal Appeals Nos. 714 of 1986, 735 of 1986 and 826 of 1986. All these appeals have been heard with Criminal Writ Petition No. 601 of 1987 and Criminal Application No. 1749 of 1986. The Anti-Corruption Bureau, Pune, prosecuted some members of the Chhabria family and some of the officers of Sampada Sahakari Bank Ltd. in the Court of the Special Judge, Pune, for the offences punishable under sections 120-B, 409, 109, 420, 467, 468, 471 and 477-A I.P.C. read with section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act, 1947, and section 147(o) read with section 147G(b) of the Maharashtra Co-operative Societies Act, 1 960. Pending the prosecution, the Additional Deputy Commissioner of Police, Anti-Corruption Bureau, Pune, filed an application before the District Judge, Pune, under the provisions of section 3 of the Criminal Law Amendment Ordinance (XXXVIII of 1944) for attachment of the property of the applicants who are the accused in that case. The learned District Judge, after giving notices to the applicants and after hearing them, passed orders for the attachment of the property of the applicants. Feeling aggrieved, the applicants preferred those appeals against the orders.
12. The common question raised by the learned Counsel for the appellants in all those appeals is that the appellants being not the "public servants" as defined in section 21 I.P.C., no prosecution could be launched against them for the offences under the Prevention of Corruption Act, 1947, and, secondly, he submitted that the property which is alleged to have been defalcated by the appellants along with others is not the property of the Government or a department of any Government or local authority and as such for the alleged offence under section 409 I.P.C. the property of the appellants could not be attached. In the Schedule to Ordinance No. XXXVIII of 1944 there are five clauses. Clause 4-A provides for an offence punishable under section 5 of the Prevention of Corruption Act. The prosecution has alleged that the appellants committed offences punishable under section 5 of the Prevention of Corruption Act along-with other offences. While dealing with the criminal writ petition and the criminal application I have already held that the officers of the co-operative bank failing within section 2(20) of the Maharashtra Co-operative Societies Act, 1960, in view of the provisions of section 161 of the said Act, are "public servants" as defined in section 21 I.P.C. Therefore, the contention of the learned Counsel that no action could have been taken by the Deputy Commissioner of Police, Anti-Corruption Bureau, Pune, for attachment of the property under Ordinance No. XXXVIII of 1944 can be accepted.
13. It was contended before me by the learned Counsel that the appellant No. 2 Shireeshkumar Pralhad Newale in Criminal Appeal No. 714 of 1986 had filed his affidavit and raised an objection to certain property as belonging to himself, but the learned District Judge did not consider his objection and the property belonging to him has been attached. According to him, the property of Shireeshkumar Newale requires to be released from attachment. Shireeshkumar Newale does not figure in the array of the accused. He is a son of the accused Pralhad Newale. Pralhad Newale had submitted his objection to the attachment of the property and therein he had shown that some of the properties belonged to his son Shireeshkumar and filed an affidavit of his son in support of his submission. The learned District Judge has considered the affidavit of Shireeshkumar Newale and the submission made by his father that certain ornaments belonged to him. The discussion on the point is found at paragraph 13 of the judgment of the learned District Judge. On considering the submissions of Pralhad Newale and his son Shireeshkumar, the learned District Judge found that the contention of the appellant Pralhad Newale that the ornaments were gifted by him through his wife-mother of the appellant No. 2 Shireeshkumar-to Shireeshkumar as an heir to his deceased mother and, therefore, those ornaments belonged to him could not be accepted. The learned District Judge has considered all the objections raised by the appellants to the attachment of property on the ground that the property did not belong to them, and the property which he found not belonging to the appellants was ordered to be released from attachment. The learned Counsel pointed out that in the ornaments attached from the house of Pralhad Newale one gold mangalsutra along with other ornaments has been attached. He submits that in view of section 60 C.P.C. the gold mangalsutra could not be attached. It may be mentioned that Pralhad Newale's wife is dead. She was not alive on the day the mangalsutra along with other gold ornaments was attached. It is not the case of the appellant Pralhad Newale that any woman from his family was using gold mangalsutra and it was seized from her person. Therefore, the contention of the learned Counsel that the gold mangalsutra should not have been attached and it is liable to 66 released from attachment cannot be accepted The learned Counsel has not urged before me in respect of any other property attached in those cases.
14. At this stage, the learned Counsel for the petitioner, applicant and appellants referred to the decision of the Supreme Court in Ramesh Balkrishna Kulkarni v. State of Maharashtra, and submitted that in that case their Lordships of the Supreme Court held that' the Municipal Councillor is not a public servant and, therefore, he could not be prosecuted under section 5 of the Prevention of Corruption Act, 1947. According to him, on the same analogy it must be held that the appellants in those cases are not public servants and hence are not liable' to be prosecuted under section 5 of the Prevention of Corruption Act. In the decision relied on by the learned Counsel their Lordships found that the Municipal Councillor did not fall within twelfth of section 21 I.P.C. and as such he was not a public servant and as such was not liable to be prosecuted under section 5 of the Prevention of Corruption Act. The petitioner, applicant and appellants in the present cases also do not -fall within twelfth of section 21 I.P.C. They have been made "public servants" with in the definition of that term as appearing in section 21 I.P.C. by section 161 of the Maharashtra Co-operative Societies Act, 1960. I have already considered while dealing with the criminal writ petition and the criminal application the position of the officers falling within section 2(2) read with section 161 of the Maharashtra Co-operative Societies Act and have held that the provisions of section 161 are not void on account of repugnancy. The State Legislature being competent to enact the said law it is a valid law and under that law the appellants, being the officers of the co-operative bank within the provisions of section 2(20) of the Maharashtra Co-operative Societies Act are "public servants" within the definition of section 21 I.P.C. and as such they are liable to be prosecuted for the offences under section 5 of the Prevention of Corruption Act. The decision in Ramesh Balkrishna Kulkarni's case (supra) relied on by the learned Counsel, does not support his contention that the appellants are hot public servants and are not liable to be prosecuted for the offences
15. In the result, there is no substance in the three criminal appeals and those criminal appeals are also dismissed. Interim stay vacated.