IMPORTANT POINT
Chairman and Members of Managing Committee of Cooperative Societies under the Maharashtra Cooperative Societies Act are not public servants within meaning of Section 2 of the Prevention of Corruption Act.

Headnote:(i) Prevention of Corruption Act, 1947-Section 2 r/w Section 21 of Indian Penal Code, 1860 further read with Section 161 of the Maharashtra Co-operative Societies Act, 1960-Public servant-Chairman and Members of Managing Committee of Co-operative Societies-Incorporation of provisions of Section 21, IPC in Section 161 of Maharashtra Co-operative Societies Act is for limited purpose of deeming certain categories of persons as public servants-Chairman and Members of Managing Committee of Co-operative Societies are not public servants-Cannot be prosecuted for offence under Section 5 of Prevention of Corruption Act.
       (ii) Maharashtra Coperative Societies Act, 1960-Section 161 read with Section 2(20) and read with Section 2 of Prevention of Corruption Act-Indian Penal Code, 1860-Section 21-Prevention of Corruption Act, 1947-Public servant-Chairman and Members of Managing Committee of Cooperative Societies-Not public servants within meaning of Section 21 of IPC-Provisions of Section 21 IPC incorporated in Section 161 of Maharashtra Co-operative Societies Act for a limited purpose of deeming certain category of officers as public servant-Legal fiction cannot be extended beyond purpose for which it was created.
       Held : It is undoubtedly true that the Co-operative Societies Act has been enacted by the State Legislature and their powers to make such legislation is derived from Entry 32 of List II of the Seventh Schedule to the Constitution. The legislature no-doubt in Section 161 has referred to the provisions of Section 21 of the Indian Penal Code but such reference would not make the officers concerned public servants within the ambit of Section 21. The State Legislature had the powers to amend 21 of the Indian Penal Code, the same being referable to a legislation under Entry 1 of List III of Seventh Schedule, subject to Article 254(2) of the Constitution as, otherwise, inclusion of the persons who are public servants under Section 161 of the Co-operative Societies Act would be repugnant to the definition of public servants under Section 21 of the Indian Penal Code. That not having been done, it is difficult to accept the contention of the learned counsel, appearing for the State that by virtue of deeming definition in Section 161 of the Co-operative Societies Act by reference to Section 21 of the Indian Penal Code, the persons concerned could be prosecuted for the offences under the Indian Penal Code. The Indian Penal Code and the Maharashtra Co-operative Societies Act are not Statutes in pari materia. The Co-operative Societies Act is a completely self-contained Statute with its own provisions and has created specific offences quite different from the offences in the Indian Penal Code. Both Statutes have different objects and created offences with separate ingredients. They cannot thus be taken to be Statutes in pari materia, so as to form one system. This being the position, even though the Legislatures had incorporated the provisions of Section 21 of the Indian Penal Code into the Co-operative Societies Act, in order to define a public servant but those public servants cannot be prosecuted for having committed the offence under the Indian Penal Code. It is a well known principle of construction that in interpreting a provision creating a legal fiction, the Court is to ascertain for what purpose the fiction is created, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to giving effect to the fiction. But in so construing the fiction it is not to be extended beyond the purpose for which it is created, or beyond the language of the Section by which it is created. A legal fiction in terms enacted for the purpose of one Act is normally restricted to that Act and cannot be extended to cover another Act. When the State Legislatures make the Registrar, a person exercising the power of the Registrar, a person authorised to audit the accounts of a society under Section 81 or a person to hold an inquiry under Section 83 or to make an inspection under Section 84 and a person appointed as an Administrator under Section 78 or as a Liquidator under Section 103 shall be deemed to be public servant within the meaning of Section 21 of the Indian Penal Code. Obviously, they would not otherwise come within the ambit of Section 21, the legislative intent is clear that a specific category of officers while exercising powers under specific sections have by legal fiction become public servant and it is only for the purposes of the co-operative Societies Act. That by itself does not make those persons public servants under the Indian Penal Code, so as to be prosecuted for having committed the offence under the Penal Code. When a person is "deemed to be" something, the only meaning possible is that whereas he is not in reality that something, the Act of legislature requires him to be treated as if obviously for the purposes of the said Act and not otherwise. (Para 6)

JUDGMENT

Pattanaik, J.-These appeals by grant of leave by the High Court itself under Article 134(1)(c) of the Constitution of India read with Rule 28(2) of the Supreme Court Rules, by the State of Maharashtra, raises the question whether the Chairman of a Co-operative Society under the Maharashtra Co-operative Societies Act, can be held to be a public servant for the purpose of Section 21 of the Indian Penal Code and as such, can be proceeded against for offences under Section 5(1) read with Section 5(2) of the Prevention of Corruption Act, 1947.

2. The short facts necessary for disposal of these appeals may be briefly stated as under. On the basis of criminal prosecution under Sections 120-B, 409, 420, 467, 471 and 477-A of the Indian Penal Code, Sections 7 and 9 of the Essential Commodities Act and Sections 5(1)(c) and 5(1)(d) read with Section 5(2) of the Prevention of Corruption Act, the Special Judge took cognizance of the offences as against the accused respondents. The accused persons are the members of the Managing Committee of the co-operative societies and the Chairman of such co-operative societies. It was agitated before the learned Special Judge by the accused persons that they are not public servants for the purposes of offences under Section 409 of the Indian Penal Code and Section 5(1)(c) and 5(1)(d) of the Prevention of Corruption Act, 1947 and further, the prosecution is not maintainable for want to previous sanction. The learned Special Judge considered the provisions of Section 161 of the Maharashtra Co-operative Societies Act (hereinafter referred to as the Act ) and came to the conclusion that the accused persons cannot be held to be public servants as defined under Section 21 of the Indian Penal Code notwithstanding the incorporation of Section 21 of the Indian Penal Code in Section 161 of the Act and, therefore, no cognizance can be taken of the offences under the Prevention of Corruption Act. On the question of sanction, the Special Judge also agreeing with the accused persons held that no previous sanction having been obtained for prosecution of the accused persons, the cognizance is bad in law. Assailing the order of learned Special Judge, the State moved the High Court. When the matter was placed before a learned Single Judge, he referred the matter to a larger Bench as he did not agree with the views expressed by several other learned Single Judges of the Court. The learned Single Judge formulated two questions for being answered by the larger Bench :

"(1) Whether a person defined as "officer" under Clause (20) of Section 2 of the Maharashtra Co-operative Societies Act, 1960, is a "Public Servant" within the meaning of Section 2 of the Prevention of Corruption Act, 1947 (II of 1947), by virtue of the provisions of Section 161 of the Maharashtra Co-operative Societies Act, 1960, read with Section 21 of the Indian Penal Code?

(2) Whether, assuming that provisions of Section 2 of the Prevention of Corruption Act, 1947 are applicable to such a person, is the sanction to prosecute such a person required under any of the Clauses of sub-section (1) of Section 6 of the Prevention of Corruption Act, 1947 capable of being given under the Maharashtra Co-operative Societies Act, 1960?"

3. The Division Bench by the impugned judgment analysed the provisions of Section 161 of the Act as well as Section 21 of the Indian Penal Code and Section 2 of the Prevention of Corruption Act, 1947. The Division Bench of the High Court came to the conclusion that Section 161 of the Act incorporating Section 21 of the Indian Penal Code ipso facto does not enlarge the definition of the terms public servant in Section 21 of the Indian Penal Code. It further held that the State Legislature which was competent to amend Section 21 of the Indian Penal Code, the subject of criminal law being on the con-current list and yet the said not having been done, the expression public servant under Section 161 of the Act would mean those

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2000 Supreme(SC) 447

IMPORTANT POINTChairman and Members of Managing Committee of Cooperative Societies under the Maharashtra Cooperative Societies Act are not public servants within meaning of Section 2 of the Prevention of Corruption Act.

Cases Referred (2)

IMPORTANT POINT
Chairman and Members of Managing Committee of Cooperative Societies under the Maharashtra Cooperative Societies Act are not public servants within meaning of Section 2 of the Prevention of Corruption Act.