IMPORTANT POINT
Chairman/Managing Director and Executive Director of a private bank are public servants for the purposes of Prevention of Corruption Act, 1988.

Headnote:Per Ranjan Gogoi, J.
       (a) Prevention of Corruption Act, 1988 – Section 2(c) – Public servant – Has to be understood by reference to the office and the duties performed in connection therewith to be of a public character. (Para 7)
       (1998) 4 SCC 626 – Relied upon
       (1942) AC 561 – Referred
       (b) Banking Regulation Act, 1949 – Section 46A – Employees of a banking company deemed to be public servants for purposes of Chapter IX, Indian Penal Code, 1860 containing sections 161 to 171 – Sections 161 to 165A repealed by Prevention of Corruption Act, 1988 and the offences engrafted in its sections 7 to 12 – A corresponding deeming provision ought to have been inserted in BR Act – Not done – Possibly wholly unintended legislative omission – Giving rise to casus omissus – Court can supply the casus omissus – Held, employees of a banking company would be public servants for the purpose of the PC Act by virtue of the provisions of Section 46A of the Banking Regulation Act, 1949. (Para 10, 13, 14)
       (1949) 2 AllER 155; (1950) 2 AllER 1226; (1978) 2 SCC 213; (2001) 7 SCC 71 – Relied upon
       Per Prafulla C. Pant, J.
       (c) Banking Regulation Act, 1949 – Section 46A – By 1956 amendment chairman, director and auditor of banking companies were deemed to be public servants – 1994 amendment added managing director to the list – Omission to substitute “for the purposes of Prevention of Corruption Act, 1988” for “for the purposes of Chapter IX of the Indian Penal Code (45 of 1860)” – Does not dilute legislative intention to make Act, 1988 more broad based – Section 2(c) and Section 13(2) read with Section 13(1)(d)P.C. Act, 1988 – Chairman/Managing Director and Executive Director of GTB respectively held public servants for the purposes of Prevention of Corruption Act, 1988. (Para 24, 25, 26)
       2015 SCC Online SC 1403; (1998) 4 SCC 626; (2014) 14 SCC 420; (2000) 5 SCC 88 – Relied upon
       (2003) 10 SCC 733 – Referred
       (1996) 1 SCC 95 – Distinguished
       Facts of the case:
       Whether the Chairman, Directors and Officers of Global Trust Bank Ltd. (a private bank before its amalgamation with the Oriental Bank of Commerce), can be said to be public servants for the purposes of their prosecution in respect of offences punishable under Prevention of Corruption Act, 1988 or not ?
       The Special Judge/Additional Sessions Judge, Mumbai 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.
       This view has been upheld by the High Court.
       Finding of the Court:
       Chairman/Managing Director and Executive Director of a private bank are public servants for the purposes of Prevention of Corruption Act, 1988.
       Result: Appeal allowed.

JUDGMENT :

Ranjan Gogoi, J.

1. I have had the privilege of going through the judgment of my learned brother Prafulla C. Pant, J. Though I am in full agreement with the conclusions reached by my learned brother, I would like to give my own reasons for the same.

2. The question arising has to be answered firstly within the four corners of the definition of “public servant” as contained in Section 2(c) of the Prevention 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,-

(i) xxxx xxxxx

(ii) xxxx xxxxx

(iii) xxxx xxxxx

(iv) xxxx xxxxx

(v) xxxx xxxxx

(vi) xxxx xxxxx

(vii) xxxx xxxxx

(viii) any person who holds an office by virtue of which he is authorized or required to perform any public duty;”

(ix) xxxx xxxxx

(x) xxxx xxxxx

(xi) xxxx xxxxx

(xii) xxxx xxxxx”

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 or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956);”

5. The definition of public duty in Section 2(b) of the PC Act, indeed, is wide. Discharge of duties in which the State, the public or the community at large has an interest has been brought within the ambit of the expression ‘public duty’. Performance of such public duty by a person who is holding an office which requires or authorize him to perform such duty is the sine qua non of the definition of the public servant contained in Section 2(c)(viii) of the PC Act. The expressions ‘office’ and ‘public duty’ appearing in the relevant part of the PC Act would therefore require a close understanding.

6. In P.V. Narasimha Rao Vs. State (CBI/SPE), (1998) 4 SCC 626 the meaning of the expression ‘office’ appearing in the relevant provision of the PC Act has been understood as “a position or place to which certain duties are attached specially one of a more or less public character.” Following the views expressed by Lord Atkin in McMillan Vs. Guest, (1942) AC 561 this Court had approved the meaning of the expression ‘office’ to be referable to a position which has existence independent of the person who fills up the same and which is required to be filled up in succession by successive holders.

7. While there can be no manner of doubt that in the Objects and Reasons stated for enactment of the Prevention of Corruption Act, 1988 it has been made more than clear that the Act, inter alia, envisages widening of the scope of the definition of public servant, nevertheless, the mere performance of public duties by the holder of any office cannot bring the incumbent within the meaning of the expression ‘public servant’ as contained in Section 2(c) of the PC Act. The broad definition of ‘public duty’ contained in Section 2(b) would be capable of encompassing any duty attached to any office inasmuch as in the contemporary scenario there is hardly any office whose duties cannot, in the last resort, be traced to having a bearing on public interest or the interest of the community at large. Such a wide understanding of the definition of public servant may have the effect of obliterating all distinctions between the holder of a private office or a public office which, in my considered view, ought to be maintained. Therefore, according to me, it would be more reasonable to understand the e

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2016 Supreme(SC) 172

IMPORTANT POINTChairman/Managing Director and Executive Director of a private bank are public servants for the purposes of Prevention of Corruption Act, 1988.

Cases Referred (9)

IMPORTANT POINT
Chairman/Managing Director and Executive Director of a private bank are public servants for the purposes of Prevention of Corruption Act, 1988.