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2016 Supreme(SC) 1078

SUPREME COURT OF INDIA
Ranjan Gogoi, Prafulla C. Pant, JJ.
Central Bureau of Investigation State of Madhya Pradesh – Appellant
Versus
P.G. Jain – Respondent
Criminal Appeal No. 264 OF 2016 (Arising out of Special Leave Petition (Criminal) No. 5604 of 2014)
Decided On : 05-04-2016

Advocates Appeared:
For the Appellant :Ms. Vibha Datta Makhija, Sr. Adv., Ms. Disha Vaish, Ajay Sharma, B.V. Balaram Das, Advocates
For the Respondent:Ms. Anuradha Mutatkar, Advocate

The central legal point established in the judgment is the interpretation of the definition of 'public servant' under the Prevention of Corruption Act, 1988 and the determination of the status of a cooperative society as a 'national cooperative society' under the Cooperative Societies Act, 2002.

Headnote:

Prevention of Corruption Act, 1988 - National Cooperative Consumers Federation of India Limited - Cooperative Societies Act, 2002, Section 3(r), Section 116, Section 25 - The court discussed the definition of 'public servant' under the Prevention of Corruption Act, 1988 and the status of the National Cooperative Consumers Federation of India Limited as a 'national cooperative society' under the Cooperative Societies Act, 2002. The court interpreted the provisions of Section 2(c)(iii) and Section 2(c)(ix) of the Prevention of Corruption Act, 1988 and examined the extent of government aid and control over the cooperative society. The court held that the National Cooperative Consumers Federation of India Limited is a body 'aided' by the Central Government as required under Section 2(c)(iii) of the Prevention of Corruption Act, 1988, and directed the trial against the respondent accused to proceed in accordance with law.

Fact of the Case:

The respondent, an 'Assistant Manager' in the National Cooperative Consumers Federation of India Limited, was named in an FIR alleging offences under the Prevention of Corruption Act, 1988. The trial court discharged the respondent on the ground that the NCCF is not a public servant under the P.C. Act, 1988. The High Court affirmed the order, leading to the present appeal.

Finding of the Court:

The court held that the NCCF is a body 'aided' by the Central Government as required under Section 2(c)(iii) of the P.C. Act, 1988, and directed the trial against the respondent accused to proceed in accordance with law.

Issues: The main issue was whether the respondent accused is a public servant under the P.C. Act, 1988, and the status of the NCCF as a 'national cooperative society' under the Cooperative Societies Act, 2002.

Ratio Decidendi: The court interpreted the provisions of Section 2(c)(iii) and Section 2(c)(ix) of the P.C. Act, 1988 and examined the extent of government aid and control over the cooperative society. It held that the NCCF is a body 'aided' by the Central Government as required under Section 2(c)(iii) of the P.C. Act, 1988.

Final Decision: The court set aside the order discharging the respondent accused and directed the trial against the respondent accused to proceed in accordance with law.

ORDER :

1. Leave granted.

2. The respondent who was, at the relevant point of time, working as 'Assistant Manager' in the National Cooperative Consumers Federation of India Limited, Jabalpur ("the NCCF" for short) was named in an FIR alleging commission of offences under the Prevention of Corruption Act, 1988 (hereinafter referred to as "the P.C. Act, 1988). A charge-sheet was submitted after completion of investigation. At the stage of framing of charges, however, the learned trial Court discharged the respondent accused on the ground that the NCCF is not a State within the meaning of Article 12 of the Constitution of India and, therefore, is not a public servant under the P.C. Act, 1988. The said order has been affirmed in revision by the High Court by the impugned order giving rise to the present appeal.

3. The NCCF is a Multi-State Cooperative Society under the Multi-State Cooperative Societies Act, 2002 (hereinafter referred to as "the Cooperative Societies Act, 2002"). Under Section 3(r) of the Cooperative Societies Act, 2002, a multi-State Cooperative Society specified in the Second Schedule thereto is treated as a "national cooperative society". In the Second Schedule to the Cooperative Societies Act, 2002, the NCCF is specifically included against serial No.5 of the list of multi-State Cooperative Societies treated as "national cooperative society".

4. Section 116 of the Cooperative Societies Act, 2002 contemplate exclusion or inclusion in the list of "national cooperative societies" by notification issued by the Central Government which notification is required to be laid before each House of Parliament after the same is made. Section 25 of the Cooperative Societies Act, 2002 specifies the persons who may become members of a multi-State cooperative society. Section 25(2) of the said Act specifically provides that individual persons are not eligible for being a member of a national cooperative society.

5. The learned trial Court and the High Court, in the present case, proceeded to determine the question before it, namely, whether the respondent - accused is a public servant under the P.C. Act, 1988 by attempting to understand as to whether the NCCF is a State within the meaning of Article 12 of the Constitution of India. It is in the above context that the learned trial Court had engaged itself in an elaborate discussion particularly with regard to the source of funding of the NCCF. In this regard, the learned trial Court also referred to and relied on a judgment of the High Court of Karnataka in Writ Petition No.28014 of 1995 [D.G. Katti Sethi v. National Co-operative Consumers Federation of India Ltd.] wherein the issue arising in the present case specifically with reference to the NCCF was dealt with by the High Court. Following the said decision and the finding recorded by the High Court therein that the employees of the NCCF would not be public servants under the P.C. Act, 1988 as the NCCF is not a State within the meaning of Article 12 of the Constitution of India, the discharge of the respondent - accused was ordered which has been upheld by the High Court. We are also told that the decision of the High Court of Karnataka in Writ Petition No.28014 of 1995 [D.G. Katti Sethi v. National Co-operative Consumers Federation of India Ltd.] has attained finality as the Special Leave Petition against the said order has since been dismissed.

6. Notwithstanding the above, we have noticed a different dimension to the issue before us. The question whether the respondent accused is a public servant has to be further considered in the context of the definition of "public servant" appearing in Section 2(c) of the P.C. Act, 1988. Sub-clauses (iii) and (ix) of Section 2(c) of the P.C. Act, 1988 would be relevant and is, therefore, extracted below:

"2(c) "public servant" means,-

(i) ...........

(ii) ...........

(iii) any person in the service or pay of a corporation established by or under a Central, Provincial or State Act, or an authori







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