The essential characteristic of banking and the nature of the entity in question are crucial in determining the status of individuals as public servants under the relevant laws.

S.S.Grewal, J.

1. This petition under Section 482 of the Code of Criminal Procedure relates to quashment of First Information Report No. 353 dated 31-9-1984 under Sections 161, 165-A Indian Penal Code and under Section 5 (2)(47) of the prevention of Corruption Act registered at Police Station, Sirsa as well as quashment of order dated 18-7-1987 whereby charge against the petitioners was framed Special Judge, Sirsa.

2. In brief, according to the allegations made in the impugned first information report recorded on the basis of the enquiry report submitted by Deputy Superintendent of Police to his immediate superior, Lakhi Ram (Petitioner No. 1) as Manager of Land Development Bank, Sirsa, whereas, Sher Singh (Petitioner No. 2) as Land Evaluation Officer. In the said Bank and Dharam Singh (Petitioner No. 3) a mechanic of the said Bank, accepted illegal gratification/bribe in their capacity of public servants while sanctioning the loan to 150 farmers and cultivators. After completion of the investigation all the three petitioners in the present case were challenged. On the basis of the allegations in the first Information Report and other material produced by the investigating agency the learned Special Judge framed charge under Section 5 (2) of the Prevention of Corruption Act and under Section 16 of the Indian Penal Code against petitioner Nos 1 and 2 whereas against petitioner No 3 only charge under Section 165 A of the Indian Penal Code was framed.

3. Counsel for the parties were heard.

4. It was mainly contended on behalf of petitioner Nos. 1 and 2 that they are not public servants within the meaning of Sections 5 (2) of the Prevention of Corruption Act and Section 21 of the Indian Penal Code because Cooperative Society is not a corporation established by statute, and, that the impugned First Information Report as well as consequent proceedings taken against them are liable to be quashed.

5. The said Bank no doubt has power of granting loans to the farmers and get back the same. However, there is neither any specific assertion in the First Information Report, nor, any material has been collected by the investigating agency that the said Bank has the power of receiving money on deposit from customers and honouring their cheques which is essential characteristic of a Banking Company under the provisions of Banking Regulations Act, 1949 (hereinafter referred to as the Act). Thus the essential characteristic of banking, namely the power to receive deposits from the public which are repayable in the manner indicated in Section 5 (1)(b) of the Act is absent and merely the power of granting loans is retained and exercised that does not make the company a banking company. Lending of money may be one phase of a banking business but it is not the main phase or the distinguishing phase. I find support in my view from the Division Bench in Mahaluxmi Bank Ltd. vs Registrar of Companies, West Bengal, A.I R. 1961 Calcutta 606.

6. The Land Development Bank had been registered under the Haryana Cooperative Societies Act and the Act would be applicable to the said Cooperative Society only to the extent specified in Part V. Same does not specifically cover the provisions of Section 46 A of the Act, which, specifies that every Chairman, Director, Auditor, Liquidator, Manager and other employees of the Banking Company shall be public servants for the purpose of Chapter IX of the Indian Penal Code.

7. I am fortified in my view by Single Bench authority of this Court in Yash Kumar Sharma vs State of Punjab, 1987 (1) Recent Criminal Reports 496 : 1987 (1) C.L.R. 654 wherein relying upon Full Bench of this Court in State of Punjab v. Kesari Chand and another 1987(1) Recent Criminal Reports 297 : 1987(1) C L.R. 510 it was held that an employee of Punjab Land Cooperative Bank Muktsar was not a public servant within the meaning of Section 5 (2) of the Prevention of Corruption Act or under Section 2) of the Indian Penal Code because a Cooperative