The judgment establishes the public duty of Multi-State Co-operative Societies and the status of its employees as public servants, clarifies that investor status does not provide immunity from prosecution, and emphasizes that the arbitration clause does not exclude criminal proceedings under the IPC.

JUDGMENT :

SHARAD KUMAR SHARMA, J.

1. The present applicant is facing the proceedings of Sessions Trial No. 18 of 2021, State of Uttarakhand vs. Jai Pal Singh Palni and Another whereby he has been summoned to face trial, by an order dated 24.11.2021 for being tried for the offences under Sections 406, 409, 420 of the IPC and Section 3 of the Uttarakhand Protection of Interests of Depositors (In Financial Establishment) Act, 2005. While putting a challenge to the proceedings of the aforesaid Sessions Trial, as well as, the consequential summoning order dated 24.11.2021, which has been resultantly rendered by the Court of District and Sessions Judge on submission of the charge-sheet is on the following grounds:

(1) That since it is not an “authority” it will not fall to be bringing the present applicant within the ambit being a “public servant” to attract Section 409 of the IPC.

(2) He submits that he is not a beneficiary of this scheme of the society and since the society itself, which is a Multi-State Co-operative Society, is a creation of the Statute, has expressed its willingness to remit the amount, which is due to be paid to the investors, the present applicant may not be required to be prosecuted on a criminal side.

(3) He further submits that his nature of appointment and the status, which he enjoys in the society, being that of a very lower cadre employee, he may not be held to be at all involved for commission of offence, as it has been complained of in the FIR No. 33 of 2020 dated 17.10.2020 in relation to the offences, as disclosed above.

(4) He further submits that since the applicant and the complainant both have been the depositors in the multi-state co-operative society i.e. Kamuna Credit Co-operative Society Limited.

(5) He submits that since the Kamuna Credit Co-operative Society Limited, which has been created under the Act of 2002, is still willing to remit the amount payable to the depositors, no offence as against the present applicant would be made out.

(6) He submits that there is no direct nexus or involvement of the present applicant in commission of the offence, for the reason being that, no amount has been deposited in his account, as such.

(7) Lastly, that to bring an offence, as committed under the provisions of the Multi-State Co-operative Societies Act, 2002, the appropriate recourse available to the complainant, would have been to resort to the proceedings of an arbitration, as contemplated under Section 84 of the Multi-State Co-operative Societies Act, 2002.

2. To deal with the questions argued by the learned counsel for the applicant as to whether the Multi-State Co-operative Society created under the Act will be an authority at all to give it the status to the present applicant as to be a public servant to attract the provisions contained under Section 409 of the IPC.

3. In order to answer the aforesaid aspect, it is always the question, as to whether a body, which is created under an Act, which is discharging a public duty or not and if it is performing a public duty and has an obligation towards the public at large, it will be treated as to be performing a public act and, the authorities responsible to function so, would be a “public authority” and that too, in view of the Constitution Amendment, as made by 97th Amendment of the Constitution. It has been laid down under Article 43(B) of the Constitution that it is rather the State’s responsibility to ensure a voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies. Meaning thereby the implication of Article 43(B) of the Constitution, which means that a State would have a control over the functioning of the Multi-State Co-operative Societies, created under the Act of 2002 and since being engaged in a function contemplated under Article 43(B) of the Constitution of India, they will be deemed to be a “public servant” as they are performing a public duty to meet a constitutional objective. Hence