Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Crl.), 1077-1081 of 2013, Judgment Date: Feb 04, 2016

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 expression “public servant” by reference to  the  office  and
the duties performed in connection therewith to be of a public character.

                                                             REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                   CRIMINAL APPEAL NOS. 1077-1081 OF 2013
Central Bureau of Investigation,
Bank Securities & Fraud Cell                                   .....Appellant

                                   Versus

Ramesh Gelli and Others                                        ...Respondents

                                    WITH

                    WRIT PETITION (CRL.) NO. 167 OF 2015

Ramesh Gelli                                              ...Writ Petitioner

                                   Versus

Central Bureau of Investigation through
Superintendent of Police, BS & FC & Anr.                      ...Respondents


                               J U D G M E N T
PER 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,-
(c) “Public Servant” means,-
(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)[1]   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[2],  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 expression “public servant” by reference to  the  office  and
the duties performed in connection therewith to be of a public character.

8.    Coming to the next limb of the case, namely, the applicability of  the
provisions of Section 46A of the Banking Regulation Act,  1949  (hereinafter
referred to as the ‘BR Act’)  what  is  to  be  found  is  that  a  chairman
appointed on a whole  time  basis,  managing  director,  director,  auditor,
liquidator, manager and any other employee of a banking  company  is  deemed
to be a public servant for the purposes of Chapter IX of  the  Indian  Penal
Code.  Section 46A,  was amended by Act 20 of 1994 to bring within its  fold
a larger category of functionaries of a banking company. Earlier,  only  the
chairman, director and auditor had come within the purview of the  aforesaid
Section 46A.

9.    Sections 161 to 165A contained in Chapter IX of the Indian Penal  Code
have been repealed by Section 31 of the Prevention of Corruption  Act,  1947
and the said offences have been engrafted in Sections 7, 8, 9,  10,  11  and
12 of the Prevention of Corruption Act,  1988.   Section  166(as  originally
enacted), Section 167 (with amendment), Sections 168, 169, 170 and  171  (as
originally enacted) continue to remain in Chapter IX  of  the  Indian  Penal
Code even after enactment of the Prevention of Corruption Act, 1988.

10.   By virtue of Section 46A of the BR Act office bearers/employees  of  a
Banking  Company  (including  a  Private  Banking  Company)   were   “public
servants” for the purposes of Chapter IX of the I.P.C.  with  the  enactment
of the PC Act the offences under Section 161 to 165A included in Chapter  IX
of Code came to be deleted from the said  Chapter  IX  and  engrafted  under
Sections 7 to 12 of  the  PC  Act.   With  the  deletion  of  the  aforesaid
provisions from Chapter IX of the I.P.C. and inclusion of the  same  in  the
PC Act there ought to have been a corresponding insertion in Section 46A  of
the BR Act with regard to the deeming provision therein being  continued  in
respect of officials of a Banking Company  insofar  as  the  offences  under
Sections 7 to 12 of the PC Act are concerned.  However,  the  same  was  not
done. The Court need not speculate the  reasons  therefor,  though,  perhaps
one possible reason could be the wide expanse of the definition  of  “public
servant” as made by Section 2(c) of the PC Act. Be that  as  it  may,  in  a
situation where the legislative intent behind the enactment of  the  PC  Act
was, inter alia, to expand the definition of “public servant”, the  omission
to incorporate the relevant provisions of the PC Act in Section 46A  of  the
BR Act after deletion of Sections 161 to 165A of the I.P.C. from Chapter  IX
can be construed to be a wholly unintended legislative  omission  which  the
Court can fill up by a process of interpretation. Though the rule  of  casus
omissus  i.e. “what has not been provided  for  in  the  statute  cannot  be
supplied by the Courts”  is  a  strict  rule  of  interpretation  there  are
certain well known  exceptions  thereto.   The  following  opinion  of  Lord
Denning in Seaford Court Estates Ltd. Vs. Asher[3] noticed and  approved  by
this Court may be taken note of.
“The English language is not an instrument of  mathematical  precision.  Our
literature would be much the poorer if it were ....He (The Judge)  must  set
to work in the constructive task of finding  the  intention  of  Parliament,
and he must do this not only from the language  of  the  statute,  but  also
from a consideration of the social conditions which gave rise to it, and  of
the mischief which it was passed to remedy, and then he must supplement  the
written word so as to  give  “force  and  life”  to  the  intention  of  the
legislature.....A judge should ask himself the question, how, if the  makers
of the Act had themselves come across this ruck in the texture of  it,  they
would have straightened it out? He must then do as they would have  done.  A
judge must not alter the material of which the Act is woven, but he can  and
should iron out the creases.”

In Magor & St. Mellons Rural District  Council  Vs.  Newport  Corporation[4]
the learned judge restated the above  principles  in  a  somewhat  different
form to the following effect :
“We sit here to find out the intention of Parliament and  of  ministers  and
carry it out, and we do this better by filling in the gaps and making  sense
of the enactment than by opening it up to destructive analysis.”

11.   Though the above  observations  of  Lord  Denning  had  invited  sharp
criticism in his own country we find reference  to  the  same  and  implicit
approval thereof in the judicial quest to define the  expression  “industry”
in Bangalore Water Supply & Sewerage Board  Vs.  A  Rajappa  and  Others[5].
Paragraphs 147 and  148  of  the  opinion  of  Chief  Justice  M.H.  Beg  in
Bangalore Water Supply & Sewerage Board (supra),  which  are  quoted  below,
would clearly indicate the acceptance of this Court referred to earlier.
“147. My learned Brother has relied on what  was  considered  in  England  a
somewhat unorthodox method of construction in Seaford Court Estates Ltd.  v.
Asher [(1949 2 ALL ER 155, 164], where Lord Denning, L.J., said :

When a defect appears a Judge cannot simply fold his  hands  and  blame  the
draftsman. He must set to work on  the  constructive  task  of  finding  the
intention of Parliament — and then he must supplement the written  words  so
as to give ‘force and life’ to the intention of legislature. A Judge  should
ask himself the question how, if the makers of the Act had  themselves  come
across this ruck in the texture of it, they would have straightened it  out?
He must then do as they  would  have  done.  A  Judge  must  not  alter  the
material of which the Act is woven, but he  can  and  should  iron  out  the
creases.

When this case went up to the House of Lords it appears that the  Law  Lords
disapproved  of  the  bold  effort  of  Lord  Denning  to   make   ambiguous
legislation more comprehensible. Lord  Simonds  found  it  to  be  “a  naked
usurpation  of  the  legislative  function  under  the  thin   disguise   of
interpretation”. Lord  Morton  (with  whom  Lord  Goddard  entirely  agreed)
observed: “These heroics are out  of  place”  and  Lord  Tucker  said  “Your
Lordships would be acting in a legislative rather than a  judicial  capacity
if the view put forward by Denning, L.J., were to prevail.”

148. Perhaps, with the passage  of  time,  what  may  be  described  as  the
extension of a method resembling the “arm-chair rule”  in  the  construction
of wills. Judges can more frankly step into the  shoes  of  the  legislature
where an enactment leaves  its  own  intentions  in  much  too  nebulous  or
uncertain a state. In M. Pentiah v.  Muddala  Veeramallappa  [(1961)  2  SCR
295], Sarkar, J., approved of the reasoning, set out above, adopted by  Lord
Denning. And, I must say that, in a case where the definition of  “industry”
is left in the state in which we find it, the situation  perhaps  calls  for
some judicial heroics to cope with the difficulties  raised.    (Underlining
is mine)


12.   There  are  other  judicial  precedents  for  the  view  that  I  have
preferred to take and reach the same eventual  conclusion  that  my  learned
brother Prafulla C. Pant, J. has reached. I would like to refer to only  one
of them specifically, namely, the decision of a Constitution Bench  of  this
Court in Dadi Jagannadham Vs. Jammulu Ramulu and others[6].
      Order XXI Rule 89 read with Rule 92(2) of the CPC provided for  filing
of an application to set aside a sale. Such an application was  required  to
be made after deposit of the amounts specified within 30 days from the  date
of the sale. While  the  said  provision  did  not  undergo  any  amendment,
Article 127 of the Limitation Act, 1963 providing a time limit  of  30  days
for filing of the application to set aside the  sale  was  amended  and  the
time was extended from 30 days to 60 days. Taking note of  the  objects  and
reasons for the amendment of the Limitation Act,  namely,  that  the  period
needed to be enlarged from 30 to 60 days  as  the  period  of  30  days  was
considered to be too short, a Constitution  Bench  of  this  Court  in  Dadi
Jagannadham (supra) harmonised the  situation  by  understanding  Order  XXI
rule 89 to be casting an obligation on the Court to set aside  the  sale  if
the application for setting aside along  with  deposit  is  made  within  30
days. However, if such an application along with the deposit is  made  after
30 days but before the period of 60 days as contemplated by Article  127  of
the Limitation Act, 1963, (as  amended)  the  Court  would  still  have  the
discretion to set aside the same.  The period of 30 days in  Order  21  Rule
89/92(2) CPC referred to hereinabove was subsequently (by Act  22  of  2002)
amended to 60 days also.

13.   Turing to the case in  hand  there  can  be  no  dispute  that  before
enactment of the PC Act, Section 46A  of  the  BR  Act  had  the  effect  of
treating the concerned employees/office bearers  of  a  Banking  Company  as
public servants for the purposes of Chapter IX of the IPC by virtue  of  the
deeming provision contained therein.  The enactment of the PC Act  with  the
clear intent to widen the definition of ‘public servant’ cannot  be  allowed
to have the opposite effect by expressing judicial helplessness  to  rectify
or fill up what is a clear omission in Section  46A  of  the  BR  Act.   The
omission to continue to extend the deeming provisions in Section 46A of  the
BR Act  to the offences under Sections 7  to  12  of  the  PC  Act  must  be
understood to be  clearly  unintended  and  hence  capable  of  admitting  a
judicial exercise to fill up the same.  The unequivocal  legislative  intent
to widen the definition of “public servant” by enacting the  PC  Act  cannot
be allowed to be defeated by interpreting and understanding the omission  in
Section 46A of the BR Act to be incapable of being filled up by the court.

14.   In the above view of the matter, I also arrive at the same  conclusion
as my learned Brother Prafulla C. Pant, J. has  reached,  namely,  that  the
accused respondents are public servants for the purpose of  the  PC  Act  by
virtue of the provisions of Section 46A of the Banking Regulation Act,  1949
and  the  prosecutions  launched  against  the   accused   respondents   are
maintainable in law.   Consequently,  the  criminal  appeals  filed  by  the
C.B.I. are  allowed  and  Writ  Petition  (Criminal)  No.  167  of  2015  is
dismissed.

                                  ........................................J.
                                                  [RANJAN GOGOI]
NEW DELHI
FEBRUARY 23, 2016


                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                   CRIMINAL APPEAL NOS. 1077-1081 OF 2013

Central Bureau of Investigation,
Bank Securities & Fraud Cell            … Appellant

                                   Versus

Ramesh Gelli and others                      …Respondents

                                    WITH

                    WRIT PETITION (CRL.) NO. 167 OF 2015


Ramesh Gelli                               … Writ Petitioner

                                   Versus

Central Bureau of Investigation through
Superintendent of Police, BS & FC & Anr. …Respondents



                               J U D G M E N T


Prafulla C. Pant, J.


      Appellant Central Bureau of Investigation (C.B.I) has  challenged  the
judgment and order dated 13.07.2009, passed by the High Court of  Judicature
at Bombay whereby Criminal Revision Application No. 131 of  2007  (filed  by
CBI) has been dismissed, and Criminal Writ Petition Nos.  2400,  2401,  2402
and 2403 of 2008, filed by the accused/respondent are allowed in  part,  and
upheld the order dated 05.02.2007 passed by the  trial  court  i.e.  Special
Judge/Additional Sessions Judge, Mumbai.  The courts below  have  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.

Writ Petition (Criminal) No. 167 of 2015 has been filed  before  this  Court
by accused Ramesh Gelli praying quashing of charge sheet  filed  by  CBI  in
connection with FIR No. RC BD.1/ 2005/E/0003 dated  31.03.2005  relating  to
offences punishable under Section 120B read with  Sections  420,  467,  468,
471 of Indian Penal Code (IPC) and offence punishable  under  Section  13(2)
read with Section 13(1)(d) of the Prevention of Corruption  Act,  1988  (for
short “the P.C. Act, 1988”), pending  before  Special  Judge,  CBI,  Patiala
House Courts, New Delhi.

Briefly stated prosecution case is that the Global Trust  Bank  (hereinafter
referred as “GTB”) was incorporated on 29.10.1993 as banking  company  under
Companies Act, 1956.  Said Bank was issued licence  dated  06.09.1994  under
Banking Regulation Act, 1949 by Reserve Bank of  India  (for  short  “RBI”).
Ramesh Gelli (writ petitioner before this Court) was Chairman  and  Managing
Director, and Sridhar Subasri (writ petitioner before the  High  Court)  was
Executive Director of the Bank.  The two were also promoters  of  GTB.   For
raising their contribution to the capital, the  two  accused  (Ramesh  Gelli
and Sridhar Subasri) obtained loans from various individuals and  companies,
including M/s. Beautiful Group of Companies  of  accused  Rajesh  Mehta  and
Vijay Mehta, and M/s.  Trinity  Technomics  Services  Pvt.  Ltd.,  of  which
accused Vijay Mehta and his employees were directors.  M/s. Beautiful  Group
of Companies opened their first account in the name  of  Beautiful  Diamonds
Ltd. with G.T.B. in the year 1994-95.  Investigation revealed  that  various
credit facilities were allowed to said company by Ramesh Gelli  and  Sridhar
Subasri,  and  they  fraudulently  instructed  the  branch  heads,   without
following norms for sanctioning the  credit  facilities.   The  duo  (Ramesh
Gelli and Sridhar Subasri), abusing  their  official  positions,  sanctioned
higher credit limits to M/s. Beautiful Diamonds  Ltd.  against  regulations.
According to CBI, the investigation further revealed that  in  pursuance  to
the alleged conspiracy of the accused the funds of GTB  were  diverted,  and
release of Rs.5.00 crores was made in the name of  M/s.  Beautiful  Realtors
Ltd. on the request of Directors  of  M/s.  Beautiful  Diamonds  Ltd.   Said
amount  was  further  transferred  to  already  overdrawn  account  of  M/s.
Beautiful Diamonds Ltd.  In April, 2001, Directors  of  Beautiful  Group  of
Companies in pursuance of conspiracy with other  accused  submitted  another
application for sanction of Rs.3.00 crores as diamond loan in  the  name  of
M/s. Crystal Gems.  Ramesh Gelli, Sridhar Subasri  and  other  accused,  who
were Directors of Beautiful Group of Companies, said to  have  caused  total
wrongful loss of about Rs.41.00 crores to GTB.  The  accounts  of  Beautiful
Diamonds Ltd. and other companies, which  availed  funds  from  GTB,  should
have been declared Non Performing Assets (NPA),  but  accused  Ramesh  Gelli
and Sridhar  Subasri  allegedly  manipulated  and  showed  the  accounts  of
Beautiful  Realtors  Ltd.  and  Crystal  Gems  as  higher  profit   yielding
accounts. The scam did not come to the light till 2005.

On 14.08.2004 GTB merged/amalgamated with Oriental  Bank  of  Commerce  (for
brevity “OBC”).  An FIR dated 31.03.2005 in respect of  offences  punishable
under Sections 420, 467, 468, 471 IPC and  under  Section  13(2)  read  with
Section 13(1)(d) of the P.C. Act of 1988 was  registered  by  C.B.I  on  the
complaint made by the Chief Vigilance Officer, OBC, wherein the  allegations
were made that Ramesh Gelli and others, including Directors  of  M/s.  World
Tex Limited (for short “WTL”) entered into a criminal  conspiracy  to  cheat
GTB causing wrongful loss to  the  tune  of  Rs.17.46  crores,  and  thereby
earned corresponding wrongful gain.  After investigation, charge  sheet  was
filed in said matter before the Special Judge, CBI,  Patiala  House  Courts,
New Delhi.

Another First Information Report No. RC.12(E)/2005/ CBI/BS &  FC/Mumbai  was
registered by C.B.I. on 09.08.2005 for  offences  punishable  under  Section
120B read with Sections 409 and 420 IPC, initially against two employees  of
GTB and  two  private  persons  Rajesh  Mehta  and  Prashant  Mehta  on  the
complaint dated 26.07.2005 lodged by the Chief Vigilance  Officer,  OBC.  It
is relevant to mention here that GTB was a private sector bank,  before  its
amalgamation in August 2004 with OBC, a public sector bank.  In the FIR  No.
RC 12E/2005/CBI/B.S & FC/Mumbai Dt. 09.08.2005,  it  was  alleged  that  GTB
sanctioned and disbursed loans by throwing  all  prudent  banking  norms  to
winds and thus created a  large  quantum  of  Non  Performing  Assets  (NPA)
jeopardizing the interests of thousands of depositors, but  painted  a  rosy
financial picture.  These loan transactions came to the light  during  audit
after amalgamation of GTB with OBC, and it  was  noted  that  two  accounts,
namely that of M/s. Beautiful Diamonds Ltd. and M/s. Crystal Gems were  used
to siphon out funds of the Bank.  After investigation,  charge  sheets  were
filed in this matter before Special Judge, Mumbai  in  respect  of  offences
punishable under Section 120B read with Sections 409 and 420 IPC  and  under
Section 13(2) read with Section 13(1)(d) of the P.C.  Act,  1988.   However,
on 05.02.2007 the Special Judge,  Mumbai  declined  to  take  cognizance  of
offence punishable under Section 13(2) read with S.3(1)(d)  P.C  Act,  1988,
on the ground that accused No. 1 Ramesh Gelli  and  accused  No.  2  Sridhar
Subasri were not public servants on the  dates  transactions  said  to  have
taken place, i.e. before amalgamation, and the Special Judge  directed  that
the charge  sheet  may  be  returned  for  being  submitted  to  appropriate
Metropolitan  Magistrate  for  taking  cognizance  in  respect  of  offences
punishable under IPC, i.e. for offence other than punishable under the  P.C.
Act, 1988.

Since the High Court of Judicature at Bombay  has  upheld  the  order  dated
05.02.2007 by the impugned order, the CBI has approached this Court  through
Special Leave.  Further, since W.P.(Crl.)  No.  167/2015  filed  by  accused
Ramesh Gelli also involves similar question of law in the case at Delhi,  as
such both the connected matters are being disposed of by this common  order.


The common question of law involved in these criminal appeals and  connected
writ petition, filed before us, is:

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 ?

It is admitted fact that GTB was  a  private  sector  bank  operating  under
banking licence dated 06.09.1994, issued by  RBI  under  Banking  Regulation
Act,  1949.   It   is   also   not   disputed   that   on   14.08.2004   GTB
merged/amalgamated with OBC. The transactions of  alleged  fraud,  cheating,
misappropriation and corruption relate to the period between 1994  to  2001,
i.e. prior to amalgamation  with  public  sector  bank  (OBC).  The  dispute
relates as to whether the then Chairman-cum-Managing Director and  Executive
Director of GTB come under definition of ‘public servant’ or  not,  for  the
purposes of the P.C. Act, 1988.

It is vehemently argued by Shri Mohan Parasaran and  Shri  Sidharth  Luthra,
senior advocates appearing for the accused that the accused are  not  public
servants, and cognizance cannot be taken against the writ petitioner  Ramesh
Gelli and accused/respondent Sridhar  Subasri,  who  were  said  to  be  the
Chairman-cum-Managing Director and Executive Director  respectively  of  GTB
before its amalgamation. It is further argued that a person cannot  be  said
to have been performing a public duty unless he holds  some  public  office,
and in this connection it is submitted that the accused  did  not  hold  any
public office during the period offences said to have been committed. It  is
also contended that since Sections 161 to 165A in  Chapter  IX  of  IPC  are
repealed by Section 31 of P.C. Act, 1988, Section 46A of Banking  Regulation
Act, 1949 is of little help to the prosecution. Mr. Luthra,  learned  senior
counsel, further submitted that the relationship between the customer  of  a
bank, and the bank is that of a creditor and debtor,  and  the  transactions
between the two are commercial  in  nature,  as  such,  no  public  duty  is
involved.

On the other hand, Shri Tushar Mehta, learned senior counsel for CBI  argued
that accused Ramesh Gelli and Sridhar Subasri were public servants  in  view
of definition contained in Section 2(c) of P.C. Act,  1988.   Our  attention
is also drawn  to  Section  46A  of  Banking  Regulation  Act,  1949,  which
provides that a whole time Chairman, Managing Director,  or  Director  of  a
banking company shall be  deemed  to  be  a  public  servant.   It  is  also
contended that a banking company as defined under  Section  5(b)  read  with
Section 35(A) of Banking Regulation Act, 1949 is nothing  but  extended  arm
of Reserve Bank of India.  In support of arguments  advanced  on  behalf  of
CBI, reliance is placed on the principle of law laid down by this  Court  in
Govt.  of Andhra Pradesh and Others vs. P.Venku  Reddy[7].   Lastly,  it  is
submitted  that  a  private  body  discharging  public  duty   or   positive
obligation of public nature actually  performs  public  function.   In  this
connection, reference was made to the observations made  by  this  court  in
paragraph 18, in Federal Bank Ltd. vs. Sagar Thomas and others[8].

We have considered the arguments and the counter  arguments  and  also  gone
through the relevant case laws on the issue.

Before further discussion it is just and proper to examine  the  object  for
which the Prevention of Corruption Act, 1988 was enacted by the  Parliament.
 The Statement of Objects and Reasons of the Bill is reproduced below: -
      “1.   The bill is intended to make the existing  anti-corruption  laws
more  effective  by  widening  their  coverage  and  by  strengthening   the
provisions.

      2.    The Prevention of Corruption Act,  1947,  was  amended  in  1964
based  on  the  recommendations  of  the  Santhanan  Committee.   There  are
provisions in Chapter IX of the  Indian  Penal  Code  to  deal  with  public
servants and those who abet them by way of criminal misconduct.   There  are
also provisions in the Criminal Law Amendment  Ordinance,  1944,  to  enable
attachment of ill-gotten wealth obtained through  corrupt  means,  including
from transferees of such wealth.  The bill seeks to  incorporate  all  these
provisions with modifications so as to make the  provisions  more  effective
in combating corruption among public servants.

      3.    The bill, inter  alia,  envisages  widening  the  scope  of  the
definition of the expression ‘public  servant’,  incorporation  of  offences
under sections 161  to  165A  of  the  Indian  Penal  Code,  enhancement  of
penalties provided for these offences and incorporation of a provision  that
the  order  of  the  trial  court  upholding  the  grant  of  sanction   for
prosecution would be final if it has not already  been  challenged  and  the
trial has commenced.  In order to expedite the proceedings,  provisions  for
day-to-day trial of cases and prohibitory provisions with  regard  to  grant
of stay and exercise of powers of  revision  or  interlocutory  orders  have
also been included.

      4.    Since the provisions of section 161A  are  incorporated  in  the
proposed legislation with an enhanced punishment, it  is  not  necessary  to
retain those sections  in  the  Indian  Penal  Code.   Consequently,  it  is
proposed to delete those sections with the necessary saving provision.

      5.    The notes on clauses explain in detail  the  provisions  of  the
Bill.”

                                                         (Emphasis supplied)

      From the Statement of Objects and Reasons  of  the  P.C.  Bill  it  is
clear that the Act was  intended  to  make  the  anti  corruption  law  more
effective by widening its coverage. It is  also  clear  that  the  Bill  was
introduced to widen the scope of the definition of ‘public servant’.  Before
P.C. Act, 1988, it was the Prevention of Corruption Act, 1947  and  Sections
161 to 165A in Chapter IX of IPC which  were  governing  the  field  of  law
relating  to  prevention  of  corruption.   The  Parliament   repealed   the
Prevention of Corruption Act, 1947 and also omitted Section 161 to  165A  of
I.P.C as provided under Sections 30 and 31 of P.C. Act, 1988.  Since  a  new
definition of ‘public servant’ is given under P.C.  Act,  1988,  it  is  not
necessary here to reproduce the definition  of  ‘public  servant’  given  in
Section 21 of IPC.

Section 2(c) of P.C. Act, 1988,  which  holds  the  field,  defines  ‘public
servant’ as under: -

“2.(c) "public servant" means-

any person in the service or pay of the Government  or  remunerated  by  the
Government by fees or commission for the performance of any public duty;

any person in the service or pay of a local authority ;

any person in the service or pay of 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;

any Judge, including any person empowered by law to  discharge,  whether  by
himself or as a member of any body of persons, any adjudicatory functions;

any person authorised by  a  court  of  justice  to  perform  any  duty,  in
connection with the  administration  of  justice,  including  a  liquidator,
receiver or commissioner appointed by such court;

any arbitrator or other  person  to  whom  any  cause  or  matter  has  been
referred for decision or report by a court of  justice  or  by  a  competent
public authority;

any person who holds an office  by  virtue  of  which  he  is  empowered  to
prepare, publish, maintain or revise an electoral  roll  or  to  conduct  an
election or part of an election;

any person who holds an office by  virtue  of  which  he  is  authorised  or
required to perform any public duty;

any person who is the president,  secretary  or  other  office-bearer  of  a
registered cooperative society engaged in agriculture,  industry,  trade  or
banking, receiving or having received any financial  aid  from  the  Central
Government or a State Government or from any corporation established  by  or
under a Central, Provincial or State Act, or any authority or body owned  or
controlled or aided by the Government or a Government company as defined  in
section 617 of the Companies Act, 1956;

any person who is a chairman, member or employee of any  Service  Commission
or Board, by whatever name called, or a member of  any  selection  committee
appointed by such Commission or Board for the conduct of any examination  or
making any selection on behalf of such Commission or Board;

any person who is  a  Vice-Chancellor  or  member  of  any  governing  body,
professor, reader, lecturer or any other teacher or  employee,  by  whatever
designation called, of any University and any  person  whose  services  have
been availed of by a University or any other public authority in  connection
with holding or conducting examinations;

any person who is  an  office-bearer  or  an  employee  of  an  educational,
scientific, social,  cultural  or  other  institution,  in  whatever  manner
established, receiving or having received any financial assistance from  the
Central Government or  any  State  Government,  or  local  or  other  public
authority.

      Explanation 1.-Persons falling under any of the above sub-clauses  are
public servants, whether appointed by the Government or not.

      Explanation 2.-Wherever the words "public servant" occur,  they  shall
be understood of every person who is in actual possession of  the  situation
of a public servant, whatever legal defect there may  be  in  his  right  to
hold that situation.”

Above definition shows that under Clause (viii) contained  in  Section  2(c)
of P.C. Act, 1988  a person who holds an office by virtue  of  which  he  is
authorized or required to perform any public  duty,  is  a  public  servant.
Now, for the purposes of the present case this court is required to  examine
as to whether the chairman/managing director  or  executive  director  of  a
private bank operating under licence issued by RBI under Banking  Regulation
Act, 1949, held/holds an office and performed /performs public  duty  so  as
to attract the definition of ‘public servant’ quoted above.
                                                             REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                   CRIMINAL APPEAL NOS. 1077-1081 OF 2013
Central Bureau of Investigation,
Bank Securities & Fraud Cell                                   .....Appellant

                                   Versus

Ramesh Gelli and Others                                        ...Respondents

                                    WITH

                    WRIT PETITION (CRL.) NO. 167 OF 2015

Ramesh Gelli                                              ...Writ Petitioner

                                   Versus

Central Bureau of Investigation through
Superintendent of Police, BS & FC & Anr.                      ...Respondents


                               J U D G M E N T
PER 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,-
(c) “Public Servant” means,-
(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)[1]   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[2],  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 expression “public servant” by reference to  the  office  and
the duties performed in connection therewith to be of a public character.

8.    Coming to the next limb of the case, namely, the applicability of  the
provisions of Section 46A of the Banking Regulation Act,  1949  (hereinafter
referred to as the ‘BR Act’)  what  is  to  be  found  is  that  a  chairman
appointed on a whole  time  basis,  managing  director,  director,  auditor,
liquidator, manager and any other employee of a banking  company  is  deemed
to be a public servant for the purposes of Chapter IX of  the  Indian  Penal
Code.  Section 46A,  was amended by Act 20 of 1994 to bring within its  fold
a larger category of functionaries of a banking company. Earlier,  only  the
chairman, director and auditor had come within the purview of the  aforesaid
Section 46A.

9.    Sections 161 to 165A contained in Chapter IX of the Indian Penal  Code
have been repealed by Section 31 of the Prevention of Corruption  Act,  1947
and the said offences have been engrafted in Sections 7, 8, 9,  10,  11  and
12 of the Prevention of Corruption Act,  1988.   Section  166(as  originally
enacted), Section 167 (with amendment), Sections 168, 169, 170 and  171  (as
originally enacted) continue to remain in Chapter IX  of  the  Indian  Penal
Code even after enactment of the Prevention of Corruption Act, 1988.

10.   By virtue of Section 46A of the BR Act office bearers/employees  of  a
Banking  Company  (including  a  Private  Banking  Company)   were   “public
servants” for the purposes of Chapter IX of the I.P.C.  with  the  enactment
of the PC Act the offences under Section 161 to 165A included in Chapter  IX
of Code came to be deleted from the said  Chapter  IX  and  engrafted  under
Sections 7 to 12 of  the  PC  Act.   With  the  deletion  of  the  aforesaid
provisions from Chapter IX of the I.P.C. and inclusion of the  same  in  the
PC Act there ought to have been a corresponding insertion in Section 46A  of
the BR Act with regard to the deeming provision therein being  continued  in
respect of officials of a Banking Company  insofar  as  the  offences  under
Sections 7 to 12 of the PC Act are concerned.  However,  the  same  was  not
done. The Court need not speculate the  reasons  therefor,  though,  perhaps
one possible reason could be the wide expanse of the definition  of  “public
servant” as made by Section 2(c) of the PC Act. Be that  as  it  may,  in  a
situation where the legislative intent behind the enactment of  the  PC  Act
was, inter alia, to expand the definition of “public servant”, the  omission
to incorporate the relevant provisions of the PC Act in Section 46A  of  the
BR Act after deletion of Sections 161 to 165A of the I.P.C. from Chapter  IX
can be construed to be a wholly unintended legislative  omission  which  the
Court can fill up by a process of interpretation. Though the rule  of  casus
omissus  i.e. “what has not been provided  for  in  the  statute  cannot  be
supplied by the Courts”  is  a  strict  rule  of  interpretation  there  are
certain well known  exceptions  thereto.   The  following  opinion  of  Lord
Denning in Seaford Court Estates Ltd. Vs. Asher[3] noticed and  approved  by
this Court may be taken note of.
“The English language is not an instrument of  mathematical  precision.  Our
literature would be much the poorer if it were ....He (The Judge)  must  set
to work in the constructive task of finding  the  intention  of  Parliament,
and he must do this not only from the language  of  the  statute,  but  also
from a consideration of the social conditions which gave rise to it, and  of
the mischief which it was passed to remedy, and then he must supplement  the
written word so as to  give  “force  and  life”  to  the  intention  of  the
legislature.....A judge should ask himself the question, how, if the  makers
of the Act had themselves come across this ruck in the texture of  it,  they
would have straightened it out? He must then do as they would have  done.  A
judge must not alter the material of which the Act is woven, but he can  and
should iron out the creases.”

In Magor & St. Mellons Rural District  Council  Vs.  Newport  Corporation[4]
the learned judge restated the above  principles  in  a  somewhat  different
form to the following effect :
“We sit here to find out the intention of Parliament and  of  ministers  and
carry it out, and we do this better by filling in the gaps and making  sense
of the enactment than by opening it up to destructive analysis.”

11.   Though the above  observations  of  Lord  Denning  had  invited  sharp
criticism in his own country we find reference  to  the  same  and  implicit
approval thereof in the judicial quest to define the  expression  “industry”
in Bangalore Water Supply & Sewerage Board  Vs.  A  Rajappa  and  Others[5].
Paragraphs 147 and  148  of  the  opinion  of  Chief  Justice  M.H.  Beg  in
Bangalore Water Supply & Sewerage Board (supra),  which  are  quoted  below,
would clearly indicate the acceptance of this Court referred to earlier.
“147. My learned Brother has relied on what  was  considered  in  England  a
somewhat unorthodox method of construction in Seaford Court Estates Ltd.  v.
Asher [(1949 2 ALL ER 155, 164], where Lord Denning, L.J., said :

When a defect appears a Judge cannot simply fold his  hands  and  blame  the
draftsman. He must set to work on  the  constructive  task  of  finding  the
intention of Parliament — and then he must supplement the written  words  so
as to give ‘force and life’ to the intention of legislature. A Judge  should
ask himself the question how, if the makers of the Act had  themselves  come
across this ruck in the texture of it, they would have straightened it  out?
He must then do as they  would  have  done.  A  Judge  must  not  alter  the
material of which the Act is woven, but he  can  and  should  iron  out  the
creases.

When this case went up to the House of Lords it appears that the  Law  Lords
disapproved  of  the  bold  effort  of  Lord  Denning  to   make   ambiguous
legislation more comprehensible. Lord  Simonds  found  it  to  be  “a  naked
usurpation  of  the  legislative  function  under  the  thin   disguise   of
interpretation”. Lord  Morton  (with  whom  Lord  Goddard  entirely  agreed)
observed: “These heroics are out  of  place”  and  Lord  Tucker  said  “Your
Lordships would be acting in a legislative rather than a  judicial  capacity
if the view put forward by Denning, L.J., were to prevail.”

148. Perhaps, with the passage  of  time,  what  may  be  described  as  the
extension of a method resembling the “arm-chair rule”  in  the  construction
of wills. Judges can more frankly step into the  shoes  of  the  legislature
where an enactment leaves  its  own  intentions  in  much  too  nebulous  or
uncertain a state. In M. Pentiah v.  Muddala  Veeramallappa  [(1961)  2  SCR
295], Sarkar, J., approved of the reasoning, set out above, adopted by  Lord
Denning. And, I must say that, in a case where the definition of  “industry”
is left in the state in which we find it, the situation  perhaps  calls  for
some judicial heroics to cope with the difficulties  raised.    (Underlining
is mine)


12.   There  are  other  judicial  precedents  for  the  view  that  I  have
preferred to take and reach the same eventual  conclusion  that  my  learned
brother Prafulla C. Pant, J. has reached. I would like to refer to only  one
of them specifically, namely, the decision of a Constitution Bench  of  this
Court in Dadi Jagannadham Vs. Jammulu Ramulu and others[6].
      Order XXI Rule 89 read with Rule 92(2) of the CPC provided for  filing
of an application to set aside a sale. Such an application was  required  to
be made after deposit of the amounts specified within 30 days from the  date
of the sale. While  the  said  provision  did  not  undergo  any  amendment,
Article 127 of the Limitation Act, 1963 providing a time limit  of  30  days
for filing of the application to set aside the  sale  was  amended  and  the
time was extended from 30 days to 60 days. Taking note of  the  objects  and
reasons for the amendment of the Limitation Act,  namely,  that  the  period
needed to be enlarged from 30 to 60 days  as  the  period  of  30  days  was
considered to be too short, a Constitution  Bench  of  this  Court  in  Dadi
Jagannadham (supra) harmonised the  situation  by  understanding  Order  XXI
rule 89 to be casting an obligation on the Court to set aside  the  sale  if
the application for setting aside along  with  deposit  is  made  within  30
days. However, if such an application along with the deposit is  made  after
30 days but before the period of 60 days as contemplated by Article  127  of
the Limitation Act, 1963, (as  amended)  the  Court  would  still  have  the
discretion to set aside the same.  The period of 30 days in  Order  21  Rule
89/92(2) CPC referred to hereinabove was subsequently (by Act  22  of  2002)
amended to 60 days also.

13.   Turing to the case in  hand  there  can  be  no  dispute  that  before
enactment of the PC Act, Section 46A  of  the  BR  Act  had  the  effect  of
treating the concerned employees/office bearers  of  a  Banking  Company  as
public servants for the purposes of Chapter IX of the IPC by virtue  of  the
deeming provision contained therein.  The enactment of the PC Act  with  the
clear intent to widen the definition of ‘public servant’ cannot  be  allowed
to have the opposite effect by expressing judicial helplessness  to  rectify
or fill up what is a clear omission in Section  46A  of  the  BR  Act.   The
omission to continue to extend the deeming provisions in Section 46A of  the
BR Act  to the offences under Sections 7  to  12  of  the  PC  Act  must  be
understood to be  clearly  unintended  and  hence  capable  of  admitting  a
judicial exercise to fill up the same.  The unequivocal  legislative  intent
to widen the definition of “public servant” by enacting the  PC  Act  cannot
be allowed to be defeated by interpreting and understanding the omission  in
Section 46A of the BR Act to be incapable of being filled up by the court.

14.   In the above view of the matter, I also arrive at the same  conclusion
as my learned Brother Prafulla C. Pant, J. has  reached,  namely,  that  the
accused respondents are public servants for the purpose of  the  PC  Act  by
virtue of the provisions of Section 46A of the Banking Regulation Act,  1949
and  the  prosecutions  launched  against  the   accused   respondents   are
maintainable in law.   Consequently,  the  criminal  appeals  filed  by  the
C.B.I. are  allowed  and  Writ  Petition  (Criminal)  No.  167  of  2015  is
dismissed.

                                  ........................................J.
                                                  [RANJAN GOGOI]
NEW DELHI
FEBRUARY 23, 2016


                        IN THE SUPREME COURT OF INDIA

                       CRIMINAL APPELLATE JURISDICTION

                   CRIMINAL APPEAL NOS. 1077-1081 OF 2013

Central Bureau of Investigation,
Bank Securities & Fraud Cell            … Appellant

                                   Versus

Ramesh Gelli and others                      …Respondents

                                    WITH

                    WRIT PETITION (CRL.) NO. 167 OF 2015


Ramesh Gelli                               … Writ Petitioner

                                   Versus

Central Bureau of Investigation through
Superintendent of Police, BS & FC & Anr. …Respondents



                               J U D G M E N T


Prafulla C. Pant, J.


      Appellant Central Bureau of Investigation (C.B.I) has  challenged  the
judgment and order dated 13.07.2009, passed by the High Court of  Judicature
at Bombay whereby Criminal Revision Application No. 131 of  2007  (filed  by
CBI) has been dismissed, and Criminal Writ Petition Nos.  2400,  2401,  2402
and 2403 of 2008, filed by the accused/respondent are allowed in  part,  and
upheld the order dated 05.02.2007 passed by the  trial  court  i.e.  Special
Judge/Additional Sessions Judge, Mumbai.  The courts below  have  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.

Writ Petition (Criminal) No. 167 of 2015 has been filed  before  this  Court
by accused Ramesh Gelli praying quashing of charge sheet  filed  by  CBI  in
connection with FIR No. RC BD.1/ 2005/E/0003 dated  31.03.2005  relating  to
offences punishable under Section 120B read with  Sections  420,  467,  468,
471 of Indian Penal Code (IPC) and offence punishable  under  Section  13(2)
read with Section 13(1)(d) of the Prevention of Corruption  Act,  1988  (for
short “the P.C. Act, 1988”), pending  before  Special  Judge,  CBI,  Patiala
House Courts, New Delhi.

Briefly stated prosecution case is that the Global Trust  Bank  (hereinafter
referred as “GTB”) was incorporated on 29.10.1993 as banking  company  under
Companies Act, 1956.  Said Bank was issued licence  dated  06.09.1994  under
Banking Regulation Act, 1949 by Reserve Bank of  India  (for  short  “RBI”).
Ramesh Gelli (writ petitioner before this Court) was Chairman  and  Managing
Director, and Sridhar Subasri (writ petitioner before the  High  Court)  was
Executive Director of the Bank.  The two were also promoters  of  GTB.   For
raising their contribution to the capital, the  two  accused  (Ramesh  Gelli
and Sridhar Subasri) obtained loans from various individuals and  companies,
including M/s. Beautiful Group of Companies  of  accused  Rajesh  Mehta  and
Vijay Mehta, and M/s.  Trinity  Technomics  Services  Pvt.  Ltd.,  of  which
accused Vijay Mehta and his employees were directors.  M/s. Beautiful  Group
of Companies opened their first account in the name  of  Beautiful  Diamonds
Ltd. with G.T.B. in the year 1994-95.  Investigation revealed  that  various
credit facilities were allowed to said company by Ramesh Gelli  and  Sridhar
Subasri,  and  they  fraudulently  instructed  the  branch  heads,   without
following norms for sanctioning the  credit  facilities.   The  duo  (Ramesh
Gelli and Sridhar Subasri), abusing  their  official  positions,  sanctioned
higher credit limits to M/s. Beautiful Diamonds  Ltd.  against  regulations.
According to CBI, the investigation further revealed that  in  pursuance  to
the alleged conspiracy of the accused the funds of GTB  were  diverted,  and
release of Rs.5.00 crores was made in the name of  M/s.  Beautiful  Realtors
Ltd. on the request of Directors  of  M/s.  Beautiful  Diamonds  Ltd.   Said
amount  was  further  transferred  to  already  overdrawn  account  of  M/s.
Beautiful Diamonds Ltd.  In April, 2001, Directors  of  Beautiful  Group  of
Companies in pursuance of conspiracy with other  accused  submitted  another
application for sanction of Rs.3.00 crores as diamond loan in  the  name  of
M/s. Crystal Gems.  Ramesh Gelli, Sridhar Subasri  and  other  accused,  who
were Directors of Beautiful Group of Companies, said to  have  caused  total
wrongful loss of about Rs.41.00 crores to GTB.  The  accounts  of  Beautiful
Diamonds Ltd. and other companies, which  availed  funds  from  GTB,  should
have been declared Non Performing Assets (NPA),  but  accused  Ramesh  Gelli
and Sridhar  Subasri  allegedly  manipulated  and  showed  the  accounts  of
Beautiful  Realtors  Ltd.  and  Crystal  Gems  as  higher  profit   yielding
accounts. The scam did not come to the light till 2005.

On 14.08.2004 GTB merged/amalgamated with Oriental  Bank  of  Commerce  (for
brevity “OBC”).  An FIR dated 31.03.2005 in respect of  offences  punishable
under Sections 420, 467, 468, 471 IPC and  under  Section  13(2)  read  with
Section 13(1)(d) of the P.C. Act of 1988 was  registered  by  C.B.I  on  the
complaint made by the Chief Vigilance Officer, OBC, wherein the  allegations
were made that Ramesh Gelli and others, including Directors  of  M/s.  World
Tex Limited (for short “WTL”) entered into a criminal  conspiracy  to  cheat
GTB causing wrongful loss to  the  tune  of  Rs.17.46  crores,  and  thereby
earned corresponding wrongful gain.  After investigation, charge  sheet  was
filed in said matter before the Special Judge, CBI,  Patiala  House  Courts,
New Delhi.

Another First Information Report No. RC.12(E)/2005/ CBI/BS &  FC/Mumbai  was
registered by C.B.I. on 09.08.2005 for  offences  punishable  under  Section
120B read with Sections 409 and 420 IPC, initially against two employees  of
GTB and  two  private  persons  Rajesh  Mehta  and  Prashant  Mehta  on  the
complaint dated 26.07.2005 lodged by the Chief Vigilance  Officer,  OBC.  It
is relevant to mention here that GTB was a private sector bank,  before  its
amalgamation in August 2004 with OBC, a public sector bank.  In the FIR  No.
RC 12E/2005/CBI/B.S & FC/Mumbai Dt. 09.08.2005,  it  was  alleged  that  GTB
sanctioned and disbursed loans by throwing  all  prudent  banking  norms  to
winds and thus created a  large  quantum  of  Non  Performing  Assets  (NPA)
jeopardizing the interests of thousands of depositors, but  painted  a  rosy
financial picture.  These loan transactions came to the light  during  audit
after amalgamation of GTB with OBC, and it  was  noted  that  two  accounts,
namely that of M/s. Beautiful Diamonds Ltd. and M/s. Crystal Gems were  used
to siphon out funds of the Bank.  After investigation,  charge  sheets  were
filed in this matter before Special Judge, Mumbai  in  respect  of  offences
punishable under Section 120B read with Sections 409 and 420 IPC  and  under
Section 13(2) read with Section 13(1)(d) of the P.C.  Act,  1988.   However,
on 05.02.2007 the Special Judge,  Mumbai  declined  to  take  cognizance  of
offence punishable under Section 13(2) read with S.3(1)(d)  P.C  Act,  1988,
on the ground that accused No. 1 Ramesh Gelli  and  accused  No.  2  Sridhar
Subasri were not public servants on the  dates  transactions  said  to  have
taken place, i.e. before amalgamation, and the Special Judge  directed  that
the charge  sheet  may  be  returned  for  being  submitted  to  appropriate
Metropolitan  Magistrate  for  taking  cognizance  in  respect  of  offences
punishable under IPC, i.e. for offence other than punishable under the  P.C.
Act, 1988.

Since the High Court of Judicature at Bombay  has  upheld  the  order  dated
05.02.2007 by the impugned order, the CBI has approached this Court  through
Special Leave.  Further, since W.P.(Crl.)  No.  167/2015  filed  by  accused
Ramesh Gelli also involves similar question of law in the case at Delhi,  as
such both the connected matters are being disposed of by this common  order.


The common question of law involved in these criminal appeals and  connected
writ petition, filed before us, is:

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 ?

It is admitted fact that GTB was  a  private  sector  bank  operating  under
banking licence dated 06.09.1994, issued by  RBI  under  Banking  Regulation
Act,  1949.   It   is   also   not   disputed   that   on   14.08.2004   GTB
merged/amalgamated with OBC. The transactions of  alleged  fraud,  cheating,
misappropriation and corruption relate to the period between 1994  to  2001,
i.e. prior to amalgamation  with  public  sector  bank  (OBC).  The  dispute
relates as to whether the then Chairman-cum-Managing Director and  Executive
Director of GTB come under definition of ‘public servant’ or  not,  for  the
purposes of the P.C. Act, 1988.

It is vehemently argued by Shri Mohan Parasaran and  Shri  Sidharth  Luthra,
senior advocates appearing for the accused that the accused are  not  public
servants, and cognizance cannot be taken against the writ petitioner  Ramesh
Gelli and accused/respondent Sridhar  Subasri,  who  were  said  to  be  the
Chairman-cum-Managing Director and Executive Director  respectively  of  GTB
before its amalgamation. It is further argued that a person cannot  be  said
to have been performing a public duty unless he holds  some  public  office,
and in this connection it is submitted that the accused  did  not  hold  any
public office during the period offences said to have been committed. It  is
also contended that since Sections 161 to 165A in  Chapter  IX  of  IPC  are
repealed by Section 31 of P.C. Act, 1988, Section 46A of Banking  Regulation
Act, 1949 is of little help to the prosecution. Mr. Luthra,  learned  senior
counsel, further submitted that the relationship between the customer  of  a
bank, and the bank is that of a creditor and debtor,  and  the  transactions
between the two are commercial  in  nature,  as  such,  no  public  duty  is
involved.

On the other hand, Shri Tushar Mehta, learned senior counsel for CBI  argued
that accused Ramesh Gelli and Sridhar Subasri were public servants  in  view
of definition contained in Section 2(c) of P.C. Act,  1988.   Our  attention
is also drawn  to  Section  46A  of  Banking  Regulation  Act,  1949,  which
provides that a whole time Chairman, Managing Director,  or  Director  of  a
banking company shall be  deemed  to  be  a  public  servant.   It  is  also
contended that a banking company as defined under  Section  5(b)  read  with
Section 35(A) of Banking Regulation Act, 1949 is nothing  but  extended  arm
of Reserve Bank of India.  In support of arguments  advanced  on  behalf  of
CBI, reliance is placed on the principle of law laid down by this  Court  in
Govt.  of Andhra Pradesh and Others vs. P.Venku  Reddy[7].   Lastly,  it  is
submitted  that  a  private  body  discharging  public  duty   or   positive
obligation of public nature actually  performs  public  function.   In  this
connection, reference was made to the observations made  by  this  court  in
paragraph 18, in Federal Bank Ltd. vs. Sagar Thomas and others[8].

We have considered the arguments and the counter  arguments  and  also  gone
through the relevant case laws on the issue.

Before further discussion it is just and proper to examine  the  object  for
which the Prevention of Corruption Act, 1988 was enacted by the  Parliament.
 The Statement of Objects and Reasons of the Bill is reproduced below: -
      “1.   The bill is intended to make the existing  anti-corruption  laws
more  effective  by  widening  their  coverage  and  by  strengthening   the
provisions.

      2.    The Prevention of Corruption Act,  1947,  was  amended  in  1964
based  on  the  recommendations  of  the  Santhanan  Committee.   There  are
provisions in Chapter IX of the  Indian  Penal  Code  to  deal  with  public
servants and those who abet them by way of criminal misconduct.   There  are
also provisions in the Criminal Law Amendment  Ordinance,  1944,  to  enable
attachment of ill-gotten wealth obtained through  corrupt  means,  including
from transferees of such wealth.  The bill seeks to  incorporate  all  these
provisions with modifications so as to make the  provisions  more  effective
in combating corruption among public servants.

      3.    The bill, inter  alia,  envisages  widening  the  scope  of  the
definition of the expression ‘public  servant’,  incorporation  of  offences
under sections 161  to  165A  of  the  Indian  Penal  Code,  enhancement  of
penalties provided for these offences and incorporation of a provision  that
the  order  of  the  trial  court  upholding  the  grant  of  sanction   for
prosecution would be final if it has not already  been  challenged  and  the
trial has commenced.  In order to expedite the proceedings,  provisions  for
day-to-day trial of cases and prohibitory provisions with  regard  to  grant
of stay and exercise of powers of  revision  or  interlocutory  orders  have
also been included.

      4.    Since the provisions of section 161A  are  incorporated  in  the
proposed legislation with an enhanced punishment, it  is  not  necessary  to
retain those sections  in  the  Indian  Penal  Code.   Consequently,  it  is
proposed to delete those sections with the necessary saving provision.

      5.    The notes on clauses explain in detail  the  provisions  of  the
Bill.”

                                                         (Emphasis supplied)

      From the Statement of Objects and Reasons  of  the  P.C.  Bill  it  is
clear that the Act was  intended  to  make  the  anti  corruption  law  more
effective by widening its coverage. It is  also  clear  that  the  Bill  was
introduced to widen the scope of the definition of ‘public servant’.  Before
P.C. Act, 1988, it was the Prevention of Corruption Act, 1947  and  Sections
161 to 165A in Chapter IX of IPC which  were  governing  the  field  of  law
relating  to  prevention  of  corruption.   The  Parliament   repealed   the
Prevention of Corruption Act, 1947 and also omitted Section 161 to  165A  of
I.P.C as provided under Sections 30 and 31 of P.C. Act, 1988.  Since  a  new
definition of ‘public servant’ is given under P.C.  Act,  1988,  it  is  not
necessary here to reproduce the definition  of  ‘public  servant’  given  in
Section 21 of IPC.

Section 2(c) of P.C. Act, 1988,  which  holds  the  field,  defines  ‘public
servant’ as under: -

“2.(c) "public servant" means-

any person in the service or pay of the Government  or  remunerated  by  the
Government by fees or commission for the performance of any public duty;

any person in the service or pay of a local authority ;

any person in the service or pay of 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;

any Judge, including any person empowered by law to  discharge,  whether  by
himself or as a member of any body of persons, any adjudicatory functions;

any person authorised by  a  court  of  justice  to  perform  any  duty,  in
connection with the  administration  of  justice,  including  a  liquidator,
receiver or commissioner appointed by such court;

any arbitrator or other  person  to  whom  any  cause  or  matter  has  been
referred for decision or report by a court of  justice  or  by  a  competent
public authority;

any person who holds an office  by  virtue  of  which  he  is  empowered  to
prepare, publish, maintain or revise an electoral  roll  or  to  conduct  an
election or part of an election;

any person who holds an office by  virtue  of  which  he  is  authorised  or
required to perform any public duty;

any person who is the president,  secretary  or  other  office-bearer  of  a
registered cooperative society engaged in agriculture,  industry,  trade  or
banking, receiving or having received any financial  aid  from  the  Central
Government or a State Government or from any corporation established  by  or
under a Central, Provincial or State Act, or any authority or body owned  or
controlled or aided by the Government or a Government company as defined  in
section 617 of the Companies Act, 1956;

any person who is a chairman, member or employee of any  Service  Commission
or Board, by whatever name called, or a member of  any  selection  committee
appointed by such Commission or Board for the conduct of any examination  or
making any selection on behalf of such Commission or Board;

any person who is  a  Vice-Chancellor  or  member  of  any  governing  body,
professor, reader, lecturer or any other teacher or  employee,  by  whatever
designation called, of any University and any  person  whose  services  have
been availed of by a University or any other public authority in  connection
with holding or conducting examinations;

any person who is  an  office-bearer  or  an  employee  of  an  educational,
scientific, social,  cultural  or  other  institution,  in  whatever  manner
established, receiving or having received any financial assistance from  the
Central Government or  any  State  Government,  or  local  or  other  public
authority.

      Explanation 1.-Persons falling under any of the above sub-clauses  are
public servants, whether appointed by the Government or not.

      Explanation 2.-Wherever the words "public servant" occur,  they  shall
be understood of every person who is in actual possession of  the  situation
of a public servant, whatever legal defect there may  be  in  his  right  to
hold that situation.”

Above definition shows that under Clause (viii) contained  in  Section  2(c)
of P.C. Act, 1988  a person who holds an office by virtue  of  which  he  is
authorized or required to perform any public  duty,  is  a  public  servant.
Now, for the purposes of the present case this court is required to  examine
as to whether the chairman/managing director  or  executive  director  of  a
private bank operating under licence issued by RBI under Banking  Regulation
Act, 1949, held/holds an office and performed /performs public  duty  so  as
to attract the definition of ‘public servant’ quoted above.

Section 2(b) of P.C. Act, 1988 defines ‘public duty’ as under:
         “public duty” means a duty in the discharge  of  which  the  State,
the public or the community at large has an interest”.

But, what is most relevant for the purpose of this case is  Section  46A  of
Banking Regulation Act, 1949, which reads as under: -
“46A. Chairman, director etc., to be public servants  for  the  purposes  of
Chapter IX of the Indian Penal Code. – Every chairman who is appointed on  a
whole-time basis, managing director, director, auditor, liquidator,  manager
and any other employee of a banking company shall be deemed to be  a  public
servant for the purposes of Chapter IX of  the  Indian  Penal  Code  (45  of
1860).”

                                                         (Emphasis supplied)

Section 46A was inserted in Banking Regulation Act, 1949 by  Act  No.  95/56
with  effect  from  14.01.1957.   The  expression  “every  chairman  who  is
appointed on a whole time basis, managing director, director,  auditor”  was
substituted by Act No. 20/94 with effect from 31.01.1994 in place of  “every
chairman, director, auditor”.   As  such  managing  director  of  a  banking
company is also deemed  to  be  a  public  servant.   In  the  present  case
transactions in question relate to the period subsequent to 31.01.1994.

  In Federal Bank Ltd. v. Sagar Thomas and others  (supra)  this  Court  has
held that a private company carrying banking business as  a  scheduled  bank
cannot be termed as  a  company  carrying  any  statutory  or  public  duty.
However, in said case the Court was examining as  to  whether  writ  can  be
issued under Article 226 of the Constitution of India  against  a  scheduled
bank or not.  There was no  issue  before  the  Court  relating  to  deeming
fiction contained in Section 46A of Banking Regulation Act, 1949 in  respect
of a chairman/managing director or director of  a  banking  company  against
whom a crime relating to anti-corruption was registered.
In a recent case  of  State  of  Maharashtra  &  ors.  v.  Brijlal  Sadasukh
Modani[9], this Court has observed as under: -
“21.  As we notice, the High Court has really been swayed by the concept  of
Article 12 of the Constitution, the provisions contained  in  the  1949  Act
and in a mercurial manner taking note  of  the  fact  that  the  multi-state
society is not controlled or aided by the  Government  has  arrived  at  the
conclusion.  In our considered opinion, even any grant or  any  aid  at  the
time of establishment of the society  or  in  any  construction  or  in  any
structural concept or any aspect would be an aid.  We are inclined to  think
so as the term ‘aid’ has not  been  defined.   A  sprinkle  of  aid  to  the
society will also  bring  an  employee  within  the  definition  of  ‘public
servant’.  The concept in entirety has to be observed  in  the  backdrop  of
corruption…….”

In P.V. Narasimha Rao vs. State (CBI/SPE)[10], this Court has explained  the
word “office” in following manner: -

“61.  ……..The word “office” is normally understood to mean  “a  position  to
which certain duties are attached, especially a place  of  trust,  authority
or service  under  constituted  authority”.  (See:  Oxford  Shorter  English
Dictionary, 3rd Edn., p. 1362.) In McMillan v.  Guest  (1942  AC  561)  Lord
Wright has said:

“The word ‘office’ is of indefinite  content.  Its  various  meanings  cover
four columns of the New English Dictionary, but I take as the most  relevant
for purposes of this case the following:

‘A position or place to which certain duties are  attached,  especially  one
of a more or less public character.’ ”

In the same case Lord Atkin gave the following meaning:

“… an office or employment  which  was  subsisting,  permanent,  substantive
position, which had an existence independent of the person  who  filled  it,
which went on and was filled in succession by successive holders.”

In Statesman (P) Ltd. v.  H.R.  Deb  (AIR  1968  SC  1495)  and  Mahadeo  v.
Shantibhai [(1969) 2 SCR 422] this Court has adopted the  meaning  given  by
Lord Wright when it said:

“An office means no more  than  a  position  to  which  certain  duties  are
attached.”

Attention of this court is drawn on behalf of the accused  to  the  case  of
Housing Board of Haryana v.  Haryana  Housing  Board  Employees’  Union  and
others[11],  wherein  this  Court  has  held  that  when  particular   words
pertaining to a class of genus are followed by general  words,  the  latter,
namely, the general words are construed as limited  to  the  things  of  the
same kind as those specified, and this is  known  as  the  rule  of  ejusdem
generis reflecting an  attempt  to  reconcile  incompatibility  between  the
specified and general words.  This case is of little help to the accused  in
the  present  case  as  managing  director  and  director  are  specifically
mentioned in Section 46A of Banking Regulation Act, 1949.

In Manish Trivedi v. State  of  Rajasthan[12],  which  pertains  to  a  case
registered against a councillor under Prevention of  Corruption  Act,  1988,
this Court, while interpreting the word  “public  servant”,  made  following
observations: -
“14.  Section 87 of the  Rajasthan  Municipalities  Act,  1959  makes  every
Member to be public servant within the meaning of Section 21  of  the  Penal
Code, 1860 and the same reads as follows:

“87. Members, etc. to be deemed public servants.—(1) Every  member,  officer
or servant, and every lessee of the levy of any  municipal  tax,  and  every
servant or other employee of any such lessee shall be deemed to be a  public
servant within the meaning of Section 21 of the Penal  Code,  1860  (Central
Act 45 of 1860).

(2) The word ‘Government’ in  the  definition  of  ‘legal  remuneration’  in
Section 161 of that Code shall, for the purposes of sub-section (1) of  this
section, be deemed to include a Municipal Board.”

From a plain reading of the aforesaid provision it is evident  that  by  the
aforesaid section the legislature has created a fiction  that  every  Member
shall be deemed to be a public servant within the meaning of Section  21  of
the Penal Code. It is well settled that  the  legislature  is  competent  to
create a legal fiction. A deeming provision is enacted for  the  purpose  of
assuming the existence of a fact which  does  not  really  exist.  When  the
legislature creates a legal fiction, the court has  to  ascertain  for  what
purpose the fiction is created and after ascertaining this,  to  assume  all
those facts and consequences which are incidental or inevitable  corollaries
for giving effect to the fiction. In our  opinion,  the  legislature,  while
enacting Section 87 has, thus, created a legal fiction for  the  purpose  of
assuming that the Members, otherwise, may not be public servants within  the
meaning of Section 21 of the Penal Code but shall be assumed  to  be  so  in
view of the legal fiction so created. In view of the aforesaid, there is  no
escape from the conclusion that the appellant is  a  public  servant  within
the meaning of Section 21 of the Penal Code.

            xxx              xxx             xxx

16. Under the scheme of the Rajasthan Municipalities Act it is evident  that
the appellant happens to be a Councillor and a Member of the Board.  Further
in view of language of Section 87 of the Rajasthan  Municipalities  Act,  he
is a public servant within the meaning of Section 21 of the Penal Code.  Had
this been a case of prosecution under  the  Prevention  of  Corruption  Act,
1947 then this would have been the end of the matter. Section 2 of this  Act
defines “public servant” to mean public servant as defined under Section  21
of the Penal Code. However, under the Prevention of  Corruption  Act,  1988,
with which we  are  concerned  in  the  present  appeal,  the  term  “public
servant” has been defined  under  Section  2(c)  thereof.  In  our  opinion,
prosecution under this Act can take place only of  such  persons,  who  come
within the definition of public servant therein. The definition  of  “public
servant” under the Prevention of Corruption Act, 1947 and Section 21 of  the
Penal Code is of no consequence. The appellant is sought  to  be  prosecuted
under the Prevention of Corruption Act, 1988 and, hence,  to  determine  his
status it would be necessary to look into its interpretation  under  Section
2(c) thereof, read with the provisions of the Rajasthan Municipalities Act.


            xxx              xxx             xxx

19. The present Act (the 1988 Act) envisages widening of the  scope  of  the
definition of the expression “public servant”. It was brought  in  force  to
purify public administration.  The  legislature  has  used  a  comprehensive
definition of “public servant” to  achieve  the  purpose  of  punishing  and
curbing corruption among public servants. Hence, it would  be  inappropriate
to limit the contents of the  definition  clause  by  a  construction  which
would be against the spirit of the statute. Bearing in mind this  principle,
when we consider the case of the appellant, we have no doubt that  he  is  a
public servant within the meaning of Section 2(c) of the Act. Clause  (viii)
of Section 2(c) of the present Act makes any person, who holds an office  by
virtue of which he is authorised or required to perform any public duty,  to
be a public servant. The word “office” is of indefinite connotation and,  in
the present context, it would mean a position  or  place  to  which  certain
duties are attached and  has  an  existence  which  is  independent  of  the
persons who fill it. Councillors and Members  of  the  Board  are  positions
which exist under the Rajasthan Municipalities Act.  It  is  independent  of
the person who fills it. They perform various duties which are in the  field
of public duty. From the conspectus of what we have observed  above,  it  is
evident that appellant is a public servant within Section 2(c)(viii) of  the
Prevention of Corruption Act, 1988.”

                                                         (Emphasis supplied)

At the end it is relevant to mention that in the case of Govt. of  A.P.  and
others vs. Venku Reddy (supra), in which  while  interpreting  word  ‘public
servant’ this court has made following observations:

      “12. In construing the definition of “public servant”  in  clause  (c)
of Section 2 of the 1988 Act, the court is required  to  adopt  a  purposive
approach as would give effect to the intention of the legislature.  In  that
view the Statement of Objects and Reasons contained in the Bill  leading  to
the passing of the Act can be taken assistance of. It gives  the  background
in which the legislation was enacted. The present Act,  with  a  much  wider
definition of “public servant”,  was  brought  in  force  to  purify  public
administration.  When  the  legislature  has  used  such   a   comprehensive
definition of “public servant” to  achieve  the  purpose  of  punishing  and
curbing growing corruption in government  and  semi-government  departments,
it would be appropriate not to limit the contents of the  definition  clause
by construction which would be  against  the  spirit  of  the  statute.  The
definition of “public servant”, therefore,  deserves  a  wide  construction.
(See State of M.P. v. Shri Ram Singh (2000) 5 SCC 88)”

In the light of law laid down by this court  as  above,  it  is  clear  that
object of enactment of P.C. Act, 1988, was to make the anti  corruption  law
more effective and widen its coverage.  In  view  of  definition  of  public
servant in Section 46A of  Banking  Regulation  Act,  1949  as  amended  the
Managing Director and Executive Director  of  a  Banking  Company  operating
under  licence  issued  by  Reserve  Bank  Of  India,  were  already  public
servants, as such  they  cannot  be  excluded  from  definition  of  ‘public
servant’. We are of the view that over the  general  definition  of  ‘public
servant’ given in Section 21  of  IPC,  it  is  the  definition  of  ‘public
servant’ given in the P.C. Act, 1988, read  with  Section  46-A  of  Banking
Regulation Act, which holds the field for the  purposes  of  offences  under
the said Act.  For banking business what cannot be forgotten is Section  46A
of Banking Regulation Act, 1949 and merely for the reason that Sections  161
to 165A of IPC have been repealed  by  the  P.C.  Act,  1988,  relevance  of
Section 46A of Banking Regulation Act, 1949, is not lost.

Be it noted that when Prevention of Corruption Act, 1988  came  into  force,
Section 46 of Banking Regulation Act, 1949 was already in place,  and  since
the scope of  P.C.  Act,  1988  was  to  widen  the  definition  of  “public
servant”.  As such, merely for the reason that  in  1994,  while  clarifying
the word “chairman”, legislature did not substitute words “for the  purposes
of Prevention  of  Corruption  Act,  1988”   for  the  expression  “for  the
purposes of Chapter IX of the Indian Penal Code (45 of  1860)”   in  Section
46A  of  Banking  Regulation  Act,  1949,  it  cannot  be  said,  that   the
legislature had intention to make Section 46A inapplicable for the  purposes
of P.C. Act, 1988, by which Sections 161 to 165A of IPC  were  omitted,  and
the offences stood replaced by Sections 7 to 13 of P.C. Act, 1988.


A law which is not shown ultravires must be given proper  meaning.   Section
46-A of Banking  Regulation  Act,  1949,  cannot  be  left  meaningless  and
requires harmonious construction.  As  such  in  our  opinion,  the  Special
Judge (CBI) has erred in not taking cognizance of offence  punishable  under
Section 13(2) read with Section 13(1)(d) of P.C. Act,  1988.    However,  we
may make it clear that in the present case the accused cannot be said to  be
public servant within  the   meaning of   Section 21 IPC,  as  such  offence
under Section 409 IPC may not get attracted, we leave it open for the  trial
court to take cognizance of other offences  punishable  under  Indian  Penal
Code, if the same get attracted.

Therefore, having considered the  submissions  made  before  us,  and  after
going through the  papers  on  record,  and  further  keeping  in  mind  the
Statement of Objects and Reasons of  the  Bill  relating  to  Prevention  of
Corruption Act, 1988 read with Section 46A of Banking Regulation Act,  1949,
we are of the opinion that the courts below have erred  in  law  in  holding
that accused Ramesh Gelli and Sridhar Subasri,  who  were  Chairman/Managing
Director and  Executive  Director  of  GTB  respectively,  were  not  public
servants for the purposes of Prevention of Corruption Act, 1988.   As  such,
the orders impugned are  liable  to  be  set  aside.   Accordingly,  without
expressing any opinion on final merits of the cases before the trial  courts
in Mumbai and Delhi,  Criminal Appeal Nos. 1077-1081 of 2013 filed  by  CBI,
are allowed, and Writ Petition (Crl.) No. 167 of 2015 stands dismissed.

 


                                                              ……………………………..J.
                                                          [PRAFULLA C. PANT]
New Delhi;
February 23, 2016.

 

 


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[1]    (1998) 4 SCC 626
[2]    (1942) AC 561
[3]    (1949) 2AllER 155 at page 164
[4]    (1950)2AllER 1226
[5]    (1978) 2 SCC 213
[6]    (2001) 7 SCC 71
[7]    (2002) 7 SCC 631)
[8]    (2003) 10 SCC 733
[9]    2015 SCC Online SC 1403

[10]   (1998) 4 SCC 626

[11]   (1996) 1 SCC 95

[12]   (2014) 14 SCC 420


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