N Criminal Appeal No 284 of 1974
From the judgment and order dated the 12th April 1973 of the Madhya Pradesh High Court in Criminal Appeal No 43 of 1971
F section Nariman Addl
Solicitor General of India P P Rao and R N Sachthey for the appellant
The respondent appeared in person
The Judgment of the Court was delivered by FAZAL ALI J
This is an appeal by State of MP by certificate granted by the High Court of Madhya Pradesh under article 1341c of the Constitution against its judgment and order dated April 12 1973 by which the respondent who was convicted by the Special Judge Indore under section 220 IPC and s52 read with section 51d of the Prevention of Corruption Act 1947 and sentenced to one year rigorous imprisonment on each count was acquitted by the High Court
Briefly put the prosecution case against the respondent was that he was an employee in the Heavy Electricals India Ltd Bhopal which is a Government company and was working at the relevant time as Personal Assistant to Shri C Rae Manager Purchasing  Main Stores of the Company
Mr Rae was allotted a new Fiat Car at Bombay on priority basis and the respondent and Mr Rae had arrived at Bombay to take delivery of the car on March 14 1965 and they stayed there till March 13
Mr Rae however left on the morning of March 13 1965 directing the respondent to obtain delivery of the Fiat Car on March 14 1965 and then proceed to Indore
Ultimately the car was brought to Bhopal on March 16 1965 at about 2 30 PM
On March 23 1965 the respondent submitted his TA bill Ext
P 21 showing his departure from Bombay on March 16 1965 by car at 2 00 PM 8 and arrival at Bhopal on March 17 1965 at 6 30 PM and claimed daily allowance at the rate of Rs 12 per day for halt at Bombay
The respondent accordingly received the full amount of the TA Bill on April 3 1965
The allegation against the respondent was that he had prepared a false TA Bill and had cheated the Government Company and was guilty of serious criminal misconduct as envisaged by the Prevention of Corruption Act
The learned Special Judge Indore accepted the prosecution case and convicted the respondent as indicated above
The respondent then filed an appeal before the High Court of Madhya Pradesh which allowed appeal mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Prevention of Corruption Act his trial under the said Act was without jurisdiction
The High Court however left it open to the Government to prosecute the respondent under the relevant law if necessary
It is against this order of the High Court that the State of MP has filed this appeal before us after obtaining certificate of fitness from the High Court
The short point taken by the respondent before the High Court was that as the word public servant has not been expressive defined in the Prevention of Corruption Act 1947 it has borrowed the definition from section 21 of the Indian Penal Code such a definition amounts to legislation by incorporation and therefore any subsequent amendment addition or alteration in the Indian Penal Code would not at all affect the incorporated provision in the Prevention of Corruption Act
The High Court seems to have readily accepted this contention and has accordingly held that as the various amendments to section 21 of the Indian Penal Code cannot apply to the provisions of the Prevention of Corruption Act and therefore the respondent being only an employee of the Government Company does not fall within the ambit of public servant as defined in section 21 of the Indian Penal Code prior to the amendment
In order of appreciate this point it may be necessary to set out the scheme of the Prevention of Corruption Act hereinafter referred to as the Act  with particular reference to section 21 of the Indian Penal Code hereinafter referred to as the Penal Code  which has been incorporated in the Act
To begin with the preamble to the Act clearly shows that the Act has been passed for more effective prevention of bribery and corruption bribery being a form of corruption
Section 2 of the Act runs thus For the purpose of this Act Public servant means a public servant as defined in section 21 of the Indian Penal Code
 It would be seen that section 2 of the Act completely incorporates the provision of section 21 of the Penal Code in order to define a public servant
The Legislature in its wisdom did not think it necessary to give a separate definition of public servant in the Act but in order to achieve brevity in legislation incorporated the provision of section 21 of the Penal Code into it
before the Criminal Law Amendment Act 1958 Act No 11 of 1958 was passed section 21 of the Penal Code consisted only of eleven clauses and an employee under the 9 Corporation or a Government Company did not fall within the purview of any of the clauses of section 21 of the Penal Code
Thus when the Legislature incorporated the provisions of section 21 of the Penal Code in the Act in the year 1947 cl 12 was not there at all on the statute book of the Penal Code
The High Court took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment therefore it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act namely the Penal Code
It appears however that by virtue of the Criminal Law Amendment Act 1958 twelfth clause was inserted in section 21 of the Penal Code which runs as follows Twelfth
Every officer in the service or pay of a local authority or of a corporation engaged in any trade or industry which is established by a Central Provincial or State Act or of a Government company as define in section 617 of the  This Act also amended certain provisions of the Prevention of Corruption Act 1947 in enlarging the concept of criminal misconduct but it did not at all amend any portion of section 2 of the Act perhaps the reason being that in view of the enlargement of the definition of public servant in section 21 of the Penal Code express amendment of section 2 of the Act was not necessary
By virtue of the Anti Corruption Laws Amendment Act 1964 Act No XL of 1964 clause 12 of s 21 of the Penal Code was substituted as follows Twelfth
Every person a in the service or pay of the Government or remunerated by fees or commission for the performance of any public duty by the Government b in the service or pay of a local authority a corporation established by or under a Central Provincial or State Act or a Government company as defined in section 617 of the  It would thus appear that by virtue of these two amendments the Parliament sought to enlarge the definition of public servant so as to include even an employee of a Government company or a corporation with the avowed object of stamping out corruption at various levels prevailing in the country
The question that arises for consideration is whether the sub sequent amendments to section 21 of the Penal Code after its incorporation in the Act would have to be read into the Act or not
It is true that if the doctrine of legislation by incorporation is strictly applied in this 10 case then the definition of section 21 of the Penal Code prior to its amendment by Act 11 of 1958 and Act XL of 1964 would alone stand and if this is so the respondent would not be a public servant within the meaning of section 21 of the Penal Code
It is well settled that where the subsequent Act incorporates a provision of the previous Act the position is that the borrowed provision is bodily lifted from the previous Act and placed in the subsequent Act and becomes an integral and independent part of it so as to remain unaffected by any repeal change or amendment in the previous Act
In Clarke vs Bradlaugh1 Brett LJ observed as follows   but there is a rule of construction that where a statute is incorporated by reference into a second statute the repeal of the first statute by a third does not affect the second These observations were noticed and approved by this Court in Ram Sarup vs Munshi and others1 where this Court made the following observations Where the provision of an Act are incorporated by reference in a later Act the repeal of the earlier Act has in general no effect upon the construction or effect of the Act in which its provisions have been incorporated
The effect of incorporation is stated by Brett LJ in Clarke vs Bradiaugh Where a statute is incorporated by reference into a Second statute the repeal of the first statute by a third does not affect the second
 In the circumstances therefore the repeal of the Punjab Alienation of Land Act of 1900 has no effect on the continued operation of the Pre emption Act and the expression agricultural land  in the later Act has to be read as if the definition in the Alienation of Land Act had been bodily transposed into it F The doctrine of incorporation by reference to earlier legislation has been very aptly described by Lord Esher M R in In re Wood s Estate Ex parte Her Majesty s Commissioners of Works and Building3 where he observed as follows If a subsequent Act brings into itself by reference some of the clauses of a former Act the legal effect of that as has often been held is to write those sections into the new Act just as if they had been actually written in it with the pen or printed in it and the moment you have those clauses in the later Act you have no occasion to refer to the former Act at all For all practical purposes therefore those sections of the Act of 1840 are to be dealt with as if they were actually in the Act of 1855
 11 Craies on Statute Law 7th Edition while referring to the observations of Brett LJ observed at p 361 as follows There is a rule of construction that where a statute is incorporated by reference into a second statute the repeal of the first statute by a third does not affect the second as the incorporated provisions have become part of the second statute The Privy Council in Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd 1 while amplifying this doctrine observed as follows Their Lordship regard the local Act as doing nothing more than incorporating certain provisions from an existing Act and for convenience of drafting doing so by reference to that Act instead of setting out for itself at length the provisions which it was desired to adopt
The independent existence of the two Acts is therefore recognized despite the death of the parent Act its offspring survives in the incorporating Act
Though no such saving clause appears in the General Clauses Act their Lordships think that the principle involved is as applicable in India as it is in this country
 Thus the position is that after the provision of the previous Act is incorporated in the subsequent Act the off spring namely the incorporated provisions survives even if the previous Act is repealed amended declared a nullity or erased from the statute book
The High Court appears to have relied on all these decisions in order to come to its conclusion that as the Act has incorporated the provisions of section 21 of the Penal Code in section 2 thereof any amendment in the previous Act namely the Penal Code will not affect the subsequent Act namely the Prevention of Corruption Act
It was argued before the High Court as also before us that the Act and the Penal Code are statutes in pari materia and form part of one system and they should therefore be interpreted as enforcing each other
Thus any change in the definition of section 21 of the Penal Code would have to be implicitly read into s2 of the Act
The Additional Solicitor General Mr Nariman appearing for the State however conceded later on and in our opinion rightly
that it may not be possible to hold that the Act and the Penal Code were statutes in pari materia
It would appear that the Act is a completely self contained statute with its own provisions and has created a specific offence of criminal misconduct which is quite different from the offence of bribery as defined in the Penal Code
Both these statutes have different objects and create offences with separate ingredients
No authority has been cited before us in support of the proposition that the Act namely the Prevention of Corruption Act and the Penal Code are statutes in pari materia so as to form one system
12 In the State of Madras vs Vaidyanath Aiyar 1 this Court while construing the meaning of the phrase it shall be presumed  appearing in section 4 of the Act utilised the construction placed on the phrase shall presume  in the Evidence Act by holding that the Evidence Act was a statute in pari materia with the Prevention of Corruption Act
There can be no doubt that the Evidence Act and the Prevention of Corruption Act form part of one system because the rules of the Evidence Act with minor exceptions apply to trials of offences created under the Act
This principle however cannot apply to the present case where as we have already stated the areas of the two statutes namely the Act and the Penal Code are entirely different
Secondly while the Indian Penal Code is essentially a penal statute of a much wider scope than the Act the Act no doubt contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone In other words public servants alone fall within the mischief of the Act ie the Prevention of Corruption Act and no one else
Mr Nariman then argued that having regard to the preamble and the object of the Act and the Penal Code there can be no doubt that the Act was undoubtedly a statute supplemental to the Penal Code and that being the position any amendment in the definition of section 21 of the Penal Code would have to be read into section 2 of the Act because once the definition of s21 of the Penal Code was incorporated in the Act it had to be imported into the other Act and considered pari passu the Penal Code
In our opinion this argument is well founded and must prevail
We have already indicated that the object of the Act was to eradicate corruption from various levels either in Government services or in services under the Corporations or Government companies
The Penal Code no doubt creates offences like those mentioned in sections 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expanding needs of the nation
In these circumstances it was considered necessary to evolve a quick expeditious and effective machinery to destroy the evil of corruption existing in any from
If therefore the Penal Code with the same object enlarged the definition of s21 by adding the twelfth clause by virtue of the Criminal Law Amendment Act 1958 and the Anti corruption Laws Amendment Act 1964 there is no reason why the extended meaning to the provision of s2 of the Act as borrowed from section 21 of the Penal Code be not given to that section
This Court in section Gangoli vs The State of Uttar Pradesh2 while interpreting section 2 of the Prevention of Corruption Act that the accused were public servants within the meaning of the Act being employees of the East Indian Railway which was managed and owned by the Government of India observed as follows The East Indian Railway which has employed the appellants was at the material time owned by the Government of India and managed and run by it and so if the status of the appellants had to be judged at the material date solely 13 by reference to s21 of the Code there would be no difficulty in holding that they are public servants as defined by the said section
 Even while discussing the exact ambit and scope of the Prevention of Corruption Act this Court observed in M Narayanan Nambiar vs Slate of Kerala1 as follows The preamble indicates that the Act was passed as it was expedient to make more effective provision for the prevention of bribery and corruption
The long title as well as the preamble indicate that the Act was passed to put down the said social evil ie bribery and corruption by public servant 
It also aims to protect honest public servants from harassment by prescribing that the investigation against them could be made only by police officials of particular status and by making the sanction of the Government or other appropriate officer a pre condition for their prosecution
As it is a socially useful measure conceived in public interest it should be liberally construed so as to bring about the desired object ie to prevent corruption among public servants and to prevent harassment of the honest among them
 These observations regarding the object of the Act obviously were based on the footing that the Act must be read as supplemental to the Penal Code and therefore the definition borrowed from the Penal Code must be read into section 2 of the Act not only at the time when it was borrowed but even at the material date when the offence is committed
This being the position it is manifest that by virtue of the amendments referred to above in the Penal Code which inserted twelfth clause to s21 of the Penal Code the respondent clearly comes within the meaning of public servant and the High Court was in error in taking a view to the contrary
Further the Prevention of Corruption Act being a social legislation its provisions must be liberally construed so as to advance the object of the Act
This can only be done if we give extended meaning to the term public servant as referred to in section 2 of the Act by applying the enlarged definition contained in clause 12 inserted in the Penal Code by the two amendments referred to above
There is yet another aspect of the matter which is spelt out from the decision of the Privy Council in the Hindustan Co operative Insurance Society s case supra which has been relied upon by the High Court itself
While reiterating the principle that after certain provisions from an existing Act have been incorporated into a subsequent Act no addition to the former Act can be made their Lordships of the Privy Council made it clear that this principle would not apply where the subsequent Act is rendered unworkable or is not able to function effectually
In this connection their Lordships observed
as follows 14 It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act no addition to the former Act which is not expressly made applicable to the subsequent Act can be deemed to be incorporated in it at all events if it is possible for the subsequent Act to function effectually without the addition  On a consideration of these authorities therefore it seems that the following proposition emerges Where a subsequent Act incorporates provisions of a previous Act then the borrowed provisions become an integral and independent part of the subsequent Act and are to tally unaffected by any repeal or amendment in the previous Act
This principle however will not apply in the following cases a where the subsequent Act and the previous Act are supplemental to each other b where the two Acts are in pari materia c where the amendment in the previous Act if not imported into the subsequent Act also would render the subsequent Act wholly unworkable and ineffectual and d where the amendment of the previous Act either expressly or by necessary intendment applies the said provisions to the subsequent Act
The Additional Solicitor General vehemently contended that if the enlarged definition by the insertion of clause 12 in section 21 of the Penal Code is not imported into section 21 of the Act then the Act would become wholly unworkable
For instance if two persons are serving under a Government company and have committed an offence of accepting illegal gratification and if one is prosecuted under section 161 of the Penal Code and the other under the Act it is obvious that the prosecution against the employee under the Penal Code would succeed on proof of facts whereas the employee of the same company who is prosecuted under the Act will fail because such an employee will not be a public servant according to the extended meaning given by the amendments to section 21 of the Penal Code
This will therefore defeat and frustrate not only the object of the Act but will render it absolutely unworkable
In view of these circumstances therefore we are inclined to hold that in the facts and circumstances of the present case and having regard to the nature and scope or the Prevention of Corruption Act the extended definition of s21 of the Penal Code would have to be imported into section 2 of the Act
That being the position there can be no doubt that the respondent was a public servant within the meaning of section 2 of the Act and his conviction by the learned Special Judge Indore did not suffer from any legal infirmity
There is yet another aspect of the matter
lt seems to us that even if section 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant then the provisions of the 15 Penal Code would have come into operation by implied reference because the
Act was a supplemental Act to the Penal Code
It was only by way of abundant caution that section 2 of the Act incorporated the definition of public servant as mentioned in section 21 of the Penal Code and in that sense alone the Act can be treated as being pari materia with the Penal Code
For these reasons therefore for are clearly of the opinion that the judgment of the High Court holding that the respondent was not a public servant is legally erroneous and cannot be allowed to stand
The other point is regarding the question of sentence
The High Court has itself pointed out that the respondent had been forced under duress exercised by his superior officer in drawing the inflated travelling allowance
The High Court has also expressed the view that having regard to the fact that as the accused had to face a trial for a numher of years the Government will consider the desirability of not prosecuting him again
In view of these circumstances therefore we feel the respondent has committed only a technical offence and a token sentence is called for We therefore allow the appeal set aside the judgment of the High Court dated April 12 1973 acquitting the respondent
We convict the respondent under section 420 IPC and section 52 read with section 51d of the Prevention of Corruption Act but reduce his sentence to the imprisonment already served
VMK Appeal allowed


Summary:
Section 2 of the Prevention of Corruption Act 1947 provides that for the purposes of this Act Public servant means a public servant as defined in section 21 of the Indian Penal Code
Before the Criminal Law Amendment Act 1958 Act No 11 of 1958 was passed adding clause 12 to this section section 21 of the Penal Code consisted only of eleven clauses and an employee under the Corporation or a Government Company did No fall within the purview of any of the clauses of section 21 of the Penal Code
Clause 12 was further amended by the Anti Corruption Laws Amendment Act 1964 Act No XL of 1964 enlarging the definition of public servant
The respondent who was an employee in the Heavy Electricals India Ltd Bhopal which is a Government Company was convected by the Special Judge Indore under section 420 IPC and section 52 read with section 51d of the Act and was sentenced to one year rigorous imprisonment on each count
The appeal filed by the respondent before the High Court of Madhya Pradesh was allowed mainly on the ground that as the respondent was not a public servant as contemplated by the provisions of the Act his trial under the Act was without jurisdiction
The High Court took the view that as the Act had incorporated the definition of the Penal Code prior to its amendment it became an integral and independent part of the Act and would remain unaffected by any repeal or change in the previous Act namely the Penal Code
This appeal has been preferred on the basis of the certificate granted by the High Court
Allowing the appeal  HELD i It is well settled that after the provision of the previous Act is incorporated in the subsequent Act the off spring namely the incorporated provisions survives even if the previous Act is repealed amended declared a nullity or erased from the statute book
But the Act being a social legislation its provisions must be construed liberally so as to advance the object of the Act
Though the Act and the Penal Code are not statutes in pari materia there can be no doubt that the evidence Act and the Prevention of Corruption Act form part of one system because the rules of Evidence Act with minor exceptions apply to trials of offences created under the Act
The Act no doubt contains a penal flavour but it is in effect a piece of social legislation directed towards eradication of the evil of corruption amongst the services alone
In other words the public servants alone fall within the mischief of the Act and no one else
11E 12A C Clarke vs Bradlaugh 69 Ram Sarup vs Munshi and other   868 869 In re Wood s Estate Ex parte Her Majesty s Commissioners of Works and Buildings 18861  615 616 Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd LR 58 IA 259
266 267 referred to
State of Madras vs Vaidyanath Aiyar AIR 1958 SC 61 relied on
ii The object of the Act is to eradicate corruption from various levels either in Government services or in service under the Corporation or Government Companies
The Penal Code no doubt creates offences like those mentioned in sections 161 and 165 of the Code but they were not found sufficient to cope with the present situation and the expending needs of the nation
In these circumstances 7 it was considered necessary to evolve a quick expeditious and effective machinery to destroy the evil of corruption existing in any form
If therefore the Penal Code with the same object enlarged the definition of section 21 by adding the twelfth clause by virtue of the Criminal law Amendment Act 1958 and the Anti corruption Laws Amendment Act 1964 there is no reason why the extended meaning to the provision of section 2 of the Act ns borrowed from section 21 of the Penal Code be not given lo that section
Otherwise the Act would become wholly unworkable
12D F Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd LR 58 IA 259 266 267
section Gangoli vs The State of Uttar Pradesh 1960 1 section C R 290 and M Narayanan Nambiar vs State of Kerala 1963 Supp 2 SCR 724
referred to
iii Even if section 2 of the Act had not applied the provisions of the Penal Code and had not defined public servant then the provisions of the Penal Code would have come into operation by implied reference because the Act was a supplemental Act to the Penal Code
It was only by way of abundant caution that section 2 of the Act incorporated the definition of public servant as mentioned in section 21 of the Penal Code and in that sense alone the Act can be treated as being pari meteria with the Penal Code
15A B