Case: State of Maharashtra &amp; Others Vs. Brijlal Sadasukh Modani

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 (1 of 1956);" 16. On a perusal of the decisions of this Court, it is manifest that stress has always been laid on Section 2(c)(ix) of the 1988 Act as a consequence of which the fall out is that the registered cooperative society must have received financial aid from the Central Government or the State Government or any other institution mentioned therein.17. The High Court has referred to various provisions of the 1949 Act and proceeded on the status of cooperative society and eventually has held that:- "So far as the Bank is concerned, the Central Government has not purchased any share of the Bank. It is argued by the learned A.P.P. that the power conferred on the Reserve Bank of India and the Central Registrar under the provisions of the Banking Regulation Act are sufficient proof to arrive at conclusion that the functioning of the Bank is regulated and controlled by the Reserve Bank of India. We do not accept the proposition advanced by the learned APP. It is settled position that general regulations under an Act, like the Companies Act or Cooperative Societies Act, would not render the activities of a company or a society as subject to control of the State. Whatever control exercised by the Government or its authorities under the provisions of the Act are meant to ensure proper functioning of the society. The Government or in this case the Reserve Bank of India or any other statutory authorities have no role to play in day-to-day functioning of the societies/banks much less control over the recruitment of the staff, its service conditions etc. Considering the provisions of the different enactments more particularly the provisions of the Banking Regulation Act 1949, we are of the view that the Reserve Bank of India or the Government or its authorities do not exercise any direct, deep and pervasive control over the functioning of the Bank." 18. And again :- "... Therefore it would not be reasonable and proper now to relegate the petitioner to alternative forum by asking him to appear before respondent No. 3 and agitate the same issues." 19. In Prabhakarrao (supra) the Court was dealing with the issue whether the High Court was justified in holding that the accused was not a public servant. In the said case, the High Court had placed heavy reliance on the authority of State of Maharashtra v. Laljit Rajshi Shah, 2000(2) R.C.R.(Criminal) 71 : (2000) 2 SCC 699. In P. Venku Reddy (supra), the Court has distinguished the said decision and referred to Section 2 of the 1988 Act and in that context observed thus :- "3. Under clause (iii) of Section 2(c), 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 and under clause (ix) the President, Secretary and other office-bearers of a registered cooperative society engaged in agriculture, industry, have been included in the definition of "public servant".4. The question for consideration is whether the accused in the present case comes within the purview of the aforementioned clauses or any other clause of Section 2(c) of the Prevention of Corruption Act, 1988. For determination of the question, enquiry into facts, relating to the management, control and funding of the society, is necessary to be ascertained." 20. 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 understood in the backdrop of corruption. In Shri Ram Singh (supra), this Court had to say this :- "Corruption in a civilised society is a disease like cancer, which if not detected in time, is sure to maliganise (sic) the polity of the country leading to disastrous consequences. It is termed as a plague which is not only contagious but if not controlled spreads like a fire in a jungle. Its virus is compared with HIV leading to AIDS, being incurable. It has also been termed as royal thievery. The socio-political system exposed to such a dreaded communicable disease is likely to crumble under its own weight. Corruption is opposed to democracy and social order, being not only anti-people, but aimed and targeted against them. It affects the economy and destroys the cultural heritage. Unless nipped in the bud at the earliest, it is likely to cause turbulence - shaking of the socio-economic-political system in an otherwise healthy, wealthy, effective and vibrating society." 21. We share the said perception, and reiterate with agony. The ingemination has to be realised with sanctity. Therefore, we are of the convinced opinion that it was entirely unnecessary on the part of the High Court to enter into elaborate deliberation to arrive at the conclusion that the respondent was not a public servant. Regard being had to the facts of the case, we think it would be apposite that it is left to be dealt with in the course of trial whether the society concerned has ever been granted any kind of aid or not.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]21. We share the said perception, and reiterate with agony. The ingemination has to be realised with sanctity. Therefore, we are of the convinced opinion that it was entirely unnecessary on the part of the High Court to enter into elaborate deliberation to arrive at the conclusion that the respondent was not a public servant. Regard being had to the facts of the case, we think it would be apposite that it is left to be dealt with in the course of trial whether the society concerned has ever been granted any kind of aid or not.As far as State of Madhya Pradesh is concerned, there is no difficulty as the M.P. Cooperative Societies Act, 1960 itself declares the authorities as public servant. The issue that arises for consideration in the present case is whether asociety which handles crores of rupees and the persons who handle such huge amounts of money should be allowed to escape the rigour of corruption charges under the 1988 Act on the ground that they do not come under the ambit and sweep of Article 12 of the Constitution or solely because of construction placed under Section 2(c) (ix) of the 1988 Act. That apart, another significant issue also arises for consideration. Section 2(ix) to make an employee of a cooperative society provides certain conditions or conditions precedent to be satisfied and, therefore, the question would be, whether the High Court by only stating that it is the admitted position should have quashed the proceeding. There are various stages and hence, the thrust of the matter is in a corruption case whether exercise of jurisdiction under Section 482 of the Code of Criminal Procedure, 1973 is warrantable. In this regard, the relevant paragraphs from the Statement of Objects and Reasons are requisite to be reproduced.On a perusal of the decisions of this Court, it is manifest that stress has always been laid on Section 2(c)(ix) of the 1988 Act as a consequence of which the fall out is that the registered cooperative society must have received financial aid from the Central Government or the State Government or any other institution mentioned therein.17. The High Court has referred to various provisions of the 1949 Act and proceeded on the status of cooperative society and eventually has heldfar as the Bank is concerned, the Central Government has not purchased any share of the Bank. It is argued by the learned A.P.P. that the power conferred on the Reserve Bank of India and the Central Registrar under the provisions of the Banking Regulation Act are sufficient proof to arrive at conclusion that the functioning of the Bank is regulated and controlled by the Reserve Bank of India. We do not accept the proposition advanced by the learned APP. It is settled position that general regulations under an Act, like the Companies Act or Cooperative Societies Act, would not render the activities of a company or a society as subject to control of the State. Whatever control exercised by the Government or its authorities under the provisions of the Act are meant to ensure proper functioning of the society. The Government or in this case the Reserve Bank of India or any other statutory authorities have no role to play infunctioning of the societies/banks much less control over the recruitment of the staff, its service conditions etc. Considering the provisions of the different enactments more particularly the provisions of the Banking Regulation Act 1949, we are of the view that the Reserve Bank of India or the Government or its authorities do not exercise any direct, deep and pervasive control over the functioning of the Bank.... Therefore it would not be reasonable and proper now to relegate the petitioner to alternative forum by asking him to appear before respondent No. 3 and agitate the same issues.In Prabhakarrao (supra) the Court was dealing with the issue whether the High Court was justified in holding that the accused was not a public servant. In the said case, the High Court had placed heavy reliance on the authority of State of Maharashtra v. Laljit Rajshi Shah, 2000(2) R.C.R.(Criminal) 71 : (2000) 2 SCC 699. In P. Venku Reddy (supra), the Court has distinguished the said decision and referred to Section 2 of the 1988 Act and in that context observed thusUnder clause (iii) of Section 2(c), 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 and under clause (ix) the President, Secretary and otherof a registered cooperative society engaged in agriculture, industry, have been included in the definition of "public servant".4. The question for consideration is whether the accused in the present case comes within the purview of the aforementioned clauses or any other clause of Section 2(c) of the Prevention of Corruption Act, 1988. For determination of the question, enquiry into facts, relating to the management, control and funding of the society, is necessary to be ascertained.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 thesociety 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 understood in the backdrop of corruption. In Shri Ram Singh (supra), this Court had to say thisin a civilised society is a disease like cancer, which if not detected in time, is sure to maliganise (sic) the polity of the country leading to disastrous consequences. It is termed as a plague which is not only contagious but if not controlled spreads like a fire in a jungle. Its virus is compared with HIV leading to AIDS, being incurable. It has also been termed as royal thievery. Thesystem exposed to such a dreaded communicable disease is likely to crumble under its own weight. Corruption is opposed to democracy and social order, being not onlybut aimed and targeted against them. It affects the economy and destroys the cultural heritage. Unless nipped in the bud at the earliest, it is likely to cause turbulenceshaking of thesystem in an otherwise healthy, wealthy, effective and vibrating society."