Case: Brijlal S/O Sadasukh Modani Vs. The State of Maharashtra Through The Secretary To The Government of Maharashtra &amp; Others

2) Briefly stated, the facts are:3) According to the petitioner, he served in different capacities with the Osmanabad Janta Sahakari Bank Limited Osmanabad (for short, "the Bank") since 1972. As he completed 58 years of age he retired from the services of the Bank on or about 2nd June 2004. The Managing Committee of the Bank extended the services of the petitioner by two years. The petitioner would have retired on or about 2nd June 2006 after getting extension. But he was suffering from severe diabetes he requested the Managing Committee of the Bank to retire him after completion of one year of his extended period. Consequently, he retired from the serves of the Bank on or about 10th June 2005 and since then the petitioner is not in service of the Bank.4) Initially, the petitioner was appointed as Accountant in the Bank in the year 1972. He was promoted to the post of the Manager of the Bank on or about 18th June 1981 and was later on designated as General Manager of the Bank. He worked in that capacity till his retirement. According to the petitioner, he worked in the capacity of the General Manager under the control and supervision of the Managing Director of the Bank. The General Manager was not entitled to attend the meetings of the Managing Committee of the Bank. The General Manager of the Bank had no authority, power or jurisdiction to sanction loans.5) The petitioner contends that the Bank was registered in accordance with the provisions contained in the Cooperative Act 1912 on or about 3rd September 1933. In accordance with the provisions of Section 166(2) of the Maharashtra Cooperative Societies Act, 1960 (for short, "the Act of 1960") the Bank was deemed to have been registered in accordance with the provisions of the Act of 1960. The area of operation of the Bank consisted of Osmanabad District, Beed District, Latur District and Solapur District. The Bank is a Banking Cooperative Society within the meaning of sub section (10) of Section 2 of the Act, 1960. The Managing Committee of the Bank had taken a decision to extend the area of operation beyond these Districts to Bidar District in Karnataka State in or about the year 1999. The Bank had submitted appropriate application before the Central Registrar for its registration in accordance with the provisions of Sections 6 and 7 of the Multi State Cooperative Societies Act, 2002 (for short, "the Act of 2002"). Accordingly the Bank was registered by the Central Registrar on 12th July 2000. The registration certificate is bearing No.MHCS/CR/106/12.7.2000. According to the petitioner, since 12th July 2000 the Bank is governed by the provisions of the Act of 2002.6) The petitioner contends that the Bank had framed certain rules laying down service conditions in respect of its employees. The supervision and control over the employees of the bank is of the Managing Committee. The petitioner in the capacity of the General Manager was directly under the supervision and control of the Managing Committee of the Bank. He was appointed by the Managing Committee. The petitioner specifically contended that he could not have been appointed, removed or dismissed either by the State Government or the Central Government or any other authority constituted or appointed by the State or Central Government. The salary of the petitioner was being paid from the corpus of the bank. There is no direct or indirect supervision or control of the Central or State Government on the functioning of the Bank or its employees.7) The petitioner contends that the petitioner received a notice signed by the Deputy Superintendent of Police, Anti Corruption Bureau Osmanabad on 11th January 2001. The petitioner was asked to give details in respect of acquisition of property by him. The petitioner submitted his reply on or about 15th February 2001 to the Deputy Superintendent of Anti Corruption Bureau, Osmanabad. The petitioner took a stand that the provisions of the Prevention of Corruption Act 1988 could not be made applicable to the petitioner as the petitioner is not a public servant. According to the petitioner, the word "Public Servant" has been defined in(c) of Section 2 of the Prevention of Corruption Act 1988. The petitioner relied on(ix) of Section 2(c) of the Prevention of Corruption Act. According to the petitioner he cannot be treated as a Public Servant even within the meaning of Section 21 of the Indian Penal Code. After petitioner submitted his rely to the Deputy Superintendent of Police, Anti Corruption Bureau Osmanabad no further steps were taken by the authorities concerned nor the petitioner was called for the purpose of enquiry. The petitioner therefore presumed that the proceedings were dropped.8) The petitioner thereafter received two communications dated 10th November 2006 and 19th November 2006 from the Deputy Superintendent of Police, Anti Corruption Bureau Osmanabad asking the petitioner to attend to the enquiry in which his statement was to be recorded in respect of the properties and expenditure of the petitioner. The petitioner was directed to attend the enquiry proceedings on 20th November 2006 at 10 a.m. The petitioner submitted his reply on 21st November 2006. The petitioner received another notice dated 21st November 2006 wherein it was informed that inquiry in respect of the property acquired by him was being made and he should remain present on 27th November 2006. The petitioner has annexed copies of these communications with the petition.9) The petitioner submitted his reply on 27th November 2006. The petitioner thereafter decided to challenge these two communications under Articles 14 and 226 of the Constitution of India.10) In response to the notice issued, the Anti Corruption Bureau filed06 and further additionalr was filed by the petitioner on 5th March 2007.11) The respondentAnti Corruption Bureau contended that the petitioner comes under the purview of Public Servant as per Section 2(c)(iii) and (ix) of the Prevention of Corruption Act 1988. Reliance is also placed by the respondent on some reported judgments of the Apex Court. A further objection was raised by the respondent that the petition is premature and challenge to the notice is not maintainable by way of a writ petition.12) Respondent No.3 in his additionalcontended that the Bank is governed by the provisions of the Act of 2002. The Bank was initially registered in the year 1933 and later on by the provision of the Act of 1960. Thereafter the Bank got registration as a Multi State Cooperative Bank on 12th July 2000. It is contended that the Multi State Cooperate Bank Act 1984 came to be repealed by the Act of 2002. The respondent has also referred to the provisions of Section 56 of the Banking Regulation Act 1949 and submitted that in view of the amendment to Section 56 of the said Act the provisions of the said Act were also made applicable to the cooperative banks. In the contention of respondent No.3 as per the provisions of the Banking Regulation Act 1949 the Reserve Bank of India has direct control and supervision over the functioning of the cooperative banks. The provisions of Sectionand 36 of the Banking Regulation Act 1949 were relied upon by respondent No.3 to highlight the nature of direct control of the Reserve Bank of India over the functioning of cooperative banks. In the contention of the respondent No.3 the term "Public Servant" is defined under Section 21 of the Indian Penal code. The scope of the said term has been further expanded by Section 2(c) of the Prevention of Corruption Act 1988 and Sectionof the Banking Regulation Act. It is further contended that the Bank is having 30 branches in the States of Maharashtra and Karnataka. According to respondent No.3, as per sections 122 and 123 of the Multi State cooperative Societies Act 2002 the Central Government has powers to give directions to the Multi State Cooperative Bank in public interest.13) We have considered the submissions of the learned counsel appearing for the parties. Before addressing to the issues raised in the petition we would refer to some of the necessary provisions of different enactments for proper appreciation of the issues raised in the petition.

Court's reasoning:
16) We have considered the provisions of the different enactments for ascertaining whether the State Government or Central Government or its authority control the functioning or the management of the Bank and even govern the service conditions of its employees. Section 2(c) of the Prevention of Corruption Act 1988 defines "public servant". We are concerned with clauses (iii) and (ix) of the said section. While considering the provisions contained in clause (iii) of Section 2(c) we find that the Bank was not established by or under a Central or State Act or by an authority or a body owned or controlled or aided by the State or Central Government. It is even not a Government company as defined in section 617 of the Companies Act, 1956. While considering the provisions of Section 2(c) (ix) we find that the Bank does not receive any financial aid from the Central or State Government. We had even enquired with the learned Additional Public Prosecutor, who was instructed by the officers, to place before this Court any evidence, in case it is there, to the effect that the Bank was provided with financial aid by the Government or its authority or Corporation established by the Government. The learned A.P.P. stated that there is no such evidence brought to his notice that the Bank was getting financial aid.17) The provisions of Sectionand 36 of the Banking Regulation Act 1949 were referred to by respondent No.3 to support contentions that the Reserve Bank of India has powers to issue directions which would amount to having control over the functioning of the Bank. Reference was also made to the provisions of Section 56 of the Act of 1949 which speak that the provisions of the Act of 1949 would apply to any cooperative society as they apply to banking companies subject to the modifications enumerated thereunder.18) We have perused theof the Bank registered as aCooperative Society. Bye law No.21 says that the final authority of the society shall vest in the General Body. The Board of the Bank would convene annual general meting for the purposes of taking decisions on various issues.No.55 refers to the service rules. The Bank shall have service rules for regulating the service conditions of its employees as formulated and amended by the Board from time to time. The Bank shall maintain a Contributory Provident Fund for the benefit of its employees in accordance with the provisions of Employees Provident Fund and Miscellaneous Provisions Act,The question, therefore, would be as to whether the provisions of the Banking Regulation Act which were introduced by the Banking Regulation (Amendment) and Miscellaneous Provisions Act, 2004 (24 of 2004) amending some of the provisions bringing into its sweep regulating control over societies which transact banking business, are attracted in the case in hand. Perusal of the Banking Regulation Act 1949 indicates that the Reserve Bank of India exercises regulatory control and power of supersession of Board of directions ofe bank, grant of licence to startcooperative bank, to lay down policy of grant of loan, recovery of loan amounts, implementation of Deposit Insurance and Credit Guarantee scheme under the Deposit Insurance and Credit Guarantee Corporation Act 1961, winding up of the bank etc. It needs to be considered as to whether these powers enumerated under the Banking Regulation Act 1949 to be exercised by the Reserve Bank of India operate as deep and pervasive control of the Bank so as to treat the persons working in the capacity of president, secretary or other office bearers like General Manager, Manager to be public servants for the purpose of application of the Prevention of Corruption Actis 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 exercise 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 authorises do not exercise any direct, deep and pervasive control over the functioning of theWe find that in the present case the petitioner has questioned the jurisdiction of respondent No.3 to issue notice for enquiring about the property of the petitioner in exercise of powers conferred under the provisions of the Prevention of Corruption Act. There is no dispute on this point. This is not a case where the police machinery while exercising powers under the Code of Criminal Procedure in connection with a penal offence has initiated some proceedings against the petitioner. We are of the opinion that the petition would be maintainable in the facts of the case and the issues raised therein. Respondent No.3 has put forth his stand by way ofTherefore 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.28) We are, therefore, of the opinion that the petitioner who discharged his duties as General Manger could not be termed as a public servant as defined in the Prevention of Corruption Act, 1988. Under the provisions of the Banking Regulation Act 1949 the Central Government or any authority of the Government, the Reserve Bank of India exercise regulatory control over the Bank which is registered under theCooperative Societies Act. The said control exercised by these authorities would not be termed as deep and pervasive one. The day to day activities, the internal management are not at all governed and controlled by the Government or its authorities. The Bank is not aided one or funded in any manner by the Government or its authorises. The service conditions of its employees are not regulated by the State or the Central Government or its authorities. Respondent No.3 is, therefore, not competent to initiate action under the provisions of the Prevention Corruption Act against the petitioner. The impugned, notices issued to the petitioner by the respondent No.3 are without jurisdiction and null and void. The notices are required to be quashed and set aside.