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PETITIONER:

STATE OF MAHARASHTRA

Vs.

RESPONDENT:

LALJIT RAJSHI SHAH & ORS.

DATE OF JUDGMENT: 28/02/2000

BENCH:

N.S.Hegde, G.B.Pattanaik

JUDGMENT:

PATTANAIK, J.

These appeals by grant of leave by the High Court

itself under Article 134(1)(c) of the Constitution of India

read with Rule 28(2) of the Supreme Court Rules, by the

State of Maharashtra, raises the question whether the

Chairman of a Co-operative Society under the Maharashtra

Co-operative Societies Act, can be held to be a public

servant for the purpose of Section 21 of the Indian Penal

Code and as such, can be proceeded against for offences

under Section 5(1) read with Section 5(2) of the Prevention

of Corruption Act, 1947.

The short facts necessary for disposal of these

appeals may be briefly stated as under. On the basis of

criminal prosecution under Sections 120-B, 409, 420, 467,

471 and 477-A of the Indian Penal Code, Sections 7 and 9 of

the Essential Commodities Act and Sections 5[1][c] and

5[1][d] read with Section 5[2] of the Prevention of

Corruption Act, the Special Judge took cognizance of the

offences as against the accused respondents. The accused

persons are the members of the Managing Committee of the

co-operative societies and the Chairman of such co-operative

societies. It was agitated before the learned Special Judge

by the accused persons that they are not public servants

for the purposes of offences under Section 409 of the Indian

Penal Code and Section 5[1][c] and 5[1][d] of the Prevention

of Corruption Act, 1947 and further, the prosecution is not

maintainable for want of previous sanction. The learned

Special Judge considered the provisions of Section 161 of

the Maharashtra Co-operative Societies Act (hereinafter

referred to as the Act) and came to the conclusion that

the accused persons cannot be held to be public servants

as defined under Section 21 of the Indian Penal Code

notwithstanding the incorporation of Section 21 of the

Indian Penal Code in Section 161 of the Act and, therefore,

no cognizance can be taken of the offences under the

Prevention of Corruption Act. On the question of sanction,

the Special Judge also agreeing with the accused persons

held that no previous sanction having been obtained for

prosecution of the accused persons, the cognizance is bad in

law. Assailing the order of learned Special Judge, the

State moved the High Court. When the matter was placed

before a learned Single Judge, he referred the matter to a

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larger Bench as he did not agree with the views expressed by

several other learned Single Judges of the Court. The

learned Single Judge formulated two questions for being

answered by the larger Bench:

(1) Whether a person defined as officer under

Clause (20) of Section 2 of the Maharashtra Co- operative

Societies Act, 1960, is a Public Servant within the

meaning of Section 2 of the Prevention of Corruption Act,

1947 (II of 1947), by virtue of the provisions of Section

161 of the Maharashtra Co-operative Societies Act, 1960,

read with Section 21 of the Indian Penal Code?

(2) Whether, assuming that provisions of Section 2 of

the Prevention of Corruption Act, 1947 are applicable to

such a person, is the sanction to prosecute such a person

required under any of the Clauses of sub-section (1) of

Section 6 of the Prevention of Corruption Act, 1947 capable

of being given under the Maharashtra Co-operative Societies

Act, 1960?

The Division Bench by the impugned Judgment analysed

the provisions of Section 161 of the Act as well as Section

21 of the Indian Penal Code and Section 2 of the Prevention

of Corruption Act, 1947. The Division Bench of the High

Court came to the conclusion that Section 161 of the Act

incorporating Section 21 of the Indian Penal Code ipso facto

does not enlarge the definition of the term public servant

in Section 21 of the Indian Penal Code. It further held

that the State Legislature which was competent to amend

Section 21 of the Indian Penal Code, the subject of criminal

law being on the con-current list and yet the said not

having been done, the expression public servant under

Section 161 of the Act would mean those officers to be

public servants for the purpose of offences under the Co-

operative Societies Act and Section 21 of the Indian Penal

Code cannot be said to have engrafted into Section 161 of

the Act. Accordingly, the High Court held that the accused

persons cannot be prosecuted for offences under Section 409

of the Indian Penal Code and Sections 5[1][c] and 5[1][d]

read with 5(2) of the Prevention of Corruption Act, though

they can be prosecuted for other offences for which

cognizance had been taken. Having held so, leave to appeal

having been prayed for by the State, the High Court granted

leave under Article 134(1)(c) of the Constitution read with

Rule 28(2) of the Supreme Court Rules and hence the present

appeals.

On behalf of the appellant-State, it is contended that

the Registrars and other officers under the Co-operative

Societies Act, having been held by the Act itself, deemed to

be public servants within the meaning of Section 21 of the

Indian Penal Code, those officers could be prosecuted for

the offences under Indian Penal Code notwithstanding the

fact that they do not become 'public servants' under Section

21 of the Indian Penal Code and the High Court, therefore,

was in error in coming to the conclusion that until and

unless the provisions of Section 21 of the Indian Penal Code

are amended, these officers cannot be prosecuted for

offences committed under Indian Penal Code.

Mr. Deshpande, learned counsel appearing for the

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respondents on the other hand contended that the provisions

of Maharashtra Co-operative Societies Act, were enacted by

the State Legislature, for which they had the competence

under Entry 32 of List II of the Seventh Schedule read with

Entry 64 thereof, whereas Indian Penal Code is an pre-

existing law, which was there at the commencement of the

Constitution and is a legislation under Entry 1 of List III

of the Seventh Schedule. The two Statutes operate in

different and distinct field and, therefore, the provisions

thereof have to be judged with reference to its own source

and this being the position in law, an officer who may be a

public servant under Section 161 of the Co-operative

Societies Act cannot be prosecuted for offences under the

Indian Penal Code, so long as Section 21 of the Indian Penal

Code, is not amended and the impugned judgment of the High

Court, therefore, is unassailable. The learned counsel

further submitted that in view of the pronouncement of the

Supreme Court in Antulays case, 1984(2) SCC 183, indicating

as to who can be a public servant, the elected office

bearers of the Co- operative Society cannot come within the

purview of the said definition and, therefore, they cannot

be prosecuted for offences under the Indian Penal Code,

until and unless Section 21 of the Indian Penal Code itself

is amended. Lastly, he urged that this question has been

decided by this Court in Ramesh Balkrishna Kulkarni vs.

State of Maharashtra, 1985(3) SCC 606, wherein an identical

provision under Section 302 of the Maharashtra

Municipalities Act, 1965 was under consideration and the

Court held that the concerned officers cannot be prosecuted

for offences under the Indian Penal Code.

In view of the rival submission at the Bar, the sole

question that arises for consideration is, as to what is the

effect of the provisions of Section 161 of the Maharashtra

Co-operative Societies Act in interpreting the provisions of

Section 21 of the Indian Penal Code. It is undoubtedly true

that the Co-operative Societies Act has been enacted by the

State Legislature and their powers to make such legislation

is derived from Entry 32 of List II of the Seventh Schedule

to the Constitution. The legislature no-doubt in Section

161 has referred to the provisions of Section 21 of the

Indian Penal Code but such reference would not make the

officers concerned public servants within the ambit of

Section 21. The State Legislature had the powers to amend

Section 21 of the Indian Penal Code, the same being

referable to a legislation under Entry 1 of List III of the

Seventh Schedule, subject to Article 254(2) of the

Constitution as, otherwise, inclusion of the persons who are

public servants under Section 161 of the Co-operative

Societies Act would be repugnant to the definition of

public servant under Section 21 of the Indian Penal Code.

That not having been done, it is difficult to accept the

contention of the leaned counsel, appearing for the State

that by virtue of deeming definition in Section 161 of the

Co-operative Societies Act by reference to Section 21 of the

Indian Penal Code, the persons concerned could be prosecuted

for the offences under the Indian Penal Code. The Indian

Penal Code and the Maharashtra Co- operative Societies Act

are not Statutes in pari materia. The Co-operative

Societies Act is a completely self-contained Statute with

its own provisions and has created specific offences quite

different from the offences in the Indian Penal Code. Both

Statutes have different objects and created offences with

separate ingredients. They cannot thus be taken to be

Statutes in pari materia, so as to form one system. This

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being the position, even though the Legislatures had

incorporated the provisions of Section 21 of the Indian

Penal Code into the Co-operative Societies Act, in order to

define a public servant but those public servants cannot

be prosecuted for having committed the offence under the

Indian Penal Code. It is a well known principle of

construction that in interpreting a provision creating a

legal fiction, the Court is to ascertain for what purpose

the fiction is created, and after ascertaining this, the

Court is to assume all those facts and consequences which

are incidental or inevitable corollaries to giving effect to

the fiction. But in so construing the fiction it is not to

be extended beyond the purpose for which it is created, or

beyond the language of the Section by which it is created.

A legal fiction in terms enacted for the purposes of one Act

is normally restricted to that Act and cannot be extended to

cover another Act. When the State Legislatures make the

Registrar, a person exercising the power of the Registrar, a

person authorised to audit the accounts of a society under

Section 81or a person to hold an inquiry under Section 83 or

to make an inspection under Section 84 and a person

appointed as an Administrator under Section 78 or as a

Liquidator under Section 103 shall be deemed to be public

servant within the meaning of Section 21 of the Indian

Penal Code. Obviously, they would not otherwise come within

the ambit of Section 21, the legislative intent is clear

that a specific category of officers while exercising powers

under specific sections have by legal fiction become public

servant and it is only for the purposes of the co-operative

Societies Act. That by itself does not make those persons

public servants under the Indian Penal Code, so as to be

prosecuted for having committed the offence under the Penal

Code. When a person is deemed to be something, the only

meaning possible is that whereas he is not in reality that

something, the Act of legislature requires him to be treated

as if obviously for the purposes of the said Act and not

otherwise. In a somewhat similar situation in Ramesh

Balkrishna Kulkarni vs. State of Maharashtra, 1985(3) SCC

606, the question for consideration was whether a Municipal

Councillor can be prosecuted for having committed an offence

under the Indian Penal Code, since under Section 302 of the

Municipalities Act, a Councillor shall be deemed to be a

public servant within the meaning of Section 21 of the

Indian Penal Code. Section 302 of the Maharashtra

Municipalities Act, 1965 is quoted herein below in extenso:

302. Every councillor and every officer or servant

of a Council, every contractor or agent appointed by it for

the collection of any tax and every person employed by such

contractor or agent for the collection of such tax, shall be

deemed to be a public servant within the meaning of Section

21 of the Indian Penal Code.

A Municipal Councillor was prosecuted for having

committed an offence under the Prevention of Corruption Act

and the said conviction and sentence was upheld in appeal by

the High Court, but this Court in the aforementioned

decision, 1985(3) SCC 606, set aside the conviction and

sentence on a finding that Municipal Councillor cannot be

held to be a public servant within the meaning of Section

21 of the Indian Penal Code. In the aforesaid premises, we

see no infirmity with the impugned judgment of the High

Court to be interfered with by this Court. The appeals fail

and are dismissed.

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