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CASE NO.: Appeal (crl.)  514 of 2001

PETITIONER: N.K. Sharma                                                      

RESPONDENT: Abhimanyu                                                                

DATE OF JUDGMENT: 07/10/2005

BENCH: S.B. Sinha & R.V. Raveendran

JUDGMENT: JUDGMENT

S.B. SINHA, J :

       Whether a Class I Officer of the State Government (Haryana) deputed  to work as Managing Director of a Co-operative Society is entitled to  protection under Section 197 of the Code of Criminal Procedure is in  question in this appeal which arises out of a judgment and order dated  14.7.2000 passed by the High Court Punjab and Haryana at Chandigarh.

       The fact of the matter, shorn of  all unnecessary details is as under :

       The Respondent herein was working as Land Valuation Officer under  one Dalip Singh, Manager,  Primary Agricultural Land Development Bank,  Dabwali,  a  branch office of the Cooperative Society wherein the Appellant  was the Managing Director.   

       A Veterinary Doctor V.K. Mittal was arrested by the Vigilance  Bureau on or about 29.3.1995, allegedly while accepting illegal gratification  of Rs.700/- from a farmer.  The said doctor made an allegation that out of  the said amount of Rs. 700/-, a sum of Rs.400/- was to be paid to the  Manager.  Dalip Singh, on the basis of the said statement, was arrested.  He  was later on, however, acquitted.   

       The District Manager, Sirsa, in charge of the Circle, by a letter dated  12.4.1995 brought to the Appellant’s notice that a relative of the  Respondent, working as Inspector in Vigilance at the instance of the  Respondent, got the said Manager arrested as he had been nursing a grudge  against him having been transferred from Dabawali on his recommendation.   Upon receipt of the said letter, the Appellant addressed a letter dated  19.4.1995 to the Director General of Police, Vigilance Department, Haryana,  Chandigarh, requesting him to look into the matter personally.  The letter  contained a statement "Later on with the connivance of Shri Abhimanyu,  Land Valuation Officer and his one relative who is in Haryana Police, has  falsely implicated Shri Dilip Singh\005.The Manager has been implicated due  to personal difference with Shri Abhimanyu\005"  The said letter was  published in a newspaper, whereafter the Respondent filed a complaint  against the Appellant herein in the Court of  the Chief Judicial Magistrate,  Sirsa,  purported to be for commission of an offence under Section 500 of  the Indian Penal Code (for short, IPC), on the ground that by reason thereof  his prestige got lowered in the general public as  also amongst his relatives.   The Appellant was summoned in the said case by the Chief Judicial  Magistrate by an order dated 13.7.1998.   

       The Appellant herein filed an application before the said Court on  30.4.1999 on the ground that no sanction in terms of Section 197 Cr. PC  having been obtained, the entire proceeding was vitiated in law as,   according to him, the aforementioned DO letter was issued by him in his  official capacity.  It was further contended that the said letter has been

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procured by some persons wherewith the Appellant has no concern.   

       The said application, however, was dismissed by the Chief Judicial  Magistrate by an order dated 14.8.1999.  Aggrieved thereby the Appellant  filed an application under Section 482 of the Code of Criminal Procedure  praying therein for quashing the order dated 13.7.1998 whereby he had been  summoned.  By reason of the impugned order, the said application was  dismissed holding that as the Appellant was working on deputation in the  Cooperative Housing Federation at the relevant time, he was not entitled to  get the protection under Section 197 Cr.PC.  Being aggrieved, the Appellant  is before us.

       Mr. Vijay Kumar, the learned counsel appearing on behalf of the  Appellant, would submit that the Appellant being a Class-I Officer of the  State Government was entitled to the said protection in terms of the  provisions of the Haryana Civil Services (Punishment or Appeal) Rules,  1987 as also the Haryana Cooperative Societies Act, 1984.   

Sanction for prosecution of a public servant, the learned counsel  would contend, is a valuable right.  It was submitted that the High Court  committed a manifest error in dismissing the Appellant’s application under  Section 482 Cr.PC.  relying on or on the basis of a decision of this Court in  Mohd. Hadi Raja vs. State of Bihar and Another [(1998) 5 SCC 91] without  taking into consideration paragraph 25 thereof wherein it is laid down that  such protection can be afforded by any statute or statutory rules framed by  the State.

Mr. Mahabir Singh, the learned counsel appearing on behalf of the  Respondent, on the other hand, would contend that in absence of any  statutory provision, the question as to whether an officer deputed to work in  a cooperative society is a ’public servant’ or not must be determined strictly  in terms of Section 21 of IPC.

It was submitted that the provisions of the Haryana Civil Services  (Punishment or Appeal) Rules, 1987, referred to above, are wholly  inapplicable inasmuch as the definition of ’public servant’ contained therein  is meant to be applied for the purpose of the said rules only.

As regards the availability of protection under Section 123 of the  Haryana Cooperative Societies Act, 1984, the learned counsel for the  Respondent would contend that only those employees who come within the  purview of Section 123 thereof would be ’public servant’ and not others and  the Appellant herein does not answer the description of the employees  specified therein.

Indisputably the underlying object in enacting Section 197 of the  Cr.PC is to protect a public servant from a frivolous prosecution.  The said  provision, however, although may not be construed too narrowly, as was  held in Shreekantiah Ramayya Munipalli vs. State of Bombay [1955 (1)  SCR  1177], whereupon the learned counsel for the Appellant placed  reliance, cannot be interpreted liberally so as to bring within its purview  other officers who are not so protected.  Section 197 of the Code of Criminal  Procedure, inter alia, protects the public servants.   ’Public Servant’ has been  defined in Section 21 of the IPC, clause 12 whereof is as under :

"Twelfth \026 Every person \026 (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 Companies Act,  1956 (1 of 1956)"

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 Admittedly the salary of the Appellant is not paid by the Government.   He at the relevant time was not in the service of the State.  Prosecution  against an officer of the Government company or a public undertaking  would not require any sanction under Section 197 Cr. PC .   It has not been denied or disputed before us that the Appellant herein  does not answer the description of a public servant within the meaning of the  provision of Section  21 of IPC.  What is contended is that he continues to be  a public servant  within the meaning of the  Haryana Civil Services  (Punishment or Appeal) Rules,  1987, Rule 2(D) whereof is as under :

"2(D)   government employees : means any person  appointed to any civil service or post in connection with  the affairs of the State of Haryana

Explanation :A govt. employee whose services are placed  at the disposal of a company, corporation or organization  or a local authority or university by the Govt. shall for  the purpose of these rules be deemed to be a government  employee serving under the government notwithstanding  that his salary is drawn from sources other than the  consolidated fund of the State."       

       The said rule had been made in terms of proviso appended to Article  309 of the Constitution of India.  An employee of the State, whose services  have been placed at the disposal of a company, corporation or organization  or a local authority or university would be deemed to a Government  employee despite the fact that his salary has been drawn from sources other  than the consolidated fund of the State, for the purpose of the said rules.    The definition of the ’Government employee’ cannot be extended for  purposes other than sought to be achieved thereby.  Provisions of the said  rules, therefore, cannot be invoked for affording protection under Section  197 of the Code of Criminal Procedure.   

       Reliance has also been placed upon Sections  118 and 123 of the  Haryana  Cooperative Societies Act, 1984, which read as under :

"S. 118.        Cognizance of offence

i)      No court inferior to that of  Judicial  Magistrate of the First Class shall try any  offence under this Act .

ii)     No prosecution shall be instituted without  the sanction of the Registrar  and such  sanction shall not be given without giving to  the person concerned a reasonable  opportunity to represent his case.                  S. 123..  Employees etc. to be public servants : - Any  employee of cooperative society engaged in the recovery  of loans under the provisions of this Act or rules or any  person appointed as liquidator or arbitrator shall be  deemed to be a public servant within the meaning of  Section 21 of the Indian Penal Code."

                                             [Emphasis supplied]

       Section 117 of the said Act enumerates offences.  Section 118 limits  taking of cognizance of offences which come within the purview of the said  Act, as would be evident from clause (i) thereof, and not under the

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provisions of the Indian Penal Code or any other statute.   The said  provision, therefore, has no application.  In terms of Section 123, only an  employee who is engaged in the recovery of loans or a person who has been  appointed as a liquidator or an arbitrator only shall be treated as a public  servant.  By reason of the said provision, a legal fiction has been created.  A  legal fiction, as is well known,  is created for a specific purpose and, thus,  applicability thereof cannot be extended for a purpose other than those for  which it has been created.  As the Managing Director of the Haryana State  Cooperative Land Development Bank Ltd., the Appellant was not engaged  in the recovery of loans or appointed as a liquidator or an arbitrator and in  that view of the matter, the limited purpose for which the legal fiction has  been created would have no application in the instant case.

       The views we have taken find support from a decision of this Court in  S.S. Dhanoa vs,. Municipal Corporation, Delhi and Others  [(1981) 3 SCC  431] wherein,  this Court noticed a well marked distinction between a body   created by a statute and a body coming into existence and governed in  accordance with the provisions of a statute.  In that case the Appellant  therein, was a member of the Indian Administrative Service.  His services  were placed  at the disposal of  Cooperative Stores Ltd., a society registered  under the Bombay Cooperative Societies Act.  He was prosecuted under  Section 7 of the Prevention of Food Adulteration Act,  1954.  Rejecting a  contention that he was entitled to protection under Section 197 of  Cr. PC, it  was observed :

"5. The short question that falls for our  determination in this appeal is whether a member of the  Indian Administrative Service, whose services are placed  at the disposal of an organisation which is neither a local  authority, nor a corporation established by or under a  Central, Provincial or State Act, nor a Government  Company, by the Central Government or the Government  of a State, can be treated to be a ’public servant’ within  the meaning of clause Twelfth of Section 21 of the Indian  Penal Code for purposes of Section 197 of the Code of  Criminal Procedure, 1973. The answer to the question  turns on the construction of clause Twelfth of Section 21  of the Indian Penal Code, 1860 and Section 197 of the  Code of Criminal Procedure, 1973\005"

       It was opined :  

"\005By no stretch of imagination, could it be said that the  appellant was employed in connection with the affairs of  the Union within the meaning of Section 197 of the Code  of Criminal Procedure, 1973. The Super Bazaars are not  owned by the Central Government. They are owned and  managed by the Cooperative Store Limited. Pursuant to  an agreement executed between the Cooperative Store  Limited and the Union of India, the Central Government  has advanced a loan of Rs 40,00,000 to the Society for  establishment and management of the Super Bazaars, and  the Central Government also holds more than 97 per cent  shares in the total shareholding of the Society. Clause 6  of the Agreement provides:

"That the incumbents of supervisory and  other key posts including those of General  Manager, Deputy General Manager, Finance  Manager, Assistant General Manager, Purchase  Manager, Sales Manager and Accounts Manager,  by whatever other designation they may be known  shall not be appointed or removed from their posts  by the debtor except with the prior approval of the

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creditor in writing."

The Super Bazaar at Connaught Place and at various  other places are run by the Cooperative Store Limited  under the control of the Ministry of Agriculture  (Department of Cooperation). The incumbents of  supervisory and other key posts including that of the  General Manager cannot be appointed or removed  without the prior approval of the Central Government.  The whole purpose of clause 6 of the Agreement in the  matter of appointment of General Manager and other  incumbents holding key posts is to safeguard the interests  of the Central Government. Legally speaking, the Super  Bazaars are owned and managed by the Society and not  by the Central Government and, therefore, the appellant  was not employed in connection with the affairs of the  Union within the meaning of Section 197 of the Code of  Criminal Procedure, 1973."

       We may, however, notice that therein a distinction between a  company engaged under the Act and the Company which comes into  existence in accordance with the Act was noticed relying on or on the basis  of a decision of this Court in Sukhdev Singh vs. Bhagatram Sardar Singh  Raghuvanshi  [(1975) 1 SCC 421].  The Court therein also relied upon  Sabhajit Tewary vs. Union of India [(1975) 1 SCC 485].  The said decision,  however, has been reversed by a Seven Judge Bench of this Court in  Pradeep Kumar Biswas & Ors. vs. Indian Institute of Chemical Biology &  Ors. [JT 2002 (4) SC 146].  In this case, we are not, however, concerned  with the said issue.           The said decision has been followed in Mohd. Hadi Raja (supra)  whereupon reliance has been placed by the High Court, observing :     "21. It is to be noted that though through the contrivance  or mechanism of corporate structure, some of the public  undertakings are performing the functions which are  intended to be performed by the State, ex facie, such  instrumentality or agency being a juridical person has an  independent status and the action taken by them, however  important the same may be in the interest of the State  cannot be held to be an action taken by or on behalf of  the Government as such within the meaning of Section  197 CrPC."

It was further observed :  

 "23. The importance of the public undertaking should not  be minimised. The Government’s concern for the smooth  functioning of such instrumentality or agency can be well  appreciated but on the plain language of Section 197 of  the Code of Criminal Procedure, the protection by way of  sanction is not available to the officers of the public  undertaking because being a juridical person and a  distinct legal entity, such instrumentality stands on a  different footing than the government departments.         xxx             xxx             xxx             xxx

25. It will be appropriate to notice that whenever there  was a felt need to include other functionaries within the  definition of "public servant", they have been declared to  be "public servants" under several special and local acts.  If the legislature had intended to include officers of an  instrumentality or agency for bringing such officers  under the protective umbrella of Section 197 CrPC, it

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would have done so expressly."

       We have noticed hereinbefore that the petition does not come within  the purview of Section 123 of the Act.  

       At this juncture, we may notice that in B.S. Sambhu vs. T.S.  Krishnaswamy [(1983) 1 SCC 11], this Court emphasized  there must be a  reasonable connection between the act and the discharge of official duty by  the accused.

       The learned counsel for the Appellant submitted that the allegations  made by the Respondent herein even if given face value and taken to be  correct in its entirety would not attract the mischief of Section 499 of  IPC in  view of several exceptions carved out therein.  From the judgment of the  High Court it does not appear that such a question was raised therein.   

       We have noticed hereinbefore that the Appellant filed an application  purported to be under Section 203 of the Cr. PC before the Chief Judicial  Magistrate.  Such an application was not maintainable in view of the  decision of this Court in  Adalat Prasad vs. Rooplal Jindal and Others  [(2004) 7 SCC 338], wherein it has been held :

"15. It is true that if a Magistrate takes cognizance of an  offence, issues process without there being any allegation  against the accused or any material implicating the  accused or in contravention of provisions of Sections 200  and 202, the order of the Magistrate may be vitiated, but  then the relief an aggrieved accused can obtain at that  stage is not by invoking Section 203 of the Code because  the Criminal Procedure Code does not contemplate a  review of an order. Hence in the absence of any review  power or inherent power with the subordinate criminal  courts, the remedy lies in invoking Section 482 of the  Code."

       [See also Poonam Chand Jain vs. Fazru -  (2005) SCC (Cri) 190]

       For the reasons aforementioned, we do not find any merit in this  appeal, which is dismissed accordingly.

       However, the Appellant shall be at liberty to raise other contentions in  an appropriate proceeding.