IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.647 OF 2009

(Arising out of S.L.P.(Crl.)NO.5937 of 2007) State of Madhya Pradesh   …Appellant

Vs. Rameshwar & Ors. …Respondents

WITH Criminal Appeal No.648 of 2009

(Arising out of S.L.P.(Crl.)NO.6929 of 2007) J U D G M E N T  

ALTAMAS KABIR,J.

1. Leave  granted  in  both  the  special  leave

petitions  which  are  taken  up  for  hearing

and final disposal together.

2. The  respondents  were  Directors  of  the

Indore  Premier  Co-operative  Bank  Limited

and were also members of the Loan Committee

for sanctioning loans. One Harish Patil and

Kanhaiyalal Yadav lodged a complaint with

the Special Establishment of the Lokayukt,

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Madhya Pradesh at Indore, alleging that the

respondents had sanctioned loans amounting

to Rs.56,50,000/- in favour of 35 persons

without  verifying  their  eligibility  to

receive such loans or the end-use of such

loans  and  had  intentionally  acted  in  an

illegal manner to enable the said borrowers

to  avail  of  the  loans.  On  receiving  the

complaint,  the  Special  Establishment

Lokayukt,  Indore,  registered  Crime

No.133/99 and after investigation filed a

charge-sheet against the respondents under

Sections 409, 420 and 120-B of the Indian

Penal Code (`IPC’ for short) together with

Sections 13(1)(d) read with Section 13(2)

of the Prevention of Corruption Act, 1988

(hereinafter  referred  to  as  the  ‘P.C.

Act’). The Trial Court on due consideration

of  the  charge-sheet,  found  a  prima  facie

case  against  the  respondents  and  by  its

order dated 4.11.2006 directed framing of

charges as suggested in the charge-sheet.

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3. Being  aggrieved  by  the  said  order  dated

4.11.2006,  directing  framing  of  charges,

the  respondents  moved  in  revision  before

the Indore Bench of the Madhya Pradesh High

Court for setting aside the aforesaid order

passed  by  the  Special  Judge,  Indore,  in

Special  Case  No.1  of  2006  and  for  their

discharge from the above-mentioned charges.

4. Considering  the  case  made  out  by  the

respective parties, the High Court came to

the  conclusion  that  admittedly  the

respondents  were  members  of  the  Loan

Committee and as such members they are only

required to consider the loan cases which

are put up to them by the concerned Bank

Manager for the grant of loan and it was

for the Branch Managers to verify the facts

regarding  entitlement  for  grant  of  loan

before  submitting  the  same  to  the  Loan

Committee.  Furthermore, it is only after

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the Executive Officer had also verified the

applications for loan that the loan cases

were put up before the Loan Committee for

its  sanction.  In  view  of  the  aforesaid

procedure,  the  High  Court  held  that  it

could not be said that the Members of the

Loan Committee (the respondents herein) had

acted illegally and had wrongly sanctioned

loans to the concerned borrowers. The High

Court also took into consideration the fact

that out of the total amount of loan which

had been sanctioned by the Loan Committee

amounting to Rs.56,50,000/- a total sum of

Rs.64,69,000/-  had  already  been  deposited

by the concerned depositors in the Bank and

hence  it  could  not  be  contended  that  by

sanctioning  the  loans  to  the  concerned

borrowers  the  Bank  had  suffered  any

monetary  loss  since  the  full  amount  of

loan, together with interest, had already

been  deposited  by  the  borrowers  in  the

Bank.

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5. On  the  question  of  status  of  the

respondents  as  “public  servants”  for  the

purpose of prosecution under the provisions

of the Prevention of Corruption Act, 1988,

the High Court relying on the judgment of

this  Court  in  State  of  Maharashtra  vs.

Laljit Rajshi Shah and others [(2000) 2 SCC

699] held that the respondents could not be

treated as public servants and could not,

therefore, be punishable either under the

provisions of the Prevention of Corruption

Act, 1988, or under Section 409 IPC.

6. On  such  finding,  the  High  Court  by  its

order  dated 17th March,  2007,  allowed  the

Revision Petition and set aside the order

of the Trial Court dated 4.11.2006 framing

charges  against  the  respondents  and

discharged them from the said charges under

Sections 409, 418, 420 and 120-B IPC and

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Section 13(1)(d) read with Section 13(2) of

the P.C. Act.

7. The present appeals have been filed by the

State  of  Madhya  Pradesh  against  the  said

order of the High Court.

8. Appearing for the appellant State of Madhya

Pradesh,  Mr.  Ravindra  Srivastava,  learned

Senior  Counsel  submitted  that  the  High

Court had erred both as to the role played

by the respondents and also on the question

of the status of the said respondents as

“public  servants”  for  the  purpose  of

prosecution under the provision of the P.C.

Act.   Mr.  Srivastava  also  submitted  that

the  High  Court  had  travelled  beyond  its

jurisdiction under Sections 397 read with

Section 401 Criminal Procedure Code in re-

assessing the factual position in order to

arrive  at  the  conclusion  that  the

provisions,  under  which  they  had  been

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charged,  were  not  supported  by  the

materials in the charge-sheet.   

9. Referring to the inquiry report dated 21st

January,  1999,  submitted  by  the  District

Vigilance  Committee,  Indore,  on  the

complaint  of  Shri  Kanhaiyalal  Yadav,  Mr.

Srivastava  submitted  that  it  had  come  to

light during the inquiry that the quotation

of Indore Motor and Agro Machinery, having

its registered office at 535 Scheme No.54,

Indore, loans were advanced by the Banks to

the  persons  named  in  the  report  for

purchase  of  different  kinds  of  vehicles.

However, the said firm was not available at

the address indicated.  It also transpired

that  the  firm  was  managed  by  one  Shri

Himanshu  Joshi,  son  of  Shri  Hem  Joshi,

Public  Contact  Officer  working  in  the

Indore  Premier  Co-operative  Bank  and  the

Current Account of the firm was with the

Kila Maidan Branch, Indore and the various

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Demand  Drafts  were  deposited  in  the  said

account  and  the  cash  was  subsequently

withdrawn.  It was also reported that the

loans were sanctioned with the connivance

of the Bank administration for the purchase

of vehicles, but were not used for the said

purpose and the Demand Drafts were encashed

with  the  intention  of  cheating  the  Bank.

Mr. Srivastava submitted that the tenor of

the Inquiry Report was that Shri Hem Joshi

had, in his capacity as the Public Contact

Officer of the Bank, in connivance with the

other respondents, set up a fictitious firm

in the name of his son Shri Himanshu Joshi

for  the  purpose  of  encashing  the  Bank

Drafts  which  were  all  deposited  in  the

account of the purported firm in the Kila

Maidan Branch, Indore.     

10. Mr.  Srivastava  pointed  out  that  from  the

statements  made  by  the  Managers  of  the

different  Branches  of  the  Bank  a  prima

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facie case was made out  that not only were

the rules relating to sanctioning of loans

not followed, but the grant of such loans

revealed lack of awareness and application

on the part of the respondents.  He also

submitted that the officers of the National

Bank for Agricultural and Rural Development

(hereinafter  referred  as  ‘NABARD’)

conducted  an  inspection  of  the  Indore

Premier Co-operative Bank in June, 1998 and

in their Report they also raised objections

with regard to the loans which formed the

subject matter of the present appeals.

11. Mr. Srivastava submitted that the finding

of  the  District  Vigilance  Committee  was

that  while  the  Branch  Managers  of  the

different  Branches  of  the  Bank  had  not

complied  with  the  directions  given  with

regard to the policy of sanctioning loans,

the  Chairman,  and  the  Chief  Executive

Officer of the Bank, who are the Respondent

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Nos.  1  and 3 herein, failed  to  take  any

action  despite  the  Inspection  Report  of

NABARD, which gave rise to the conclusion

that they had also played a decisive role

in  defrauding  the  Bank.  Mr.  Srivastava

submitted  that  since  the  said  Inquiry

Report indicted all the respondents, along

with  several  others,  it  had  recommended

that a case be registered under Section 420

read with Section 120-B IPC against all the

persons named. A further recommendation was

made  to  register  a  case  against  the

officers  of  the  Bank,  including  the

respondents herein, under Section 406, 409,

419 and 420 read with Section 120-B IPC.

Departmental  action  was  also  recommended

against the Members of the Loan Committee

of  which  the  Respondent  No.1,  Rameshwar,

was  the  President,  while  the  other

respondents, who were all Directors of the

Bank, were members.   

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12. Mr.  Srivastava  urged  that  the  High  Court

had  erred  in  completely  absolving  the

respondents  of  any  responsibility  in

connection  with  the  sanctioning  of  the

loans and placing the entire burden of the

fraud  perpetrated  on  the  Branch  Managers

and the Executive Officer for inadequate or

improper verification of the entitlement of

the  borrowers  for  grant  of  such  loans.

Learned  counsel  also  urged  that  the  High

Court  had  erred  in  observing  that  the

members of the Loan Committee had a limited

role to play for the purpose of sanctioning

loans,  since  the  ground  work  had  already

been prepared upto the level of the Branch

Managers who had recommended the grant of

such loans.

13. Mr. Srivastava submitted that in going into

factual  aspects  of  the  matter,  the  High

Court had travelled beyond its revisional

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powers in coming to findings of fact, which

were yet to be established on evidence.   

14. To support his submission, Mr. Srivastava

firstly  referred  to  a  decision  of  this

Court  in  Stree  Atyachar  Virodhi  Parishad

vs. Dilip Nathumal Chordia & Anr. [(1989) 1

SCC  715],  wherein,  while  considering  the

question  relating  to  discharge  of  or

framing of charges against an accused, it

was held that when the Trial Court, finding

a prima facie case prefers to frame charges

against the accused, the High Court should

not  interfere  by  probing  into  the

sufficiency  of  grounds  for  conviction  of

the accused and ordering his discharge.   

15. Mr.  Srivastava  then  referred  to  another

decision of this Court in  Om Wati (Smt) &

Anr. vs. State, through Delhi Admn. & Ors.

[(2001)  4  SCC  333],  wherein  also,  while

considering the provisions of Sections 227,

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228 and 401 of the Criminal Procedure Code,

1973, this Court, inter alia, observed that

the  High  Court  should  not  ordinarily

interfere with the Trial Court’s order for

framing of charge unless there is glaring

injustice.

16. Reference was lastly made to the decision

of this Court in  Munna Devi vs.  State of

Rajasthan  &  Anr. [(2001)  9  SCC  631],

wherein  it  was  held  that  the  revisional

powers  of  the  High  Court  could  not  be

exercised  in  a  routine  and  casual  manner

for quashing the charges framed against an

accused, except where there was a legal bar

or where no offence is made out against an

accused in the F.I.R.

17. Mr.  Srivastava  submitted  that  apart  from

the above, the finding of the High Court

that  the  respondents  were  not  public

servants  was  erroneous,  as  they  had  been

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elected  as  Office  Bearers  of  the  Co-

operative Bank.  He submitted that the High

Court had wrongly relied upon the decision

of this Court in  State of Maharashtra vs.

Laljit Rajshi Shah & Ors. (supra), in which

the  definition  of  “public  servant”  as

contained in section 2 of the Prevention of

Corruption  Act,  1947  was  under

consideration.   In  the  said  Act,  “public

servant” has been defined in Section 2 to

mean “public servant” as defined in Section

21  of  the  Indian  Penal  Code.   Mr.

Srivastava  urged  that  the  definition  of

“public  servant”  in  the  Prevention  of

Corruption Act, 1988 has been given a much

wider  connotation  and  the  limited

interpretation  of  the  said  expression  in

Laljit  Rajshi  Shah  &  Ors.’s  case  (supra)

would not, therefore, be applicable to the

facts of this case.   

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18. Mr. Srivastava submitted that on account of

being an Office Bearer of a registered Co-

operative Society engaged in banking, the

respondents came within the definition of

“public servant” under Section 2(c)(ix) of

the 1988 Act.  He also submitted that the

High  Court  had  failed  to  take  note  of

Section  87  of  the  M.P.  Co-operative

Societies  Act,  1960,  which  provides  that

the Registrar and other officers, as well

as employees of a Co-operative Bank or a

Co-operative Society, would be deemed to be

“public  servants”  within  the  meaning  of

Section 21 of the Indian Penal Code.

19. In this regard, Mr. Srivastava referred to

the  decision  of  this  Court  in  Govt.  of

Andhra Pradesh & Ors. Vs.  P. Venku Reddy

[(2002)  7  SCC  631],  where  reference  was

made to the decision in Laljit Rajshi Shah

& Ors.’s case (supra) and it was observed

that the same was distinguishable as it was

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based  on  an  interpretation  of  the

definition of “public servant”, as defined

in  the  1947  Act,  which  restricted  such

definition  to  cover  only  such  “public

servants” as were included in Section 21 of

the Indian Penal Code.  Reference was also

made to another decision of this Court in

State  of  Maharashtra  &  Anr. vs.

Prabhakarrao & Anr. [(2002) 7 SCC 636], in

which  the  wider  definition  of  the

expression “public servant” under Section 2

(c)  of  the  Prevention  of  Corruption  Act,

1988 was held to be applicable and not the

narrow definition under Section 21 of the

Indian Penal Code.

20. Mr. Srivastava submitted that as far as the

State of Madhya Pradesh was concerned, the

same submissions would also be relevant in

SLP(Crl.)No.6929/07.

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21. Replying to the submissions made on behalf

of the appellant, Mr. Vivek Tankha, learned

Senior  Counsel,  firstly,  took  us  to  the

Charge framed against the respondents under

Section 13(1)(d) read with Section 13(2) of

the Prevention of Corruption Act, 1988 and

Sections  409,  418,  420  and  120-B  of  the

Indian Penal Code.  Mr. Tankha pointed out

that  the  Charge  was  framed  against  the

Respondent  No.1  in  his  capacity  as

Chairman/Manager of the Indore Premier Co-

operative Bank and as a Member of the Loan

Sanctioning  Committee  during  the  period

from 4th March, 1997 to 4th May, 1998, when

he  was  a  public  servant.   The  charge

against  the  Respondent  No.1  was  that  in

connivance with the other accused persons

and  on  the  basis  of  forged  documents

relating  to  “Indore  Motor  and  Agro

Machinery”, he had, without verification of

the loan applications filed for the purpose

of purchasing of vehicles by the other co-

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accused, without ensuring that the margin

money was deposited as per the rules and

without obtaining security, sanctioned the

loans  in  contravention  of  the  Bank  Rules

and issued the cheque/drafts of such loans

to the applicants directly who withdrew the

amount  without  purchasing  the  vehicles,

resulting  in  misappropriation  of

Rs.56,50,000/-.   Accordingly,  the

Respondent  No.1  was  purported  to  have

committed the offence punishable under the

above-mentioned  provisions  of  the

Prevention of Corruption Act, 1988 and the

Indian  Penal  code.   Similar  charges  were

framed against the other respondents.

22. Mr. Tankha submitted that from the Inquiry

Report of the District Vigilance Committee

it would be quite apparent that it was the

Branch Managers of the different Branches

of the Bank who had failed to comply with

the  procedure  relating  to  grant  and

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sanction of loans and that all the lapses

which were attempted to be foisted on the

respondents  by  Mr.  Srivastava  during  the

course of his submissions, were required to

be  fulfilled  at  the  Branches  before

proposals  were  put  up  for  sanctioning  of

the loans.  Mr. Tankha submitted that the

Loan Sanctioning Committee had to deal with

innumerable  loan  applications  and  it  was

not  possible  for  the  said  Committee  to

scrutinize  each  application  to  ensure

whether  all  the  conditions  for  grant  of

loan had been satisfied.  Mr. Tankha, in

fact, urged that in the Inquiry Report, the

only  allegation  made  against  the

respondents  herein  was  that  they  had  not

taken  any  action  despite  the  Inspection

Report  of  NABARD  and  it  was  only  a

presumption  that  as  a  result  thereof  a

conclusion must be drawn that the Chairman

of the Bank and the Chief Executive Officer

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had also played a main role in the fraud

committed upon the Bank.   

23. Mr.  Tankha  submitted  that  apart  from  the

above,  the  only  other  allegation  against

the respondents in the Inquiry Report was

that the members of the Loan Committee had

failed to perform their duties efficiently.

He submitted that the allegations pointed

out  by  Mr.  Srivastava  had  really  been

directed  at  the  Branch  Managers  of  the

various Branches and the concerned officers

of the said Branches.   

24. Mr.  Tankha  submitted  that  there  was  no

justification  whatsoever  for  framing  of

charges  against  the  respondents  herein,

either under the provisions of the Indian

Penal Code or under the provisions of the

Prevention  of  Corruption  Act,  1988.   He

urged  that  if  any  irregularity  had  been

committed by the Respondents in sanctioning

the loans, there was sufficient scope for

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action  to  have  been  taken  against  them

under the M.P. Co-operative Societies Act

instead of taking recourse to the criminal

process to apply pressure in respect of a

dispute,  which  was  basically  civil  in

nature.  Referring to the decision of this

Court in  Indian Oil Corpn. vs.  NEPC India

Ltd. 7 Ors. [(2006) 6 SCC 736], Mr. Tankha

relied  on  the  observations  made  by  this

Court in holding that it was necessary to

take  notice  of  a  growing  tendency  in

business  circles  to  convert  purely  civil

disputes  into  criminal  cases  and  at  the

stage of an application under Section 482

Cr.P.C. all that was required to be seen

was  whether  necessary  allegations  existed

in the complaint to make out an offence as

alleged.

25. Further, reference was made to the decision

of  this  Court  in  Nikhil  Merchant vs.

Central  Bureau  of  Investigation  &  Anr.

21

[2008 (11) SCALE 379], where, while taking

recourse  to  Article  142  of  the

Constitution,  it  was  observed  that  the

dispute involved in the case had overtones

of  a  civil  dispute  with  certain  criminal

facets.  Mr. Tankha submitted that similar

was the position in the present case, where

the dispute was mainly of a civil nature,

which had been given a criminal twist to

bring  it  within  the  scope  of  the  Indian

Penal  code  and  also  the  Prevention  of

Corruption Act, 1988.

26. Mr. Tankha also referred to the decision of

this Court in Manoj Sharma vs. State & Ors.

(MANU/SC/8122/2008),  where  the  question

which  fell  for  determination  was  whether

the First Information Report for offences

which  were  not  compoundable,  could  be

quashed either under Section 482 Cr.P.C. or

under Article 226 of the Constitution when

the  accused  and  the  complainant  had

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compromised and settled the matter between

themselves.  Mr. Tankha submitted that this

Court had set aside the order upon holding

that  once  a  dispute  of  a  civil  nature

between private parties, had been settled,

the  more  pragmatic  view  would  be  to

exercise powers under Section 482 Cr.P.C.

or Article 226 of the Constitution to bring

and end to such litigation.

27. As to the question whether the respondents

were  public  servants  or  not,  Mr.  Tankha

submitted  that  in  a  series  of  decisions

this Court had held that certain officers

discharging public functions had been held

not  to  be  public  servants,  except  for

purposes confined to the enactments under

which  they  perform  their  functions.   In

this  regard,  Mr.  Tankha  also  referred  to

the decision in Laljit Rajshi Shah & Ors.,

which  had  been  referred  to  by  Mr.

Srivastava, wherein it had been held that

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the  Chairman  and  Members  of  the  Managing

Committee were not public servants but were

deemed to be public servants under the M.P.

Co-operative Societies Act, but not for any

other purpose.

28. Mr.  Tankha  took  us  through  the  M.P.  Co-

operative Societies Act, 1960, in support

of his submissions.  He submitted that the

said Act was a complete self-contained Code

by  itself  and  provided  for  different

eventualities  relating  to  the

administration  of  Co-operative  Societies.

Referring  to  Section  74  of  the  Act,  Mr.

Tankha submitted that Clause (d) thereof is

the  remedy  contemplated  in  respect  of  an

offence alleged to have been committed of

the instant type.  Further- more, Section

75 provided for penalties to be inflicted

in case of a proven offence and Section 76

also provided that offences under the Act

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were  triable  by  a  Magistrate  of  the  Ist

Class.

29. As to the definition of “public servant” in

Section  2(c)(ix)  of  the  Prevention  of

Corruption Act, 1988, it was submitted that

the same should be read in two parts and

that the definition of “public servant” in

the  said  provision  in  respect  of  a  Co-

operative Society would be covered by the

first part and not by the second part.

30. Mr.   Tankha  submitted  that  the  charges

against  the  respondents  were  without  any

foundation,  as  would  be  clear  from  the

Inquiry  Report  of  the  District  Vigilance

Committee which laid the responsibility for

grant of the loans to the 35 persons at the

door  of  the  Branch  offices  and  had  only

included the respondents within the scope

of the charge for their alleged failure of

not having taken action on the report of

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NABARD  and  also  in  not  having  discharged

their  duties  efficiently.   Mr.  Tankha

submitted that the same were not sufficient

to  maintain  the  charges  against  the

respondents  under  Sections  409,  418,  420

and 120-B IPC read with Sections 13(1)(d)

and 13(2) of the Prevention of Corruption

Act,  1988  and  the  High  Court  had  quite

rightly  quashed  the  charges  against  the

respondents.

31. As to  SLP(Crl.)No.6929/07,  Mr.  Tankha

submitted that the same was in regard to a

hospital loan of Rs.2 lacs, which had been

advanced  and  had  also  been  repaid  with

interest  on  10th July,  2008.   Mr.  Tankha

submitted  that  in  both  the  cases,  the

principal  amount  of  the  several  loans

together with interest had been repaid and

consequently,  the  very  foundation  of  the

charges were nonest and the prosecution was

liable to be quashed.

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32. In  addition  to  Mr.  Tankha’s  submissions,

Mr.  Sushil  Kumar  Jain,  who  appeared  for

some  of  the  respondents,  submitted  that

unless  there  was  a  criminal  intent

disclosed  in  the  charge-sheet,  no  charge

either  under  Section  406  or  Section  409

would lie.  He also urged that in order to

invoke the provisions of the Prevention of

Corruption Act the accused would have to be

a public servant and the property alleged

to  have  been  misappropriated,  must  have

been entrusted to him while he was a public

servant.   He  urged  that  the  charge-sheet

did  not  contain  any  allegation  that  the

loan advanced by the Society was out of any

fund  or  contribution  received  from  the

State.   Accordingly,  the  question  of

misappropriation of any amount received by

the  public  servant  in  his  capacity  as  a

public servant did not arise.   

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33. Mr. Jain reiterated the other submissions

made by Mr. Tankha that the respondents had

no conscious knowledge of the ineligibility

of the borrowers to apply for and receive

the  loans  and  that  the  loans  had  been

sanctioned  on  the  basis  of  the

recommendations and proposals put up by the

Branch office.

34. Mr.  Jain  also  submitted  that  the

allegations  against  the  respondents  were

misconceived and the remedy in respect of

the  lapses,  if  any,  lay  not  under  the

general  criminal  process,  but  under  the

provisions  of  the  M.P.   Co-Operative

Societies Act, 1960, itself.     

35. Having considered the submissions made on

behalf  of  the  respective  parties  and  the

various decisions cited in support thereof,

we  are  unable  to  agree  with  the  views

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expressed by the High Court in the order

impugned in these appeals.

36. While  it  is  no  doubt  true  that  in  the

Inquiry  Report  of  the  District  Vigilance

Committee  the  role  attributed  to  the

respondents in sanctioning loans was shown

to  be  purely  managerial  where  the

groundwork had been completed by the Branch

offices  and  that  as  members  of  the  Loan

Sanctioning  Committee,  they  had  acted

inefficiently, it has also been suggested

that the Chairman and the Executive Officer

of  the  Bank  had  connived  with  the  other

accused  in  defrauding  the  Bank.  In  the

Inquiry  Report  it  was  stated  that  the

respondents had in conspiracy with Shri Hem

Joshi,  the  Public  Contact  Officer  of  the

Bank, whose son, Himanshu Joshi, maintained

a current account of a fictitious firm –

Indore Motor and Agro Machinery in the Kila

Maidan  Branch  of  the  Bank  at  Indore

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encashed the various Demand Drafts issued

on account of the loans, by using the said

account without purchase of any vehicle for

which the loans had been sanctioned.   

37. The  High  Court  also  did  not,  while

considering  the  definition  of  the

expression  “public  servant”,  take  into

account  the  fact  that  the  decision  in

Laljit  Rajshi  Shah  &  Ors.’s  case  (supra)

was  no  longer  applicable  in  view  of  the

amended provisions of Section 2(c) of the

Prevention  of  Corruption  Act,  1988,

defining the said expression.  Prima facie,

it appears to us that the Respondent Nos.1

and 3, in their capacity as the Chairman

and  Executive  Officer  of  the  Bank,  come

within the definition of “public servant”

under  Section  2(c)(ix)  of  the  1988  Act,

which reads as follows :-

“public servant” means – any person who is  the  President,  Secretary  or  other

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office-bearer  of  a  registered  co- operative society engaged in agriculture, industry, trade or banking, receiving or having  received  any  financial  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).”

38. Mr. Tankha’s submissions, which were echoed

by  Mr.  Jain,  that  the  M.P.  Co-operative

Societies Act, 1960 was a complete Code in

itself  and  the  remedy  of  the  prosecuting

agency lay not under the criminal process

but within the ambit of Sections 74 to 76

thereof, cannot also be accepted, in view

of the fact that there is no bar under the

M.P. Co-operative Societies Act, 1960, to

take  resort  to  the  provisions  of  the

general  criminal  law,  particularly  when

charges under the Prevention of Corruption

Act, 1988, are involved.

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39. The  judgments  referred  to  by  Mr.  Tankha

regarding  the  tendency  to  convert  civil

disputes into criminal cases to pressurize

the  accused,  are  unimpeachable,  but  the

same will not apply to the facts of this

case where a conspiracy to cheat the Bank

is alleged.

40. We are, therefore, inclined to accept Mr.

Srivastava’s  submissions  that  the  High

Court had in revision erroneously quashed

the charges framed against the respondents.

Consequently, the orders dated 17th March,

2007,  passed  by  the  High  Court  in  Crl.

Revision No.1303 of 2006 and Crl. Revision

No.36  of  2007,  impugned  in  these  two

appeals  are  set  aside  and  the  charges

framed  by  the  Trial  Court  against  the

respondents are restored.  The appeals are,

accordingly, disposed of with a direction

to  the  Trial  Court  to  proceed  with  the

trial.   We make it clear  that  the  views

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expressed in this judgment are prima facie

in nature for the disposal of these appeals

only and should not influence the trial in

any way.

______________J. (ALTAMAS KABIR)

______________J. (CYRIAC JOSEPH)

New Delhi Dated:06.04.2009

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