AMICUS AI
Citation Codes
Neutral Citations
2002 INSC 404
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Clause (c) of Section 2 of the 1988 Act
  • Sub-clause (iii) of clause (c) of Section 2 of the 1988 Act
  • Sub-clause (ix) of clause (c) of Section 2 of the 1988 Act
  • Section 482 of the Criminal Procedure Code (CrPC)
  • Section 21 of the Indian Penal Code
  • Section 161 to 165-A of the Indian Penal Code
  • sub-clause (ix) of clause (c) of Section 2 of the Prevention of Corruption Act, 1988
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • The 1947 Act
  • The repealed Act of 1947
  • Section 617 of the Companies Act, 1956
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Cites
Cited by
Citation Codes
Neutral Citations
2002 INSC 404
Equivalent Citations
citation codes
Case Number
Disposition
Advocates
Judges
Acts
  • Clause (c) of Section 2 of the 1988 Act
  • Sub-clause (iii) of clause (c) of Section 2 of the 1988 Act
  • Sub-clause (ix) of clause (c) of Section 2 of the 1988 Act
  • Section 482 of the Criminal Procedure Code (CrPC)
  • Section 21 of the Indian Penal Code
  • Section 161 to 165-A of the Indian Penal Code
  • sub-clause (ix) of clause (c) of Section 2 of the Prevention of Corruption Act, 1988
  • Section 5, Subsection 2 of the 1983 Income Tax Act
  • The 1947 Act
  • The repealed Act of 1947
  • Section 617 of the Companies Act, 1956
Smart Summary

Factual and Procedural Background

The respondent, employed as a Supervisor in the District Cooperative Central Bank Limited, Nellore (“the Bank”), was prosecuted for allegedly accepting a bribe, an offence punishable under the Prevention of Corruption Act, 1988 (“the 1988 Act”). Exercising its inherent powers under Section 482 of the Code of Criminal Procedure, the High Court of Andhra Pradesh quashed the criminal proceedings on the ground that the respondent was not a “public servant” within the meaning of Section 2(c)(ix) of the 1988 Act. The Government of Andhra Pradesh and the Bank challenged that order before the Supreme Court. Special leave to appeal was granted, and the matter was heard on the merits.

Legal Issues Presented

  1. Whether an employee of a cooperative bank controlled or aided by the Government falls within the definition of “public servant” under Section 2(c) of the Prevention of Corruption Act, 1988.
  2. Whether the specific category in Section 2(c)(ix) (“president, secretary or other office-bearer” of certain cooperative societies) excludes employees of such societies from the broader category in Section 2(c)(iii).

Arguments of the Parties

Appellants (State of Andhra Pradesh & DCCB Nellore)

  • The definition of “public servant” in Section 2(c) is deliberately wide.
  • Under Section 2(c)(iii), any person in the service of a body “owned or controlled or aided by the Government” is a public servant; the Bank meets that description.

Respondent-Accused

  • Invoked the principle generalia specialibus non derogant: the specific provision in Section 2(c)(ix) governs cooperative societies, thereby excluding employees not expressly mentioned.
  • Relied on Supreme Court decisions in State of Gujarat v. Patel Ramjibhai Danabhai and Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth to support the primacy of the special provision.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
State of Gujarat v. Patel Ramjibhai Danabhai (1979) 3 SCC 347 Principle that a special provision overrides a general one (generalia specialibus non derogant). Cited by the respondent; the Court did not accept that Section 2(c)(ix) excluded Section 2(c)(iii).
Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27 Same interpretative principle of special provision prevailing over general. Cited by the respondent for the same proposition and similarly rejected.
State of M.P. v. Shri Ram Singh (2000) 5 SCC 88 Adopts a purposive, expansive construction of “public servant” under the 1988 Act. Relied on to justify a wide reading of Section 2(c) in line with the Act’s anti-corruption purpose.
State of Maharashtra v. Prabhakarrao (2002) 7 SCC 636 Holds that employees of a cooperative society controlled or aided by Government are public servants. Treated as directly governing the present issue; used to overrule the High Court’s view.
State of Maharashtra v. Laljit Rajshi Shah (2000) 2 SCC 699 Interprets “public servant” under the repealed 1947 Act (linked to IPC § 21). Distinguished by the Court as inapplicable because the 1988 Act contains a broader definition.

Court's Reasoning and Analysis

1. The High Court erred by focusing exclusively on Section 2(c)(ix) and ignoring Section 2(c)(iii). The latter expressly covers “any person in the service” of a body owned, controlled or aided by Government, which undisputedly describes the Bank.

2. Section 2(c)(ix) was intended to bring elected office-bearers (who are not employees) within the net of “public servant”. It does not impliedly exclude employees already covered under the broader clause (iii).

3. The 1988 Act was enacted to combat corruption through a deliberately expansive definition of “public servant”, as reflected in the Statement of Objects and Reasons and the Notes on Clauses. A purposive interpretation furthers that legislative intent.

4. Precedent in State of M.P. v. Shri Ram Singh mandates a wide construction of the term, and State of Maharashtra v. Prabhakarrao squarely holds that employees of government-controlled cooperative banks are public servants. These authorities foreclose the respondent’s contrary argument.

5. The respondent’s reliance on decisions invoking generalia specialibus non derogant was misplaced because those cases dealt with situations where a genuine conflict existed between a general and a special provision, which is not the case here.

Holding and Implications

Appeals Allowed; High Court order dated 26-9-2001 set aside. The trial court is directed to proceed with the corruption case against the respondent in accordance with law.

Implications: The ruling reaffirms that employees of cooperative banks owned, controlled or aided by Government are “public servants” under the Prevention of Corruption Act, 1988. The decision removes an interpretative obstacle to prosecuting such employees for corruption offences but does not create a new legal test.

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    Govt. Of Andhra Pradesh And Others v. P. Venku Reddy .

    D.M Dharmadhikari, J.— Special leave to appeal is granted.

    2. The learned counsel appearing for the parties are heard finally on merits of the case.

    3. The Government of Andhra Pradesh and District Cooperative Central Bank Limited, Nellore, through its General Manager, have preferred this appeal challenging the order dated 26-9-2001 of the Division Bench of the High Court of Andhra Pradesh whereby criminal case instituted against the respondent-accused, who was working as Supervisor in District Cooperative Central Bank Limited, Nellore, for the alleged offence of accepting bribe punishable under provisions of the Prevention of Corruption Act, 1988 (for short “the 1988 Act”) has been quashed in proceedings under Section 482 of the Criminal Procedure Code (for short “CrPC”).

    4. The High Court by the impugned order quashed the criminal case pending against Respondent 1 under the 1988 Act on the sole ground that the accused is not a “public servant” as defined in sub-clause (ix) of clause (c) of Section 2 of the 1988 Act. In the opinion of the High Court, the definition contained in sub-clause (ix) of clause (c) of Section 2 of the 1988 Act covers only President, Secretary and other office-bearers of a registered cooperative society engaged amongst other businesses in banking. Section 2 of the 1988 Act with the relevant clause (c) and sub-clauses (iii) and (ix) read as under:

    “2. Definitions.—In this Act, unless the context otherwise requires,—
    (a)-(b)***
    (c) ‘public servant’ means—
    (i)-(ii)***
    (iii) 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 or a government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956);
    (iv)-(viii)***
    (ix) any person who is the president, secretary or other office-bearer of a registered cooperative 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);”
    (emphasis supplied)

    5. The learned counsel appearing for the State and the District Cooperative Central Bank Limited, Nellore submit that the definition of “public servant” in clause (c) of Section 2 of the 1988 Act is very wide and the respondent-accused who is employed as Supervisor in the District Cooperative Central Bank Limited which is “an authority or a body owned or controlled or aided by the Government” in terms of sub-clause (iii) of clause (c) of Section 2 of the 1988 Act, clearly falls within the definition of “public servant”.

    6. On the other hand, learned counsel appearing for the respondent-accused, who supports the impugned judgment of the High Court by placing reliance on the decisions of the Supreme Court in the cases of State of Gujarat v. Patel Ramjibhai Danabhai (1979) 3 SCC 347 and Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth (1984) 4 SCC 27 contends that on comparative reading of sub-clauses (iii) and (ix) of clause (c) of Section 2 of the 1988 Act, the principle of interpretation generalia specialibus non derogant would apply. There being a special provision in sub-clause (ix) which covers only certain holders of offices of the specified cooperative societies, and does not include other employees of such societies, the general provision contained in sub-clause (iii) of clause (c) of Section 2 of the 1988 Act shall have no application. It is argued that the special provision in sub-clause (ix) shall exclude the general provision in sub-clause (iii).

    7. After hearing the learned counsel appearing for the parties, our conclusion is that the High Court is clearly in error in relying on sub-clause (ix) and overlooking sub-clause (iii) of clause (c) of Section 2 of the 1988 Act for quashing the proceedings on the ground that the respondent-accused is not covered by the definition of “public servant”.

    8. From the abovequoted sub-clause (ix) of clause (c) of Section 2 of the 1988 Act, it is evident that in the expansive definition of “public servant”, elected office-bearers with the President and Secretary of a registered cooperative society which is engaged in trade amongst others in “banking” and “receiving or having received any financial aid” from the Central or State Government, are included although such elected office-bearers are not servants in employment of the cooperative societies. But employees or servants of a cooperative society which is controlled or aided by the Government, are covered by sub-clause (iii) of clause (c) of Section 2 of the 1988 Act. Merely because such employees of cooperative societies are not covered by sub-clause (ix) along with holders of elective offices, the High Court ought not to have overlooked that the respondent, who is admittedly an employee of a cooperative bank which is controlled and aided by the Government, is covered within the comprehensive definition of “public servant” as contained in sub-clause (iii) of clause (c) of Section 2 of the 1988 Act. It is not disputed that the respondent-accused is in service of a cooperative Central bank which is an “authority or body” controlled and aided by the Government.

    9. It cannot be lost sight of that the 1988 Act, as its predecessor, that is, the repealed Act of 1947 on the same subject, was brought into force with the avowed purpose of effective prevention of bribery and corruption. The Act of 1988 which repeals and replaces the Act of 1947 contains a very wide definition of “public servant” in clause (c) of Section 2 of the 1988 Act. The Statement of Objects and Reasons contained in the Bill by which the Act was introduced in the legislature throws light on the intention of the legislature in providing a very comprehensive definition of the words “public servant”. Para 3 of the Statement of Objects and Reasons reads:

    “3. The Bill, inter alia, envisages widening the scope of the definition of the expression ‘public servant’, incorporation of offences under Sections 161 to 165-A of the Indian Penal Code, enhancement of penalties provided for these offences and incorporation of a provision that the order of the trial court upholding the grant of sanction for prosecution would be final if it has not already been challenged and the trial has commenced. In order to expedite the proceedings, provisions for day-to-day trial of cases and prohibitory provisions with regard to grant of stay and exercise of powers of revision on interlocutory orders have also been included.”

    10. Clause 2 of the Notes on Clauses in the Gazette of India, Extraordinary, Part II, Section 2, further clarifies the legislative intent thus:

    “2. This clause defines the expressions used in the Bill. Clause 2(c) defines ‘public servant’. In the existing definition the emphasis is on the authority employing and the authority remunerating. In the proposed definition the emphasis is on public duty. The definition of ‘election’ is based on the definition of this expression in the Indian Penal Code.”

    11. Under the repealed Act of 1947 as provided in Section 2 of the 1988 Act, the definition of “public servant” was restricted to “public servants” as defined in Section 21 of the Indian Penal Code. In order to curb effectively bribery and corruption not only in government establishments and departments but also in other semi-governmental authorities and bodies and their departments where the employees are entrusted with public duty, a comprehensive definition of “public servant” has been given in clause (c) of Section 2 of the 1988 Act.

    12. In construing the definition of “public servant” in clause (c) of Section 2 of the 1988 Act, the court is required to adopt a purposive approach as would give effect to the intention of the legislature. In that view the Statement of Objects and Reasons contained in the Bill leading to the passing of the Act can be taken assistance of. It gives the background in which the legislation was enacted. The present Act, with a much wider definition of “public servant”, was brought in force to purify public administration. When the legislature has used such a comprehensive definition of “public servant” to achieve the purpose of punishing and curbing growing corruption in government and semi-government departments, it would be appropriate not to limit the contents of the definition clause by construction which would be against the spirit of the statute. The definition of “public servant”, therefore, deserves a wide construction. (See State of M.P v. Shri Ram Singh (2000) 5 SCC 88, AIR 2000 SC 870.)

    13. As a matter of fact, we find that the point arising before us on the definition of “public servant” that it does include an employee of a banking cooperative society which is “controlled or aided by the Government” is clearly covered against the respondent-accused by the judgment in the case of State of Maharashtra v. Prabhakarrao (2002) 7 SCC 636, JT 2002 Supp (1) SC 5.

    14. The other decision relied on behalf of the respondent in the case of State of Maharashtra v. Laljit Rajshi Shah (2000) 2 SCC 699 is distinguishable as it was based on interpretation of the definition of “public servant” as was contained in the repealed Act of 1947 which restricted it to cover only such “public servants” as are included in Section 21 of the Indian Penal Code.

    15. The appeals, therefore, succeed and are allowed. The impugned order of the High Court dated 26-9-2001 is hereby set aside. The trial court is directed to proceed with the trial of the case against the respondent in accordance with law.

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    Govt. Of Andhra Pradesh And Others v. P. Venku Reddy .
    (Sep 23, 2002)