Supreme Court of India
CENTRAL BUREAU OF INVESTIGATION, BANK SECURITIES & FRAUD CELLversusRAMESH GELLI AND OTHERS
- Citation
- 2016 INSC 134
- Decided
- 23 February 2016
- Disposal
- Case Partly allowed
- Bench
- RANJAN GOGOI
Holding
The Chairman/Managing Director and Executive Director of Global Trust Bank are deemed public servants under Section 46A of the Banking Regulation Act, 1949 and therefore fall within the definition of "public servant" in Section 2(c) of the Prevention of Corruption Act, 1988.
Summary
The Central Bureau of Investigation appealed against orders that held the Chairman‑cum‑Managing Director and Executive Director of Global Trust Bank (a private bank before its 2004 amalgamation with Oriental Bank of Commerce) were not public servants for purposes of the Prevention of Corruption Act, 1988 (PC Act). The Court examined the definition of "public servant" under the PC Act, the deeming provision in Section 46A of the Banking Regulation Act, 1949, and the legislative intent to widen the scope of the PC Act. It held that Section 46A makes the bank’s top officers public servants, and that this deeming provision must be read harmoniously with the PC Act despite the repeal of the corresponding IPC sections. Consequently, the Special Judge’s refusal to take cognizance of the PC Act offences was erroneous. The appeal was allowed and the related writ petition dismissed.
Issues considered
- The applicability of Section 46A of the Banking Regulation Act, 1949 to officers of a private bank for purposes of the Prevention of Corruption Act, 1988.
- Whether the Chairman, Managing Director and Executive Director of Global Trust Bank qualify as "public servants" under Section 2(c) of the PC Act.
- The effect of the repeal of IPC Sections 161‑165A by the PC Act on the deeming provision of Section 46A.
- The proper construction of the statutes to give effect to the legislative intent of widening the definition of public servant.
Legislation cited
- Banking Regulation Act, 1949s. 46A
- Companies Act, 1956s. 617
- Indian Penal Code, 1860s. 161-165A, s. 21, s. 409
- Prevention of Corruption Act, 1988s. 13(1)(d), s. 13(2), s. 2(b), s. 2(c)
Subjects
public servantPrevention of Corruption ActBanking Regulation Actsection 46Astatutory interpretationprivate bankcorruption offencedefinition of officepublic duty
Judgment
[2016] l S.C.R. 762
A CENTRAL BUREAU OF INVESTIGATION, BANK SECURITIES
& FRAUD CELL
v.
RAMESH GELL! AND OTHERS
(Criminal Appeal Nos. I 077-1081 of2013)
B FEBRUARY 23, 2016
[PRAFULLA C. PANT AND RANJAN GOGOi, JJ.)
Prevention of Corruption Act, 1988 - s. 13(2) read with s.
J 3(1)(d) - Banking Regulation Act, 1949 - s. 46A - Chairman,
Directors and Officers of GTE-private bank, before its amalgamation
c with the Oriental Bank of Commerce - Whether public servants for
the purposes of their prosecution in respect of offences punishable
under the PC Act - Held: Chairman/Managing Director and
Executive Director of GTE bank are public servants for the purposes
of PC Act by virtue of s. 46A of the Banking Regulation Act, 1949 -
D Jn view of definition of public servant in s. 46A as amended, the
Managing Director and Executive Director of a Banking Company
operating under licence issued by Reserve Bank of India, were
already public servants, as such they cannot be excluded from
definition of 'public servant' - Merely because the PC Act repealed
ss. 161 to 165A !PC, it cannot be said, that the legislature had
E illlention to make s. 46A inapplicable for the purposes of PC Act -
Law which is not shown ultra vires must be given proper meaning -
s. 46A cannot be left meaningless and requires harmonious
construction - Interpretation of statutes.
Allowing the appeal filed by CBI and dismissing the writ
F petition filed by accused, the Court
PER PRAFULLA C. PANT, J.
HELD: 1.1 The object of enactment of Prevention of
Corruption Act, 1988, was to make the anti corruption law more
effective and widen its coverage. In view of definition of public
G servant in Section 46A of Banking Regulation Act, 1949 as
amended the Managing Director and Executive Director of :i
Banking Company operating under licence issued by Reserve
Bank of India, were already public servants, as such they cannot
be excluded from definition of 'public servant'. Over the general
H definition of 'public servant' given in Section 21 IPC, it is_ the
762
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 763
definition of 'public servant' given in the P.C. Act read with Section A
46-A of Banking Regulation Act, which holds the field for the
purposes of offences under the said Act. For banking business
what cannot be forgotten is Section 46A of Banking Regulation
Act, 1949 and merely for the reason that Sections 161 to 165A
IPC have been repealed by the P.C. Act, 1988, relevance of Section
B
46A of Banking Regulation Act, 1949, is not lost. [Para 24] [779-
B-D]
1.2 When P.C. Act, 1988 came into force, Section 46 of
Banking Regulation Act, 1949 was already in place, and since
the scope of P.C. Act, 1988 was to widen the definition of "public
servant", as such, merely for the reason that in 1994, while c
clarifying the word "chairman", legislature did not substitute
words "for the purposes of P.C. Act, 1988" for the expression
"for the purposes of Chapter IX of the Penal Code in Section
46A of Banking Regulation Act, 1949, it cannot be said, that the
legislature had intention to make Section 46A inapplicable· for D
the purposes of P.C. Act, 1988, by which Sections 161 to 165A
IPC were omitted, and the offences stood replaced by Sections 7
to 12 of P.C. Act, 1988. [Para 25] [779-E-F]
1.3 A law which is not shown ultra vires must be given
proper meaning. Section 46-A of Banking Regulation Act, 1949, E
cannot be left meaningless and requires harmonious construction.
As such, the Special Judge (CBI) erred in not taking cognizance
of offence punishable under Section 13(2) read with Section
13(1)(d) of P.C. Act, 1988. However, the accused cannot be said
to be public servant within the meaning of Section 21 IPC, as
such offence under Section 409 IPC may not get attracted, it is F
left open for the trial court to take cognizance Qf other offences
punishable under the Penal Code, if the same get attracted.
Therefore, the courts below erred in law in holding that accused
who were Chairman/Managing Director and Executive Director
of GTB respectively, were not public servants for the purposes G
of Prevention of Corruption Act, 1988. As such, the orders
impugned are set aside. [Paras 26, 27] [779-G-H; 780-A-C]
Govt. of Andhra Pradesh and Others vs. P Venku Reddy
2002 (2) Suppl. SCR 538: (2002) 7 SCC 631; Federal
Bank Ltd. vs. Sagar Thomas and others 2003 (4) Suppl.
H
764 SUPREME COURT REPORTS (2016] I S.C.R.
A SCR 121: (2003) 10 SCC 733; State of Maharashtra
& ors. vs. Brij/a/ Sadasukh Modanin 2015 SCC Online
SC 1403; P. V. Narasimha Rao vs. State (CBIISPEJ 1998
(2) SCR 870: (1998) 4 SCC 626; Housing Board of
Haryana v. Hwyana Housing Board Employees' Union
and others 1995 (4) Suppl. SCR 533: (1996) 1 SCC
B
95; Manish Trivedi v. State of Rajas than 2013 (12) SCR
205: (2014) 14 sec 420 - referred to.
PER RANJAN GOGOi, J. (SUPPLEMENTING):
1.1 The definition of public duty in Section 2(b) of the PC
Act, indeed, is wide. Discharge of duties in which the State, the
c public or the community at large has an interest has been brought
within the ambit of the expression 'public duty'. Performance of
such public duty by a person who is holding an office which requires
or authorize him to perform such duty is the si11e qua 11011 of the
definitiQn of the public servant contained in Section 2(c)(viii) of
D the PC Act. [Para 5) [781-E-F]
1.2 In the objects and reasons stated for enactment of the
Prevention of Corruption Act, 1988 it has been made more than
clear that the Act, illfer 11/ia, envisages widening of the scope of
th'e 'definition of public servant, nevertheless, the mere
performance of public duties by the holder of any office cannot
E
bring the incumbent within the meaning of the expression 'public
servant' as contained in Section 2(c) of the PC Act. The broad
definition of 'public duty' contained in Section 2(b) would be
capable of encompassing any duty attached to any office inasmuch
as in the cootem porary scenario there is hardly any office whose
F duties cannot, in the last resort, be traced to having a bearing on
public interest' or the interest of the community at large. Such a
wide understanding of the definition of public servant may have
the effect of obliterating all distinctions between the holder of a
private office or a public office ought to be maintained. Therefore,
it would be more reasonable to understand the expression "public
G
servant" by reference to the office and the duties performed in
connection therewith to be of a public character. [Para 7) [782-A-
D)
1.3 Section 46A, was amended by Act 20 of 1994 to bring
within its fold a larger category of functionaries of a banking
H company. Earlier, only the chairman, director and auditor had
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 765
come within the pnrview of the Section 46A. By virtue of Section A
46A, office bearers/employees of a Banking Company (including
a Private Banking Company) were "public servants" for the
purposes of Chapter IX I.P.C. with the enactment of the PC Act
the offences under Section 161 to 165A included in Chapter IX
of Code came to be deleted from the said Chapter IX and
B
engrafted under Sections 7 to 12 of the PC Act. With the deletion
of the said provisions from Chapter IX of the I.P.C. and inclusion
of the same in the PC Act there ought to have been a
corresponding insertion in Section 46A of the BR Act with regard
to the deeming provision therein being continued in respect of
officials of a Banking Company insofar as the offences under c
Sections 7 to 12 of the PC Act are concerned. However, the same
was not done. The Court need not speculate the reasons therefor,
though, perhaps one possible reason could be the wide expanse
of the definition of "public servant" as made by Section 2(c) of
the PC Act. In a situation where the legislative intent behind the
D
enactment of the PC Act was, inter alia, to expand the definition
of "public servant'', the omission to incorporate the relevant
provisions of the PC Act in Section 46A of the BR Act after
deletion of Sections 161 to 165A of the I.P.C. from Chapter IX
can be construed to be a wholly unintended legislative omission
which the Court can fill up by a process of interpretation. Though E
the rule of casus omissus i.e. "what has not been provided for in
the statute cannot be supplied by the Courts" is a strict rule of
interpretation there are certain well known exceptions thereto.
[Paras 8, 10) [782-F-H; 783-A-EJ
1.4 The enactment of the PC Act with the clear intent to F
widen the definition of 'public servant' cannot be allowed to have
the opposite effect by expressing judicial helplessness to rectify
or fill up what is a clear omission in .Section 46A. The omission to
continue to extend the deeming provisions in Section 46A to the
offences under Sections 7 to 12 of the PC Act must be understood
to be clearly unintended and hence capable of admitting a judicial G
exercise to fill up the same. The unequivocal legislative intent to
widen the definition of "public servant" by enacting the PC Act
cannot be allowed to be defeated by interpreting and
understanding the omission in Section 46A of the BR Act to be
incapable of being filled up by the court. [Para 13] (786-C-D]
H
766 SUPREME COURT REPORTS [2016) I S.C.R.
A P. V Narasimha Rao vs. Stare (CBIISPE) 1998 (2) SCR
870:(1998) 4 SCC 626; Bangalore Water Supply &
Sewerage Board Vs. A Rajappa and Others 1978 (3)
SCR 207:(1978) 2 SCC 213; Dadi Jagannadham Vs.
Jammulu Ramulu and others 2001 (2) Suppl. SCR
60:(2001) 7 sec 71 - referred to.
B
McMillan Vs. Guest (1942) AC 561; Seaford Court
Estates Ltd. Vs. Asher (1949) 2 AllER 155; Magar &
St. Mellons Rural District Council Vs. Newport
Corporation (1950) 2 AUER 1226 - referred to.
c Case Law Reference
In the judi:;ment of Prafulla C. Pant, J.
2002 (2) Suppl. SCR 538 referred to. Para 10
2003 (4) Suppl. SCR 121 referred to. Para 10
D 2015 SCC Online SC 1403 referred to. Para 19
1998 (~) SCR 870 referred to. Para.20
1995 (4) Suppl. SCR 533 referred to. Para 21
2013 (12) SCR 205 referred to. Para 22
E
In the judi:;ment of Ranjan Goi:;oi, J.
1998 (2) SCR 870 referred to Para 6
1978 (3) SCR 207 referred to Para 11
F
2001 (2) Suppl. SCR 60 referred to Para 12
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
Nos. 1077-1081 of2013
From the Judgment and Order dated 13.07.2009 of the High Court
G of Judicature at Mumbai in Criminal Revision Application No. 131 of
2007 with Criminal Writ Petition No. 2400 of2008 to 2403 of2008
WITH
W. P. (CRL.) NO. 167 OF 2015
Tushar Mehta,ASG, Rana Mukherjee, Mohan Parasaran, Siddharth
H
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 767
Luthra, Ranjana Narayan, T. A. Khan, B. V. Bairam Das, Arvind Kumar A
Sharma, G. Umapathy, R. Mekhala, Rakesh K. Sharma, Bina Gupta,
Viraj Gandhi, Sameer Chaudhary, Purnima Raj, Abhisaar Bairagi, Pallav
Pal it, {for M/s. Khaitan & Co.) for the appearing parties.
The Judgments of the Court were delivered by
PRAFULLA C. PANT, J. l. Appellant Central Bureau of B
Investigation (C.B.I) has challenged the judgment and order dated
13.07.2009, passed by the High Court ofJudicature at Bombay whereby
Criminal Revision Application No. 131 of2007 (filed by CBI) has been
dismissed, and Criminal Writ Petition Nos. 2400, 2401, 2402 and 2403 of
2008, filed by the accused/respondent are allowed in part, and upheld c
the order dated 05.02.2007 passed by the trial court i.e. Special Judge/
Additional Sessions Judge, Mumbai. The courts below have held that
cognizance cannot be taken against the accused namely Ramesh Gelli
Chairman and Managing Director, and Sridhar Subasri, Executive
Director of Global Trust Bank, on the ground that they are not public
servants. D
2. Writ Petition (Criminal) No. 167of2015 has been filed before
this Court by accused Ramesh Gelli praying quashing of charge sheet
'
filed by CBI in connection with FIR No. RC BO. II 2005/E/0003 dated
31.03.2005 relating to offences punishable under Section l 20B read with
Sections 420, 467, 468, 471 of Indian Penal Code (!PC) and offence E
punishable under Section 13(2) read with Section 13( I)( d) of the
Prevention of Corruption Act, 1988 (for short "the P.C. Act, 1988"),
pending before Special Judge, CBI, Patiala House Courts, New Delhi.
3. Briefly stated prosecution case is that the Global Trust Bank
(hereinafter referred as "GTB.'') was incorporated on 29. I 0.1993 as F
banking company under Companies Act, 1956. Said Bank was issued
licence dated 06.09 .1994 under Banking Regulation Act, 1949 by Reserve
Bank of India (for short "RBI"). Ramesh Gelli (writ petitioner before
this Court) was Chairman and Managing Director, and Sridhar Subasri
(writ petitioner before the High Court) was Executive Director of the
G
Bank. The two were also promoters of GTB. For raising their
contribution to the capital, the two accused (Ramesh Ge Iii and Sridhar
Subasri) obtained loans from various individuals and companies, including
Mis. Beautiful Group of Companies of accused Rajesh Mehta and Vijay
Mehta, and Mis. TrinityTechnomics Services Pvt. Ltd., of which accused
Vijay Mehta and his employees were directors. Mis. Beautiful Group H
768 SUPREME COURT REPORTS (2016] I S.C.R.
A of Companies opened their first account in the name of Beautiful
Diamonds Ltd. with G.T.B. in the year 1994-95. Investigation revealed
that various credit facilities were allowed to said company by Ramesh
Gelli and Sridhar Subasri, and they fraudulently instructed the branch
heads, without following norms for sanctioning the credit facilities. The
duo (Ramesh Gel Ii and Sridhar Subasri), abusing their official positions,
B
sanctioned higher credit limits to Mis. Beautiful Diamonds Ltd. against
regulations. According to CBI, the investigation further revealed that in
pursuance to the alleged conspiracy of the accused the funds of GTB
were diverted, and release of Rs.5.00 crores was made in the name of
Mis. Beautiful Realtors Ltd. on the request of Directors of Mis. Beautiful
c Diamonds Ltd. Said amount was further transferred to already overdrawn
account ofM/s. Beautiful Diamonds Ltd. In April, 2001, Directors of
Beautiful Group of Companies in pursuance of conspiracy with other
accused submitted another application for sanction of Rs.3 .00 crores as
diamond loan in the name ofM/s. Crystal Gems. Ramesh Ge Iii, Sridhar
Subasri and other accused, who were Directors of Beautiful Group of
D
Companies, said to have caused total wrongful loss of about Rs.41.00
crores to GTB. The accounts of Beautiful Diamonds Ltd. and other
companies, which availed funds from GTB, should have been declared
Non Performing Assets (NPA), but accused Ramesh Gelli and Sridhar
Subasri allegedly manipulated and showed the accounts of Beautiful
E Realtors Ltd. and Crystal Gems as higher profit yielding accounts. The
scam did not come to the light till 2005.
4. On 14.08.2004 GTB merged/amalgamated with Oriental Bank
of Commerce (for brevity "OBC"). An FIR dated 31.03 .2005 in respect
ofoffences punishable under Sections 420, 467, 468, 471 !PC and under
F Section 13(2) read with Section 13(1)(d) of the P.C. Act of 1988 was
registered by C.B.I on the complaint made by the ChiefVigilance Officer,
OBC, wherein the allegations were made that Ramesh Ge Iii and others,
including Directors ofM/s. World Tex Limited (for short "WTL") entered
into a criminal conspiracy to cheat GTB causing wrongful loss to the
tune of Rs.17.46 crores, and thereby earned corresponding wrongful
G
gain. After investigation, charge sheet was filed in said matter before
the Special Judge, CBI, Patiala House Courts, New Delhi.
5. Another First Information Report No. RC.12(E)/2005 I CBI!
BS & FC/Mumbai was registered by C.B.I. on 09.08.2005 for offences
punishable under Section 120B read with Sections 409 and 420 !PC,
H
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 769
[PRAFULLA C. PANT, J.)
initially against two employees ofGTB and two private persons Rajesh A
Mehta and Prashant Mehta on the complaint dated 26.07.2005 lodged
by the Chief Vigilance Officer, OBC. It is relevant to mention here that
GTB was a private sector bank, before its amalgamation in August 2004
with OBC, a public sector bank. In the FIR No. RC I 2E/2005/CBI/B.S
& FC/Mumbai Dt. 09.08.2005, it was alleged that GTB sancti9ned and
B
disbursed loans by throwing all prudent banking norms to winds and thus
created a large quantum ofNon Performing Assets (NPA)jeopardizing
the interests of thousands of depositors, but painted a rosy financial picture.
These loan transactions came to the light during audit after amalgamation
ofGTB with OBC, and it was noted that two accounts, namely that of
Mis. Beautiful Diamonds Ltd. and Mis. Crystal Gems were used to c
siphon out funds of the Bank. After investigation, charge sheets were
filed in this matter before Special Judge, Mumbai in respect of offences
punishable under Section I 208 read with Sections 409 and 420 !PC and
under Section 13(2) read with Section 13(1 )(d) of the P.C. Act, 1988.
However, on 05.02.2007 the Special Judge, Mumbai declined to take
D
cognizance ofoffence punishable under Section 13(2) read with S.3(1 )(d)
P.C Act, 1988, on the ground that accused No. I Ramesh Gelli and
accused No. 2 Sridhar Subasri were not public servants on the dates
transactions.said to have taken place, i.e. before amalgamation, and the
Special Judge directed that the charge sheet may be returned for being
submitted to appropriate Metropolitan Magistrate for taking cognizance E
in respect of offences punishable under !PC, i.e. for offence other than
punishable under the P.C. Act, 1988.
6. Since the High Court of Judicature at Bombay has upheld the
order dated 05.02.2007 by the impugned order, the CBI has approached
this Court through Special Leave. Further, since W.P.(Crl.) No. 167/ F
2015 filed by accused Ramesh Ge Iii also involves similar question oflaw
in the case at Delhi, as such both the connected matters are being disposed
of by this common order.
7. The common question oflaw involved in these criminal appeals
and connected writ petition, filed before us, is: G
Whether the Chairman, Directors and Officers of Global Trust
Bank Ltd. (a private bank before its amalgamation with the
Oriental Bank of Commerce), can be said to be public servants
for the purposes of their prosecution in respect of offences
punishable under Prevention of Corruption Act, 1988 or not? H
770 SUPREME COIJRT REPORTS [2016] I S.C.R.
A 8. It is admitted fact that GTB was a private sector bank operating
under banking licence dated 06.09.1994, issued by RBI under Banking
Regulation Act, I 949. It is also not disputed that on 14.08.2004 GTB
merged/amalgamated with OBC. The transactions of alleged fraud,
cheating, misappropriation and corruption relate to the period between
1994 to 2001, i.e. prior to amalgamation with public sector bank (OBC).
B
The dispute relates as to whether the then Chairman-cum-Managing
Director and Executive Director ofGTB come under definition of'public
servant' or not, for the purposes of the P.C. Act, 1988.
9. It is vehemently argued by Shri Mohan Parasaran and Shri
Sidharth Luthra, senior advocates appearing for the accused that the
c accused are not public servants, and cognizance cannot be taken against
the writ petitioner Ramesh Gelli and accused/respondent Sridhar Subasri,
who were said to be the Chairman-cum-Managing Director and Executive
Director respectively ofGTB before its amalgamation. It is further argued
that a person cannot be said to have been performing a public duty
D unless he holds some public office, and in this connection it is submitted
that the accused did not hold any public office during the period offences
said to have been committed. It is also contended that since Sections
16 I to I 65A in Chapter IX of !PC are repealed by Section 3 I of P.C.
Act, 1988, Section 46A of Banking Regulation Act, 1949 is of little help
to the prosecution. Mr. Luthra, learned senior counsel, further submitted
E that the relationship between the customer of a bank, and the bank is
that of a creditor and debtor, and the transactions between the two are
commercial in nature, as such, no public duty is involved.
I 0. On the other hand, Shri Tushar Mehta, learned senior counsel
for CBI argued that accused Ramesh Gelli and Sridhar Subasri were
F public servants in view of definition contained in Section 2(c) of P.C.
Act, 1988. Our attention is also drawn to Section 46A of Banking
Regulation Act, 1949, which provides that a whole time Chairman,
Managing Director, or Director of a banking company shall be deemed
to be a public servant. It is also contended that a banking company as
G defined under Section S(b) read with Section 3 5( A) of Banking Regulation
Act, 1949 is nothing but extended arm of Reserve Bank of India. In
support of arguments advanced on behalf of CBI, reliance is placed on
the principle oflaw laid down by this Court in Govt. ofAndhra Pradesh
and Others vs. P. Venku Reddy'. Lastly, it is submitted that a private
body discharging pub Iic duty or positive obligation of public nature actually
H • (2002J 7 sec 631 J
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 77 l
[PRAFULLA C. PANT, J.]
performs public function. In this connection, reference was made to the A
observations made by this court in paragraph 18, in Federal Bank Ltd.
vs. Sagar Thomas and others'.
11. We have considered the arguments and the counter arguments
and alsci gone through the relevant case laws on the issue.
12. Before further discussion it is just and proper to examine the B
object for which the Prevention of Corruption Act, 1988 was enacted by
the Parliament. The Statement of Objects and Reasons of the Bill is
reproduced below: -
"I. The bill is intended to make the existing anti-corruption laws
more effective by widening their coverage and by strengthening c
the provisions.
2. The Prevention of Corruption Act, 194 7, was amended in 1964
based on the recommendations of the Santhanan Committee.
There are provisions in Chapter IX of the Indian Penal Code to
deal with public servants and those who abet them by way of D
criminal misconduct. There are also provisions in the Criminal
Law Amendment Ordinance, 1944, to enable attachment of ill-
gotten wealth obtained through corrupt means, including from
transferees of such wealth. The bill seeks to incorporate all these
provisions with modifications so as to make the provisions more
effective in combating corruption among public servants. E
3. The bill, inter a/ia, envisages widening the scope ofthe definition
of the expression 'pub Iic servant', incorporation ofoffences under
sections 161to165A 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 F
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 or interlocutory orders have also been included.
G
4. Since the provisions of section 16 I A are incorporated in the
proposed legislation with an enhanced punishment, it is not
necessary to retain those sections in the Indian Penal Code.
Consequently, it is proposed to delete those sections with the
necessary saving provision.
2
(2003) 1osec 733 H
772 SUPREME COL:F..T REPORTS [2016] I S.C.R.
A 5. The notes on clauses explain in detail the provisions of the
Bill."
(Emphasis supplied)
From the Statement of Objects and Reasons of the P.C. Bill it is
clear that the Act was intended to make the anti corruption law more
B effective by widening its coverage. It is also clear that the Bill was
introduced to widen the scope of the definition of 'public servant'. Before
P.C. Act, 1988, it was the Prevention of Corruption Act, 1947 and Sectio~s
161to165A in Chapter IX of IPC which were governing the field of law
relating to prevention of corruption. The Parliament repealed the
Prevention of Corruption Act, 1947 and also omitted Section 161 to I 65A
c of 1.P.C as provided under Sections 30 and 31 of P.C. Act, 1988. Since
a new definition of'public servant' is given under P.C. Act, 1988, it is not
necessary here to reproduce the definition of 'public servant' given in
Section 21 of !PC.
13. Section 2(c) of P.C. Act, 1988, which holds the field, defines
D
'public servant' as under: -
"2.(c) "public servant'" means-
(i) any person in the service or pay of the Government or
remunerated by the Government by fees or commission for
the performance of any public duty;
E
(ii) any person in the service or pay of a local authority ;
(iii) any person in the service or payofa 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
F CompaniesAct, 1956;
(iv) any Judge, including any person empowered by law to
discharge, whether by himself or as a member of any body
of persons, any adjudicatory functions;
(v) any person authorised by a court ofjustice to perform any
G duty, in connection with the administration ofjustice, including
a liquidator, receiver or commissioner appointed by such
court;
(vi) any arbitrator or other person to whom any cause or matter
has been referred for decision or report by a court ofjustice
H or by a competent public authority;
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELLI 773
[PRAFULLA C. PANT, J.]
(vii) any person who holds an office by virtue of which he is A
empowered to prepare, publish, maintain or revise an
electoral roll or to conduct an election or part of an election;
(viii) any person who holds an office by virtue of which he is
authorised or required to perform any public duty;
(ix) any person who is the president, secretary or other office- B
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
c
Government or a Government company as defined in section
617 of the Companies Act, 1956;
(x) any person who is a chairman, member or employee of any
Service Commission or Board, by whatever name called,
or a member of any selection committee appointed by such D
Commission or Board for the conduct of any examination
or making any selection on behalf of such Commission or
Board;
(xi) any person who is a Vice-Chancellor or member of any
governing body, professor, reader, lecturer or any other E
teacher or employee, by whatever designation called, of
any University and any person whose services have been
availed of by a University or any other public authority in
connection with holding or conducting examinations;
(xii) any person who is an office-bearer or an employee of an
F
educational, scientific, social, cultural or other institution, in
whatever manner established, receiving or having received
any financial assistance from the Central Government or
any State Government, or local or other public authority.
Explanation I .-Persons falling under any of the above sub-clauses
are public servants, whether appointed by the Government or not. G
Explanation 2.-Wherever the words "public servant" occur, they
shall be understood of every person who is in actual possession of
the situation of a public servant, whatever legal defect there may
be in his right to hold that situation."
H
774 SUPREME COURT REPORTS [2016] I S.C.R.
A 14. Above definition shows that under Clause (viii) contained in
Section 2(c) of P.C. Act, 1988 a person who holds an office by virtue of
which he is authorized or required to perfonn any public duty, is a public
servant. Now, for the purposes of the present case this court is required
to examine as to whether the chainnan/managing director or executive
director of a private bank operating under licence issued by RBI under
B
Banking Regulation Act, 1949, held/holds an office and performed I
perfonns public duty so as to attract the definition of 'public servant'
quoted above.
15. Section 2(b) of P.C. Act, 1988 defines 'public duty' as under:
c "public duty" means a duty in the discharge of which the State,
the public or the community at large has an interest".
16. But, what is most relevant for the purpose of this case is
Section 46A of Banking Regulation Act, 1949, which reads as under: -
"46A. Chairman, director etc., to be public servants for the
D purposes of Chapter IX of the Indian Penal Code. - Every
chairman who is appointed on a whole-time basis, managing
director, director, auditor, liquidator, manager and any other
employee of a banking company shall be deemed to be a public
servant for the purposes of Chapter IX of the Indian Penal Code
E (45of1860)."
(Emphasis supplied)
17. Section 46A was inserted in Banking Regulation Act, 1949 by
Act No. 95156 with effect from 14.01.1957. The expression "every
chainnan who is appointed on a whole time basis, managing director,
F director, auditor" was substituted by Act No. 20/94 with effect from
31.01.1994 in place of "every chainnan, director, auditor". As such
managing director of a banking company is also deemed to be a public
servant. In the present case transactions in question relate to the period
subsequent to 31.01.1994.
G 18. In Federal Bank Ltd. v. Sagar Tflomas and otflers (supra)
this Court has held that a private company carrying banking business as
a scheduled bank cannot be tenned as a company carrying any statutory
or public duty. However, in said case the Court was examining as to
whether writ can be issued under Article 226 of the Constitution oflndia
against a scheduled bank or not. There was no issue before the Court
H
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 775
[PRAFULLA C. PANT, J.]
relating to deeming fiction contained in Section 46A of Banking Regulation A
Act, 1949 in respect of a chairman/managing director or director of a
banking company against whom a crime relating to anti-corruption was
registered.
19. In a recent case of State of Maharashtra & ors. v. Brijla/
Sadasukh Modani', this Court has observed as under: - B
"21. As we notice, the High Court has really been swayed by the
concept ofArticle 12 of the Constitution, the provisions contained
in the 1949 Act and in a mercurial manner taking note of the fact
that the multi-state society is not controlled or aided by the
Government has arrived at the conclusion. In our considered c
opinion, even any grant or any aid at the time of establishment of
the society or in any construction or in any structural concept or
any aspect would be an aid. We are inclined to think so as the
term 'aid' has not been defined. A sprinkle of aid to the society
will also bring an employee within the definition of 'public servant'.
The concept in entirety has to be observed in the backdrop of D
corruption ......."
20. Jn P. V. Narasimlia Rao vs. State (CBI/SPE)', this Court
has explained the word "office" in following manner: -
"61. ........ The word "office" is normally understood to mean "a
position to which certain duties are attached, especially a place of E
trust, authority or service under constituted authority". (See:
OXford Shorter English Dictionary, 3rd Edn., p. 1362.) In
McMillan v. Guest (1942 AC 561) Lord Wright has said:
"The word 'office' is of indefinite content. Its various meanings
cover four columns of the New English Dictionary, but I take F
as the most relevant for purposes of this case the following:
'A position or place to which certain duties are attached, -
especially one of a more or less public character.'"
In the same case Lord Atkin gave the following meaning:
" ... an offi'ce or employment which was subsisting, permanent, G
substantive position, which had an existence independent of
the person who filled' it, which went on and was filled in
succession by successive holders."
'2015 sec Online sc 1403
'(1998)4SCC626 H
776 SUPREME COURT REPORTS [2016] I S.C.R.
A In Statesman (PJ Ltd. v. H.R. Deb (AIR 1968 SC 1495) and
Mahadeo v. Shantibhai [(1969) 2 SCR 422] this Court has
adopted the meaning given by Lord Wright when it said:
"An office means no more than a position to which certain
duties are attached."
B 21. Attention of this court is drawn on behalf of the accused to
the case of Housinf( Board of Haryana v. Haryana Housing Board
Employees' Union and others-', wherein this Court has held that when
particular words pertaining to a class of genus are followed by general
words, the latter, namely, the general words are construed as limited to
the things of the same kind as those-specified, and this is known as the
c rule of ejusdem generis reflecting an attempt to reconcile incompatibility
between the specified and general words. This case is of little help to
the accused in the present case as managing director and director are
specifically mentioned in Section 46A of Banking Regulation Act, 1949.
22. In Manis/1 Trivedi v. State of Rajasthm1 6 , which pertains to
D
a case registered against a councillor under Prevention of Corruption
Act. 1988, this Court, while interpreting the word "public servant", made
following observations: -
"14. Section 87 of the Rajasthan Municipalities Act, 1959 makes
every Member to be public servant within the meaning of Section
E 21 of the Penal Code, 1860 and the same reads as follows:
"87. Members, etc. to be deemed public servants.--( I) Every
member, officer or servant, and every lessee of the levy of
any municipal tax, and every servant or other employee of any
such lessee shall be deemed to be a public servant within the
F meaning of Section 21 of the Penal Code, 1860 (Central Act
45of1860).
(2) The word 'Government• in the definition of 'legal
remuneration' in Section 161 of that Code shall, forthe purposes
of sub-section (I) of this section, be deemed to include a
G Municipal Board."
From a plain reading of the aforesaid provision it is evident that by
the aforesaid section the legislature has created a fiction that every
Member shall be deemed to be a public servant within the meaning
5
(1996) I SCC95
H '' (2014)14SCC420
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 777
[PRAFULLA C. PANT, J.]
of Section 21 of the Penal Code. It is well settled that the legislature A
is competent to create a legal fiction. A deeming provision is
enacted for the purpose of assuming the existence ofa fact which
does not really exist. When the legislature creates a legal fiction,
the court has to ascertain for what purpose the fiction is created
and after ascertaining this. to assume all those facts and
B
consequences which are incidental or inevitable corollaries for
giving effect to the fiction. In our opinion, the legislature, while
enacting Section 87 has, thus, created a legal fiction for the purpose
of assumihg that the Members, otherwise, may not be public
servants within the meaning of Section 21 of the Penal Code but
shall be assumed to be so in view of the legal fiction so created. c
In view of the aforesaid, there is no escape from the conclusion
that the appellant is a public servant within the meaning of Section
21 of the Penal Code.
xxx xxx xxx
16. Under the scheme of the Rajasthan Municipalities Act it is D
evident that the appellant happens to be a Councillor and a
Member of the Board. Further in view oflanguage of Section 87
of the Rajasthan Municipalities Act. he is a public servant within
the meaning of Section 21 of the Penal Code. Had this been a
case of prosecution under the Prevention of Corruption Act, I 94 7
then this would have been the end of the matter. Section 2 of this E
Act defines "public servant" to mean public servant as defined
under Section 21 of the Penal Code. However, under the Prevention
of Corruption Act, 1988, with which we are concerned in the
present appeal, the term "public servant" has been defined under
Section 2(c) thereof. In our opinion, prosecution under this Act F
can take place only of such persons, who come within the definition
of public servant therein. The definition of"public servant" under
the Prevention of Corruption Act. 194 7 and Section 2 I of the
Penal Code is of no consequence. The appellant is sought to be
prosecuted under the Prevention of Corruption Act, 1988 and, .
hence, to determine his status it would be necessary to look into G
its interpretation under Section 2(c) thereof. read with the
provisions of the Rajasthan Municipalities Act.
xxx xxx xxx
19. The present Act (the 1988 Act) envisages widening of the
scope of the definition of the expression "public servant". It was H
778 SUPREME COURT REPORTS (2016] 1 S.C.R.
A brought in force to purify pub Iic administration. The legislature
has used a comprehensive definition of"public servant" to achieve
the purpose of punishing and curbing corruption among public
servants. Hence, it would be inappropriate to limit the contents of
the definition.clause by a construction which would be against the
spirit of the statute. Bearing in mind this principle, when we consider
B
the case of the appellant, we have no doubt that he is a Pl!blic
servant within the meaning of Section 2(c) of the Act. Clause
(viii) of Section 2(c) of the present Act makes any person, who
holds an office by virtue of which he is authorised or required to
perform any public duty, to be a public servant. The word "office"
c is of indefinite connotation and, in the present context, it would
mean a position or place to which certain duties are attached and
has an existence which is independent of the persons who fill it.
Councillors and Members of the Board are positions which exist
under the Rajasthan Municipalities Act. It is independent of the
person who fills it. They perform various duties which are in the
D
field of public duty. From the conspectus of what we have observed
above, it is evident that appellant is a public servant within Section
2(c)(viii) of the Prevention of Corruption Act, 1988."
(Emphasis supplied)
E 23. At the end it is relevant to mention that in the case of Govt. of
A.P. and others v. Venku Reddy (supra), in which while interpreting
word 'public servant' this court has made following observations:
"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
F purposive approach as would give effect to the intention of the
legislature. In that view the Statement ~f ONects 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 mu.ch wider definition of
"public servant", was brought in force to purify public
G administration. When the legislature has used such a
comprehensive definition of "public servant" to achieve the
purpose ofpunishing 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
H would be against the spirit of the statute. The definition of"public
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 779
[PRAFULLA C. PANT, J.]
servant", therefore, deserves a wide construction. (See State of A
MP. v. Shri Ram Singh (2000) 5 SCC 88)"
24. In the light oflaw laid down by this court as above, it is clear
that object of enactment of P.C. Act, 1988, was to make the anti
corruption law more effective and widen its coverage. In view of definition
of public servant in Section 46A of Banking Regulation Act, 1949 as B
amended the Managing Director and Executive Director of a Banking
Company operating under licence issued by Reserve Bank Of India,
were already public servants, as such they cannot be excluded from
definition of 'public servant'. We are of the view that over the general
definition of'public servant' given in Section·21 of!PC, it is the definition
of 'public servant' given in the P.C. Act, 1988, read with Section 46-A of
c
Banking Regulation Act, which holds the field forthe purposes of offences
under the said Act. For banking business what cannot be forgotten is
Section 46A of Banking Regulation Act, 1949 and merely for the reason
that Sections 161 to 165A of !PC have been repealed by the P.C. Act,
1988, relevance of Section 46A of Banking Regulation Act, 1949, is not D
lost.
25. Be it noted that when Prevention of Corruption Act, 1988
came into force, Section 46 ofBanking Regulation Act, 1949 was already
in place, and since the scope of P.C. Act, 1988 was to widen the definition
of"public servant". As such, merely for the reason that in 1994, while E
clarifying the word "chairman", legislature did not substitute words "for
the purposes of Prevention of Corruption Act, 1988" for the expression
"for the purposes of Chapter IX 9fthe Indian Penal Code (45 of 1860)"
in Section 46A of Banking Reg61ation Act, 1949, it cannot be said, that
the legislature had intention to make Section 46A inapplicable for the
purposes of P.C. Act, 1988, by which Sections 161to165Aof!PC were F
omitted, and the offences stood replaced by Sections 7 to 13 of P.C. Act,
1988.
26. A law which is not shown ultravires must be given proper
meaning. Section 46-AofBanking Regulation Act, 1949, cannot be left
meaningless and requires harmonious construction. As such in our opinion, G
the Special Judge (CBI) has erred in not taking cognizance of offence
punishable under Section 13(2) read with Section 13(1 )(d) of P.C. Act,
1988. However, we may make it clear that in the present case the
accused cannot be said to be public servant within the meaning of
Section 21 !PC, as such offence under Section 409 !PC may not get
H
780 SUPREME COURT REPORTS [2016] 1 S.C.R.
A attracted, we leave it open for the trial court to take cognizance of other
offences punishable under Indian Penal Code, ifthe same get attracted.
27. Therefore, having considered the submissions made before
us, and after going through the papers on record, and further keeping in
mind the Statement of Objects and Reasons of the Bill relating to
B Prevention of Corruption Act, 1988 read with Section 46A of Banking
Regulation Act, 1949, we are of the opinion that the courts below have
erred in law in holding that accused Ramesh Gelli and Sridhar Subasri,
who were Chairman/Managing Director and Executive Director ofGTB
respectively, were not public servants for the purposes of Prevention of
Corruption Act, 1988. As such, the orders impugned are liable to be set
c aside. Accordingly, without expressing any opinion on final merits of the
cases before the trial courts in Mumbai and Delhi, Criminal Appeal
Nos. 1077-1081 of2013 filed by CBI, are allowed, and Writ Petition
(Cr!.) No. 167 of2015 stands dismissed.
D PER RANJAN GOGOi, J. I. I have had the privilege of going
through the judgment of my learned brother Prafulla C. Pant, J. Though
I am in full agreement with the conclusions reached by my learned
brother, I would like to give my own reasons for the same.
2. The question arising has to be answered firstly within the four
corners of the definition of"public servant" as contained in Section 2(c)
E
of the Prevention of Corruption Act, 1988 (hereinafter referred to as
'the PC Act'), particularly, those contained in Section 2(c)(viii), which is
extracted below.
2. ""Definitions.-!11 this Act, unless the context otherwise
requires,-
F
(c) "Public Servant" means, -
(i) xxxx xxxxx
(ii) xxxx xxxxx
(iii) xxxx xxxxx
G (iv) xxxx xxxxx
(v) xxxx xxxxx
(vi) xxxx xxxxx
(vii) xxxxxxxxx
(viii) any person who holds an office by virtue of which he is
H authorized or required to perform any public duty;"
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 781
[RANJAN GOGOi, J.]
(ix) xxxx xxxxx A
(x) xxxx xxxxx
(xi) xxxx xxxxx
(xii) xxxxxxxxx"
3. While understanding the true purport and effect of the aforesaid
B
provision of the PC Act, the meaning of the expression "office" appearing
therein as well as "public duty" which is defined by Section 2(b) has also
to be understood.
4. A reference to Section 2(b) of the PC Act which defines "public
duty" may at this stage be appropriate to be made.
c
"2. (b) "public duty" means a duty in discharge of which the
State, the public or the community at large has an i111erest."
Explanation.- In this clause "State" includes 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 D
Government or a Government company as de.fined in Section
617 of the Companies Act, 1956 (1 of 1956);"
5. The definition of public duty in Section 2(b) of the PC Act,
indeed, is wide. Discharge of duties in which the State, the public or the
community at large has an interest has been brought within the ambit of E
the expression 'public duty'. Performance of such public duty by a
person who is holding an office which requires or authorize him to perform
such duty is the sine qua 11011 of the definition of the public servant
contained in Section 2(c)(viii) of the PC Act. The expressions 'office'
and 'public duty' appearing in the relevant part of the PC Act would
therefore require a close understanding. F
6. In P. V. Narasimha Rao Vs. State (CBl/SPE)1 the meaning
of the expression 'office' appearing in the relevant provision of the PC
Act has been understood as "a position or place to which certain duties
are attached specially one ofa more or less public character." Following
the views expressed by Lord Atkin in McMillan Vs. Guest', this Court G
had approved the meaning of the expression 'office' to be referable to a
position which has existence independent of the person who fills up the
same and which is required to be filled up in succession by successive
holders.
sec 626
1 (1998) 4
' (1942)AC 561 H
782 SUPREME COURT REPORTS [2016) I S.C.R.
A 7. While there can be no mannerof doubt that in the Objects and
Reasons stated for enactment of the Prevention of Corruption Act, 1988
it has been made more than clear that the Act, inter a/ia, envisages
.widening of the scope of the definition of public servant, nevertheless,
the mere performance of public duties by the holderofany office cannot
bring the incumbent within the meaning ofthe expression 'public servant'
B
as contained in Section 2(c) of the PC Act. The broad definition of
'public duty' contained in Section 2(b) would be capable of encompassing
any duty attached to any office inasmuch as in the contemporary scenario
there is hardly any office whose duties cannot, in the last resort, be
traced to having a bearing on public interest or the interest of the
c community at large. Such a wide understanding of the definition of
public servant may have the effect of obliterating all distinctions between
the holder of a private office or a public office which, in my considered
view, ought to be maintained. Therefore, according to me, it would be
more reasonable to understand the expression "pub Iic servant" by
reference to the office and the duties performed in connection therewith
D
to be of a public character.
8. Coming to the next limb of the case, namely, the applicability of
the provisions of Section 46A of the Banking Regulation Act, 1949
(hereinafter referred to as the 'BR Act') what is to be found is that a
chairman appointed on a whole time basis, managing director, director,
E auditor, liquidator, manager and any other employee of a banking company
is deemed to be a public servant for the purposes of Chapter IX of the
Indian Penal Code. Section 46A, was amended by Act 20 of 1994 to
bring within its fold a larger category of functionaries of a banking
company. Earlier, only the chairman, director and auditor had come within
F the purview of the aforesaid Section 46A.
9. Sections 161 to l 65A contained in Chapter IX of the Indian
Penal Code have been repealed by Section 31 of the Prevention of
Corruption Act, 194 7 and the said offences have been engrafted in
Sections 7, 8, 9, 10, 11 and 12 of the Prevention of Corruption Act, 1988.
G Section l 66(as originally enacted), Section 167 (with amendment),
Sections 168, 169, 170 and 171 (as originally enacted) continue to remain
in Chapter IX of the Indian Penal Code even after enactment of the
Prevention of Corruption Act, 1988.
10. By virtue of Section 46A of the BR Act office bearers/
H employees of a Banking Company (including a Private Banking
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 783
[RANJAN GOGOI, J.]
Company) were "public servants" for the purposes of Chapter IX of the A
I.P.C. with the enactment of the PC Act the offences under Section 161
to l 65A included in Chapter IX of Code came to be deleted from the
said Chapter IX and engrafted under Sections 7 to 12 of the PC Act.
With the deletion of the aforesaid provisions from Chapter IX of the
I.P.C. and inclusion of the same in the PC Act there ought to have been
B
a corresponding insertion in Section 46A of the BR Act with regard to
the deeming provision therein being continued in respect of oft'idals ofa
Banking Company insofar as the offences under Sections 7 to 12 of the
PC Act are concerned. However, the same was not done. The Court
·need not speculate the reasons therefor, though, perhaps one possible
reason could be the wide expanse of the definition of"public servant" as c
made by Section 2( c) of the PC Act. Be that as it may, in a situation
where the legislative intent behind the enactment of the PC Act was,
inter alia, to expand the definition of"public servant", the omission to
incorporate the relevant provisions of the PC Act in Section 46A of the
BR Act after deletion of Sections 161 to l 65A of the l.P.C. from Chapter
D
IX can be construed to be a wholly unintended legislative omission which
the Court can fill up by a process of interpretation. Though the rule of
casus omissus i.e. "what has not been provided for in the statute cannot
be supplied by the Courts" is a strict rule of interpretation there are
certain well known exceptions thereto. The following opinion of Lord
Denning in Seaford Court Estates Ltd Vs. Asher' noticed and approved E
by this Court may be taken note of.
"The English language is not an instrument of mathematical
precision. Our literature would be much the poorer if it were
.... He (The Judge) must set to work in the constructive task of
finding the intention of Parliament, and he must do this not F
only from the language of the statute, but also from a
consideration of the social conditions which gave rise to it,
and of the mischief which it was passed to remedy, and then
he must supplement the written word so as to give ''force and
life" to the intention of the legislature ..... A judge should ask
himself the question, how, if the makers of the Act had G
themselves come across this ruck in the texture of it, they
would have straightened it out? He must then do as they would
have done. A judge must not alter the material of which the
Act is woven, but he can and should iron out the creases. "
' ( 1949) 2AllER 155 at page 164 H
784 SUPREME COURT REPORTS [2016] l S.C.R.
A In Magor & St. Me//011s Rural District Cou11cil Vs. Newport
Corporation' the learned judge restated the above principles in a
somewhat different form to the following effect :
"We sit here to find out the intention of Parliament and of
ministers and carry it out, and we do this better by filling in
B the gaps and maki11g sense of the enactment than by opening
it up to destructive analysis. "
11. Though the above observations of Lord Denning had invited
sharp criticism in his own country we find reference to the same and
implicit approval thereof in the judicial quest to define the expression
c "industry" in Bangalore Water Supply & Sewerage Boa.rd Vs. A
Rajappa and Otl1ers5. Paragraphs 147 and 148 of the opinion of Chief
Justice M.H. Beg in Ba11galore Water Supply & Sewerage Board
(supra), which are quoted below, would clearly indicate the acceptance
of this Court referred to earlier.
D "147. My learned Brother has relied 011 what was considered
in England a somewhat unorthodox method of construction
in Seaford Court Estates Ltd. v. Asher {(1949 2 ALL ER 155,
164}, where Lord Denning, L.J., said :
When a defect appears a Judge cannot simply fold his hands
E and blame the draftsman. He must set to work on the
constructive task of finding the intention of Parliament -
and then he must supplement the written words so as to
give force and life' to the intention of legislature. A Judge
should ask himself the question how, if the makers of the
Act had themselves come across this ruck in the texture of
F it, they would have straightened it out? He must then do as
they would have done. A Judge must not alter the material
of which the Act is woven. but he can and should iron out
the creases.
When this case went up to the House of Lords it appears that
G the Law Lords disapproved of the bold effort of Lord Denning
to make ambiguous legislation more comprehensible. Lord
Simonds found it to be "a naked usurpation of the legislative
function under the thin disguise of interpretation". Lord
' ( 1950) 2 AllER 1226
H '(1978)2SCC213
CBI, BANK SECURITIES & FRAUD CELL v. RAMESH GELL! 785
[RANJAN GOGOi, J.]
Morton (with whom Lord Goddard entirely ay;reed) observed: A
"These heroics are out of place" and Lord Tucker said "Your
Lordships would be acting in a legislative rather than a
iudicial capacity if the view put fonvard by Denning, L.J.,
were to prevail. "
148. Perhaps, with the passage of time, what may be described B
as the extension of a method resembling the ''arm-chair rule"
in the construction of wills. Judges can more frankly step
into the shoes of the legislature where an enactment leaves its
own intentions in much too nebulous or uncertain a state. In
M. Pentiah v. Muddala Veeramallappa [(1961) 2 SCR 295],
Sarkar, J., approved of the reasoning, set out above, adopted c
by Lord Denning. And, I must say that, in a case where the
definition of "industry" is left in the state in which we find it,
the situation perhaps calls for some judicial heroics to cope
with the difficulties raised. (Underlining is mine)
12. There are other judicial precedents for the view that I have D
preferred to take and reach the same eventual conclusion that my learned
brother Prafulla C. Pant, J. has reached. I would like to refer to only one
of them specifically, namely, the decision ofa Constitution Bench of this
Court in Dadi Jagannadlwm Vs. Jammulu Ramulu and others'.
Order XXI Rule 89 read with Rule 92(2) of the CPC provided for E
filing of an application to set aside a sale. Such an application was required
to be made after deposit of the amounts specified within 30 days from
the date of the sale. While the said provisibn did not undergo any
amendment, Article 127 of the Limitation Act, 1963 providing a time
limit of 30 days for filing of the application to set aside the sale was F
amended and the time was extended from 30 days to 60 days. Taking
note of the objects and reasons for the amendment of the Limitation
Act, namely, that the period needed to be enlarged from 30 to 60 days as
the period of 30 days was considered to be too short, a Constitution
Bench of this Court in Dadi Jagannadham (supra) harmonised the
situation by understanding Order XX! rule 89 to be casting an obligatiOn G
on the Court to set aside the sale if the application for setting aside along
with deposit is made within 30 days. However, if such an application
along with the deposit is made after 30 days but before the period of 60
days as contemplated by Article 127 of the Limitation Act, 1963, (as
6
(2001)7SCC71 H
786 SUPREME COURT REPORTS (2016] l S.C.R.
A amended) the Court would still have the discretion to set aside the same.
The period of 30 days in Order 21 Rule 89/92(2) CPC referred to
hereinabove was subsequently (by Act 22 of2002) amended to 60 days
also.
13. Turing to the case in hand there can be no dispute that before
B enactment of the PC Act, Section 46A of the BR Act had the effect of
treating the concerned employees/office bearers of a Banking Company
as public servants forthe purposes of Chapter IX of the !PC by virtue of
the deeming provision contained therein. The enactment of the PC Act
with the clear intent to widen the definition of'public servant' cannot be
allowed to have the opposite effect by expressing judicial helplessness
c to rectify or fill up what is a clear omission in Section 46A of the BR
Act. The omission to continue to extend the deeming provisions in Section
46A of the BR Act to the offences under Sections 7 to 12 of the PC Act
must be understood to be clearly unintended and hence capable of
admitting a judicial exercise to fill up the same. The unequivocal
D legislative intent to widen the definition of"public servant" by enacting
the PC Act cannot be allowed to be defeated by interpreting and
understanding the omission in Section 46A of the BR Act to be incapable
of being filled up by the court.
14. In the above view of the matter, I also arrive at the same
E · conclusion as my learned Brother Prafulla C. Pant, J. has reached, namely,
that the accused respondents are public servants for the purpose of the
PC Act by virtue of the provisions of Section 46A of the Banking
Regulation Act, 19.49 and the prosecutions launched against the accused
respondents are maintainable in law. Consequently, the criminal appeals
filed by the C.B.I. are allowed and Writ Petition (Criminal) No. 167 of
F 2015 is dismissed.
Nidhi Jain Appeal partly allowed.
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