STATE OF MAHARASHTRAversusLALJIT RAJSHI SHAH AND ORS.

       i


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                                 STATE OF MAHARASHTRA
                                                  v.
                                                                                              A

                              LAL.TIT RAJSHI SHAH AND ORS.

                                       FEBRUARY 28, 2000

                    [G.B. PATTANAIK AND N. SANTOSH HEGDE, JJ.]                                B

                  Penal Code, 1860-Section 21 Maharashtra Co-operative Societies Act,
           1960-Sections 161 and 2(20)-Public servant for purpose of the Code-In-
           corporation of section 21 of the code in section 161 of the Maharashtra Co-
           operative Societies Act-Held, chairman and the members of managing                 C
           committee of a co-operative society under the Act not public servant-Preven-
           tion of CorrnptionAct, 1947, sections 2, 5(1) and 5(2)--Constitution of India
           Articles 245, 246 and 254(2) and Seventh Schedule list II entry 32 and List
           III entry I.

                 Interpretation of statutes :                                                 D
                 Pari materia provisions-Penal Code and Maharashtra Co-operative
           Societies Act-Held, not statutes in pari materia as both statutes have different
           objects and sections with separate ingredients.

                  Legal fiction-Construing of-Not to be extended beyond the purpose           E
           for which it is created-To be restricted for the purpose of the Act for which
           it is enacted and not be extended to cover another Act.

                 Words and Phrases :

                 'Public servant'-Meaning of                                                  F

                 'Deemed to be'-Meaning of

                 Respondents were the chairman and the members of the managing
           committee of a co-operative society under the Maharashtra Co-operative
           Societies Act. They were prosecuted for offences under section 409 of the G
           Indian Penal Code and section 5(1) and (2) of the Prevention of Corrup-
           tion Act. Respondents contended that they are not 'public servants' for the
           purpose of offences under the Code and the prosecution was not main-
           tainable. High Court held that a person defined as "officer" under section
           2(20) of the Maharashtra Co-operative Societies Act is not a "Public H
                                             1239
    1240                  SUPREME COURT REPORTS                    [2000) 1 S.C.R.
A Servant" within the meaning of section 2 of the Prevention of Corruption
    Act, by virtue of provisions of section 161 of the Maharashtra Co-operative
    Societies Act, read with Section 21 of the Penal Code. Hence these appeal.

           Dismissing thl! app!!als, the Court

B         HELD : 1.1. 'The respondents cannot be held to be 'public servants'
    as defined under Section 21 of the Indian Penal Code notwithstanding the
    incorporation of Section 21 of the Code in section 161 of the Maharashtra
    Co-operative Societies Act and, therefore, no cognizance can be taken of
    the offences under the Prevention of Corruption Act. The inclusion of the
C   persons who are 'public servants' under section 161 of the Co-operative
    Societies Act would be repugnant to the definition of 'public servant' under
    section 21 of the Indian Penal Code. [1242-A-B; 1244-E-F]

         Ramesh Balkrishna Ku/kami v. State of Maharashtra, [1985] 3 SCC
    606 and R.S. Nayak v. A.R. Antulay, [1984] 2 SCC 183, relied on.
D
          2.1. The Indian Penal Code and the Maharashtra Co-operative
    Societies Act are not statutes in pari mate1ia. The Co-operative Societies
    Act is a completely self-contained statute with its own provisions and has
    created specific offences quite different from the offences in the Indian
E   Penal Code. [1244-G]

           2.2. In interpreting a provision creating a legal fiction, court is to
    ascertain for what purpose the fiction is created, and after ascertaining
    this, the court is to assume all those facts and consequences which are
    incidental or inevitable corollaries to giving effect to the fiction. It is not
F
    to be extended beyond the purpose for which it is created, or beyond the
    language of the section by which it is created. A legal fiction in terms
    enacted for the purposes of one Act is normally restricted to that Act and
    cannot be extended to cover another Act. Thus, even though the legislature
    had incorporated the provisions of Section 21 of the Indian Penal Code
G   into the Co-operative Act, in order to define a 'public servant' but those
    'public servants' cannot be prosecuted for having committed the offence
    under the Indian Penal Code. [1245-B-E]                                           •

           3,1. When a person is "deemed to be" something, the only meaning
H possible is that whereas he is not in reality that something, the Act of
                      STATEv. L.R.SHAH[PATTANAIK,J.]                     1241

    legislature requires him to be treated as if obviously for the purposes of A
    the said Act and not othernise. [1245-E-F]

          CRIMINAL APPELLATE JURISDICTION                   Criminal Appeal
    Nos. 752-755A of 1995.

          From the Judgment and Order dated 12/13.1.94 of the Bombay High        B
    Court in Crl R.A. Nos. 144/86, 145-146/86 and Cr!. Application No. 20/93
    in Cr!. W.P. No. 738 of 1992.

         D.M. Nargolkar, A.S. Bhasme, S.S. Shinde and G.B. Sathe for the
    Appellant.                                                                   C

         S.V. Deshpande, Pramit Saxena and Mrs. Anuradha Rustagi for the
    Respondents.

          The Judgment of the Court was delivered by
                                                                                 D
           PATIANAIK, J. These appeals by grant of leave by the High Court
    itself under Article 134(1)(c) of the Constitution of India read with Rule
    28(2) of the Supreme Court Rules, by the State of Maharashtra, raises the
    question whether the Chairman of a Co-operative Society under the
    Maharashtra Co-operative Societies Act, can be held to be a 'public
    servant' for the purpose of Section 21 of the Indian Penal Code and as       E
    such, can be proceeded against for offences under Section 5(1) read with
    Section 5(2) of the Prevention of Corruption Act, 1947.

           The short facts necessary_for disposal of these appeals may be briefly
    stated as under. On the basis of criminal prosecution under Sections 120-B, p
    409, 420, 467, 471 and 477-A of the Indian Penal Code, Sections 7 and 9
    of the Essential Commodities Act and Sections 5[1)[c) and 5[1)[d) read with
    Section 5[2) of the Prevention of Corruption Act, the Special Judge took
    cognizance of the offences as against the accused respondents. The ac-
    cused persons are the members of the Managing Committee of the co-
    operative societies and the Chairman of such co-operative societies. It was G
    agitated before the learned Special Judge by the accused persons that they
~   are not 'public servants' for the purposes of offences under Section 409 of
    the Indian Penal Code and Section 5[1)(c) and 5[1)[d] of the Prevention of
    Corruption Act, 1947 and further, the prosecution is not maintainable for
    want of previous sanction. The learned Special Judge considered the H
    1242                 SUPREME COURT REPORTS                   [2000] 1 S.C.R.

A   provisions of Section 161 of the Maharashtra Co-operative Societies Act
    (hereinafter referred to as 'the Act') and came to the conclusion that the
    accused persons cannot be held to be 'public servants' as defined under
                                                                                    -
    Section 21 of the Indian Penal Code notwithstanding the incorporation of
    Section 21 of the Indian Penal Code in Section 161 of the Act and,
    therefore, no cognizance can be taken of the offences under the Prevention
B   of Corruption Act. On the question of sanction, the Special Judge also
    agreeing with the accused persons held that no previous sanction having
    been obtained for prosecution of the accused persons, the cognizance is
    bad in law. Assailing the order of learned Special Judge, the State moved
    the High Court. When the matter was placed before a learned Single
c   Judge, he referred the matter to a larger Bench as he did not agree with
    the views expressed by several other learned Single Judges of the Court.
    The learned Single Judge formulated two questions for being answered by
    the larger Bench:

            "(1) Whether a person defined as "officer" under Clause (20) of
D           Section 2 of the Maharashtra Co-operative Societies Act, 1960, is
            a "Public Servant" within the meaning of Section 2 of the Prevention
            of Corruption Act, 1947 (II of 1947), by virtue of the provisions of
            Section 161 of the Maharashtra Co-operative Societies Act, 1960,
            read with Section 21 of the Indian Penal Code?
E
            (2) Whether, assuming that provisions of Section 2 of the Preven-
            tion of Corruption Act, 1947 are applicable to such a person, is
            the sanction to prosecute such a person required under any of the
            Clauses of sub-section (1) of Section 6 of the Prevention of Cor-
F           ruption Act, 1947 capable of being given under the Maharashtra
            Co-operative Societies Act, 1960?"

          The Division Bench by the impugned Judgment analysed the
    provisions of Section 161 of the Act as well as Section 21 of the Indian
    Penal Code and Section 2 of the Prevention of Corruption Act, 1947. The
G   Division Bench of the High Court came to the conclusion that Section 161
    of the Act incorporating Section 21 of the Indian Penal Code ipso facto
    does not enlarge the definition of the term 'public servant' in Section 21 of
    the Indian Penal Code. It further held that the State Legislature which was
    competent to amend Section 21 of the Indian Penal Code, the subject of
H   criminal law being on the Concurrent List and yet the said not having been
                  STATE v. LR. SHAH [PATTANAIK, J.]                  1243

done, the expression 'public servant' under Section 161 of the Act would A
mean those officers to be 'public servants' for the purpose of offences
under the Co-operative Societies Act and Section 21 of the Indian Penal
Code cannot be said to have engrafted into Section 161 of the Act.
Accordingly, the High Court held that the accused persons cannot be
prosecuted for offences under Section 409 of the Indian Penal Code and
Sections 5[1)[c] and 5[1)[d] read with 5(2) of the Prevention of Corruption B
Act, though they can be prosecuted for other offences f~r which cognizance
had been taken. Having held so, leave to appeal having been prayed for by
the State, the High Court granted leave under Article 134(1)(c) of the
Constitution read with Rule 28(2) of the Supreme Court Rules and hence
~~~~~~                                                                      c
       On behalf of the appellant-State, it is contended that the Registrars
and other officers under the Co-operative Societies Act, having been held
by the Act itself, deemed to be 'public servants' within the meaning of
Section 21 of the Indian Penal Code, those officers could be prosecuted D
for the offences under Indian Penal Code notwithstanding the fact that they
do not become 'public servants' under Section 21 of the Indian Penal Code
and the High Court, therefore, was in error in coming to the conclusion
that until and unless the provisions of Section 21 of the Indian Penal Code
are amended, these officers cannot be prosecuted for offences committed
under Indian Penal Code.                                                     E

      Mr. Deshpande, learned counsel appearing for the respondents on
the other hand contended that the provisions of Maharashtra Co- operative
Societies Act, were enacted by the State Legislature, for which they had ·
the competence under Entry 32 of List II of the Seventh Schedule read F
with Entry 64 thereof, whereas Indian Penal Code is an pre-existing law,
which was there at the commencement of the Constitution and is a legis-
lation under Entry 1 of List III of the Seventh Schedule. The two Statutes
operate in different and distinct field and, therefore, the provisions thereof
have to be judged with reference to its own source and this being the
position in law, an officer who may be a 'public servant' under Section 161 G
of the Co-operative Societies Act cannot be prosecuted for offences under
the Indian Penal Code, so long as Section 21 of the Indian Penal Code, is
not amended and the impugned judgment of the High Court, therefore, is
unassailable. Tlte learned counsel further submitted that in view of the
pronouncement of the Supreme Court inAnntlay's case, (1984] 2 SCC 183, H
    1244                   SUPREME COURT REPORTS                    (2000] 1 S.C.R.

A indicating as to who can be a 'public servant', the elected office bearers or'
    the Co-operative Society cannot come within the purview of the said
    defmition and, therefore, they cannot be prosecuted for offences under the
    Indian Penal Code, until and unless Section 21 of the Indian Penal Code
    itself is amended. Lastly, he urged that this question has been decided by
    this Court in Ramesh Balklishna Kulkami v. State of Maharashtra, [1985) 3
B   SCC 606, wherein an identical provision under Section 302 of the
    Maharashtra Municipalities Act, 1965 was under consideration and the
    Court held that the concerned officers cannot be prosecuted for offences
    under the Indian Penal Code.

C          In view of the rival submission at the Bar, the sole question that arises
     for consideration is, as to what is the effect of the provisions of Section 161
     of the Maharashtra Co-operative Societies Act in interpreting the
     provisions of Section 21 of the Indian Penal Code. It is undoubtedly true
     that the Co-operative Societies Act has been enacted by the State Legisla-
D    ture and their powers to make such legislation is derived from Entry 32 of
     List II of the Seventh Schedule to the Constitution. The Legislature no-
     doubt in Section 161 has referred to the provisions of Section 21 of the
     Indian Penal Code but such reference would not make the officers con-
     cerned 'public servants' within the ambit of Section 21. The State Legisla-
     ture had the powers to amend Section 21 of the Indian Penal Code, the
E    same being referable to a legislation under Entry 1 of List III of the Seventh
     Schedule, subject to Article 254(2) of the Constitution as, otherwise, in-
     clusion of the persons who are 'public servants' under Section 161 of the
     Co-operative Societies Act would be repugnant to the definition of 'public
     servant' under Section 21 of the Indian Penal Code. That not having been
F    done, it is difficult to accept the contention of the leaned counsel, appear-
     ing for the State that by virtue of deeming definition in Section 161 of the
     Co-operative Societies Act by reference to Section 21 of the Indian Penal
     Code, the persons concerned could be prosecuted for the offences under
     the Indian •Penal Code. The Indian Penal Code and the Maharashtra
G    Co-operative Societies Act are not Statutes in pari materia. The Co-opera-
     tive Societies Act is a completely self-contained Statute with its own
     provisions and has created specific offences quite different from the offen-
     ces in the Indian Penal Code. Both Statutes have different objects and
     created offences with separate ingredients. They cannot thus be taken to
     be Statutes in pari materia, so as to form one system. This being the
H    position, even though the Legislatures had incorporated the provisions of
                   STATEv. L.R.SHAH[PATTANAIK,J.]                        1245

 Section 21 of the Indian Penal Code into the Co- operative Societies Act, A
 in order to define a 'public servant' but those 'public servants' cannot be
 prosecuted for having committed the offence under the Indian Penal Code.
 It is a well known principle of construction that in interpreting a provision
 creating a legal fiction, the Court is to ascertain for what purpose the
fiction is created, and after ascertaining this, the Court is to assume all B
those facts and consequences which are incidental or inevitable corollaries
to giving effect to the fiction. But in so construing the fiction it is not to be
extended beyond the purpose for which it is created, or beyond the
language of the Section by which it is created. A legal fiction in terms
enacted for the purposes of one Act is normally restricted to that Act and
cannot be extended to cover another Act. When the State Legislatures C
make the Registrar, a person exercising the power of the Registrar, a
person authorised to audit the accounts of a society under Section 81or a
person to hold an inquiry under Section 83 or to make an inspection under
Section 84 and a person appointed as an Administrator under Section 78
or as a Liquidator under Section 103 shall be deemed to be 'public servant' D
within the meaning of Section 21 of the Indian Penal Code. Obviously, they
would not otherwise come within the ambit of Section 21, the legislative
intent is clear that a specific category of officers while exercising powers
under specific sections have by legal fiction become 'public servant' and it
is only for the purposes of the Co-operative Societies Act. That by itself
does not make those persons 'public servants' under the Indian Penal E
Code, so as to be prosecuted for having committed the offence under the
Penal Code. When a person is "deemed to be" something, the only meaning
possible is that whereas he is not in reality that something, the Act of
legislature requires him to be treated as if obviously for the purposes of
the said Act and not otherwise. In a· somewhat similar situation in Ramesh
                                                                                  F
Balk1ishna Kulkami v. State of Maharashtra, [1985) 3 SCC 606, the question
for consideration was whether a Municipal Councillor can be prosecuted
for ha·;ing committed an offence under the Indian Penal Code, since under
Section 302 of the Municipalities Act, a Councillor shall be deemed to be
a 'public servant' within the meaning of Section 21 of the Indian Penal
Code. Section 302 of the Maharashtra Municipalities Act, 1965 is quoted G
herein below in extenso:

        "302. Every councillor and every officer or servant of a Council,
        every contractor or agent appointed by it for the collection of any
        tax and every person employed by such contractor or agent for the H
                                                                                    >


    1246                 SUPREME COURT REPORTS                   [2000] 1 S.C.R.
A           collection of such tax, shall be deemed to be a public servant within
            the meaning of Section 21 of the Indian Penal Code."

          A Municipal Councillor was prosecuted for having committed an
    offence under the Prevention of Corruption Act and the said conviction
    and sentence was upheld in appeal by the High Court, but this Court in
B   the aforementioned decision, [1985] 3 sec 606, set aside the conviction
    and sentence on a finding that Municipal Councillor cannot be held to be
    a 'public servant' within the meaning of Section 21 of the Indian Penal
    Code. In the aforesaid premises, we see no infirmity with the impugned
    judgment of the High Court to be interfered with by this Court. The
C   appeals fail and are dismissed.

    NJ.                                                      Appeals dismissed.