{"id":136318,"date":"2009-04-06T00:00:00","date_gmt":"2009-04-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-m-p-vs-rameshwar-ors-on-6-april-2009"},"modified":"2015-03-18T13:24:50","modified_gmt":"2015-03-18T07:54:50","slug":"state-of-m-p-vs-rameshwar-ors-on-6-april-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-m-p-vs-rameshwar-ors-on-6-april-2009","title":{"rendered":"State Of M.P vs Rameshwar &amp; Ors on 6 April, 2009"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">State Of M.P vs Rameshwar &amp; Ors on 6 April, 2009<\/div>\n<div class=\"doc_author\">Author: A Kabir<\/div>\n<div class=\"doc_bench\">Bench: Altamas Kabir, Cyriac Joseph<\/div>\n<pre>                                                                           1\n\n\n              IN THE SUPREME COURT OF INDIA\n            CRIMINAL APPELLATE JURISDICTION\n             CRIMINAL APPEAL NO.647 OF 2009\n      (Arising out of S.L.P.(Crl.)NO.5937 of 2007)\n\nState of Madhya Pradesh                        ...Appellant\n\n                                  Vs.\n\nRameshwar &amp; Ors.                                 ...Respondents\n\n                          WITH\n             Criminal Appeal No.648 of 2009\n      (Arising out of S.L.P.(Crl.)NO.6929 of 2007)\n\n                     J U D G M E N T\n<\/pre>\n<p>ALTAMAS KABIR,J.\n<\/p>\n<\/p>\n<p> 1.      Leave    granted    in   both   the    special       leave<\/p>\n<p>         petitions which are taken up for hearing<\/p>\n<p>         and final disposal together.\n<\/p>\n<\/p>\n<p> 2.      The     respondents      were   Directors      of     the<\/p>\n<p>         Indore    Premier     Co-operative      Bank   Limited<\/p>\n<p>         and were also members of the Loan Committee<\/p>\n<p>         for sanctioning loans. One Harish Patil and<\/p>\n<p>         Kanhaiyalal Yadav lodged a complaint with<\/p>\n<p>         the Special Establishment of the Lokayukt,<br \/>\n<span class=\"hidden_text\">                                                              2<\/span><\/p>\n<p>Madhya Pradesh at Indore, alleging that the<\/p>\n<p>respondents had sanctioned loans amounting<\/p>\n<p>to Rs.56,50,000\/- in favour of 35 persons<\/p>\n<p>without      verifying        their    eligibility             to<\/p>\n<p>receive such loans or the end-use of such<\/p>\n<p>loans    and    had    intentionally            acted    in    an<\/p>\n<p>illegal manner to enable the said borrowers<\/p>\n<p>to   avail     of   the     loans.    On    receiving         the<\/p>\n<p>complaint,          the      Special        Establishment<\/p>\n<p>Lokayukt,           Indore,      registered              Crime<\/p>\n<p>No.133\/99 and after investigation filed a<\/p>\n<p>charge-sheet against the respondents under<\/p>\n<p>Sections 409, 420 and 120-B of the Indian<\/p>\n<p>Penal Code (`IPC&#8217; for short) together with<\/p>\n<p>Sections 13(1)(d) read with Section 13(2)<\/p>\n<p>of the Prevention of Corruption Act, 1988<\/p>\n<p>(hereinafter         referred    to        as     the    `P.C.<\/p>\n<p>Act&#8217;). The Trial Court on due consideration<\/p>\n<p>of the charge-sheet, found a prima facie<\/p>\n<p>case    against       the   respondents          and    by    its<\/p>\n<p>order dated 4.11.2006 directed framing of<\/p>\n<p>charges as suggested in the charge-sheet.<br \/>\n<span class=\"hidden_text\">                                                                     3<\/span><\/p>\n<p>3.   Being    aggrieved       by    the     said       order       dated<\/p>\n<p>     4.11.2006,      directing          framing        of    charges,<\/p>\n<p>     the   respondents        moved       in    revision          before<\/p>\n<p>     the Indore Bench of the Madhya Pradesh High<\/p>\n<p>     Court for setting aside the aforesaid order<\/p>\n<p>     passed    by   the      Special       Judge,       Indore,       in<\/p>\n<p>     Special    Case    No.1       of    2006     and       for    their<\/p>\n<p>     discharge from the above-mentioned charges.<\/p>\n<p>4.   Considering       the     case        made    out        by     the<\/p>\n<p>     respective parties, the High Court came to<\/p>\n<p>     the      conclusion           that         admittedly           the<\/p>\n<p>     respondents       were        members        of        the     Loan<\/p>\n<p>     Committee and as such members they are only<\/p>\n<p>     required to consider the loan cases which<\/p>\n<p>     are put up to them by the concerned Bank<\/p>\n<p>     Manager for the grant of loan and it was<\/p>\n<p>     for the Branch Managers to verify the facts<\/p>\n<p>     regarding      entitlement           for    grant       of     loan<\/p>\n<p>     before    submitting          the     same    to       the     Loan<\/p>\n<p>     Committee.        Furthermore, it is only after<br \/>\n<span class=\"hidden_text\">                                                         4<\/span><\/p>\n<p>the Executive Officer had also verified the<\/p>\n<p>applications for loan that the loan cases<\/p>\n<p>were put up before the Loan Committee for<\/p>\n<p>its    sanction.     In    view    of    the     aforesaid<\/p>\n<p>procedure,     the    High    Court       held    that    it<\/p>\n<p>could not be said that the Members of the<\/p>\n<p>Loan Committee (the respondents herein) had<\/p>\n<p>acted illegally and had wrongly sanctioned<\/p>\n<p>loans to the concerned borrowers. The High<\/p>\n<p>Court also took into consideration the fact<\/p>\n<p>that out of the total amount of loan which<\/p>\n<p>had been sanctioned by the Loan Committee<\/p>\n<p>amounting to Rs.56,50,000\/- a total sum of<\/p>\n<p>Rs.64,69,000\/-       had    already      been    deposited<\/p>\n<p>by the concerned depositors in the Bank and<\/p>\n<p>hence   it   could    not    be    contended      that   by<\/p>\n<p>sanctioning     the       loans    to    the     concerned<\/p>\n<p>borrowers     the     Bank        had     suffered       any<\/p>\n<p>monetary     loss    since    the       full    amount    of<\/p>\n<p>loan, together with interest, had already<\/p>\n<p>been    deposited     by    the    borrowers       in    the<\/p>\n<p>Bank.\n<\/p>\n<p><span class=\"hidden_text\">                                                            5<\/span><\/p>\n<p>5.   On     the    question       of     status       of    the<\/p>\n<p>     respondents     as   &#8220;public      servants&#8221;      for   the<\/p>\n<p>     purpose of prosecution under the provisions<\/p>\n<p>     of the Prevention of Corruption Act, 1988,<\/p>\n<p>     the High Court relying on the judgment of<\/p>\n<p>     this    Court   in   <a href=\"\/doc\/900221\/\">State     of    Maharashtra       vs.<\/p>\n<p>     Laljit Rajshi Shah and others<\/a> [(2000) 2 SCC<\/p>\n<p>     699] held that the respondents could not be<\/p>\n<p>     treated as public servants and could not,<\/p>\n<p>     therefore, be punishable either under the<\/p>\n<p>     provisions of the Prevention of Corruption<\/p>\n<p>     Act, 1988, or under Section 409 IPC.<\/p>\n<p>6.   On   such    finding,    the      High   Court    by   its<\/p>\n<p>     order dated 17th March, 2007, allowed the<\/p>\n<p>     Revision Petition and set aside the order<\/p>\n<p>     of the Trial Court dated 4.11.2006 framing<\/p>\n<p>     charges      against     the        respondents        and<\/p>\n<p>     discharged them from the said charges under<\/p>\n<p>     Sections 409, 418, 420 and 120-B IPC and<br \/>\n<span class=\"hidden_text\">                                                                6<\/span><\/p>\n<p>     Section 13(1)(d) read with Section 13(2) of<\/p>\n<p>     the P.C. Act.\n<\/p>\n<\/p>\n<p>7.   The present appeals have been filed by the<\/p>\n<p>     State of Madhya Pradesh against the said<\/p>\n<p>     order of the High Court.\n<\/p>\n<\/p>\n<p>8.   Appearing for the appellant State of Madhya<\/p>\n<p>     Pradesh,      Mr.    Ravindra         Srivastava,   learned<\/p>\n<p>     Senior     Counsel        submitted       that    the     High<\/p>\n<p>     Court had erred both as to the role played<\/p>\n<p>     by the respondents and also on the question<\/p>\n<p>     of the status of the said respondents as<\/p>\n<p>     &#8220;public       servants&#8221;         for     the     purpose     of<\/p>\n<p>     prosecution under the provision of the P.C.<\/p>\n<p>     Act.      Mr. Srivastava also submitted that<\/p>\n<p>     the    High    Court      had    travelled       beyond    its<\/p>\n<p>     jurisdiction under Sections 397 read with<\/p>\n<p>     Section 401 Criminal Procedure Code in re-<\/p>\n<p>     assessing the factual position in order to<\/p>\n<p>     arrive        at    the         conclusion       that      the<\/p>\n<p>     provisions,         under       which    they     had     been<br \/>\n<span class=\"hidden_text\">                                                                  7<\/span><\/p>\n<p>     charged,      were     not      supported          by        the<\/p>\n<p>     materials in the charge-sheet.<\/p>\n<p>9.   Referring to the inquiry report dated 21st<\/p>\n<p>     January,     1999,    submitted       by    the   District<\/p>\n<p>     Vigilance         Committee,        Indore,       on         the<\/p>\n<p>     complaint     of    Shri     Kanhaiyalal        Yadav,       Mr.<\/p>\n<p>     Srivastava submitted that it had come to<\/p>\n<p>     light during the inquiry that the quotation<\/p>\n<p>     of Indore Motor and Agro Machinery, having<\/p>\n<p>     its registered office at 535 Scheme No.54,<\/p>\n<p>     Indore, loans were advanced by the Banks to<\/p>\n<p>     the    persons       named     in    the     report          for<\/p>\n<p>     purchase     of    different     kinds      of    vehicles.<\/p>\n<p>     However, the said firm was not available at<\/p>\n<p>     the address indicated.              It also transpired<\/p>\n<p>     that   the    firm    was     managed      by     one       Shri<\/p>\n<p>     Himanshu     Joshi,     son    of    Shri       Hem     Joshi,<\/p>\n<p>     Public     Contact     Officer       working          in     the<\/p>\n<p>     Indore   Premier      Co-operative         Bank       and    the<\/p>\n<p>     Current Account of the firm was with the<\/p>\n<p>     Kila Maidan Branch, Indore and the various<br \/>\n<span class=\"hidden_text\">                                                                    8<\/span><\/p>\n<p>      Demand Drafts were deposited in the said<\/p>\n<p>      account     and    the        cash    was    subsequently<\/p>\n<p>      withdrawn.        It was also reported that the<\/p>\n<p>      loans were sanctioned with the connivance<\/p>\n<p>      of the Bank administration for the purchase<\/p>\n<p>      of vehicles, but were not used for the said<\/p>\n<p>      purpose and the Demand Drafts were encashed<\/p>\n<p>      with the intention of cheating the Bank.<\/p>\n<p>      Mr. Srivastava submitted that the tenor of<\/p>\n<p>      the Inquiry Report was that Shri Hem Joshi<\/p>\n<p>      had, in his capacity as the Public Contact<\/p>\n<p>      Officer of the Bank, in connivance with the<\/p>\n<p>      other respondents, set up a fictitious firm<\/p>\n<p>      in the name of his son Shri Himanshu Joshi<\/p>\n<p>      for   the    purpose      of       encashing       the       Bank<\/p>\n<p>      Drafts    which    were       all    deposited          in    the<\/p>\n<p>      account of the purported firm in the Kila<\/p>\n<p>      Maidan Branch, Indore.\n<\/p>\n<\/p>\n<p>10.   Mr. Srivastava pointed out that from the<\/p>\n<p>      statements    made       by    the    Managers          of    the<\/p>\n<p>      different    Branches         of     the    Bank    a    prima<br \/>\n<span class=\"hidden_text\">                                                                9<\/span><\/p>\n<p>      facie case was made out             that not only were<\/p>\n<p>      the rules relating to sanctioning of loans<\/p>\n<p>      not followed, but the grant of such loans<\/p>\n<p>      revealed lack of awareness and application<\/p>\n<p>      on the part of the respondents.                    He also<\/p>\n<p>      submitted that the officers of the National<\/p>\n<p>      Bank for Agricultural and Rural Development<\/p>\n<p>      (hereinafter           referred         as      `NABARD&#8217;)<\/p>\n<p>      conducted       an   inspection         of   the     Indore<\/p>\n<p>      Premier Co-operative Bank in June, 1998 and<\/p>\n<p>      in their Report they also raised objections<\/p>\n<p>      with regard to the loans which formed the<\/p>\n<p>      subject matter of the present appeals.<\/p>\n<p>11.   Mr. Srivastava submitted that the finding<\/p>\n<p>      of    the   District     Vigilance       Committee       was<\/p>\n<p>      that    while    the     Branch     Managers       of     the<\/p>\n<p>      different     Branches       of   the    Bank      had    not<\/p>\n<p>      complied     with    the     directions      given       with<\/p>\n<p>      regard to the policy of sanctioning loans,<\/p>\n<p>      the    Chairman,       and    the    Chief      Executive<\/p>\n<p>      Officer of the Bank, who are the Respondent<br \/>\n<span class=\"hidden_text\">                                                          10<\/span><\/p>\n<p>Nos. 1 and 3 herein, failed to take any<\/p>\n<p>action    despite     the    Inspection          Report   of<\/p>\n<p>NABARD, which gave rise to the conclusion<\/p>\n<p>that they had also played a decisive role<\/p>\n<p>in     defrauding     the    Bank.        Mr.   Srivastava<\/p>\n<p>submitted     that     since        the    said       Inquiry<\/p>\n<p>Report indicted all the respondents, along<\/p>\n<p>with    several     others,      it   had       recommended<\/p>\n<p>that a case be registered under Section 420<\/p>\n<p>read with Section 120-B IPC against all the<\/p>\n<p>persons named. A further recommendation was<\/p>\n<p>made     to   register       a    case       against      the<\/p>\n<p>officers      of     the     Bank,        including       the<\/p>\n<p>respondents herein, under Section 406, 409,<\/p>\n<p>419 and 420 read with Section 120-B IPC.<\/p>\n<p>Departmental        action    was     also      recommended<\/p>\n<p>against the Members of the Loan Committee<\/p>\n<p>of    which   the    Respondent       No.1,      Rameshwar,<\/p>\n<p>was     the    President,         while         the    other<\/p>\n<p>respondents, who were all Directors of the<\/p>\n<p>Bank, were members.\n<\/p>\n<p><span class=\"hidden_text\">                                                                 11<\/span><\/p>\n<p>12.   Mr. Srivastava urged that the High Court<\/p>\n<p>      had     erred   in     completely         absolving       the<\/p>\n<p>      respondents      of      any          responsibility       in<\/p>\n<p>      connection      with    the       sanctioning        of   the<\/p>\n<p>      loans and placing the entire burden of the<\/p>\n<p>      fraud    perpetrated       on    the     Branch    Managers<\/p>\n<p>      and the Executive Officer for inadequate or<\/p>\n<p>      improper verification of the entitlement of<\/p>\n<p>      the   borrowers      for     grant       of   such    loans.<\/p>\n<p>      Learned counsel also urged that the High<\/p>\n<p>      Court     had   erred      in     observing       that    the<\/p>\n<p>      members of the Loan Committee had a limited<\/p>\n<p>      role to play for the purpose of sanctioning<\/p>\n<p>      loans, since the ground work had already<\/p>\n<p>      been prepared upto the level of the Branch<\/p>\n<p>      Managers who had recommended the grant of<\/p>\n<p>      such loans.\n<\/p>\n<\/p>\n<p>13.   Mr. Srivastava submitted that in going into<\/p>\n<p>      factual    aspects      of      the    matter,    the     High<\/p>\n<p>      Court had travelled beyond its revisional<br \/>\n<span class=\"hidden_text\">                                                                    12<\/span><\/p>\n<p>      powers in coming to findings of fact, which<\/p>\n<p>      were yet to be established on evidence.<\/p>\n<p>14.   To support his submission, Mr. Srivastava<\/p>\n<p>      firstly      referred       to    a     decision     of      this<\/p>\n<p>      Court   in       <a href=\"\/doc\/239250\/\">Stree   Atyachar        Virodhi     Parishad<\/p>\n<p>      vs. Dilip Nathumal Chordia &amp; Anr.<\/a> [(1989) 1<\/p>\n<p>      SCC   715],      wherein,        while    considering        the<\/p>\n<p>      question         relating        to     discharge       of    or<\/p>\n<p>      framing of charges against an accused, it<\/p>\n<p>      was held that when the Trial Court, finding<\/p>\n<p>      a prima facie case prefers to frame charges<\/p>\n<p>      against the accused, the High Court should<\/p>\n<p>      not     interfere         by          probing    into        the<\/p>\n<p>      sufficiency        of    grounds        for   conviction       of<\/p>\n<p>      the accused and ordering his discharge.<\/p>\n<p>15.   Mr.   Srivastava         then     referred      to   another<\/p>\n<p>      decision of this Court in Om Wati (Smt) &amp;<\/p>\n<p>      Anr. vs. State, through Delhi Admn. &amp; Ors.<\/p>\n<p>      [(2001)      4    SCC    333],        wherein   also,     while<\/p>\n<p>      considering the provisions of Sections 227,<br \/>\n<span class=\"hidden_text\">                                                                    13<\/span><\/p>\n<p>      228 and 401 of the Criminal Procedure Code,<\/p>\n<p>      1973, this Court, inter alia, observed that<\/p>\n<p>      the    High     Court        should        not    ordinarily<\/p>\n<p>      interfere with the Trial Court&#8217;s order for<\/p>\n<p>      framing of charge unless there is glaring<\/p>\n<p>      injustice.\n<\/p>\n<\/p>\n<p>16.   Reference was lastly made to the decision<\/p>\n<p>      of this Court in <a href=\"\/doc\/335430\/\">Munna Devi vs. State of<\/p>\n<p>      Rajasthan       &amp;     Anr.<\/a>       [(2001)     9    SCC    631],<\/p>\n<p>      wherein    it       was   held     that    the    revisional<\/p>\n<p>      powers    of    the       High    Court      could      not   be<\/p>\n<p>      exercised in a routine and casual manner<\/p>\n<p>      for quashing the charges framed against an<\/p>\n<p>      accused, except where there was a legal bar<\/p>\n<p>      or where no offence is made out against an<\/p>\n<p>      accused in the F.I.R.\n<\/p>\n<\/p>\n<p>17.   Mr.    Srivastava         submitted       that   apart    from<\/p>\n<p>      the above, the finding of the High Court<\/p>\n<p>      that     the    respondents           were       not    public<\/p>\n<p>      servants was erroneous, as they had been<br \/>\n<span class=\"hidden_text\">                                                           14<\/span><\/p>\n<p>elected    as    Office           Bearers    of    the    Co-<\/p>\n<p>operative Bank.         He submitted that the High<\/p>\n<p>Court had wrongly relied upon the decision<\/p>\n<p>of this Court in <a href=\"\/doc\/900221\/\">State of Maharashtra vs.<\/p>\n<p>Laljit Rajshi Shah &amp; Ors.<\/a> (supra), in which<\/p>\n<p>the     definition      of        &#8220;public     servant&#8221;     as<\/p>\n<p>contained in section 2 of the Prevention of<\/p>\n<p>Corruption        Act,             1947      was         under<\/p>\n<p>consideration.          In the said Act, &#8220;public<\/p>\n<p>servant&#8221; has been defined in Section 2 to<\/p>\n<p>mean &#8220;public servant&#8221; as defined in Section<\/p>\n<p>21    of   the    Indian           Penal     Code.        Mr.<\/p>\n<p>Srivastava      urged     that      the     definition     of<\/p>\n<p>&#8220;public     servant&#8221;         in     the     Prevention     of<\/p>\n<p>Corruption Act, 1988 has been given a much<\/p>\n<p>wider      connotation             and      the      limited<\/p>\n<p>interpretation       of   the       said    expression     in<\/p>\n<p>Laljit Rajshi Shah &amp; Ors.&#8217;s case (supra)<\/p>\n<p>would not, therefore, be applicable to the<\/p>\n<p>facts of this case.\n<\/p>\n<p><span class=\"hidden_text\">                                                                   15<\/span><\/p>\n<p>18.   Mr. Srivastava submitted that on account of<\/p>\n<p>      being an Office Bearer of a registered Co-<\/p>\n<p>      operative Society engaged in banking, the<\/p>\n<p>      respondents came within the definition of<\/p>\n<p>      &#8220;public servant&#8221; under Section 2(c)(ix) of<\/p>\n<p>      the 1988 Act.           He also submitted that the<\/p>\n<p>      High    Court     had      failed    to     take     note    of<\/p>\n<p>      Section     87     of       the     M.P.        Co-operative<\/p>\n<p>      Societies     Act,      1960,     which     provides       that<\/p>\n<p>      the Registrar and other officers, as well<\/p>\n<p>      as employees of a Co-operative Bank or a<\/p>\n<p>      Co-operative Society, would be deemed to be<\/p>\n<p>      &#8220;public    servants&#8221;         within       the    meaning     of<\/p>\n<p>      Section 21 of the Indian Penal Code.<\/p>\n<p>19.   In this regard, Mr. Srivastava referred to<\/p>\n<p>      the    decision       of   this     Court       in   Govt.   of<\/p>\n<p>      Andhra Pradesh &amp; Ors. Vs. P. Venku Reddy<\/p>\n<p>      [(2002)   7     SCC     631],     where     reference        was<\/p>\n<p>      made to the decision in Laljit Rajshi Shah<\/p>\n<p>      &amp; Ors.&#8217;s case (supra) and it was observed<\/p>\n<p>      that the same was distinguishable as it was<br \/>\n<span class=\"hidden_text\">                                                              16<\/span><\/p>\n<p>      based      on     an     interpretation           of   the<\/p>\n<p>      definition of &#8220;public servant&#8221;, as defined<\/p>\n<p>      in   the   1947       Act,   which   restricted        such<\/p>\n<p>      definition       to    cover    only       such    &#8220;public<\/p>\n<p>      servants&#8221; as were included in Section 21 of<\/p>\n<p>      the Indian Penal Code.           Reference was also<\/p>\n<p>      made to another decision of this Court in<\/p>\n<p>      <a href=\"\/doc\/1689306\/\">State      of     Maharashtra          &amp;     Anr.      vs.<\/p>\n<p>      Prabhakarrao &amp; Anr.<\/a> [(2002) 7 SCC 636], in<\/p>\n<p>      which      the     wider       definition         of   the<\/p>\n<p>      expression &#8220;public servant&#8221; under Section 2<\/p>\n<p>      (c) of the Prevention of Corruption Act,<\/p>\n<p>      1988 was held to be applicable and not the<\/p>\n<p>      narrow definition under Section 21 of the<\/p>\n<p>      Indian Penal Code.\n<\/p>\n<\/p>\n<p>20.   Mr. Srivastava submitted that as far as the<\/p>\n<p>      State of Madhya Pradesh was concerned, the<\/p>\n<p>      same submissions would also be relevant in<\/p>\n<p>      SLP(Crl.)No.6929\/07.\n<\/p>\n<p><span class=\"hidden_text\">                                                                        17<\/span><\/p>\n<p>21.   Replying to the submissions made on behalf<\/p>\n<p>      of the appellant, Mr. Vivek Tankha, learned<\/p>\n<p>      Senior       Counsel,      firstly,          took    us     to    the<\/p>\n<p>      Charge framed against the respondents under<\/p>\n<p>      Section 13(1)(d) read with Section 13(2) of<\/p>\n<p>      the Prevention of Corruption Act, 1988 and<\/p>\n<p>      Sections      409,       418,    420       and     120-B    of    the<\/p>\n<p>      Indian Penal Code.               Mr. Tankha pointed out<\/p>\n<p>      that    the       Charge    was       framed        against       the<\/p>\n<p>      Respondent          No.1        in        his      capacity        as<\/p>\n<p>      Chairman\/Manager of the Indore Premier Co-<\/p>\n<p>      operative Bank and as a Member of the Loan<\/p>\n<p>      Sanctioning            Committee          during     the    period<\/p>\n<p>      from 4th March, 1997 to 4th May, 1998, when<\/p>\n<p>      he     was    a    public       servant.             The    charge<\/p>\n<p>      against      the       Respondent          No.1    was     that    in<\/p>\n<p>      connivance with the other accused persons<\/p>\n<p>      and     on    the       basis        of     forged       documents<\/p>\n<p>      relating          to     &#8220;Indore           Motor      and        Agro<\/p>\n<p>      Machinery&#8221;, he had, without verification of<\/p>\n<p>      the loan applications filed for the purpose<\/p>\n<p>      of purchasing of vehicles by the other co-<br \/>\n<span class=\"hidden_text\">                                                        18<\/span><\/p>\n<p>      accused, without ensuring that the margin<\/p>\n<p>      money was deposited as per the rules and<\/p>\n<p>      without obtaining security, sanctioned the<\/p>\n<p>      loans in contravention of the Bank Rules<\/p>\n<p>      and issued the cheque\/drafts of such loans<\/p>\n<p>      to the applicants directly who withdrew the<\/p>\n<p>      amount   without    purchasing     the    vehicles,<\/p>\n<p>      resulting     in       misappropriation            of<\/p>\n<p>      Rs.56,50,000\/-.             Accordingly,         the<\/p>\n<p>      Respondent   No.1    was    purported      to    have<\/p>\n<p>      committed the offence punishable under the<\/p>\n<p>      above-mentioned       provisions          of     the<\/p>\n<p>      Prevention of Corruption Act, 1988 and the<\/p>\n<p>      Indian Penal code.         Similar charges were<\/p>\n<p>      framed against the other respondents.<\/p>\n<p>22.   Mr. Tankha submitted that from the Inquiry<\/p>\n<p>      Report of the District Vigilance Committee<\/p>\n<p>      it would be quite apparent that it was the<\/p>\n<p>      Branch Managers of the different Branches<\/p>\n<p>      of the Bank who had failed to comply with<\/p>\n<p>      the   procedure     relating     to      grant   and<br \/>\n<span class=\"hidden_text\">                                                                19<\/span><\/p>\n<p>sanction of loans and that all the lapses<\/p>\n<p>which were attempted to be foisted on the<\/p>\n<p>respondents      by    Mr.       Srivastava        during       the<\/p>\n<p>course of his submissions, were required to<\/p>\n<p>be     fulfilled       at        the     Branches         before<\/p>\n<p>proposals were put up for sanctioning of<\/p>\n<p>the loans.        Mr. Tankha submitted that the<\/p>\n<p>Loan Sanctioning Committee had to deal with<\/p>\n<p>innumerable      loan       applications           and   it     was<\/p>\n<p>not    possible       for    the       said    Committee         to<\/p>\n<p>scrutinize       each        application           to     ensure<\/p>\n<p>whether    all    the       conditions        for    grant       of<\/p>\n<p>loan had been satisfied.                     Mr. Tankha, in<\/p>\n<p>fact, urged that in the Inquiry Report, the<\/p>\n<p>only      allegation             made         against           the<\/p>\n<p>respondents herein was that they had not<\/p>\n<p>taken    any     action      despite         the    Inspection<\/p>\n<p>Report    of     NABARD          and    it     was       only        a<\/p>\n<p>presumption       that      as     a    result      thereof          a<\/p>\n<p>conclusion must be drawn that the Chairman<\/p>\n<p>of the Bank and the Chief Executive Officer<br \/>\n<span class=\"hidden_text\">                                                                   20<\/span><\/p>\n<p>      had also played a main role in the fraud<\/p>\n<p>      committed upon the Bank.\n<\/p>\n<p>23.   Mr. Tankha submitted that apart from the<\/p>\n<p>      above,       the    only      other    allegation      against<\/p>\n<p>      the respondents in the Inquiry Report was<\/p>\n<p>      that the members of the Loan Committee had<\/p>\n<p>      failed to perform their duties efficiently.<\/p>\n<p>      He submitted that the allegations pointed<\/p>\n<p>      out     by    Mr.       Srivastava      had     really      been<\/p>\n<p>      directed       at       the   Branch     Managers      of    the<\/p>\n<p>      various Branches and the concerned officers<\/p>\n<p>      of the said Branches.\n<\/p>\n<\/p>\n<p>24.   Mr.   Tankha        submitted         that    there    was    no<\/p>\n<p>      justification            whatsoever      for    framing       of<\/p>\n<p>      charges       against         the     respondents      herein,<\/p>\n<p>      either under the provisions of the Indian<\/p>\n<p>      Penal Code or under the provisions of the<\/p>\n<p>      Prevention         of    Corruption      Act,    1988.        He<\/p>\n<p>      urged    that       if    any   irregularity          had   been<\/p>\n<p>      committed by the Respondents in sanctioning<\/p>\n<p>      the loans, there was sufficient scope for<br \/>\n<span class=\"hidden_text\">                                                                  21<\/span><\/p>\n<p>      action    to     have      been    taken     against       them<\/p>\n<p>      under the M.P. Co-operative Societies Act<\/p>\n<p>      instead of taking recourse to the criminal<\/p>\n<p>      process to apply pressure in respect of a<\/p>\n<p>      dispute,       which       was    basically        civil     in<\/p>\n<p>      nature.       Referring to the decision of this<\/p>\n<p>      Court in <a href=\"\/doc\/39679\/\">Indian Oil Corpn. vs. NEPC India<\/p>\n<p>      Ltd.<\/a> 7 Ors. [(2006) 6 SCC 736], Mr. Tankha<\/p>\n<p>      relied    on    the     observations        made    by     this<\/p>\n<p>      Court in holding that it was necessary to<\/p>\n<p>      take     notice       of    a     growing    tendency        in<\/p>\n<p>      business      circles       to    convert    purely      civil<\/p>\n<p>      disputes      into     criminal      cases    and    at     the<\/p>\n<p>      stage of an application under Section 482<\/p>\n<p>      Cr.P.C. all that was required to be seen<\/p>\n<p>      was    whether    necessary        allegations       existed<\/p>\n<p>      in the complaint to make out an offence as<\/p>\n<p>      alleged.\n<\/p>\n<\/p>\n<p>25.   Further, reference was made to the decision<\/p>\n<p>      of     this    Court       in     Nikhil     Merchant       vs.<\/p>\n<p>      Central       Bureau       of    Investigation       &amp;     Anr.<br \/>\n<span class=\"hidden_text\">                                                                       22<\/span><\/p>\n<p>      [2008 (11) SCALE 379], where, while taking<\/p>\n<p>      recourse         to        Article           142         of      the<\/p>\n<p>      Constitution,         it     was       observed      that        the<\/p>\n<p>      dispute involved in the case had overtones<\/p>\n<p>      of a civil dispute with certain criminal<\/p>\n<p>      facets.      Mr. Tankha submitted that similar<\/p>\n<p>      was the position in the present case, where<\/p>\n<p>      the dispute was mainly of a civil nature,<\/p>\n<p>      which had been given a criminal twist to<\/p>\n<p>      bring   it   within        the     scope      of    the       Indian<\/p>\n<p>      Penal     code    and       also       the    Prevention          of<\/p>\n<p>      Corruption Act, 1988.\n<\/p>\n<\/p>\n<p>26.   Mr. Tankha also referred to the decision of<\/p>\n<p>      this Court in Manoj Sharma vs. State &amp; Ors.<\/p>\n<p>      (MANU\/SC\/8122\/2008),               where      the        question<\/p>\n<p>      which   fell     for       determination           was    whether<\/p>\n<p>      the First Information Report for offences<\/p>\n<p>      which     were    not        compoundable,           could        be<\/p>\n<p>      quashed either under Section 482 Cr.P.C. or<\/p>\n<p>      under Article 226 of the Constitution when<\/p>\n<p>      the     accused        and       the     complainant             had<br \/>\n<span class=\"hidden_text\">                                                                        23<\/span><\/p>\n<p>      compromised and settled the matter between<\/p>\n<p>      themselves.            Mr. Tankha submitted that this<\/p>\n<p>      Court had set aside the order upon holding<\/p>\n<p>      that    once       a    dispute       of    a   civil        nature<\/p>\n<p>      between private parties, had been settled,<\/p>\n<p>      the     more       pragmatic         view       would        be    to<\/p>\n<p>      exercise powers under Section 482 Cr.P.C.<\/p>\n<p>      or Article 226 of the Constitution to bring<\/p>\n<p>      and end to such litigation.\n<\/p>\n<\/p>\n<p>27.   As to the question whether the respondents<\/p>\n<p>      were    public         servants      or    not,       Mr.    Tankha<\/p>\n<p>      submitted      that       in    a    series      of    decisions<\/p>\n<p>      this Court had held that certain officers<\/p>\n<p>      discharging public functions had been held<\/p>\n<p>      not     to    be       public       servants,      except         for<\/p>\n<p>      purposes confined to the enactments under<\/p>\n<p>      which    they      perform       their      functions.             In<\/p>\n<p>      this regard, Mr. Tankha also referred to<\/p>\n<p>      the decision in Laljit Rajshi Shah &amp; Ors.,<\/p>\n<p>      which        had       been     referred          to        by    Mr.<\/p>\n<p>      Srivastava, wherein it had been held that<br \/>\n<span class=\"hidden_text\">                                                                    24<\/span><\/p>\n<p>      the Chairman and Members of the Managing<\/p>\n<p>      Committee were not public servants but were<\/p>\n<p>      deemed to be public servants under the M.P.<\/p>\n<p>      Co-operative Societies Act, but not for any<\/p>\n<p>      other purpose.\n<\/p>\n<\/p>\n<p>28.   Mr.   Tankha    took       us   through      the       M.P.   Co-<\/p>\n<blockquote><p>      operative Societies Act, 1960, in support<\/p>\n<p>      of his submissions.              He submitted that the<\/p>\n<p>      said Act was a complete self-contained Code<\/p>\n<p>      by    itself        and    provided         for    different<\/p>\n<p>      eventualities              relating               to          the<\/p>\n<p>      administration        of    Co-operative           Societies.<\/p>\n<p>      Referring      to    Section      74   of    the       Act,   Mr.<\/p>\n<p>      Tankha submitted that Clause (d) thereof is<\/p>\n<p>      the remedy contemplated in respect of an<\/p>\n<p>      offence alleged to have been committed of<\/p>\n<p>      the instant type.               Further- more, Section<\/p>\n<p>      75 provided for penalties to be inflicted<\/p>\n<p>      in case of a proven offence and Section 76<\/p>\n<p>      also provided that offences under the Act<br \/>\n<span class=\"hidden_text\">                                                                         25<\/span><\/p>\n<p>      were   triable       by    a    Magistrate          of    the     Ist<\/p>\n<p>      Class.\n<\/p><\/blockquote>\n<blockquote>\n<\/blockquote>\n<p>29.   As to the definition of &#8220;public servant&#8221; in<\/p>\n<p>      Section       2(c)(ix)         of     the     Prevention            of<\/p>\n<p>      Corruption Act, 1988, it was submitted that<\/p>\n<p>      the same should be read in two parts and<\/p>\n<p>      that the definition of &#8220;public servant&#8221; in<\/p>\n<p>      the    said    provision        in     respect          of    a   Co-<\/p>\n<p>      operative Society would be covered by the<\/p>\n<p>      first part and not by the second part.<\/p>\n<p>30.   Mr.      Tankha      submitted          that       the       charges<\/p>\n<p>      against     the     respondents            were    without         any<\/p>\n<p>      foundation,         as    would       be    clear        from      the<\/p>\n<p>      Inquiry     Report        of   the     District          Vigilance<\/p>\n<p>      Committee which laid the responsibility for<\/p>\n<p>      grant of the loans to the 35 persons at the<\/p>\n<p>      door   of     the    Branch         offices       and    had      only<\/p>\n<p>      included the respondents within the scope<\/p>\n<p>      of the charge for their alleged failure of<\/p>\n<p>      not having taken action on the report of<br \/>\n<span class=\"hidden_text\">                                                                          26<\/span><\/p>\n<p>      NABARD and also in not having discharged<\/p>\n<p>      their       duties       efficiently.                  Mr.    Tankha<\/p>\n<p>      submitted that the same were not sufficient<\/p>\n<p>      to     maintain          the         charges         against       the<\/p>\n<p>      respondents         under         Sections       409,    418,      420<\/p>\n<p>      and 120-B IPC read with Sections 13(1)(d)<\/p>\n<p>      and 13(2) of the Prevention of Corruption<\/p>\n<p>      Act,    1988       and      the      High      Court    had     quite<\/p>\n<p>      rightly      quashed           the     charges       against       the<\/p>\n<p>      respondents.\n<\/p>\n<\/p>\n<p>31.   As     to     SLP(Crl.)No.6929\/07,                    Mr.     Tankha<\/p>\n<p>      submitted that the same was in regard to a<\/p>\n<p>      hospital loan of Rs.2 lacs, which had been<\/p>\n<p>      advanced       and       had      also      been     repaid        with<\/p>\n<p>      interest      on     10th      July,     2008.         Mr.    Tankha<\/p>\n<p>      submitted       that        in       both      the     cases,      the<\/p>\n<p>      principal       amount            of     the     several        loans<\/p>\n<p>      together with interest had been repaid and<\/p>\n<p>      consequently,            the      very    foundation          of   the<\/p>\n<p>      charges were nonest and the prosecution was<\/p>\n<p>      liable to be quashed.\n<\/p>\n<p><span class=\"hidden_text\">                                                                         27<\/span><\/p>\n<p>32.   In    addition       to    Mr.    Tankha&#8217;s        submissions,<\/p>\n<p>      Mr.    Sushil    Kumar       Jain,       who      appeared     for<\/p>\n<p>      some    of    the     respondents,            submitted       that<\/p>\n<p>      unless        there        was    a         criminal      intent<\/p>\n<p>      disclosed       in    the    charge-sheet,           no    charge<\/p>\n<p>      either    under       Section         406    or    Section     409<\/p>\n<p>      would lie.       He also urged that in order to<\/p>\n<p>      invoke the provisions of the Prevention of<\/p>\n<p>      Corruption Act the accused would have to be<\/p>\n<p>      a public servant and the property alleged<\/p>\n<p>      to    have    been        misappropriated,          must      have<\/p>\n<p>      been entrusted to him while he was a public<\/p>\n<p>      servant.        He urged that the charge-sheet<\/p>\n<p>      did    not    contain       any       allegation       that    the<\/p>\n<p>      loan advanced by the Society was out of any<\/p>\n<p>      fund     or    contribution            received      from      the<\/p>\n<p>      State.          Accordingly,            the       question         of<\/p>\n<p>      misappropriation of any amount received by<\/p>\n<p>      the    public    servant         in    his     capacity       as        a<\/p>\n<p>      public servant did not arise.\n<\/p>\n<p><span class=\"hidden_text\">                                                                 28<\/span><\/p>\n<p>33.   Mr. Jain reiterated the other submissions<\/p>\n<p>      made by Mr. Tankha that the respondents had<\/p>\n<p>      no conscious knowledge of the ineligibility<\/p>\n<p>      of the borrowers to apply for and receive<\/p>\n<p>      the    loans   and     that       the    loans     had    been<\/p>\n<p>      sanctioned        on        the         basis      of      the<\/p>\n<p>      recommendations and proposals put up by the<\/p>\n<p>      Branch office.\n<\/p>\n<\/p>\n<p>34.   Mr.     Jain      also        submitted          that      the<\/p>\n<p>      allegations      against        the      respondents      were<\/p>\n<p>      misconceived and the remedy in respect of<\/p>\n<p>      the    lapses,    if     any,      lay    not     under    the<\/p>\n<p>      general     criminal        process,       but    under    the<\/p>\n<p>      provisions       of    the        M.P.          Co-Operative<\/p>\n<p>      Societies Act, 1960, itself.\n<\/p>\n<\/p>\n<p>35.   Having considered the submissions made on<\/p>\n<p>      behalf of the respective parties and the<\/p>\n<p>      various decisions cited in support thereof,<\/p>\n<p>      we    are   unable     to    agree       with     the    views<br \/>\n<span class=\"hidden_text\">                                                                                29<\/span><\/p>\n<p>      expressed by the High Court in the order<\/p>\n<p>      impugned in these appeals.\n<\/p>\n<\/p>\n<p>36.   While      it    is        no    doubt          true    that       in    the<\/p>\n<p>      Inquiry      Report         of        the       District       Vigilance<\/p>\n<p>      Committee            the        role        attributed             to     the<\/p>\n<p>      respondents in sanctioning loans was shown<\/p>\n<p>      to      be       purely              managerial              where        the<\/p>\n<p>      groundwork had been completed by the Branch<\/p>\n<p>      offices      and      that           as    members       of    the      Loan<\/p>\n<p>      Sanctioning            Committee,                they        had        acted<\/p>\n<p>      inefficiently, it has also been suggested<\/p>\n<p>      that the Chairman and the Executive Officer<\/p>\n<p>      of   the     Bank      had       connived             with    the       other<\/p>\n<p>      accused         in    defrauding                the    Bank.       In     the<\/p>\n<p>      Inquiry         Report          it        was    stated        that       the<\/p>\n<p>      respondents had in conspiracy with Shri Hem<\/p>\n<p>      Joshi, the Public Contact Officer of the<\/p>\n<p>      Bank, whose son, Himanshu Joshi, maintained<\/p>\n<p>      a current account of a fictitious firm &#8211;<\/p>\n<p>      Indore Motor and Agro Machinery in the Kila<\/p>\n<p>      Maidan       Branch             of        the    Bank        at      Indore<br \/>\n<span class=\"hidden_text\">                                                                       30<\/span><\/p>\n<p>        encashed the various Demand Drafts issued<\/p>\n<p>        on account of the loans, by using the said<\/p>\n<p>        account without purchase of any vehicle for<\/p>\n<p>        which the loans had been sanctioned.<\/p>\n<p>37.     The     High       Court     also         did    not,     while<\/p>\n<p>        considering          the       definition           of        the<\/p>\n<p>        expression         &#8220;public     servant&#8221;,          take        into<\/p>\n<p>        account      the     fact     that        the    decision       in<\/p>\n<p>        Laljit Rajshi Shah &amp; Ors.&#8217;s case (supra)<\/p>\n<p>        was   no    longer      applicable         in    view    of   the<\/p>\n<p>        amended provisions of Section 2(c) of the<\/p>\n<p>        Prevention         of       Corruption           Act,     1988,<\/p>\n<p>        defining the said expression.                    Prima facie,<\/p>\n<p>        it appears to us that the Respondent Nos.1<\/p>\n<p>        and 3, in their capacity as the Chairman<\/p>\n<p>        and   Executive         Officer      of    the    Bank,       come<\/p>\n<p>        within the definition of &#8220;public servant&#8221;<\/p>\n<p>        under      Section      2(c)(ix)      of    the    1988       Act,<\/p>\n<p>        which reads as follows :-\n<\/p>\n<p>\n      &#8220;public servant&#8221; means &#8211; any person who<br \/>\n      is the President, Secretary or other<br \/>\n<span class=\"hidden_text\">                                                            31<\/span><\/p>\n<p>      office-bearer     of    a    registered    co-<br \/>\n      operative society engaged in agriculture,<br \/>\n      industry, trade or banking, receiving or<br \/>\n      having received any financial aid from<br \/>\n      the   Central    Government     or   a   State<br \/>\n      Government    or    from    any    corporation<br \/>\n      established    by   or    under   a   Central,<br \/>\n      Provincial or State Act, or any authority<br \/>\n      or body owned or controlled or aided by<br \/>\n      the Government or a Government Company as<br \/>\n      defined in Section 617 of the Companies<br \/>\n      Act, 1956 (1 of 1956).&#8221;\n<\/p>\n<\/p>\n<p>38.     Mr. Tankha&#8217;s submissions, which were echoed<\/p>\n<p>        by   Mr.   Jain,   that    the    M.P.   Co-operative<\/p>\n<p>        Societies Act, 1960 was a complete Code in<\/p>\n<p>        itself and the remedy of the prosecuting<\/p>\n<p>        agency lay not under the criminal process<\/p>\n<p>        but within the ambit of Sections 74 to 76<\/p>\n<p>        thereof, cannot also be accepted, in view<\/p>\n<p>        of the fact that there is no bar under the<\/p>\n<p>        M.P. Co-operative Societies Act, 1960, to<\/p>\n<p>        take   resort      to   the      provisions   of   the<\/p>\n<p>        general    criminal       law,    particularly     when<\/p>\n<p>        charges under the Prevention of Corruption<\/p>\n<p>        Act, 1988, are involved.\n<\/p>\n<p><span class=\"hidden_text\">                                                                         32<\/span><\/p>\n<p>39.   The   judgments          referred        to     by    Mr.     Tankha<\/p>\n<p>      regarding        the     tendency         to     convert         civil<\/p>\n<p>      disputes into criminal cases to pressurize<\/p>\n<p>      the    accused,        are     unimpeachable,              but     the<\/p>\n<p>      same will not apply to the facts of this<\/p>\n<p>      case where a conspiracy to cheat the Bank<\/p>\n<p>      is alleged.\n<\/p>\n<\/p>\n<p>40.   We are, therefore, inclined to accept Mr.<\/p>\n<p>      Srivastava&#8217;s           submissions             that     the       High<\/p>\n<p>      Court had in revision erroneously quashed<\/p>\n<p>      the charges framed against the respondents.<\/p>\n<p>      Consequently, the orders dated 17th March,<\/p>\n<p>      2007,    passed        by     the    High       Court       in    Crl.<\/p>\n<p>      Revision No.1303 of 2006 and Crl. Revision<\/p>\n<p>      No.36       of   2007,        impugned          in    these        two<\/p>\n<p>      appeals      are       set     aside       and       the    charges<\/p>\n<p>      framed      by     the       Trial       Court       against       the<\/p>\n<p>      respondents are restored.                     The appeals are,<\/p>\n<p>      accordingly, disposed of with a direction<\/p>\n<p>      to    the    Trial       Court      to    proceed          with    the<\/p>\n<p>      trial.       We make it clear that the views<br \/>\n<span class=\"hidden_text\">                                               33<\/span><\/p>\n<p>       expressed in this judgment are prima facie<\/p>\n<p>       in nature for the disposal of these appeals<\/p>\n<p>       only and should not influence the trial in<\/p>\n<p>       any way.\n<\/p>\n<\/p>\n<p>                                  ______________J.\n<\/p>\n<p>                                   (ALTAMAS KABIR)<\/p>\n<p>                                  ______________J.\n<\/p>\n<p>                                   (CYRIAC JOSEPH)<br \/>\nNew Delhi<br \/>\nDated:06.04.2009<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India State Of M.P vs Rameshwar &amp; Ors on 6 April, 2009 Author: A Kabir Bench: Altamas Kabir, Cyriac Joseph 1 IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.647 OF 2009 (Arising out of S.L.P.(Crl.)NO.5937 of 2007) State of Madhya Pradesh &#8230;Appellant Vs. Rameshwar &amp; Ors. &#8230;Respondents WITH [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-136318","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Of M.P vs Rameshwar &amp; Ors on 6 April, 2009 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/state-of-m-p-vs-rameshwar-ors-on-6-april-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Of M.P vs Rameshwar &amp; 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