M.M.Husain, J. - (1.) THIS is an application under section 482 CrPC for quashing the proceedings of a case pending against the applicant S. C. Agarwal in the court of the Special Judge West U. P. at Lucknow. The Delhi Special Police Establishment has submitted a charge-sheet in that case against the applicant alleging that, in his capacity as a public servant, in between 1972 and 1974 he committed offences of cheating and forgery and of misconduct as a public servant. It is said that the applicant was Branch Manager of the then Union Bank of India at Muzaffarnagar at the time of occurrence. He asked Sri S. C. Arora, a partner of Universal Mill Stores, to advance him a sum of rupees ten thousand as the same was required by the Bank for a day or two. He received that amount and permitted an overdraft to the tune of rupees ten thousand to Sri S. C. Arora in his Bank, though the applicant had no authority to allow overdraft up to that amount. In order to avoid objection by the Head Office on that score the applicant made a fake transfer entry on 29 -12-1972 in the account of M/s. Bhagirathi Iron & Steel Works showing adjustment of the overdraft granted to Sri Arora. Again on 5-1-1973 a transfer entry was made showing payment of rupees ten thousand to M/s. Bhagirathi Iron & Steel Works by Sri Arora from latter's account standing in the name of Universal Mill Stores. The prosecution case is that the applicant thus cheated Sri Arora by using corrupt and illegal means and by abusing his official position as Branch Manager of the Bank and obtained pecuniary advantage of rupees ten thousand for himself or for some other person. The case registered against the applicant was investigated in accordance with the provisions of the Prevention of Corruption Act, 1947 and charge-sheet was submitted before the learned Special Judge. The applicant took a preliminary objection in that Court to the effect that investigation of the case and submission of charge-sheet against him in the Court of the Special Judge was without jurisdiction because he was not "a public servant" for the purposes of section 2 of the Prevention of Corruption Act, 1947. That objection was repelled by the learned Special Judge. The applicant has now come to this Court with a prayer that because the learned Special Judge had no jurisdiction to take cognizance of the case against the applicant, so the proceedings of the case pending before him should be quashed by this Court.
(2.) THE main point requiring consideration in this case is whether or not the applicant is a "public servant" for purposes of Sec. 2 of the Prevention of Corruption Act, 1947. That section lays down that a public servant means a public servant as defined in section 21 of the Indian Penal Code. THE contention on behalf of the State is that the applicant is a public servant as defined by sub-clause (b) of clause Twelfth of section 21 IPC. That sub-clause lays down that every person in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act, or a Government company as defined in section 617 of the Companies Act, 1956 is a public servant, THE learned counsel for the State contended that the Union Bank of India, whose Branch Manager the applicant happened to be, was nationalised by the Central Government on 31-3-70 through the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1970 which was subsequently replaced by an Act of the Parliament, namely, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act 5 of 1970). It was urged that since after that nationalisation the corresponding bank became a corporation established by a Central Act and the applicant being an employee of that corporation, was a "public servant" for the purposes of sub-clause (b) of clause Twelfth of section 21 IPC. It was alternatively argued that even if the corresponding bank established by Act No. 3 of 1970 was treated to be a Company,, it was a Government Company as defined by section 617 of the Companies Act, 1956 and the applicant being an employee of that Company was a public servant for the purposes of the aforesaid sub-clause. After hearing the learned counsel for the parties I find force in. these contentions raised on behalf of the; State. The applicant was, undisputedly, the Branch Manager of the Union Bank of India. That bank was nationalised through the Banking Companies (Acquisition and Transfer of Undertaking Ordinance, 1970 which was subsequently replaced by Act No. 5 of 1970. That Act came into force to provide for the acquisition and transfer of the undertakings of certain banking companies;, having regard to their size, resources;, coverage and organisation, in order to control the heights of the economy and to meet progressively and serve better, the needs of development of the economy in conformity with national policy and objectives and for matters connected therewith or incidental thereto. Section 2 (f) of that Act defines an "existing bank" as a banking company specified in column 1 of the First Schedule being a company the deposits of which as shown in the return as on the last Friday of June, 1969, furnished to the Reserve Bank under Section 27 of the Banking Regulation Act, 1949, were not less than rupees fifty crores. The Union Bank of India Limited is mentioned tin that column. As soon as nationalisation came into operation the Union Bank of India Limited stood converted into a "corresponding new bank", namely, Union Bank of India mentioned in column No. 2 of the First Schedule of the Act. The definition of the "corresponding new bank" is contained in Section 2 (d) of the Act. It lays down that a "corresponding new bank", in relation to an existing bank, means the 'body corporate' specified against such bank in column 2 of the First Schedule. Section 3 of the Act lays down that the entire capital of each corresponding new bank shall stand vested in, and allotted to, the Central Government and the corresponding new bank had to carry on and transact the business of banking as defined in clause (b) of Section 5 of the Banking Regulation Act, 1949. The position which thus emerged after nationalisation is that the then Union Bank of India Ltd. became Union Bank of India with all of its capital vesting in the Central Government and the corresponding new bank had to carry on the banking business as a Government Bank. Till nationalisation the applicant was an employee of the Union Bank of India Limited and was governed by the provisions of the Banking Regulation Act, 1949. Section 46-A was incorporated in that Act through the Banking Companies (Amendment) Act, 1956 (Act No. 95 of 1956). That section made every chairman, director, auditor, liquidator, manager and any other employee of a banking company a "public servant" for the purposes of Chapter IX of the Indian Penal Code. The applicant was thus a public servant only for the purposes of Chapter IX of the Indian Penal Code when the Union Bank of India Limited was nationalised. Section 12 of Act No. 5 of 1970 has d down that the employees of the existing bank shall be deemed to be the employees of the corresponding new bank on the same terms and conditions. The applicant thus became the Branch Manager of Union Bank of India when the Union Bank of India Limited was nationalised and continued to remain a Branch Manager of the corresponding new bank on existing terms and conditions. The status of the corresponding new bank has been clarified by Section 3 (4) of the aforesaid Act No. 5 of 1970 which lays down that every corresponding new bank shall be a "body corporate" with perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose off property, and to contract, and may sue and be sued in its name. Section 2 (7) of the Companies Act, 1956 lays down that a 'body corporate' or a 'corporation' is one and the same thing. It is thus clear by Section 3 (4) of Act No. 5 of 1970 that the new corresponding bank, which came into existence after the nationalisation of Union Bank of India Limited, is a corporation established by the Central Government and the applicant is its employee. He is, therefore, a public servant for the purposes of sub-clause (b) of clause twelfth of Sec. 21 IPC which lays down that every person in the service or pay of a corporation established by or under a Central Act is a public servant. Thus, considering the applicant to be an employee of the corresponding new bank which came into existence after the nationalisation of Union Bank of India Limited he is the servant of a corporation established by or under a Central Act and is a public servant.
(3.) COMING to the alternative argument advanced on behalf of the State, Section 11 of the aforesaid Act No. 5 of 1970 lays down that for the purposes of the Income Tax Act, 1961, every corresponding new bank shall be deemed to be an Indian company and a company in which the public are substantially interested. The corresponding new bank in whose service the applicant happened to be at the time of occurrence is, therefore, a company. Sec. 617 of the Companies Act, 1956 defines a Government Company as a Company in which not less than fifty one percent of the paid-up share capital is held by the Central Government. Section 4 of the aforesaid Act No. 5 of 1970 lays down that on the commencement of this Act, the undertaking of every existing bank shall be transferred to, and shall vest in the corresponding new bank. Under this provision the entire paid-up share capital of the Union Bank of India Limited stood transferred and vested in the corresponding new bank. Section 3 (3) of the aforesaid Act lays down that the entire capital of each corresponding new bank shall stand vested in, and allotted to, the Central Government. On that account, the corresponding new bank is a Government Company for the purposes of Section 617 of the Indian Companies Act, 1956. The applicant being an employee of that company is a public servant for the purposes of subclause (b) of cl. Twelfth of Sec. 21 IPC which lays down that every person in the service or pay of a Government Company as defined in Section 617 of the Companies Act, 1956 is a public servant. Thus the applicant was a public servant at the time of occurrence and the case registered against him for committing misconduct, cheating and forgery in his capacity as a public servant, was rightly investigated under the provisions of Prevention of Corruption Act, 1947 and a charge-sheet was rightly submitted against him by the Delhi Special Police Establishment in the Court of the Special Judge West at Lucknow. The learned Special Judge does not lack any jurisdiction in taking cognizance of the case. The proceedings of the case are validly and properly continuing in his Court and the same suffer from no legal defect.;