2009 (4) TMI 1062 - SC - Indian Laws

Summary

Issues Involved:
1. Role of respondents in sanctioning loans.
2. Status of respondents as "public servants" under the Prevention of Corruption Act, 1988.
3. Jurisdiction of the High Court in revisional powers.
4. Applicability of the M.P. Co-operative Societies Act, 1960.

Summary:

1. Role of Respondents in Sanctioning Loans:
The respondents, as Directors and members of the Loan Committee of Indore Premier Co-operative Bank Limited, were accused of sanctioning loans amounting to Rs. 56,50,000/- without verifying the eligibility of the borrowers. The Trial Court found a prima facie case against the respondents and directed framing of charges u/s 409, 420, and 120B IPC, and Sections 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. The High Court, however, concluded that the respondents had acted based on the groundwork done by the Branch Managers and Executive Officer, and thus, could not be said to have acted illegally. The Supreme Court disagreed, noting that the Inquiry Report suggested the respondents had connived in defrauding the Bank.

2. Status of Respondents as "Public Servants":
The High Court held that the respondents could not be treated as public servants based on the judgment in State of Maharashtra v. Laljit Rajshi Shah and Ors. The Supreme Court, however, found this view erroneous, noting that the definition of "public servant" u/s 2(c)(ix) of the Prevention of Corruption Act, 1988, had a wider connotation than the definition in the 1947 Act. The respondents, as office bearers of a registered Co-operative Society engaged in banking, fell within this definition.

3. Jurisdiction of the High Court in Revisional Powers:
The Supreme Court held that the High Court had erred in re-assessing the factual position and quashing the charges framed by the Trial Court. It was emphasized that the High Court should not interfere with the Trial Court's order for framing of charges unless there is glaring injustice, as established in Stree Atyachar Virodhi Parishad v. Dilip Nathumal Chordia and Anr. and other cases.

4. Applicability of the M.P. Co-operative Societies Act, 1960:
The respondents argued that any irregularities should be dealt with under the M.P. Co-operative Societies Act, 1960, which provided for penalties and was a complete self-contained Code. The Supreme Court rejected this argument, stating that there is no bar under the M.P. Co-operative Societies Act, 1960, to resort to the provisions of the general criminal law, especially when charges under the Prevention of Corruption Act, 1988, are involved.

Conclusion:
The Supreme Court set aside the High Court's orders quashing the charges against the respondents and restored the charges framed by the Trial Court. The Trial Court was directed to proceed with the trial, with the clarification that the views expressed were prima facie for the disposal of the appeals and should not influence the trial.