CRL OP/27302/2003 of M. RAJA Vs THE DEPUTY SUPERINTENDENT OF on 9 December 2003

:O R D E R

The above Criminal Original Petition has been filed praying tocall for the records relating to the F.I.R. in Cr.No.3/AC/2003 dated 7.2.2003on the file of the respondent and quash the same.

2. Tracing the history of the case, what comes to be known isthat the petitioner is working as Cooperative Sub Registrar, KrishnagiriAgricultural Producers Marketing Society, Krishnigiri; that during 198 8 toMay 2001, he was holding additional charge as Managing Director ofKaveripatinam Agricultural Producers Marketing Society; that the CentralGovernment evolved a scheme through the National Agriculture CooperativeMarketing Federation (hereinafter called as NAFED) for procurement of fairaverage quality of copra; that as per the said scheme, a minimum price wouldbe fixed by NAFED; that the Tamil Nadu Cooperative MarketingFederation(TANFED) had been appointed as principal agent for procuring the copra; that TANFED would purchase the copra from the farmers and thedisbursement of amount was by way of cheque, and the said purchase was inoperation between 25.8.2000 to 3.2.2001; that after two years, the respondentregistered a case under Sections 13(2) r/w 13(1)(c) and (d) of Prevention ofCorruption Act as well as Sections 120(B) r/w 417, 420, 409, 468 and 477, IPCon the allegation that copra worth about Rs.16,19,11,750/- was purchased andprocurements were made at the rate of Rs.32.50 per kg., whereas the actualmarket price was only Rs.24/- and thus, there was a loss to the Government tothe tune of Rs.3,28,48,000/-; that the petitioner, who was acting as theManaging Director on additional charge, was implicated as A5 and he has comeforward to file the above Criminal Original Petition for the relief extractedsupra.

3. In the counter filed on behalf of the respondent, besides generally denying all the averments contained in the petition, the petitionerwould specifically admit the averments made in paragraphs 1 to 4 of thepetition and would submit that the petitioner is a "public servant" and he wasin charge of and responsible for the procurement of copra from thefarmers/coconut growers with the assistance of the employees of NAFED andTANFED and the officials of the said society in ensuring the identity ofbeneficiaries, quality and quantity with measurement and shortage and forproper maintenance of records.

4. The counter affidavit would further state that during the year 2 000, the Government of India announced the Price Support Scheme withthe view to benefit and help the farmers/coconut growers to make procurementof fair average quality of copra at the rate of Rs.32.50 per kg.; that theprevailing market rate was Rs.24.00 per kg.; that the NAFED and TANFED enteredinto an agreement between themselves and decided to appoint Taluk AgriculturalProducers Cooperative Marketing Societies (APCMS) as its agency in differentplaces to procure copra; that the Kaveripattinam Society is one among suchagencies so appointed as procurement centre and the procurements were madefrom 25.8.2000 to 3.2.2001 at Kaveripattinam.

5. The counter affidavit would further give the procedures of

procurement of copra by the representatives of the NAFED and TANFED and theclaim bills for making the payments to coconut growers would be prepared andsent to the Regional Manager at Dharmapuri who would claim the same and sendto the Marketing Society for disbursement; that in the purchase register,entries were made as if 4981.900 Metric Tonnes of copra worth aboutRs.16,19,11,750/- was purchased and entries were made in the stock registersigned by A2, A3 and A5, the petitioner herein; that the entries effected inthe identity cards were manipulated, thus boosting the extent, number oftrees, yield etc. and procurements have been made with ineligible personsresiding outside the jurisdiction of Kaveripattinam Society, furtherfabricating the records such as bills, stock registers, delivery challansetc., fabricating the same and amounts have been disbursed by A5, thepetitioner herein and A8 one Ganesan; that the commission of the saidirregularities caused wrongful loss to the Government to the tune ofRs.3,28,48,000/- being the difference amount between the actual market priceof copra and the price paid under the Price Support Scheme and therefore, the petitioner is also responsible for causing wrongful loss to the Government andhence the case against him also for the pecuniary advantage obtained by him inconnivance with others for cheating the Government; that the petitioner wasalso responsible to verify the quality and quantity of copra during thepurchase, thus willfully failing to follow the instructions. On suchaverments, the respondent would ultimately pray to dismiss the above CriminalOriginal Petition.

6. During arguments, the learned counsel appearing on behalf of the petitioner would submit that there are no mala fides in the purchase ofthe copra; that on preliminary investigation, the Deputy Superintendent ofPolice registers a case and himself takes up the same for investigation; thatafter two years of the alleged commission of the offence, they have comeforward to register the case without adhering to the Tamil Nadu CooperativeSocieties Act and the Rules made thereunder by the Tamil Nadu Government; thatthe total number of accused are sixteen, of whom, the petitioner is arrayed asA5; that as per Section 164 of the Tamil Nadu Cooperative Societies Act, 1983taking cognizance of the offences provided for, wherein under Sub-Section (2),it is clearly stated that every offence under this Act shall, for the purposeof the Code of Criminal Procedure Code 1973, be deemed to be non-cognizable;that Sub-Section 3 of the said Act contemplates that no prosecution shall beinstituted under this Act without the previous sanction of the Registrar andsuch sanction shall not be given without giving to the person concerned areasonable opportunity to represent his case. Learned counsel would point outthat these mandatory provisions of law have not been adhered to so far as thecase registered by the respondent is concerned, and therefore, the F.I.R.registered against the petitioner, who falls within the purview of the TamilNadu Cooperative Societies Act, is mala fide and is liable to be quashed.

7. At this juncture, the learned counsel would cite a

Conclusion

7. At this juncture, the learned counsel would cite a decision delivered in State of Maharashtra v. Laljit Rajshi Shah reported in2000 AIR SCW 698, wherein it is held as follows :"In view of the rival submissions at the Bar, the sole question thatarises for consideration is, as to what is the effect of the provisions ofSection 161 of the Maharashtra Cooperative Societies Act in interpreting theprovisions of Section 21 of the Indian Penal Code. It is undoubtedly truethat the Cooperative Societies Act has been enacted by the State Legislatureand their powers to make such legislation is derived from Entry 32 of List IIof the Seventh Schedule to the Constitution. The legislature no doubt inSection 161 has referred to the provisions of Section 21 of the Indian PenalCode but such reference would not make the officers concerned 'publicservants' within the ambit of Section 21. The State Legislature had thepowers to amend Section 21 of the Indian penal Code, the same being referableto a legislation under Entry 1 of List III of the Seventh Schedule, subject toArticle 254(2) of the Constitution as, otherwise, inclusion of the persons whoare 'public servants' under Section 161 of the Cooperative Societies Act wouldbe repugnant to the definition of ' public servant' under Section 21 of theIndian Penal Code. That not having been done, it is difficult to accept thecontention of the learned counsel, appearing for the State that by virtue of

deeming definition in Section 161 of the Cooperative Societies Act byreference to Section 21 of the Indian Penal Code, the persons concerned couldbe prosecuted for the offences under the Indian Penal Code. The Indian PenalCode and the Maharashtra Cooperative Societies Act are not Statutes in parimateria. The Cooperative Societies Act is a completely self-contained Statutewith its own provisions and has created specific offences quite different fromthe offences in the Indian Penal Code. Both statutes have different objectsand created offences with separate ingredients. They cannot thus be taken tobe Statutes in pari materia, so as to form one system. This being theposition, even though the Legislatures had incorporated the provisions ofSection 21 of the Indian Penal Code into the Cooperative Societies Act, inorder to define a 'public servant' but those 'public servants' cannot beprosecuted for having committed the offence under the Indian Penal Code. Itis a well known principle of construction that in interpreting a provisioncreating a legal fiction, the Court is to ascertain for what purpose thefiction is created, and after ascertaining this, the Court is to assume allthose facts and consequences which are incidental or inevitable corollaries togiving effect to the fiction. But in so construing the fiction it is not tobe extended beyond the purpose for which it is created, or beyond the languageof the Section by which it is created. A legal fiction in terms enacted forthe purposes of one Act is normally restricted to that Act and cannot beextended to cover another Act. When the State Legislatures make theRegistrar, a person exercising the power of the Registrar, a person authorisedto audit the accounts of a society under Section 81 or a person to hold aninquiry under Section 83 or to make an inspection under Section 84 and aperson appointed as an Administrator under Section 78 or as a Liquidator underSection 103 shall be deemed to be 'public servants' within the meaning ofSection 21 of the Indian Penal Code. Obviously, they would not otherwise comewithin the ambit of Section 21, the legislative intent is clear that aspecific category of officers while exercising powers under specific sectionshave by legal fiction become 'public servant' and it is only for the purposesof the Cooperative Societies Act. That by itself does not make those persons' public servants' under the Indian Penal Code, so as to be prosecuted forhaving committed the offence under the Penal Code. When a person is "deemedto be" something, the only meaning possible is that whereas he is not inreality that something, the Act of legislature requires him to be teated as itobviously for the purposes of the said Act and not otherwise."

8. On the contrary, the learned government advocate on the criminal side appearing on behalf of the respondent would submit that coprawas purchased from poor farmers and that NAFED and TANFED have been formed toserve the purpose of the farmers, in which the massive scandal has takenplace, resulting in the case being registered not only under relevantprovisions of the Indian Penal code, but also invoking the penal provisions ofthe Prevention of Corruption Act; that this petitioner who was the ManagingDirector of Kaveripattinam Agricultural Producers Marketing Society, inconnivance with 15 other accused who are the revenue officials and publicservants, forging the names of the farmers, has cheated the Government to thetune of crores of rupees in the purchase of copra and hence the case; that itis a serious case of misappropriation of the Central Government funds providedfor the benefit of the farmers and in such cases, Section 125 of the Indian Evidence Act is attracted. On such arguments, learned government advocate onthe criminal side would ultimately conclude that there is no room for thisCourt to interfere with the case and that a thorough enquiry has to beconducted in order to punish the offenders in accordance with law.

9. Learned counsel would cite two judgments delivered in (i)Govt.of Andhra Pradesh v. P. Venku Reddy 2002 reported in AIR SCW 3895 and(ii) State of Maharashtra v. Prabhakarrao reported in (2002) 7 SCC 636. Sofar as the first judgment cited above is concerned, it is held therein :"From sub-clause (ix) of Clause 8 of Section 2 of the 1988act, it is evidence that in the expansive definition of 'public servant'elected office-bearers with President and secretary of a registeredcooperative society which is engaged in trade amongst others in 'banking' and'receiving or having received any financial aid' from the Central of StateGovernment, are included although such elected office bearers are not servantsin employment of the cooperative societies. But employees or servants of acooperative society which is controlled or aided by the government, arecovered by sub-clause (iii) of Clause 8 of Section 2. Merely because suchemployees of cooperative societies are not covered by sub-clause (ix) alongwith holders of elective offices, it cannot be said that an employee of acooperative bank which is controlled and aided by the government, is notcovered within the comprehensive definition of 'public servant' as containedin subclause (iii) of clause 8 of Section 2.In construing definition of 'public servant' in clause 8 of Section 2 the Court is required to adopt a purposive approach as would giveeffect to the intention of legislature. In that view Statement of Objects andReasons contained in the Bill leading to the passing of the Act can be takenassistance of. It gives the background in which the legislation was enacted.The present Act, with much wider definition of 'public servant', was broughtin force to purify public administration. When the legislature has used suchcomprehensive 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 definitionclause by construction which would be against the spirit of the statute. Thedefinition of 'public servant', therefore, deserves a wide construction."

So far as the second judgment cited above is concerned, it is held therein :

"Under clause (iii) of Section 2(c), any person in the serviceor pay of a corporation established by or under a Central, Provincial or StateAct or an authority or a body owned or controlled or aided by the Governmentand under clause (ix) the President, Secretary and other office-bearers of aregistered cooperative society engaged in agriculture, industry, have beenincluded in the definition of 'public servant'.The question for consideration is whether the accused in thepresent case comes within the purview of the aforementioned clauses or anyother clause of Section 2(c) of the Prevention of Corruption Act, 198 8. Fordetermination of the question, enquiry into facts, relating to the management,control and funding of the society, is necessary to be ascertained.Unfortunately, the High Court in its order has not consideredthis question at all. It has proceeded on the assumption that Section 21 of the Indian Penal Code is the relevant provision for determination of thequestion whether the accused is a public servant. As noted earlier, Section21 IPC is of no relevance to consider the question which has to be oninterpretation of provision of Section 2(c) of the Prevention of CorruptionAct, 1988 read with the relevant provisions of the Maharashtra CooperativeSocieties Act, 1960."

10. In consideration of the facts pleaded, having regard to

the materials placed on record and upon hearing the learned counsel for thepetitioner and the learned government advocate on the criminal side, it couldbe summed up that a criminal case has been registered against a number ofaccused who are cooperative society officials deputed and revenue officialsand that they are the public servants within the meaning of the relevantprovisions of law; that they have been put in charge of and responsible forthe procurement of copra from the farmers, particularly the coconut growers,with the assistance of the employees of the NAFED and TANFED. It furthercomes to be seen that it is the central government which has evolved a schemethrough the National Agricultural Cooperative Marketing Federation for theprocurement of fair average quality of copra in cooperation with the TamilnaduCooperative Marketing Federation, which has been appointed as the principalagent for the procurement of copra and all these arrangements have been madeso as to be beneficial to the agriculturists, particularly the coconut growersin the State.

11. While so, the petitioner herein, who is arrayed as the fifth accused in the list of accused numbering 16, has come forward to filethe above petition seeking to quash the proceedings relating to the FIR inCrime No.3/AC/2003 dated 7.2.2003 registered by the respondent. The chargeagainst all these accused is that between 25.8.2000 to 3 .2.2001, during therelevant period of the purchase of copras, the accused, joining hands witheach other, particularly the petitioner as A5, who was in charge of disbursingof the amount, joining hands with A.8 viz., Ganesan, by manipulating recordsand creating fictitious names of farmers, have put false entries in therelevant records like the stock register, identity card, thus boosting theextent, number of trees, yield, etc., the procurement having been made fromineligible persons residing outside Kaveripattinam Society and furtherfabricating records such as bills, stock registers, delivery challans, etc.,had committed serious irregularities, thus causing wrongful loss to thegovernment to the tune of Rs.3,28,48,000/= being the difference amount betweenthe actual market price of copra and the price paid under the Price SupportScheme, and therefore, the petitioner is also held responsible for causing thewrongful loss to the government and indulging in corrupt activities and hencethe case has been registered against him also. The claim of the petitioner isthat the fictitious names shown are imaginary and that they cannot be taken tohave been established in the absence of any authenticated proof, andtherefore, prima facie, there is no case put up by the respondent, and hencewould seek for the quashing of the F.I.R.

12. On the contrary, on the part of the respondent, it would be argued that it is a serious embezzlement committed in connivance by each ofthe accused joining hands with each other in a cooperative manner, and

therefore, no interference could be caused in the investigation, particularlyin view of the many decisions rendered by the Apex Court in the recent past tothe effect that right from the framing of the F.I.R. down to the laying ofthe charge sheet, it is the domain and field of the Investigating Officer, inwhich no interference could be made, unless in extreme circumstances whereinthe Courts are definite about a rank false case having been registered. Tocite one of the judgments from the very recently delivered judgments of theApex Court, including the one recently delivered in Union of India Vs.Prakash P.Hinduja and another {IV (2003) SLT 335}, is telling to the effectthat no interference of any kind should be caused into the case which ispending investigation and the relevant portion of the judgment is extractedhereunder :

"Thus the legal position is absolutely clear and also settled by judicialauthorities that the Court would not interfere with the investigation orduring the course of investigation which would mean from the time of thelodging of the First Information Report till the submission of the report bythe officer-in-charge of police station in Court under Section 173(2),Cr.P.C., this field being exclusively reserved for the Investigating Agency."

13. So far as the legality of the question raised on the part of the petitioner regarding whether the petitioner would come within the ambitof the definition of 'public servant' is concerned, the Apex Court, in itsjudgment reported in A.I.R. 2000 698, has held in relation to the MaharashtraCooperative Societies Act, 1961 that the Chairman of the MaharashtraCooperative Societies, though being a pubic servant under their Societies Act,is not so under Section 21 IPC, and therefore, he could not be prosecuted forthe offences under Penal Code, thereby meaning that a 'public servant' comingwithin the meaning of Section 2 of the Maharashtra Cooperative Societies Act,1960, is not a 'public servant' within the meaning of Section 2 of thePrevention of Corruption Act, 1947, by virtue of the provisions of Section 161 of the Maharashtra Cooperative Societies Act, 1960 r/w. Section 21 IPC.

14. However, in the later judgments reported in 2002 AIR SCW

3895 and (2002) 7 SCC 636, it is categorically decided that within the meaningof Section 2(c) of the prevention of Corruption Act, office bearers ofCooperative Societies, in consideration of the said question on the basis ofinterpretation of Section 2(c) of the Prevention of Corruption Act relating tomanagement, control and funding of society are considered 'public servants',and therefore, the controversy raised in view of these two judgments renderedby the Apex Court is settled to the effect that the petitioner falls withinthe ambit of ' public servant' within the meaning of Section 2(c) ofPrevention of Corruption Act.

15. In the above circumstances, this Court is not inclined to cause its interference into the ongoing investigation in the main proceedingsinitiated by the respondent, wherein large scale scandals are alleged to havetaken place, which has to be investigated into in its depth and the truthfound out, so as to arrive at a finality of decision in the filing of thefinal report before the Court concerned.

In result, the above criminal original petition is devoid ofmerits and becomes liable only to be dismissed and is dismissed as such.

Consequently, Crl.M.P.No.7658 of 2003 is also dismissed.

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To

The Deputy Superintendent of Police,Vigilance and Anti-Corruption,Dharmapuri,Dharmapuri District.