Lakhi Ram and others vs State of Haryana

S.S. Grewal, J.—This petition u/s 482 of the Code of Criminal Procedure relates to quashment of First Information Report No. 353 dated 31.8.1984 under Sections 161, 165-A Indian Penal Code and u/s 5(2)(47) of the Prevention of Corruption Act registered at Police Station, Sirsa as well as quashment of order dated 18.7.1987 whereby charge against the Petitioners was framed Special Judge Sirsa.

In brief, according to the allegations made in the impugned first information report recorded on the basis of the enquiry report submitted by Deputy Superintendent of Police to his immediate superior, Lakhi Ram (Petitioner No. 1) as Manager of Land Development Bank, Sirsa. whereas, Sher Singh (Petitioner No. 2) as Land Evaluation Officer in the said Bank and Dharam Singh (Petitioner No. 3) a mechanic of the said Bank, accepted illegal, gratification/bribe in their capacity of public servants while sanctioning the loan to 150 farmers and cultivators After completion of the investigations all the three Petitioners in the present case were challaned On the basis of the allegations In the First Information Report and other matter material produced by the investigating agency the learned Special Judge framed charged u/s 5(2) of the Prevention of Corruption Act and u/s 161 of the Indian Penal Code against Petitioner Nos. 1 and 2 whereas against Petitioner No. 3 only charge u/s 165-A of the Indian Penal Code was framed.

Counsel for the parties were heard.

It was mainly contended on behalf of Petitioner Nos. 1 and 2 that they are not public servants within the meaning of Section 5(2) of the Prevention of Corruption Act and Section 21 of the Indian Penal Code because Cooperative Society is not a Corporation established by statute, and, that the impugned First Information Report as well as consequent proceedings taken against them are liable to be quashed.

The said Bank no doubt has power of granting leans to the farmers and get back the same. However, there is neither any specific assertion in the First Information Report, nor, any material has been collected by the investigating agency that the said Bank has the power of receiving money on deposit from customers and honouring their cheques which is essential characteristic of a Banking Company under the provisions of Banking Regulations Act, 1949 (hereinafter referred to as the Act). Thus, the essential characteristic of banking, namely, the power to receive deposits from the public which are repayable in the manner indicated in Sections 5(1)(b) of the Act is absent and merely the power of granting loans is retained and exercised that does not make the company a banking company. Lending of money may be one phase of a banking business but it is not the main phase or the distinguishing phase. I find support in my view from the Division Bench in Mahaluxmi Bank Ltd. Vs. Registrar of Companies, West Bengal, .

The Land Development Bank had been registered under the Haryana Cooperative Societies Act and the Act would be applicable to the said Cooperative Society only to the extent specified in Part V same does not specifically cover the provisions of Section 46-A of the Act, which, specifies that every Chairman, Director, Auditor, Liquidator, Manager and other employees of the Banking Company shall be public servants for the purpose of Chapter IX of the Indian Penal Code.

I am fortified in my view by Single Bench authority of this Court in Yash Kumar Sharma v. State of Punjab 1987 (1) C.L.R. 654, wherein relying upon Full Bench of this Court in State of Punjab v. Kesari Chand and Anr. 1987 (1) C.L.R. 510. It was held that an employee of Punjab Land Cooperative Bank, Muktsar was not a public servant within the meaning of Section 5(2) of the Prevention of Corruption Act or u/s 21 of the Indian Penal Code because a cooperative society is not Corporation established by the Statute.

It is, thus, quite evident that the Land Development Bank, Sirsa cannot be said to be a Banking Company under the provisions of the Act, nor, the same can be treated as a Corporation established by Statute. In these circumstances the said Bank can only be treated as a Co-operative Society and not Banking Company or a Corporation established by the Statute. Petitioners Nos. 1 and 2 who are employees of the said Bank would not fall within the definition of public servants u/s 5(2) of the Prevention of Corruption Act or under Action 21 of the Indian Penal Code Petitioner No 3 obviously is not a public servant. In these circumstances neither Petitioner Nos. 1 and 2 nor Petitioner No. 3 can be charged or proceeded under Sections 161, 165-A Indian Penal Code or u/s 5(2) of the Prevention of Corruption Act.

For the foregoing reasons, the impugned First Information Report and subsequent proceedings including charge framed against the Petitioners are ordered to be quashed.