Coop. Bank Officers Are 'Public Servants' Under PC Act; Dept Exoneration Without Finding On Merits No Bar To FIR: Allahabad High Court
The Allahabad High Court has clarified that the employees of Co-operative Banks controlled or aided by the government fall squarely within the definition of a 'Public Servant' under the Prevention of Corruption Act, 1988. The Court further said that a 'technical' exoneration in a departmental inquiry, where the Inquiry Officer merely states a lack of competence to investigate the...
The Allahabad High Court has clarified that the employees of Co-operative Banks controlled or aided by the government fall squarely within the definition of a 'Public Servant' under the Prevention of Corruption Act, 1988.
The Court further said that a 'technical' exoneration in a departmental inquiry, where the Inquiry Officer merely states a lack of competence to investigate the charges, cannot act as a bar against the lodging of an FIR against the employee over allegations of disproportionate assets.
A bench of Justice Abdul Moin and Justice Babita Rani thus dismissed a plea seeking to quash an FIR lodged under the 1988 Act against a Deputy General Manager of the Uttar Pradesh Sahkari Gram Vikas Bank Ltd.
Case in brief
The petitioner (Subhash Chandra) approached the HC challenging the September 2025 FIR lodged by the Lucknow Sector Vigilance Establishment under Sections 13(1)(b) and 13(2) of the PC Act.
The vigilance department alleged that while the petitioner's income from valid sources was approximately Rs. 2.52 crore but he had spent approximately Rs. 6.30 crore which makes it a disproportionate expenditure of over Rs. 3.77 crore.
It was alleged that the petitioner indulged in corruption and had exploited the employees to accumulate disproportionate assets and had indulged in other profession like running ITI in Kanpur and Lucknow and that he had not given the details of his movable and immovable property to the competent authority.
The petitioner moved the HC seeking the quashing of the FIR on two primary grounds:
- He is an employee of a Co-operative Bank and thus not a 'Public Servant' within the meaning of the PC Act.
- He was exonerated in a 2018 departmental inquiry regarding the same charges and under the law a criminal proceedings cannot continue after departmental exoneration on identical facts.
The petitioner's counsel argued that the definition of 'Public Servant' under Section 2 of the PC Act does not include an employee of a co-operative society. He also alleged that it was malicious prosecution against the petitioner.
High Court's order
Rejecting this submission, the Court relied on the Supreme Court's rulings in Govt. of AndhraPradesh v. P. Venku Reddy and CBI v. Ramesh Gelli.
The Bench said that since the petitioner admitted to being in the service of a Co-operative Bank, which is controlled and aided by the Government and therefore, he would within this definition.
Furthermore, the Court cited Section 124 of the Uttar Pradesh Co-operative Societies Act, 1965, which explicitly states that "any officer of a co-operative Society shall be deemed to be public servant within the meaning of Section 21 of the Indian Penal Code".
The Court held that following the 1990 amendment to the 1965 Act, the legislative intent was clear to bring such officers under the anti-corruption net.
"…definition of 'public duty' is wide and discharge of duties in which the State, the public or the community at large has an interest, has been brought within the ambit of an expression 'public duty'. Thus it is apparent that clearly, provisions of Act, 1988 would be applicable on the petitioner also", the bench further concluded.
Now, regarding the second contention of the petitioner that since he was exonerated in a departmental inquiry on the charge of disproportionate assets, the criminal prosecution was an abuse of process, the High Court perused the Inquiry Report of October 2018 and found that the petitioner's claim was 'patently misconceived'.
The Court quoted the Inquiry Officer's finding in Hindi: "Is vishay ki jaanch hetu wah saksham nahi hain" (He is not competent to investigate this subject).
In fact, the Court noted, in the inquiry report, the Inquiry Officer had recorded that only the Income Tax Department or another agency was competent to probe disproportionate assets and thus, had not given a finding on the merits of the charge.
Taking note of the same, the division bench observed:
"Thus, it is apparent that no inquiry was in fact conducted for the charge of disproportionate assets which was a charge in the charge sheet and thus there is no restraint or bar now in the respondents in lodging the First Information Report under the provisions of the Act, 1988”.
Therefore, finding no merit in the grounds of jurisdiction or malice, the High Court dismissed the writ petition.
Case title - Subhash Chandra vs .State Of U.P. Thru. Addl. Chief Secy. Deptt. Of Vigilance Lko. And Others
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