[Prevention Of Corruption Act] Chairman, MD & Executive Director Of Private Bank Come Under Definition Of "Public Servants": Telangana HC

The Telangana High Court has held that the Chairman, Managing Director, and Executive Director of a Private Bank come under the definition of 'public servant' as defined under the Prevention of Corruption Act, 1988 (PC Act) and allowed a revision setting aside the discharge petition awarded to the accused by the Court below.

The order was passed by Justice E.V. Venugopal in a plea filed by the CBI against the order passed by the Special Judge for CBI, by way of which, the respondents/accused were exonerated of the offense punishable under Section 13 of the Prevention of Corruption Act, holding that they were not public servants as per the Act.

Section 13 of the PC Act denotes that a public servant is said to commit the offence of criminal misconduct if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or any property under his control as a public servant or allows any other person to do so or if he intentionally enriches himself illicitly during the period of his office he is liable for penal prosecution under the Act.

While setting aside the order, the High Court held:

“Court is of the view that the respondents come under the definition of public servants. They misused their official position while they were entrusted with the public money being the Chairman and Managing Director and Executive Director respectively of Global Trust Bank and hence, they are liable to be prosecuted for the offences covered under the provisions of PC Act.”

It had been alleged that the accused/respondents between the years 1994 and 2003, conspired with other accused and cheated the Global Trust Bank in the matter of recommending/sanctioning/disbursing/availing huge credit facilities by dishonestly and fraudulently inducing the bank to part with its funds in the form of letter of credits and bills discounting facility with false and fabricated bills, leading to the bank suffering a loss of Rs.10.25 crores.

The trial court owing to an order passed by the Bombay High Court, wherein it was held that the accused are not covered under the ambit of 'public servant'; passed a similar order and directed the prosecution to appear before an appropriate Court to try the other offenses.

Aggrieved, the present revision was filed. The CBI contended that under Sections 2(b) and 2(c)(viiii) of the Banking Regulation Act, 1949 and also the provisions of Prevention of Corruption Act, the respondents being the Chairman and Managing Director and Executive Director respectively of the bank, are the public servants.

The advocates on behalf of the accused contended that a private company running a banking business cannot be said to have any public or statutory duty. Further the accused were being tried under the PC Act and not the Banking Regulations Act, and hence the provisions of that Act would not be applicable, it was argued.

The Bench held that the order of the Bombay High Court in question had been set aside by the Supreme Court.

“When the core issue on whether the respondents are public servants or not is decided by the Apex Court holding that they are public servants and they also come under the purview of the PC Act, this Court is not inclined to take any different view on this aspect,” the Bench noted.

Thus the revisions were allowed.

CrlRC: 365 and 406 of 2011

Counsel for petitioner: Special PP for CBI

Counsel for respondent: L Ravichander

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