Is Resolution Professional A 'Public Servant' Under Prevention Of Corruption Act? Supreme Court To Examine

The Supreme Court, on Wednesday, issued notice in a plea challenging the ruling of the Jharkhand High Court that a Resolution Professional (RP) will be considered a ‘public servant’ under Section 2(c)(v) and Section 2(c)(viii) of the Prevention of Corruption Act, 1988 (PC Act).

A vacation Bench comprising Justice AS Bopanna and Justice Prashant Kumar Mishra issued notice to the respondents in the Special Leave Petition as well as the interim relief sought therein.

The High Court had opined that the RP performs ‘public duty’ within the meaning of Section 2(b) of the PC Act and hence is a ‘public servant’ liable to be prosecuted under the PC Act. The impugned judgment was passed by the High Court while rejecting the petition praying for quashing of the entire criminal proceeding instituted against an Insolvency Professional, as well as the FIR registered for the offence under Section 7 (public servant taking gratification other than legal remuneration in respect of an official act) of the PC Act.

The Single Judge, Justice Gautam Kumar Choudhary had made it clear that the meaning of ‘public servant’ under Section 2(c) of the PC Act is not limited to those serving under the Government or its instrumentalities and drawing salary from the public exchequer. He emphasised that the nature of assignment and duty to be performed would determine if one is to be considered as a ‘public servant’ or not. In case of Resolution Professional, the Single Judge opined that, they perform functions akin to ‘public duty’. He also noted that though the Insolvency and Bankruptcy Code, 2016 (IBC) is a self-contained code, if a Resolution Professional takes bribes in order to favour a party the PC Act would be applicable.

The SLP filed through Advocate on Record, Vaibhav Niti, argues that the RP neither performs ‘public duty’ nor holds an office by virtue of which he is authorised or required to perform ‘public duty’. It submits that the nature of duty of the RP is voluntary and contractual. It further avers that the Corporate Insolvency Resolution Process (CIRP) initiated by the RP is an ‘assignment’, a professional service, for which a ‘profession fee’ is paid to the RP.

The petition submits that the present issue is pending adjudication before various High Courts and seeks the Apex Court’s indulgence as the interpretation of the status of the RP appointed by the Committee of Creditors under Section 22(3)(a) the IBC would have far reaching consequences.

[Case Note: Sanjay Kumar Agarwal v. Central Bureau of Investigation SLP(Crl) No. 7029/2023]