Holding

A deputed Class‑I officer of a cooperative society is not a public servant under Section 21 IPC and therefore is not entitled to the sanction protection of Section 197 CrPC.

Summary

N.K. Sharma, a Class‑I officer of the Haryana Government, was deputed as Managing Director of the Haryana State Cooperative Land Development Bank Ltd. A criminal complaint for defamation (IPC s.500) was filed against him after he sent a letter alleging false implication of a colleague. Sharma was summoned and applied to the Chief Judicial Magistrate seeking dismissal on the ground that prosecution required prior sanction under Section 197 of the CrPC, claiming he was a public servant. The trial court and the Punjab & Haryana High Court rejected his claim. The Supreme Court held that Sharma was not a public servant within the meaning of Section 21 of the IPC because his salary was not paid by the Government and he was not in the service of the State; the Haryana Civil Services Rules and the Haryana Cooperative Societies Act could not be stretched to confer protection under Section 197. Consequently, the application under Section 203 was not maintainable and the appeal was dismissed.

Issues considered

Whether a Class‑I officer deputed as Managing Director of a cooperative society qualifies as a 'public servant' for the purposes of Section 197 of the Criminal Procedure Code.
Whether the Haryana Civil Services (Punishment or Appeal) Rules, 1987 and the Haryana Cooperative Societies Act, 1984 can extend the protection of Section 197 CrPC to the appellant.
Whether an application under Section 203 CrPC challenging a summons is maintainable before a subordinate criminal court.

Legislation cited

Code of Criminal Procedure, 1973s. 197, s. 203, s. 482
Companies Act, 1956s. 617
Haryana Cooperative Societies Act, 1984s. 117, s. 118, s. 123
Indian Penal Code, 1860s. 21, s. 500

Subjects

public servantSection 197 CrPCsanction for prosecutioncooperative societylegal fictionclass I officerdefamationsubordinate criminal courtSection 203 CrPCSection 482 CrPC

Judgment

N.K. SHARMA A
v.
ABHIMANYU

OCTOBER 7, 2005

[S.B. SINHA AND R.V. RAVEENDRAN, JJ.] B

State Government officer-Deputed as Managing Director of a Co-
operative Society-Criminal complaint-Summoning-Held: He was not
entitled to protection ofsanction from prosecution under Section 197 Cr.P.C.- C
He was not a public servant either under Section 2 I of the JPC as he was not
in service of State and his salary was not paid by Government, or under
Section 123 of Haryana Co-operative Societies Act, 1984, as he was not
engaged in recovery of loans/appointed as liquidator/arbitrator-Also, he was
not covered under definition of 'Government employee' in Rule 2(D) ofHaryana
Civil Services (Punishment or Appeal) Rules, 1987. D
Criminal Procedure Code, ·/973-Sections 197, 203-Summoning of
accused-Application against it seeking dismissal of complaint on the ground
·that sanction for prosecution was not obtained-Held: It is not maintainable
before subordinate criminal court.
E
Interpretation of statutes-Legal fiction-It is created for a specific
purpose and its applicability cannot be extended for other purposes.

Appellant is class I officer of a State Government. He was deputed
as Managing Director of a Co-operative Society. A criminal complaint was
filed against him for commission of an offence and summons were issued F
to him by trial cour~. He filed application against it contending that he
was a public servant and as sanction for his prosecution in terms of Section
197 of the Code of Criminal Procedure was not obtained, entire
proceedings against him were vitiated. Trial Court and High Court
rejected the application. Hence the present appeal. G
Appellant contended that he was a public servant within meaning
of Rule 20 o_fHaryana Civil Services (Punishment or Appeal) Rules, 1987,
and Sections 118 and 123 of Haryana Co-operative Societies Act, 1984,
and hence entitled to protection of sanction against prosecution in terms
. 207 H
208 SUPREME COURT REPORTS (2005] SUPP. 4 S.C.R.

A of Section 197 of the Code of Criminal Procedure.
Dismissing the appeal, the Court

HELD: 1.1. The salary of the appellant is not paid by the
Government. He at the relevant time was not in the service of the State.
B Prosecution against an officer of the Government Company or a public
undertaking would not require any sanction under Section 197 Cr.P.C.
He does not answer the description of a public servant within the meaning
of the provision of Section 21 of IPC. [212-F, G]

1.2. The underlying object in enacting Section 197 of the CrPC is to
C protect a public servant from a frivolous prosecution. The said provision,
however, cannot be interpreted liberally so as to bring within its purview
other officers who are not so protected. Section 197 of the Code of
Criminal Procedure, inter alia, protects the public servants. [212-8, CJ

Shreekantiah Ramayya Munipalli v. State of Bombay, [1955] 1 SCR
D 1177, relied on.

2. Rule 2(D) of Haryana Civil Services (Punishment or Appeal)
Rules, 1987 had been made in terms of proviso appended to Article 309
of the Constitution of India. An employee of the State, whose service have
E been placed at the disposal of a company, corporation or organization or
a local authority or university would be deemed to be a Government
employee despite the fact that his salary has been drawn from sources
other than the consolidated fund of the State, for the purpose of the said
rules. The definition of the 'Government employee' cannot be extended
for purposes other than sought to be achieved thereby. Provisions of the
F said rule, therefore, cannot be. invoked for affording protection under
Section 197 of the Code of Criminal Procedure. [212-G, H; 213-A, B, C]

3.1. Section 117 of the Haryana Co-operative Societies Act, 1984
enumerates offences. Section 118 thereof limits taking of cognizance of
offences which come within the purview of the said Act, as would be
G evident from clause (i) thereof, and not under the provisions of the Indian
Penal Code or any other statute. The said provision, therefore, has no
application. In terms of its Section 123, only an employee who is engaged
in the recovery ofloans or a person who has been appointed as a liquidator
or an arbitrator only shall be treated as a public servant. [213-H; 214-A]
H
I
I
(
N.K. SHARMA v. ABHIMANYU 209
3.2. By reason of the said provision, a legal fiction has been created. A
A legal fiction, as is well known, is created for a specific purpose and, thus,
applicability thereof cannot be extended for a purpose other than those
for which if has been created. 1214-Aj

3.3. As the Managing Director of the Haryana State Cooperative
Land Development Bank Ltd, the Appellant was not engaged in the B
recovery of loans or appointed as a liquidator or an arbitrator and in that
view of the matter, the limited purpose for which the legal fiction has been
created wouid have no application in the instant case. 1214-Bj

S.S. Dhanoa v. Municipal Corporation, Delhi and Ors., (19811 3 SCC C
431, Mohd. Hadi Raja v. State of Bihar and Anr., (1998J 5 SCC 91 and B.S.
Sambhu v. T.S. Krishnaswamy, II 9831 I SCC 11, relied on.

Sukhdev Singh v. Bhagatram Sardar Singh, 119751 I SCC 485, Sabhajit
Tewary v. Union of India, (19751 I SCC 485 and Pradeep Kumar Biswas
and Ors. v. Indian Institute of Chemical Biology and Ors., JT (2002) 4 146, D
referred to.

4. Application of appellant before the Chief Judicial Magistrate
purportedly, under Section 203 of the Cr.PC, on the ground that as
sanction in terms of Section I 97 of Cr PC was not obtained, proceedings
against him and his summoning were vitiated, was not maintainable since E
subordinate criminal courts do not have any review or inherent power.
(217-B, C, DJ

Ada/at Prasad v. Roop/al Jindal and Ors., (2004] 7 SCC 338, relied
on.
F
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 514
of 2001.

From the Judgment and Order dated 14.7.2000 of the Punjab and
Haryana High Court in Crl. Misc. No. 33077-M of 1999.
G
Vijay Kumar and Ms. Naresh Bakshi for the Appellant.

Mahabir Singh, Rakesh Dahiya, Nikhil Jain, Ms. Madhusmita Bora,
Gagandeep Sharma and M.A. Chinnaswamy for the Respondent.

The Judgment of the Court was delivered by H
210 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A S.B. SINHA, J. Whether a Class I Officer of the State Government
(Haryana) deputed to work as Managing Director of a Co-operative Society
is entitled to protection under Section I 97 of the Code of Criminal Procedure
is in question in this appeal which arises out of a judgment and order dated
14.7.2000 passed by the High Court Punjab and Haryana at Chandigarh.

B The fact of the matter, shorn of all unnecessary details is as under :

The Respondent herein was working as Land Valuation Officer under
one Dalip Singh, Manager, Primary Agricultural Land Development Bank,
Dabwali, a branch office of the Cooperative Society wherein the Appellant
C was the Managing Director.

A Veterinary Doctor V.K. Mittal was arrested by the Vigilance Bureau
on or about 29.3.1995, allegedly while accepting illegal gratification ofRs.700
from a farmer. The said doctor made an allegation that out of the said amount
of Rs, 700, a sum of Rs.400 was to be paid to the Manager. Dalip Singh, on
D the basis of the said statement, was arrested. He was later on, however, I
acquitted.

The District Manager,. Sirsa, in charge of the Circle, by a letter dated
12.4.1995 brought to the Appellant's notice that a relative of the Respondent,
working as Inspector in Vigilance at the instance of the Respondent, got the
E said Manager arrested as he had been nursing a grudge against him having
. been transferred from Dabawali on his recommendation. Upon receipt of the
said letter, the Appellant addressed a letter dated 19.4.1995 to th_e Director
General of Police, Vigilance Department, Haryana, Chandigarh, requesting
him to look. into the matter personally. The letter contained a statement
"Later on with the connivance of Shri Abhimanyu, Land Valuation Officer
F and his one relative who is in Haryana Police, has falsely implicated Shri
Dilip Singh .... The Manager has been implicated due to personal difference
with Shri Abhimanyu ......" The said letter was published in a newspaper,
whereafter the Respondent filed a complaint against the Appellant herein in
the Court of the Chief Judicial Magistrate, Sirsa, purported to be for.
G commission of an offence under Section 500 of the Indian Penal Code (for
short, JPC), on the ground that by reason thereof his prestige got lowered in
the general public as also amongst his relatives. The Appellant was summoned
in the said case by the Chief Judicial Magistrate by an order dated 13.7.1998.

The Appellant herein filed an application before the said Court on
H 30.4.1999 on the ground that no sanction in terms of Section 197 Cr. PC
N.K. SHARMA v. ABHIMANYU [SINHA. J.) 211

having been obtained, the entire proceeding was vitiated in law as, according A
to him, the aforementioned DO letter was issued by him in his official capacity.
It was further contended that the said letter has been procured ··by som·e
persons wherewith the Appellant has no concern.

The said application, however, was dismissed by the Chief Judicial
Magistrate by an order dated 14.8.1999. Aggrieved thereby the Appellant B
filed an application under Section 482 of the Code of Criminal Procedure
praying therein for quashing the order dated 13. 7.1998 whereby he had been
summoned. By reason of the impugn,ed order, the said application was
dismissed holding that as the Appellant was working on deputation in the
Cooperative Housing Federation at the retevant time, he was not entitled to C
get the protection under Section 197 Cr.PC. Be_ing aggrieved, the Appellant
is. before us:

Mr. Vijay Kumar, the learned counsel appearing on behalf of the
Appellant, would submit that the Appellant being a Class-I Officer of the
State Government was entitled to the said protection ii1 terms of the provisions D
of the Haryana Civil Services (Punishment or Appeal) Rules, 1987 as also the
Haryana Cooperative Societies Act, 1984.
-.;.
Sanction for prosecution of a public servant, the learned counsel would
contend, is a valuable right. It was submitted that the High Court committed
a manifest error in dismissing the Appellant's application under Section 482 E
Cr.PC. relying on or on the basis of a decision of this Court in Mohd. Hadi
Raja v. State of Bihar and Anr., [1998] 5 SCC 91 without taking into
consideration paragraph 25 thereof wherein it is laid down that such protection
, can be afforded by any statute or statutory rules framed by t~e State.

Mr. Mahabir Singh, the learned counsel apRearing on behalf of the F
Respondent, on the other hand, would contend that in abse,nce of any statutory
provision, the question as to whether an officer deputed .to work in a
cooperative society is a 'public servant' or not must be determined strictly in
terms of .Section 21 of lPC.
G
It was submitted that the provisions o'f,_ the Haryana Civil Services
(Punishment or Appeal) Rules, 1987, referred to above, are wholly inapplicable
- inasmuch as the definition of 'public servant' contained therein is meant to
be applied for the purpose of the said rules only.

As regards the availability of protection under Section 123 of the Haryana H
212 SUPREME COURT REPORTS 12005] SUPP. 4 S.C.R.

A Cooperative Societies Act, 1984, the learned counsel for the Respondent
would contend that only those employees who come within the purview of
Section 123 thereof would be 'public servant' and not others and the Appellant
herein does not answer the description of the employees specified therein.

Indisputably the underlying object in enacting Section 197 of the Cr.PC
B is to protect a public servant from a frivolous prosecution. The said provision,
however. although may not be construed too narrowly. as was held in
Shreekantiah Rtimayya Munipalli v. State of Bombay, [1955] 1 SCR 1177,
whereupon the learned counsel for the Appellant placed reliance, cannot be
interpreted liberally so as to bring within its purview other officers who are
C not so protected. Section 197 of the Code of Criminal Procedure, inter alia,
protects the public servants. 'Public Servant' has been defined in Section 21
of the IPC, clause 12 whereof is as under :

"Twelfth~Every person

(a) in the service or pay of the Government or remunerated by fees
D or commission for the performance of any public duty by the
Government;
(b) in the service or pay of a local authority, a corporation established
by or under a Central, Provincial or State Act or a Government
company as defined in section 617 of the Companies Act, 1956
E (I of 1956)"

Admittedly the salary of the Appellant is not paid by the Government.
He at the relevant time was not in the service of the State. Prosecution against
an officer of the Government company or a public undertaking would not
F require any sanction under Section 197 Cr. PC .

It has not been denied or disputed before us that the Appellant herein
does not answer the description of a public servant within the meaning of the
provision of Section 21 of !PC. What is contended is that he continues to be
a public servant within the meaning of the Haryana Civil Services (Punishment
G or Appeal) Rules, 1987, Rule 2(0) whereof is as under :

"2(0) government employees : means any person appointed to
any civil Service or post in connection with the affairs of the State of
Haryana

Explanation A govt. employee whose services are placed at the
H
N.K. SHARMA v. ABH!MANYU [SINHA. J.) 213
disposal of a company, corporation or organization or a local authority A
or university by the Govt. shall for the purpose of these rules be
deemed to be a government employee serving under the government
notwithstanding that his salary is drawn from sources other than the
consolidated fund of the State."

The said rule had been made in terms of proviso appended to Article B
309 of the Constitution of India. An employee of the State, whose services
have been placed at the disposal of a company, corporation or organization
or a local authority or university would be deemed to a Government employee
despite the fact that his salary has been drawn from sources other than the
consolidated fund of the State, for the purpose of the said rules. The definition C
of the 'Government employee' cannot be extended for purposes other than
sought to be achieved thereby. Provisions of the said rules, therefore, cannot
be invoked for affording protection under Section 197 of the Code of Criminal
Procedure.

Reliance has also been placed upon Sections 118 and 123 of the Haryana D
Cooperative Societies Act, 1984, which read as under :

''.S. 118. Cognizance of offence
(i) No court inferior to that of Judicial Magistrate of the First Class
shall try any offence under this Act.
E
(ii) No prosecution shall be instituted without the sanction of the
Registrar and such sanction shall not be given without giving to
the person concerned a reasonable opportunity to represent his
case.

S. 123 .. Employees etc. to be public servants : - Any employee of F
cooperative society engaged in the recovery of loans under the
provisions of this Act or rules or any person appointed as liquidator
or arbitrator shall be deemed to be a public servant within the meaning
of Section 21 of the Indian Penal Code."

[Emphasis supplied] G·
Section 117 of the said Act enumerates offences. Section 118 limits
taking of cognizance of offences which come within the purview of the said
Act, as would be evident from clause (i) thereof, and not under the provisions
of the Indian Penal Code or any other statute. The said provision, therefore,
has no application. In terms of Section 123, only an employee who is engaged H
214 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A in the recovery of loans or a person who has been appointed as a liquidator
or an arbitrator only shall be treated as a public servant. By reason of the said
provision, a legal fiction has been created. A legal fiction, as is well known,
is created for a specific purpose and, thus, applicability thereof cannot be
extended for a purpose other than those for which it has been created. As the
Managing Director of the Haryana State Cooperative Land Development
B Bank Ltl, the Appellant was not engaged in the recovery of loans or appointed
as a liquidator or an arbitrator and in that view of the matter, the limited
purpose for which the legal fiction has been created would have no application
in the instant case.

C The views we have taken find support from a decision of this Court
in S.S. Dhanoa v. Municipal Corporation, Delhi and Ors., [1981] 3 SCC 431
wht:.rein, this Court noticed a well marked distinction between a body created
by a st_iitute and a body coming into existence and governed in accordance
with the provisions of a statute. In that case the Appellant therein, was a
member of the Indian Administrative Service. His services were placed at the
D disposal of Cooperative Stores Ltd., a society registered under the Bombay
Cooperative Societies Act. He was prosecuted under Section 7 of the
Prevention of Food Adulteration Act, i 954. Rejecting a contention that he
was entitled to protection under Section 197 of Cr. PC, it was observed :

"5. The short question that falls for our determination in this
E appeal is whether a member of the Indian Administrative Service,
whose services. are placed at the disposal of an organisation which is
neither a local authority, nor a corporation established by or under a
Central, Provincial or State Act, nor a Government Company, by the
Central Government or the Government of a State, can be treated to
F be a 'public servant' within the meaning of clause Twelfth of Sectiqn~
21 of the Indian Penal Code for purposes of Section 197 o(.the Code
of Criminal Procedure, 1973. The answer to the question turns on the
construction of clause Twelfth of Section. 21 of the Indian Penal
Code, 1860 and Section 197 of the Code of Criminal Procedure,
1973 ...... "
G
It was opined :

" ..... By no stretch of imagination, could it be said that the appellant
was employed in connection with the affairs of the Union within the
meaning of Section 197 of the Code of Criminal Procedure, 1973.
H The Super Bazaars are not owned by the Central Government. They
N.K. SHARMA v. ABHIMANYU [SINHA, J.] 215
are owned and managed by the Cooperative Store Limited. Pursuant A
to an agreement executed between the Cooperative Store Limited and
the Union of India, the Central Government has advanced a loan of
Rs 40,00,000 to the Society for establishment and management of the
Super Bazaars. and the Cen.tral Government also holds_ more than 97
per cent shares in the total shareholding of the Society. Clause 6 of
the Agreeme·nt provides: B

"That the incumbents of supervisory and other key posts
including those of General Manager, Deputy General Manager,
Finance Manager, Assistant General Manager, Purchase Manager,
Sales. Manager and Accounts Manager, by whatever other
. designation they may be known shall not be appointed or removed c
from their posts by the debtor except with the prior approval of
'
~
the creditor in writing."

The Super Bazaar at Connaught Place and at various other places are
run by the Cooperative Store Limited under the control of the Ministry
of Agriculture (Department of Cooperation). The incumbents of D
supervisory and other key posts including that of the General Manager
cannot be appointed or removed without the prior approval of the
Central Government. The whole purpose of clause 6 of the Agreement
in the matter of appointment of General Manager and other incumbents
'~
holding key. posts is to safeguard the interests of the Central E·
Government. Legally speaking, the Super Bazaars are owned and
managed by the Society and not by the Central Government and,
therefore, the appellant was not employed in connection with the
affairs of the Union within the meaning of Section 197 of the Code
of Criminal· Procedure, 1973."
F
We may, however, notice that therein a distinction between a company
engaged under the Act and the Company which comes into existence in
accordance with the Act was noticed relying on or on the basis of a decision
of this Court in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi,
[1975) I SCC 421. The Court therein also relied upon Sabhajit Tewary v.
Union of India, (1975) I SCC 485. The said decision, however, has been
G
reversed by a Seven Judge Bench of this Court in Pradeep Kumar Biswas &
Ors. v. Indian Institute of Chemical Biology and Ors., [JT 2002 (4) SC 146).
In this case, we are not, however, concerned with the said issue.

The said decision has been followed in Mohd. Hadi Raja (supra) H
216 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R.

A whereupon reliance has been placed by the High Court, observing :
"21. It is to be noted that though through the contrivance or mechanism
of corporate structure, some of the public undertakings are performing
the functions which are intended to be performed by the State, ex
facie, such instrumentality or agency being a juridical person has an
B independent status and the action taken by them, however important
the same may be in the interest of the State cannot be held to be an
action taken by or on behalf of the Government as such within the
meaning of Section 197 CrPC."

lt was further observed :
c
"23. The importance of the public undertaking should not be
minimised. The Government's concern for the smooth functioning of
such instrumentality or agency can be well appreciated but on the
plain language of Section 197 of the Code of Criminal Procedure, the
protection by way of sanction is not available to the officers of the
D public undertaking because being a juridical person and a distinct
legal entity, such instrumentality stands on a different footing than
the government departments.

xxx xxx xxx xxx

E 25. It will be appropriate to notice that whenever there was a felt
need to include other functionaries within the definition of "public
servant", they have been declared to be "public servants" under several
special and local acts. If the legislature had intended to include officers
of an instrumentality or agency for bringing su.ch officers under the
protective umbrella of Section I 97 CrPC, it would have done so
F
expressly."

We have noticed hereinbefore that the petition does not come within
the purview of Section 123 of the Act.

G At this juncture, we may notice that in B.S. Sambhu v. T.S.
Krishnaswamy, [ 1983] 1 SCC 11, this Court emphasized there must be a
reasonable connection between the act and the discharge of official duty by
the accused.

The learned counsel for the Appellant submitted that the allegations
H made by the Respondent herein even if given face value and taken to be
N.K. SHARMA v. ABHIMANYU [SINHA, J.] 217
correct in its entirety would not attract the mischief of Section 499 of !PC in A
view of several exceptions carved out therein. From the judgment of the High
Court it does not appear that such a question was raised therein.

We have noticed hereinbefore that the Appellant filed an application
purported to be under Section 203 of the Cr. PC before the Chief Judicial
Magistrate. Such an application was not maintainable in view of the decision B
of this Court in Ada/at Prasadv. Roop/al Jindal and Ors., [2004] 7 SCC 338,
wherein it has been held :

"15. It is true that if a Magistrate takes cognizance of an offence,
issues process without there being any allegation against the accused C
or any material implicating the accused or in contravention of
provisions of Sections 200 and 202, the order of the Magistrate may
be vitiated, but then the relief an aggrieved accused can obtain at that
stage is not by invoking Section 203 of the Code because the Criminal
Procedure Code does not contemplate a review of an order. Hence in
the absence of any review power or inherent power with the D
subordinate criminal courts, the remedy lies in invoking Section 482
of the Code."

[See also Poonam Chand Jain v. Fazru, [2005] SCC (Cri) I 90]

For the reasons aforementioned, we do not find any merit in this appeal, E
which is dismissed accordingly.

However, the Appellant shall be at liberty to raise other contentions in
an appropriate proceeding.

V.S.S. Appeal dismissed.