28 April 2021
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Introduction
The Prevention of Corruption Act, 1988 (“PC Act”), was promulgated to curb corruption in the country. In particular, the PC Act serves as a consolidated body of law to prevent corruption by public servants in India. Though the PC Act came into force in 1988, recent years have seen a marked judicial and legislative inclination towards expanding the scope of the PC Act and strengthening its provisions.
For instance, in CBI v. Ramesh Gelli[1] in 2016, the Supreme Court found that the Managing Director and Executive Director of a private bank, operating under a licence, issued by the Reserve Bank of India, would be considered as a ‘public servant’ and thus would be liable under the PC Act. Subsequently, in 2018, the PC Act was amended by the legislature, expanding the scope of offences regarding commercial organisations carrying on business in India.
To cement the trend of expanding the PC Act’s scope and to ensure policy driven, transparent and responsive governance, the Supreme Court in the case of State of Gujarat v. Mansukbhai Kanjibhai Shah[2] dealt with another instance of corruption being alleged against a prima facie private individual, in the context of a Deemed University, and in doing so provided a broad interpretation of the scope of ‘Public Servants’ covered by the PC Act, including ‘University’.
Facts of the case
In this case, the Complainant, mother of a student (“Complainant”) studying at Sumandeep Vidyapeeth Deemed University (“Deemed University”), had filed a First Information Report (“FIR”), alleging that the trustee of the trust that had established and sponsored the Deemed University (“the Respondent”), in conspiracy with others (including the Respondent, and collectively hereinafter referred to as “the Accused”), had unlawfully demanded Rs 20 lakh, in addition to the full fees already paid, to allow the Complainant’s daughter to take her final examination. An ensuing investigation and raids uncovered multiple undated cheques in favour of the Deemed University worth over Rs 100 crore. The charge sheet filed by the authorities alleged that the Accused had violated Sections 7[3], 8,[4] 10,[5] 13(1)(b)[6] and 13(2)[7] of the PC Act, read with Section 109[8] of the Indian Penal Code, 1860.
The Respondent filed an application to be discharged under Section 227 of the Code of Criminal Procedure, 1973, as per which the accused may be discharged if after hearing the accused and the prosecution, the Judge finds no sufficient ground for proceeding against the accused. However, the District and Sessions Court rejected the application, which was thereafter overturned by the High Court of Gujarat and the Respondent was discharged. The State of Gujarat (“the Appellant”) appealed against the High Court’s judgment to the Supreme Court.
While the evidence would have been examined during the trial, the foremost question put forth before the courts was whether the Respondent, being a trustee on the board of a ‘deemed university’, would be a ‘public servant’, covered under Section 2(c)(xi) of the PC Act.
Submissions by the parties
The counsel for the Appellant argued that the PC Act ought to be construed liberally as it is a comprehensive social legislation, aimed at preventing corruption and curbing illegal activities of public servants. Keeping in mind the public interest, mere technicalities ought not to defeat the object sought to be achieved by the PC Act.
The Appellant’s counsel further cited Modern Dental College & Research Centre v. Madhya Pradesh[9] and Janet Jeypaul v. SRM University[10], which held that education was a welfare activity and a public function, to argue that imparting education is a public function. Additionally, in respect of the requirement that the prosecution be sanctioned beforehand by a competent authority, the Appellant argued that mere lack of any authority to sanction the prosecution cannot itself result in non-prosecution, and in any case, there is no requirement under the PC Act of having a master-servant relationship between the competent authority and the public servant. The Respondent was discharging a public duty, and there was no formal requirement in the PC Act of a positive command or even remuneration for such duty.
The Respondent’s counsel argued that the PC Act being a criminal statute, must be construed strictly, and in favour of the accused if there are multiple possible interpretations. Further, as the Respondent is a trustee and the charge sheet made no allegation that the Respondent held a position in or was engaged by the Deemed University, he was beyond the purview of the PC Act. Additionally, the Respondent argued that he was exempt from the scope of the PC Act as Section 2(c)(xi) only extended to individuals working at a ‘University’.
The controversy
The major question before the Court was whether the Respondent was a public servant under the PC Act.
The Court found that it must first be established that a ‘Deemed University’ was a ‘University’ under Section 2(c)(xi) of the PC Act. The said Section provides that staff and persons whose services are availed of by a University under the PC Act are considered as public servants. The Court noted that the technical definition of ‘University’ under Section 2(f) of the University Grants Commission Act, 1956 (“UGC Act”),[11] relied on by the Respondent, was unhelpful as the UGC Act and the PC Act had distinct purposes, operations, and objects, and the PC Act was geared towards curbing the social evil of corruption; thus, the statutes were not pari materia. In particular, the Court observed that:
“The purpose under the PC Act was to shift focus from those who are traditionally called public officials, to those individuals who perform public duties”.
The Court while heavily relying on the term ‘any University’ used in the PC Act, the legislative debates, indicating that the legislature emphasised the prevention of corruption in educational institutions, the definition of University in numerous dictionaries and lexicons and the recognition of a ‘deemed to be University’ in Section 3 of the UGC Act, came to a conclusion that Deemed Universities and their officials perform similar public duties to Universities and their officials, and hence the Deemed University shall come within the purview of the definition of ‘University’ under Section 2(c)(xi) of the PC Act.
The Court then touched upon whether a trustee of a deemed university was a public servant under Section 2(c) of the PC Act.[12] It cited the 2016 Supreme Court Judgment in CBI v. Ramesh Gelli, which found that under Section 2(c)(viii) of the PC Act, ‘a person who holds an office by virtue of which he is authorised or required to perform any public duty, is a public servant’. ‘Public duty’ under the PC Act is a ‘duty in the discharge of which the State, the public, or the community at large has an interest’.
The Court found that there was prima facie grave suspicion that the Respondent was the final authority with respect to admission, collection of fees and donations, and that despite being a trustee, the Respondent rendered service by dealing with students and examinations. It concluded that while a detailed appreciation of evidence was necessary to reach a conclusion as to the exact position of the Respondent vis-à-vis the Deemed University, the Respondent ought not to be discharged under Section 227 of the Code of Criminal Procedure, 1973, and the trial court was directed to proceed with the case on merits expeditiously. As on the date of writing this article, the trial court is hearing the framing of charges.
Conclusion
The present case makes a decisive contribution to expanding the scope and increasing the coverage of the PC Act. Though the case relates to the specific context of Deemed Universities, in particular, the specific question of whether the Respondent as a trustee in the Board of a ‘Deemed to be University’ is a public servant, the Supreme Court’s obiter that the purpose of the PC Act is to shift focus from merely public officials found engaging in corrupt acts to those individuals who perform public duties is vital. It indicates that the emphasis ought not to be on the position held by an individual, rather, on the public duty performed by him/her.
This indicates the potential for significant expansion of the coverage of the PC Act, the full scopeof which is yet to be seen.
For further information, please contact:
Ankoosh Mehta, Partner, Cyril Amarchand Mangaldas
ankoosh.mehta@cyrilshroff.com
[1] (2016) 3 SCC 788
[2] 2020 SCC OnLine SC 412.
[3] Section 7 of the PC Act prohibits public servants from obtaining, accepting, or attempting to obtain an undue advantage either with the intention to perform or cause performance of a public duty improperly or dishonestly, or forbear or cause forbearance of such duty either himself or through another person. Acceptance such advantage as a reward for any of these acts or inducing another public servant to commit such acts is similarly prohibited under this section.
[4] Section 8 of the PC Act prohibits a person from giving, or promising to give an undue advantage to another person with the intention to either induce a public servant to improperly perform a public duty, or to reward such public servant for improperly performing the public duty. However, the section is not applicable when the person has been compelled to give such undue advantage, and that matter is reported by the person to a law enforcement authority or investigating agency within seven days of the date of giving such undue advantage.
[5] Section 10 of the PC Act provides that where an offence is committed by a commercial organisation with the consent or connivance of an officer of the organisation, such officer will be liable and punishable for such offence
[6] Section 13(1)(b) of the PC Act provides that a public servant intentionally enriching himself illicitly during the period of his office is guilty of criminal misconduct.
[7] Section 13(2) of the PC Act provides that commission of criminal misconduct is punishable with imprisonment of at least four and at most ten years, as well as by a fine.
[8] Section 109 of the Indian Penal Code provides that if the unlawful act is committed due to an abetment, and no express provision is made under the Indian Penal Code for punishing such abetment, then the abettor shall be punished with the punishment provided for in the offence.
[9] (2016) 7 SCC 353.
[10] (2015) 16 SCC 530.
[11] Section 2(f) of the UGC Act provides: “University” means a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, and includes any such institution as may, in consultation with the University concerned, be recognised by the Commission in accordance with the regulations made in this behalf under this Act.’
[12] Section 2(c) of the PC Act defines the term ‘public servant’, and enumerates individuals considered as public servants.
