Somsetti Lakshmi Narsimayya vs The State Of Andhra Pradesh on 29 March, 1971

Andhra High Court

Somsetti Lakshmi Narsimayya vs The State Of Andhra Pradesh on 29 March, 1971
Equivalent citations: 1972 CriLJ 558
Author: M Reddy
Bench: M Reddy
ORDER Madhava Reddy, J.

1. This revision petition is filed by the accused in C, C. No. 64 of 1970 to quash a charge framed
against him for an offence punishable, under Section 409 I. P. C.

2. It is alleged that the accused as Secretary of a Co-operative Credit Society registered under the
Andhra Pradesh Co-operative Societies Act (hereinafter referred to as 'the Act'), has committed
criminal breach of trust in respect of the amount and property entrusted to him. The contention of
Mr. Ravi Subba Rao, the learned Counsel for the accused is that the accused is not a public servant
or a banker, merchant, factor, broker, attorney or agent and therefore, a charge under Section 409 I.
P. C. cannot be framed. Even if all the facts alleged by the prosecution are proved, it may, at the
most amount to an offence punishable under Section 406 or 408 I. P. C., and not under Section 409.

3. The learned Public Prosecutor fairly conceded that the accused is not a banker, merchant, factor,
broker, attorney, or an agent, but contended that the Secretary of a Co-operative Credit Society
registered under the Act is a 'Public servant' within the meaning of Section 12 of the Indian Penal
Code and, therefore, the charge is properly framed under Section 409.

4. The question, therefore, that arises for consideration in this Case is whether a Secretary of the
Co-operative Credit Society registered under the Act is a 'Public servant' within the meaning of
Section 21 and Section 409 I. P. C. It is not in dispute that the accused is not appointed by the
Government. He is elected by the members of the Co-operative Society in accordance with the
registered byelaws of the Society.

5. The learned Public Prosecutor relied on Clauses (9), (10) and (12) of Section 21 I. P. C., for
supporting his contention that the Secretary of a Co-operative Credit Society is a 'public servant'.

6. Clause (9) reads as follows:

Every officer whose duty it is as such officer, to take, receive, keep or expend any property on behalf
of the Government, or to make any survey, assessment or contract on behalf of the Government or
to execute any revenue process, or to investigate, or to report on any matter affecting the pecuniary
interest of the Government, or to make, authenticate or keep any document relating to the pecuniary
interest of the Government, or to prevent the infraction of any law for the protection of the
pecuniary interests of the Government, and every officer in the service or pay of the Government or
remunerated by fees or commission for the performance of any public duty.

It is clear from this Clause that the act of an officer who claims to be a 'public servant' within the
meaning of Section 21(9) should be on behalf of the Government or should be acting in a manner so

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 Somsetti Lakshmi Narsimayya vs The State Of Andhra Pradesh on 29 March, 1971

as to affect the pecuniary interest of the Government or must have been in the service or pay of the
Government. It is clear that the Secretary of a Co-operative Society does not act on behalf of the
Government. He acts for and on behalf of the Society. It is also clear that he does not act in relation
to the pecuniary interest of the Government but only acts for and on behalf of the Society, He is not
in the service or pay of the Government but of the Society. Clause (9) has. therefore, no application.

7. The other Clause on which the learned Public Prosecutor places reliance is Clause (10) which
reads as follows:

Every officer whose duty is, as such officer, to take, receive, keep or expend any property, to make
any survey or assessment or to levy any rate of tax for any secular common purpose of any village,
town or district or to make, authenticate or keep any document for the ascertaining of the rights of
the people of any village town or district.

The officer, in this case, must be acting for any secular common purpose of any village, town or
district or for ascertaining the rights of the people of any village, town or district, that is. in respect
of all people within a particular area, the officer must be empowered to act, which power the
Secretary of a Co-operative Society does not possess. He can only discharge the duties entrusted to
him under the Act and the bye-laws of the Society. He has no authority over persons other than the
members of the Society. He can deal with third parties only as an individual but not as an officer
having authority over them. Clause (10) can have, therefore, no application whatsoever. Supreme
Court in G.A. Monterio v. State of Ajmer (Bhagwati. J.) ) in dealing with the question whether a
person employed as Chaser in Railway Carriage Workshop is an officer and public servant, laid
down the following tests:

The true test in order to determine whether a person is an officer of the Government, is : (1)
Whether he is in the service or pay of the Government; and (2) Whether he is entrusted with the
performance of any public duty.

If both these requirements are satisfied it matters not the least what is the nature of his office
whether the duties he is performing are of an exalted character or very humble indeed. If therefore,
on the facts of a particular case the Court comes to the conclusion that a person is not only in the
service or pay of the Govt. but is also performing a public duty, he has delegated to him the
functions of the Government or is in any event performing duties immediately auxiliary to those of
some one who is an officer of the Government and is therefore 'an officer' of the Government within
the meaning of Section 21 (9).

A person, who is a Class III servant and is employed as a metal examiner known as Chaser in the
Railway Carriage Workshops and is working under the Works Manager who is an officer of the
Government and the duties which he performs are immediately auxiliary to those of the Works
Manager who, besides being an officer of the Government is also armed with some authority or
representative character qua the Government is an officer in the service or pay of the Government
performing as such a public duty entrusted to him by the Government and is therefore, a public
servant within the meaning of Section 21 (9) and being such public servant he falls within the

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 Somsetti Lakshmi Narsimayya vs The State Of Andhra Pradesh on 29 March, 1971

definition of as public servant contained in Section 2, Prevention of Corruption Act. Dicta of West J.
in Reg. v. Ramajirao Jivaji (1875) 12 Bom HCR 1 Applied; Nazamuddin v. Queen Empress (1901)
ILR 28 Cal 344 and Ahad Shah v. Emperor AIR 1918 Lah 152 (2) Approved."

The accused does not satisfy any of the two tests laid down by the Supreme Court. He is an employee
of the Society appointed by its members and not an employee of the Government. He has no public
duty to perform. He only discharges the functions assigned to him under the bye-laws of the Society
and as may be entrusted in accordance with the bye-laws framed by the Society which is a
body-corporate and which has been incorporated by the volition of its members in accordance with
their application for membership under the Act. The Society does not exercise any authority over
any person other than its members and does not discharge any public function. In dealing with the
case of a President of a Co-operative Society King J. in Sombari Behara v. Emperor 1935 Mad W.N.
1337 (1) held that he is not a public servant. Speaking for a Bench of the Bombay High Court in
Shridhar v. Emperor AIR 1935 Bom. 36 Murphy J., before whom it was contended that the
Chairman of a Co-operative Society is a public servant within the meaning of Clause (10) of Section
21 I. P. C. held that the Clause 'for any secular common purpose of any village, town or district
governs the whole ' section. It must be for public purpose that the money was received or expended.
This being so. the Chairman of a Co-operative Credit Society is not a public servant. That apart, in
Clause (10) of Section 21, the secular common purpose should be of a village, town or district in
which the officer concerned would have authority in respect of all persons in the village, town or
district whereas in the case of a Chairman, of a Co-operative Society, he will have authority over its
members and by his actions cannot bind third parties or exercise rights over any third parties. In K.
Siddappa v. State of Mysore AIR 1958 Mys. 82 S. R. Das Gupta, C. J., referring to the decisions of
Madras and Bombay High Courts, noticed above, held that those decisions make it clear that the
President of a Co-operative Society is not a public servant within the meaning of the expression in
the Penal Code.

8. Lastly it was contended by the learned Public Prosecutor under Clause 12 of Section 21 I. P. C.
that since the Cooperative Society is registered under a State Act i. e., the Andhra Pradesh
Co-operative Societies Act, 1964 and he being an officer of such society, he would be a public servant
within the meaning of Clause (12) of Section 21.

9. Clause 12 reads as follows:

Every officer in the service or pay of a local authority or of a corporation engaged in any trade or
industry which is established by a Central. Provincial or State Act or of a Government Company as
defined in Section 617 of the Companies Act. 1956.

On a close reading, the said Clause discloses that it is only an officer of a corporation established by
a Central, Provincial or State Act or of a Government Company, that is a 'public servant' and not a
Society formed voluntarily by individuals and registration of which is sought under a State
enactment. The corporation envisaged by that clause is a Corporation established by the provisions
of the Act itself and not a Corporation formed by the volition of individuals. The Co-operative Credit
Society, of which the accused is the Secretary, is a Society not established by virtue of the Provisions

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 Somsetti Lakshmi Narsimayya vs The State Of Andhra Pradesh on 29 March, 1971

of the Andhra Pradesh Co-operative Societies Act, 1964, but is only registered under its provisions
on the application of certain members forming themselves into a Society. In S. R. Bhattachary v.
State (R.N. Dutt. J.) . the Secretary of a Co-operative Society which was registered under the Bengal
Co-operative Societies Act, 1940 in which it was contended that he was a public servant within the
meaning of Clause (12) of Section 21 I. P. C. it was held thus:

as a body corporate the Society has its rights and liabilities and becomes a juristic person. But the
language in Section 21. twelfth clause is 'in the service or pay of a corporation established by or
under the Central. Provincial or State Act.". A registered Co-operative Society is not a 'corporation
established by or under' The "Co-operative Societies Act". The clause, corporation established by or
under has reference to some public corporations established either by or under some statutes. Take
for instance the Life insurance Corporation which was established by the Life Insurance Corporation
Act. Similarly, take the instance of the State Transport Corporation, Calcutta, which was established
by the State Government : under a Central Act, Road Transport Corporations Act, 1950. Under
Section 19 of the Co-operative Societies Act a registered Co-operative Society is a body corporate for
the purposes enumerated in. Section 19 but it does not become a corporation established by or
under the Cooperative Societies Act. xx xx xx There is, therefore, no doubt that a Cooperative Society
though registered under the Co-operative Societies Act does not become because of Section 19 of the
Act, a Corporation established by or under the Co-operative Societies Act and in that view of the
matter the Secretary of a Co-operative Society is not a public servant under the Twelfth Clause of
Section 21 of the Indian Penal Code.

9. For the foregoing reasons, I am of the view that the Secretary of a Co-operative Credit Society in
the instant case, is not a 'public servant' within the meaning of Section 21 I. P. C. That being so, a
charge under Section 409 could not be properly framed against the Secretary of the Co-operative
Society. He would, however, be a servant against whom there is an allegation of misappropriation,
only a charge under section 408 I. P. C. can be properly framed. The charge for an offence under
Section 409 is, therefore quashed and the Magistrate is directed to frame a charge under Section
408 Indian Penal Code.

10. In the result the Criminal Revision Case is allowed to the extent indicated above.

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