ANALYSIS ON RAMESH GILLI VS CBI

INTERPRETATION OF STATUTES

DR ARUNA SRI LAKSHMI

M DHEMETHRI
20LLB026
SIXTH
 ACNOWLEDGEMENT

I would sincerely like to put forward my heartfelt gratitude to Prof Dr ARUNA SRI LAKSHMI ,
for giving me an opportunity to write a project on CBI VS RAMESH GILLI ANALYSIS I
would like to thank her for great support and help in doing the research I have tried my best to
collect information and cases about the project in various possible ways to depict clear picture
about the given topic I would also like to thank DSNLU for providing me with all the resources
with the help of which I could do all the research required to write this project
 INDEX

Synopsis……………………………………
Abstract……………………………………
Introduction………………………………
Analysis of anti corruption laws …………………
Literal interpretation rule……………………………
Case law…………………………
Analysis………………………………
Conclusion………………………………
Bibliography………………………………………
 SYNOPSIS

SYNOPSIS

Introduction
In order to interpret statutes, the courts use various principles which help them understand the
principles One of the principles is called the Literal Rule of InterpretationThe literal rule of
interpretation has been termed as the primary rule of interpretation As the name suggests, the literal
rule of interpretation means that the judge literally interprets the statute It can also be called the
plainmeaning rule or the grammatical ruleStatutes are constructed using the ordinary meaning of
language given to the term and the judges are not required to interpret the terms in any other way

Objective of the study: The researcher in this study tried to explain CBI VS RAMESH GILLI
case in detail and tried to analyse the concept of anti prevention laws and literal interpretation rule

Scope of the Study: The researcher has limited the scope to the explanation of the rule of literal
interpretation through the case law chi vs Ramesh gilli

Research Question: wether the rule of literal interpretation is primary rule ?

Literature review :

1. Supreme Court Holds Officers Of Private Banks To Be Public Servants Under The Prevention
Of Corruption Act, 1988, by DSK LEGAL
2. PAY TO PLAY – ANTICORRUPTION LAWS IN INDIA BY KNOW LAW
3. Supreme Court expands definition of 'public servant' under Prevention of Corruption Act 1988
BY SHADUK AMARDAS MANGAL
4. CBI VS RAMESH GILLI https://indiankanoonorg/doc/30121571/

Research methodology : the researcher opted for doctrine mode of research

Mode of citation : Chicago mode of citation

 CHAPTERISATION

Chapter 1 consists of introduction , analysis of corruption laws

Chapter 2 consists of literal interpretation and case law

Chapter 3 consists of analysis of the case law and the conclusion part
 ABSTRACT

The“purpose of interpretation is always to find out what the statute stands for, what is the defect it
intends to remove and what is the remedy it seeks to advance1 The basic principle of the
construction of statutes is that, the words have to be read and understood in their true literal sense
The Literal Rule is the first rule applied by the judges The literal rule is also called grammatical
rule by some jurists The purpose of this paper is to discuss the literal rule of interpretation and anti
prevention law status through the case law CBI VS RAMESH GILLI ”
 Introduction

The“essential AntiCorruption enactment in India is the Prevention of Corruption Act 1988 PCA,
which criminalises, in addition to other things, the taking and giving of an undue advantage to
public servants Both the individuals and organisations are obligated to be punished for an offence
under the PCA The Act states that undue advantage is any gratification, not restricted to being
pecuniary in nature or estimable in cash, other than the legitimate remuneration that a public
servant is allowed to get either from the government or some other association served by the public
servant Further, the term public servant has been characterised extensively and incorporates any
individual in the service or pay of any government, local authority, statutory corporation,
government organisation, or other body owned or controlled or supported by the government, just
as judges, arbitrators, and employees of institution accepting state financial assistance In CBI v
Ramesh Gelli and Ors, the Apex Court of India held that compliant with specific provisions of
Indian banking law, employees of banks whether of the public or private sector are also treated as
public servants under the PCA”
 Analyzing the Prevention of Corruption Act

The“offenses under the Prevention of Corruption Act include

• Public Servants acquiring any undue advantage with the intention of, or as a reward for,
inappropriately or dishonestly performing or causing execution of a public obligation;
• Public Servants getting any undue advantage without or for inadequate consideration from
an individual concerned in procedures or business transacted either by the public servant or
by any of the superior of a public servant;
• Criminal misconduct by a public servant which includes ownership of unbalanced
resources; and
• Commission of any subsequent offense in the wake of being convicted previously under the
PCA
The“PCA likewise focuses on the conduct of impact peddlers or middle people by criminalising the
act of taking any undue advantage or dishonest execution of a public obligation Bribe givers were
brought inside the ambit of the PCA through the offense of abetment of the offences referenced
above notwithstanding liability for criminal conspiracy under the Indian Penal Code”

Nonetheless,“legislative changes to the PCA in 2018 have, notwithstanding liability for abetment
and criminal conspiracy, explicitly focused on bribe givers also including commercial
organizations and their distinguished individuals in charge by criminalizing the act of giving or
promising to give a bribe to any individual whether or not that individual is a public servant to
induce or reward a public servant to inappropriately or dishonestly perform public obligationsThe
punishments for different offenses under the PCA incorporate imprisonment ranging from 6
months to 10 years, a fine, or both Further, ongoing legislative changes to the PCA have likewise
acquainted provisions relating to search and seizure of property obtained by the method of an
offense under the PCA It isn’t inconceivable for investigating authorities to allege that any
advantage received by bribe giver through the bribery which is an offense under the PCA could
likewise be dependent upon search and seizure, and not simply the property of the public servants
being referred to The PCA likewise accommodates a time period of two years inside which courts
must undertake to finish the trial, subject to an extension of a limit of four years”
The“ Prevention of Corruption Act, 1988 explains that any attempt made by a public servant to get
or acknowledge any undue advantage is sufficient to constitute an offense under the PCA,
regardless of whether the public servant did their official obligation inappropriately or dishonestly
An attempt to give or get a bribe is adequate to draw in liability under the PCA, and real payment
or receipt of bribes isn’t vital It is insignificant whether the bribe has been acquired for a public
servant’s own advantage or the advantage of some other individual, either legitimately or through
some other individual”

Offence“sunder the PCA are explored either by the Central Bureau of Investigation CBI on account
of offences including allegations against functionaries of the Union Government or by
anticorruption branches of the state police Trials of PCA matters are conducted under the steady
gaze of special courts The earlier sanction of the public authority is needed for the commencement
of prosecution of public servants under the PCA This concept of safe harbor applies only to legal
proceedings against serving and retired public servants, and not against people accused of giving
bribesThe PCA accommodates immunity for an individual accused of giving undue advantage if
that individual has been constrained to give the undue advantage and is eager to report the issue to
the law authority or investigation agency within seven days of the date of giving the undue
advantage”
 Literal Rule of Interpretation

In order“to interpret statutes, the courts use various principles which help them understand the
principles One of the principles is called the Literal Rule of InterpretationThe literal rule of
interpretation has been termed as the primary rule of interpretation As the name suggests, the literal
rule of interpretation means that the judge literally interprets the statute It can also be called the
plainmeaning rule or the grammatical ruleStatutes are constructed using the ordinary meaning of
language given to the term and the judges are not required to interpret the terms in any other way”

In“other words, the provisions have to be read word to word and no other meaning can be given to
the statuteIn order to avoid ambiguity, the Act generally has definitions mentioned in it If a
particular meaning is given in the definition clause, the particular meaning shall be used and no
other meaningIn the literal rule of interpretation, the courts are required to observe the ordinary and
natural meaning of words, interpret the phrase or words as it is Judges are not required to add
words or modify meaning and they must observe the actual intent of the legislature It is the safest
rule of interpretationThe literal rule of interpretation, in a way, is against the use of intelligence in
understanding language Judges are bound by the literal meaning of the words and cannot use their
judicial minds to deviate from it”

Sub Rules under the Literal Rule of Interpretation

There are a few subrules that are followed in the literal rule of interpretation:
1. Ejusdem Generis: It literally translates to of the same kind It means to follow the general
meaning of word or words of similar kind
2. Casus Omissus: It literally means cases omitted It can also be interpreted as a point which is
not provided for by the statute Where a point is not provided for by the statute, it is governed
by case laws
3. Expressio Unius Est Exclusio Alterius: It literally means that one thing has been mentioned
whereas the other has been left out
 Advantages of Literal Rule of Interpretation:

1. Literal rule enables layman to understand the issue in hand

2. It enables to understand the intent of legislature simply and clearly
3. This rule respects the parliamentary supremacy

Criticisms of Literal Rule of Interpretation:

A“major criticism of this rule of interpretation is that the meanings of words might change from
time to time and hence the literal interpretation leads to injustice Misleading precedents may be
created due to this Some ambiguity might still arise while interpreting due to the use of words like
or, and, all Another criticism of this rule is that it restricts and bounds the court making it unable to
use its judicial mind to deviate from the literal meaning of the terms Sometimes, a court might
ascertain an absolute absurd meaning which the legislature never intended”

1. CBI Bank Securities & Fraud Cell v Ramesh Gelli & Ors iii: In this case, the Supreme
Court held that a managing director or chairman of a private bank will come under the
purview of public officer
 CASE LAW

FACTS

In“August, 2004, Global Trust Bank GTB, a private bank in India amalgamated/merged with
Oriental Bank of Commerce OBC which is a public sector bank For raising their contribution to
the capital, the two accused, Mr Ramesh Gelli Chairman and Managing Director of GTB and Mr
Sridhar Subasri Executive Director of GTB both were also promoters of GTB Accused Persons
obtained loans from various individuals and companies including M/s Beautiful Group of
Companies Allegations were levelled against the Accused Persons for sanctioning higher credit
limits to M/s Beautiful Diamonds Limited, in abuse of their official positions and against banking
regulations The Accused Persons had fraudulently instructed branch heads without following
banking norms for sanctioning such credit facilities”

According“to Central Bureau of Investigation CBI, the investigations revealed that in pursuance to
the alleged conspiracy of the Accused Persons with other accused including the directors of Ms
Beautiful Diamonds Limited, the funds of GTB were diverted, and release of Rs 5 crores was made
in the name of Ms Beautiful Realtors Limited on the request of directors of Ms Beautiful
Diamonds Limited Said amount was further transferred to already overdrawn account of M/s
Beautiful Diamonds Limited In April 2001, directors of Beautiful Group of Companies in
pursuance of conspiracy with other accused submitted another application for sanction of Rs 3
crores as diamond loan in the name of Ms Crystal Gems Investigations further revealed that the
Accused Persons along with other accused directors of Beautiful Group of Companies caused total
wrongful loss of about Rs 41 crores to GTB The accounts of Beautiful Diamonds Limited and
other companies, which availed funds from GTB, should have been declared Non Performing
Assets NPA, but the Accused Persons allegedly manipulated and showed the accounts of Beautiful
Realtors and Crystal Gems as higher profit yielding accounts”
These“allegations pertained to the preamalgamation period, but were brought to light as a result of
an audit after the amalgamation CBI investigated the matter on the receipt of complaint made by
the Chief Vigilance Officer of OBC, in respect of offences punishable under Sections 420 Cheating
and dishonestly inducing delivery of property, 467 Forgery of valuable security, will, etc, 468
Forgery for purpose of cheating, 471 Using as genuine a forged document or electronic record of
the Indian Penal Code IPC and under Sections 132 read with 131d of the PCA Criminal,
misconduct by a public servant, wherein allegations were made against the Accused Persons and
other accused for entering into a criminal conspiracy to cheat GTB causing wrongful loss to the
tune of Rs 1746 crores and thereby earning corresponding wrongful gain After investigation,
charge sheet was filed in the said matter before the Special Judge, CBI Subsequent to this, another
First Information Report FIR was registered by CBI for offences punishable under Section 120B
Punishment of criminal conspiracy read with Sections 409 Criminal breach of trust by public
servant, or by banker, merchant or agent and 420 of the IPC against the Accused Persons and other
employees of GTB It was alleged that, GTB sanctioned and disbursed loans by throwing all
prudent banking norms to winds and thus created a large quantum of NPA jeopardizing the
interests of thousands of depositors, but painted a rosy financial picture It was noted that, two
accounts, namely that of M/s Beautiful Diamonds Limited and M/s Crystal Gems were used to
siphon out funds of GTBHowever on February 5, 2007, the Special Judge, Mumbai declined to
take cognizance of offence punishable under Sections 132 read with 131d of the PCA, on the
ground that the Accused Persons were not public servants on the dates such transactions were said
to have taken place Since the High Court of Judicature of Bombay had upheld the order of the
Special Judge, CBI approached the SC through special leave, which was clubbed with the writ
petition filed by Mr Ramesh Gelli, as similar questions of law were involved in both petitions, and
thus a common order was passed”
ISSUE

The SC was required to adjudicate on whether the Chairman, Directors and Officers of Global
Trust Bank Limited a private bank before its amalgamation with the Oriental Bank of Commerce,
can be said to be public servants for the purposes of their prosecution in respect of offences
punishable under the PCA or not?

DECISION

The SC was focussed on the following provisions of law : a Section 2b and Section 2cviii of the
PCA b Section 46A of the Banking Regulation Act, 1949 BR Act

Section 2b“of PCA defines public duty as a duty in discharge of which the State, the public or the
community at large has an interest and provides for an explanation stating In this clause State
includes a corporation established by or under a Central, Provincial or State Act, or an authority or
a body owned or controlled or aided by the Government or a Government company as defined in
Section 617 of the Companies Act, 1956 1 of 1956Section 2cviii of the PCA defines public servant
to be any person who holds an office by virtue of which he is authorised or required to perform any
public dutyFurther, Section 46A of the BR Act states that, every chairman who is appointed on a
wholetime basis, managing director, director, auditor, liquidator, manager and any other employee
of a banking company shall be deemed to be a public servant for the purposes of Chapter IX of the
IPC Chapter IX of IPC deals with offences by or relating to public servants”

Section 46A of BR Act provides for officers of a bank to be deemed as express provision to this
effect was not made in Section 46A of the BR Act After conjointly reading the provisions of PCA
and BR Act, the court interpreted that officers of a private banking company would fall under the
definition of a public servant as defined in the PCA
The“Court reasoned that the objectives of the PCA clearly specified that the statute was to make
the anticorruption law more effective and widen its coverage The BR Act deemed officers of banks
to be public servants and thus, the pith and substance of Section 46A of the BR Act would not be
defeated merely because the PCA repealed Section 161165A Offences in relation to public servants
of the IPC and engrafted the same in PCA, and an express provision to this effect was not made in
Section 46A of the BR Act After conjointly reading the provisions of PCA and BR Act, the court
interpreted that officers of a private banking company would fall under the definition of a public
servant as defined in the PCA”

ANALYSIS

SC“examined the object for which the PC Act was enacted repealing sections under IPC and
further relied on the statement of objects and reasons of the Prevention of Corruption Bill, which
was intended to make the existing anticorruption laws more effective by widening their coverage
and by strengthening the provisions”

SC“relied on the definition of Public Servant and Public Duty given in the PC Act, Public Servant,
Section 2c viii is a person who holds an office by virtue of which he is authorized or required to
perform any public duty, is a public servant Public Duty Section 2b means a duty in the discharge
of which the State, the public or the community at large has an interestSC considered Section 46A
of BR Act as the most relevant one, which read as under Section 46A Every chairman who is
appointed on a whole time basis, managing director, director, auditor, liquidator, manager and any
other employee of a banking company shall be deemed to be a public servant for the purposes of
Chapter IX of the Indian Penal Code 45 of 1860”
The“court concluded that merely for the reason that corruption related Sections 161 to 165A of IPC
has been repealed by the PC Act; relevance of Section 46A of BR Act is not lostSC further
mentioned that the unequivocal legislative intent to widen the definition of ‘Public Servant’ by
enacting the PC Act cannot be allowed to be defeated by interpreting and understanding the
omission in Section 46A of the BR Act to be incapable of being filled up by the court, hence the
court held that that the accused respondents are public servants for the purpose of the PC Act by
virtue of the provisions of Section 46A of the BR Act”

Challenge for private banks

In“the past, private banks have dealt with matters related to corruption by conducting domestic
enquiries against employees and taking appropriate action, which could include termination In the
present context however, it would be important for the private banks to understand the nuances of
this law and its applicability to its employees, which can pose a serious reputational threat to bank
as any aggrieved private party can directly file the complaints with enforcement agenciesThe
dilemma for complainants would be whether they should resort to filing a complaint with the State
AntiCorruption Bureaus or with the Central Bureau of Investigation In the case of complaints with
regard to corruption, the amount involved is immaterial unlike in fraud cases which are filed with
CBI and State Police depending amount involved in fraud as prescribed by RBI in its Master
Circular Frauds – Classification & Reporting”

PC Act would be a complete new domain for the private banks In light of the changes led by SC,
private banks would need to:• Revisit the existing policies and amend the same, outlining what
constitutes offence under the respective laws
• Conduct training and awareness sessions for all employees and in particular, for employees in
sensitive roles
• Follow guidelines issued by the Central Vigilance Commission
• Follow instructions given by Reserve Bank of India in its circular Internal Vigilance in Private
sector/foreign Banks dated May 26, 2011
 CONCLUSION

From“the above discussion, it is clear that the literal rule of interpretation is the primary rule of
interpretation under which courts interpret statutes and provisions in the literal and ordinary sense
without adding any meaning to them and without modifying them This rule is helpful in cases
where there is no ambiguityWith the Prevention of Corruption Amendment Bill, 2013 seeking to
include private players into the ambit of PCA, this judgment is a way forward in strengthening the
anticorruption enforcement measures in India in the private space Furthermore, it should be noted
that the judgment has been pronounced in the backdrop of several frauds being detected in the
banking sector in relation to nonperforming assets As a preventive measure, it is suggested that the
private banks ought to put more compliance mechanisms in place and need to get a clearer
understanding of the application of PCA provisions and the consequences thereof It is to be
clarified that this judgment is not meant to obliterate the distinction between the holder of a private
office and a public office, but is an instance where the Court has taken a step forward in filling up
the lacunae which the statute has not provided for”
 BIBLIOGRAPHY

1. Explained: Literal Rule of Interpretation BY AMISHA

2. Expanding the Net: The Increasing Scope of the Prevention of Corruption Act, 1988By
Ankoosh Mehta, Kriti Srivastava & Vishesh Bhatia

3. Central Bureau of Investigation, Bank Securities & Fraud Cell v Ramesh Gelli and Others,
MANUPATRA ONLINE