The Jharkhand High Court expounded that the definition of Public Servant has wide and expansive scope, therefore Resolution Professional (“RP”) would come within the ambit of a Public Servant as defined under Section 2(c) of the Prevention of Corruption Act, 1988 (hereinafter referred to as “PCA”).
The Bench further noted that RP is appointed during the resolution process before the NCLT with its approval and hence, RP is a public servant.
The definition of Public Servant is not limited to those employed with the Government or its instrumentalities and drawing a salary from the public exchequer.
It was further held that the functions relate to matters concerning loans by Banks which are primarily investments from the public. Therefore, the functions discharged by RP would fall under a public duty as per Section 2-c(viii) of the PCA.
Brief Facts:
The Petitioner has preferred the present petition to seek the quashing of criminal proceedings under Section 7 of the PCA.
The Petitioner was appointed as an Interim Resolution Professional (“IRP”) for companies undergoing the resolution process. Later, the Committee of Creditors (“CoC”) appointed Petitioner as RP.
The Complainant is the Director of one of the companies undergoing the resolution process. It was alleged that the Petitioner demanded a bribe in exchange for showing leniency in the resolution process and preparing a favourable report.
A raid was conducted, and the Petitioner was caught red-handed accepting illegal gratification from the Complainant.
Contentions of the Petitioner:
It was argued that Petitioner was not a public servant as per section 2(C) of the PCA. The appointment process of RP is as per Section 22 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”). Further, the duties of an RP are not in the nature of public duty.
It was contended that Section 232 of IBC does not mention Insolvency Professionals and Section 233 provided protection from criminal prosecution.
Contentions of the State:
It was submitted that the NCLT plays a role in the appointment of RP as the CoC forwards the name to the NCLT which then forwards it to the Board for confirmation. Therefore, the duty discharged by RP is related to the administration of justice and hence, the office of RP would come under the ambit of “Public Servant” as per Section 2 of PCA.
Observations of the Court:
The issue which came before the Court was whether the RP as per Section 22 IBC qualifies as a “Public Servant” as defined under Section 2(c) of the PCA.
It was opined that the definition of Public Servant has wide and expansive scope, therefore RP would come within the ambit of Public Servant. The definition of Public Servant is not limited to those employed with the Government or its instrumentalities and drawing a salary from the public exchequer.
It was observed by the Bench that Section 2(c) of PCA itself gives criteria to include those who discharge public duty or any duty as authorized by the Court for administrating justice.
The Bench further noted that RP is appointed during the resolution process before the NCLT with its approval and hence, RP is a public servant.
On the question of whether the function of RP is in the nature of public duty, it was expounded that the functions relate to matters concerning loans by Banks which are primarily investments from the public. Therefore, the functions discharged by RP would fall under a public duty as per Section 2-c(viii) of the PCA.
The High Court further propounded that IBC does not cover a situation like the present one, where RP was caught red-handed accepting a bribe. Further, Section 232 does not exclude the operation of the PCA.
The decision of the Court:
Based on the aforementioned reasons, the High Court accordingly dismissed the petition.
Case Title: Sanjay Kumar Agarwal v. Central Bureau of Investigation, Anti-Corruption Bureau, Dhanbad
Coram: Hon’ble Mr. Justice Gautam Kumar Choudhary
Case No.: Cr.M.P. No. 1048 of 2021
Advocates for Petitioner: Advs. Mr. S.D. Sanjay, Mr. Salona Mittal
Advocate for State: Spl. P.p. Mr. P.A.S. Pati
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