Employees/Officers Of Cooperative Society Aren't 'Public Servants', Can't Be Prosecuted U/S 409 IPC: Allahabad High Court

A bench of Justice Arun Kumar Singh Deshwal observed this while dismissing a petition filed by Brijpal Singh seeking quashing of criminal proceedings, charge sheet, and cognizance order passed by the court of Additional Chief Judicial Magistrate, Etah, in connection with a case u/s 409, 420, 467, 468, 471 IPC.

The case in brief

Facts giving rise to the present case are that the applicant was working as Secretary Sadhan Sehkari Samiti Ltd. in Etah. On receiving specific complaints against him, the District Assistant Registrar Co-operative Society, Etah (DARCS), directed to conduct an enquiry against the applicant.

On receiving the enquiry report, the DARCS directed to lodge an FIR against the applicant under the aforementioned sections for the allegation of misappropriation of stock of fertilisers, breach of trust as well as a forgery in the document of society and causing loss of around 6 lakhs to the society.

After investigation, the police submitted a chargesheet against the applicant and two other co-accused u/s said sections, and ACJM-I, Agra, took cognisance of the charge sheet. Subsequently, the case was transferred from District-Agra to District-Etah in pursuance of a circular of the High Court.

Before the High Court, the Counsel for the applicant-accused argued that an officer or employee of a cooperative society could be prosecuted only under the UP Co-operative Societies Act, 1965, as this act is itself a complete code with specific provisions, like Sections 103, 104, and 105 of the Act, 1965, providing a penalty for the offences committed by Officers of Cooperative Societies.

It was further contended that the 1965 Act, being a special act u/s 41 of IPC, shall prevail over a general act like the IPC. For any offence committed under the Act of 1965, proceedings can be taken up only under the Act of 1965; otherwise, the same will be barred by Section 103 of the 1965 Act as well as Section 26 of the General Clauses Act, being against the principle of double jeopardy.

It was argued that any dispute between the society and its employee or officer could be resolved through arbitration u/s 70 of the 1965 Act. The applicant, being the Secretary of the Society, is an Officer of the Co-operative Society as per Section-2(o) of the Act, 1965.

It was also contended that, as per Entry 32 and 65 of State List (List II) of VII Schedule of the Constitution of India, the State Government has the authority to enact any law regarding cooperative societies, and Entry 43 of the Union List specifically prohibits the Union of India from enacting any law (including criminal law) regarding cooperative societies.

On the other hand, the Counsel for the opposite party No. 2 submitted that Section 103 of the Act, 1965, does not provide for prosecuting an employee of a cooperative society who committed an illegal act that fulfils the ingredients of the offence under the IPC.

High Court's observations

After hearing the parties and perusing the record, the Court dealt with the question of whether Sections 68, 103, and 105 of the 1965 Act as well as Section 26 of the General Clauses Act, bar the prosecution of an employee of the cooperative society for an offence under the IPC.

Perusing various sections of the 1965 Act, the Court observed that though the offence of forgery in the record of a cooperative society is punishable under Section 103(ii) of the 1965 Act, as well as Chapter 18 of IPC, a person can be prosecuted and punished in either of the two enactments, not in both Acts.

In this regard, the Court stressed that even if the offence of forgery is punishable under Section 103(ii) of the Act, 1965, as well as under Chapter 18 of the IPC, there is no provision in the 1965 Act prohibiting the prosecution under Chapter 18 of the IPC instead of Section 103 of the 1965 Act, 1965.

“Though forgery is punishable under Section 103 (ii) of the Act 1965 as also in Chapter 18 of I.P.C.but in the absence of any provision under Act, 1965 which overrides the offence and penalty of Section 103(ii) of the Act, 1965 over all other laws, prosecution for the forgery committed by an officer or employee of the cooperative society can be conducted either under the Act, 1965 or IPC,” the Court held.

Further, the Court also noted that since the offence of breach of trust is not punishable under the Act of 1965 but is punishable under the IPC, therefore, prosecution of breach of trust against an employee or officer of a cooperative society will have to be conducted under the provision of the IPC.

“The Act, 1965, does not provide a punishment for breach of trust; therefore, the same can be prosecuted under Section 406 I.P.C., and the bar of Section 26 of the General Clauses Act as well as Section 300(1) Cr.P.C. will not be applicable,” the Court held.

“The employee and officer of the cooperative society are not public servants as per Section 21 of I.P.C. for the purpose of offences mentioned in IPC. Therefore, they cannot be prosecuted under Section 409 IPC but definitely can be prosecuted for the breach of trust under Section 406 IPC. However, appropriate Section can be added or removed at the time of framing of charges” the Court further remarked.

Against this backdrop, the Court found no case for interference, so the application was dismissed.

Case title – Brijpal Singh vs. State of U.P. and Another 2024 LiveLaw (AB) 260

Case Citation: 2024 LiveLaw (AB) 260

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