S. Gangoli vs The State Of Uttar Pradesh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 14 May 1959

Coram: B.P. Sinha, K.N. Wanchoo, P.B. Gajendragadkar

In the matter of S. Gangoli versus the State of Uttar Pradesh, decided on 14 May 1959, a bench consisting of Justices B. P. Sinha, K. N. Wanchoo and P. B. Gajendragadkar delivered the judgment. Justice Gajendragadkar framed the principal issue for resolution as whether the two appellants, S. Gangoli and P. R. Chaudhri—hereinafter referred to as appellants 1 and 2 respectively—were public servants within the meaning of section 2 of the Prevention of Corruption Act, 1947 (Act II of 1947). This question constituted the short question that the Court needed to decide on appeal.

The factual background was that appellant 2, P. R. Chaudhri, had been appointed as Assistant Permanent Way Inspector at Sultanpur, East Indian Railway, in March 1948, serving in the Lucknow E.I.R. Division. At the same time, appellant 1, S. Gangoli, held the post of Assistant Pay Clerk in the same Lucknow Division. The prosecution alleged that the two appellants had committed an offence punishable under section 120B of the Indian Penal Code and under section 5(2) read with sections 5(1)(c) and 5(1)(d) of the Prevention of Corruption Act. According to the prosecution, the Pay Commission’s Report had resulted in a sum of Rs 16,685 being entrusted by the railway department to appellant 2 for distribution among Class IV staff who worked under appellant 1. The payment was required to be made in the presence of appellant 1 and to be attested by him.

The prosecution further contended that both appellants entered into a criminal conspiracy to misappropriate a portion of the government-entrusted amount. The alleged scheme involved paying the Class IV employees amounts that were lower than those to which they were legally entitled, while falsifying the payroll entries to make it appear that the full amounts had been paid. The alleged misappropriation was said to have been carried out on 11 March 1948 on a moving train traveling between Faizabad and Chilbila. The payroll entries purportedly showed that the entire sum of Rs 16,591 had been paid to 216 employees, with the payment being recorded as made by appellant 2 and attested by appellant 1. In reality, the whole amount had not been disbursed; the employees collectively received Rs 1,555 less than they should have, indicating that the two appellants had misappropriated approximately Rs 1,555 and had falsified the payroll sheets in furtherance of their conspiracy.

Within a few days of the disputed payment, the affected employees grew suspicious when they learned that persons recruited on the same day had received larger arrears payments. Acting on this suspicion, the employees approached senior railway officials and lodged a complaint. The officials advised the employees to submit their grievances in writing. Consequently, several employees submitted written applications alleging that they had not received the arrears due to them. These representations prompted an inquiry, during which Mr. Dalip Singh recorded statements from the employees on 6 April and 7 April 1948, thereby creating a record of the employees’ allegations.

In the prosecution’s case, the allegation was that the discovery of the employees’ complaints caused appellant No 1 to attempt to conceal the matter by summoning all the workers and paying them the sums that had previously been improperly deducted from their arrears. The prosecution asserted that on the same day three documents, identified as Exhibits 5, 10 and 11, were executed and that these documents plainly demonstrated that the two appellants had committed the offences with which they were charged. Both appellants rejected the accusations. They asserted that no conspiracy had been formed and that they had been wrongly implicated in the present proceedings. Appellant No 1 contended that the case against him had been instigated and that false evidence had been obtained by H N Das with the assistance of Shambu, because the relationship between Das and the appellant was unfriendly. Appellant No 2 maintained that he too had been falsely implicated, emphasizing that, contrary to the police’s suggestion, he had refused to incriminate appellant No 1. Both men argued that the prosecution’s evidence was biased and fabricated, and that the documents produced by the prosecution were either forged or irrelevant to the matters in issue.

The prosecution called forty-four witnesses and relied on the three documents identified as Exhibits 5, 10 and 11, urging that the evidence established the charges beyond reasonable doubt. The learned Sessions Judge at Lucknow, after hearing the evidence, agreed with the unanimous opinion of the assessors and held that the charges had indeed been proved to the required standard. Consequently, the judge convicted appellant No 1 of rigorous imprisonment for three years and appellant No 2 of rigorous imprisonment for two years. The appellants appealed the conviction and sentence to the High Court of Judicature at Allahabad, but the High Court dismissed the appeals, largely affirming the trial judge’s conclusions. Justice Kidwai, who heard the appeals, partially accepted the defence’s contention that Das was an unreliable witness and might have fabricated Exhibit 10, and also found Shambu to be unreliable. Nevertheless, the judge concluded that the testimony of the gangmen was, on the whole, satisfactory and that Exhibits 5 and 11 corroborated the oral evidence presented by the prosecution. Accordingly, the High Court confirmed the conviction and sentence imposed by the trial court. The appellants subsequently sought special leave to appeal to this Court, raising a single point that their conviction and sentence were illegal because, they claimed, they were not public servants within the meaning of section 2 of the Act. Section 2 of the Act defines “public servant” for the purposes of the legislation.

In this case, the Court noted that Section 2 of the Act defined a public servant as a public servant as defined in section 21 of the Indian Penal Code. It was not disputed that, under section 21, the appellants qualified as public servants. The East Indian Railway, which employed the appellants, was at the material time owned by the Government of India and was managed and operated by that Government. Consequently, if the status of the appellants were to be judged solely by reference to section 21 of the Penal Code on the relevant date, there would be no difficulty in holding that they were public servants as defined by that section. The Court, however, observed that it was urged that, for determining the status of a railway servant, it was necessary to consider section 137 of the Indian Railways Act, 1890 (Act 9 of 1890). The Court recalled that when that Act was passed, almost all the railways in India were owned and managed by public limited companies, and railway servants as defined by section 3(7) of the Railways Act could not be treated as public servants under section 21 of the Code. After the railways were nationalised and taken over by the Government of India, the position had materially altered, but prior to nationalisation railway servants did not fall within section 21 of the Code. For this reason, section 137(1) and (4) were intended to bring railway servants within the definition of public servant contained in that section. Sub-section (1) of section 137 provided that every railway servant shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code. The effect of this sub-section was to treat railway servants as public servants under section 21 for offences relating to public servants dealt with in sections 161 to 171 of Chapter IX. Thus, the provision extended the definition to railway servants even though they did not satisfy the ordinary requirements of section 21. Having provided for that extension, sub-section (4) of section 137 stipulated that, notwithstanding anything contained in section 21 of the Indian Penal Code, a railway servant shall not be deemed to be a public servant for any purpose of that Code except for the purposes mentioned in sub-section (1). The appellants based their argument on this sub-section. Counsel for the appellants argued that sub-section (4) clearly provided that railway servants shall not be deemed public servants except for the purposes of Chapter IX, and since the appellants had not been charged with any offence in Chapter IX, they could not be treated as public servants for the offences under sections 5(1) and 5(2) of the Act. The Court noted that those two sections had been amended by Act 17 of 1955, and sub-section …

Section 137 of the Railways Act was amended after 1955. The amendment removed sub-section (4) and altered sub-section (1) so that every railway servant who qualifies as a public servant under section 21 of the Indian Penal Code is deemed to be a public servant solely for the purposes of chapter IX of that Code and for offences under section 409 of that Code. Consequently, after the amendment, a railway servant would be treated as a public servant under section 21 only when the matters involved fall within chapter IX or relate to section 409. The present discussion, however, is confined to the wording of section 137 as it stood before the 1955 amendment. At that time, sub-section (4) began with a non-obstante clause and expressly declared that a railway servant shall not be deemed a public servant for any of the purposes of the Indian Penal Code, except for the limited exception provided in sub-section (1). Counsel for the appellants argued that the non-obstante clause excluded the operation of section 21 in all cases save those covered by chapter IX, and therefore, because the offences alleged against the appellants did not arise under chapter IX, sub-section (4) barred their classification as public servants for those offences. The Court observed that this argument overlooked the specific phrasing “for any of the purposes of that Code” found in sub-section (4). Those words show that the restriction created by sub-section (4) is confined to the purposes of the Indian Penal Code itself and does not extend beyond that Code. In effect, sub-section (4) provides that when a railway servant is charged with an offence under the Indian Penal Code that lies outside chapter IX, he cannot be treated as a public servant for that offence. The provision does not purport to regulate offences that fall outside the Penal Code; for such offences neither sub-section (1) nor sub-section (4) of the Railways Act is applicable, and the question of whether railway servants fall within the scope of the Act must be answered by reference to the provisions of the Act itself.

The next issue before the Court was whether the appellants could be regarded as public servants under section 2 of the Act. Section 2, as the Court noted, essentially incorporates the definition of “public servant” contained in section 21 of the Indian Penal Code. The effect of section 2 is that the status of the accused must be determined by applying section 21 of the Indian Penal Code as if that definition were expressly part of the Act. Consequently, the Court concluded that the appellants must be deemed public servants under section 2 of the Act. The argument that the reference in section 2 to section 21 of the Indian Penal Code would consequently trigger the bar created by section 137(4) of the Railways Act was rejected as untenable. The Court held that the bar in section 137(4) can be invoked only when the status of the accused is being assessed for purposes of the Indian Penal Code other than those covered by chapter IX. Since the principal offences charged against the appellants arise under the Act and not under the Penal Code, section 137(4) does not apply to the present case.

In this case the Court observed that the contention that reference to section 21 of the Indian Penal Code automatically brings the bar created by section 137(4) of the Railways Act into operation is unsound. The bar under section 137(4) may be invoked only when the status of the accused is being determined for purposes of the Code that are other than those covered by chapter IX. Because the principal offences charged in the present proceedings arise under the Railways Act and not under the Penal Code, section 137(4) is inapplicable to the present facts. With respect to the construction of section 137(4) the Court noted another relevant consideration. Section 137(1) brings within the definition of section 21 of the Code certain railway servants who, but for that provision, would not satisfy the criteria laid down in section 21. The deeming provision of sub-section (1) would be inappropriate and unnecessary if the railway servants concerned could be treated as public servants directly under section 21. In other words, railway servants employed by a railway administration owned and operated by the Government of India would qualify as public servants under section 21 without reliance on the statutory fiction introduced by section 137(1). Having created that statutory fiction in sub-section (1), sub-section (4) seeks to cover the same class of railway servants and provides that this class shall not be deemed to be public servants except as specified in sub-section (1). This negative statutory fiction is intended only to emphasise that persons treated as public servants by virtue of sub-section (1) may be dealt with solely under the provisions of chapter II of the Code and no other provision. The Court considered whether the Legislature might have intended sub-section (4) to exclude the application of all Code provisions other than those in chapter IX to railway servants who would be public servants under section 21 without the aid of sub-section (1). Prima facie such an intention could not be ascribed to the Legislature. It is true that the non-obstante clause offers some support to the argument that, except for chapter IX, section 21 of the Code would be inapplicable to railway servants; however, that clause cannot prima facie be broader in scope than sub-section (1) of the same section. The non-obstante clause appears to have been inserted ex abundanti cautela, as noted in the decision of Rai Bahadur Kanwar Raju Nath & Ors. v. Promod C. Bhatt, Custodian of Evacuee Property, to clarify the effect of section 137(1). The two sub-sections therefore introduce a positive and a negative fiction respectively, achieving the same result. Since the matter before the Court concerns only the provisions of the Railways Act and not any provisions of the Code other than chapter II, the Court found it unnecessary to pursue this point further or to express a definitive opinion on that aspect.

The Court’s attention was called to the first authority cited by counsel for the petitioner, namely the Punjab High Court decision in Devi Ram Deep Chand v. The State (A.I.R. 1954 Punj. 189). In that matter the accused were goods clerks employed by the railway and they faced prosecution before a First-Class Magistrate on charges framed under section 408 of the Indian Penal Code. Counsel for the accused argued that the alleged offences were, in substance, offences punishable under section 5 of the Prevention of Corruption Act, and consequently the case should be tried solely by a special judge. On that basis an application was made to the High Court seeking transfer of the proceedings from the magistrate’s court to the jurisdiction of the special judge. The judgment of the High Court records that the learned Assistant Advocate-General informed the bench that the prosecution did not intend to frame or prove any charge against the appellants under section 5 of the Act; therefore, section 2 of the Act did not require interpretation by the Court. The High Court also noted that the observations made by Justice Dulat, that persons who are not public servants within the meaning of section 21 of the Penal Code cannot be deemed public servants for the purposes of Act 2 of 1947, were obiter. The Court added that, if those observations were intended to constitute a binding decision, they rested upon a misreading of section 137(4).

Counsel for the petitioner also drew the Court’s attention to two Supreme Court decisions, Ram Krishan v. The State of Delhi ([1956] S.C.R. 182) and C.A. Montorio v. The State of Ajmer ([1956] S.C.R. 682), which appear prima facie to oppose his contention. In Ram Krishan, the appellants were charged under section 120B of the Indian Penal Code for a criminal conspiracy intended to cause the offence of criminal misconduct punishable under section 5(2) of the Act to be committed by Madan Lal, the conspiracy also invoking section 5 read with section 116 of the Code. Both counts led to conviction by the special judge, and the High Court affirmed those convictions. Before the Supreme Court the appellants raised the issue of whether Madan Lal qualified as a public servant within the meaning of the Act. The alleged offence had occurred on 29 December 1951, and the argument relied on sections 137(1) and (4), asserting that a railway servant such as Madan Lal could not be classified as a public servant under section 2 of the Act. Justice Chandrasekhara Aiyar, delivering the Court’s opinion, quoted section 137(1) and observed that subsection (4) had been removed by the 1955 amendment. He then referred to section 2 of the Act and concluded, “The result is that before…”

The Court observed that before the amendment railway servants were treated as public servants only for the purpose of Chapter IX of the Indian Penal Code, but as a result of the amendment all railway servants have become public servants not only for that limited purpose but generally under the Prevention of Corruption Act. With respect, it may be pointed out that this observation appears to give the amended provisions of section 137 of the Railways Act retrospective effect. The question of how the relevant sections should be construed does not seem to have been fully argued before this Court, and consequently the Court has not examined it. Nevertheless it is a fact that for an offence committed in 1951 Madan Lal was held to be a public servant under section 2 of the Act. In the case of Montorio [[1956] S.C.R. 682] the principal issue presented to the Court was whether the accused was a public servant under section 21 of the Code. The Court examined that issue, interpreted section 21, and held that the appellant was an officer within the meaning of subsection 21(9) and therefore a public servant within the meaning of section 21. The judgment also referred to an earlier decision of this Court in the case of Ram Krishan [[1956] S.C.R. 182] and observed that the said decision “lays down that before the amendment of section 137 of the Railways Act, by Act 17 of 1955, railway servants were treated as public servants only for the purposes of Chapter IX of the Indian Penal Code but in any event they were public servants under the Prevention of Corruption Act.” With respect, however, that latter statement does not appear to be supported by the judgment in Ram Krishan [[1956] S.C.R. 182]. Returning once more to section 2 of the Act, the Court must hold that the definition of a public servant incorporated in that provision mirrors the definition contained in section 21 of the Indian Penal Code. Under that interpretation the appellants are unquestionably public servants. Consequently the lower courts were correct in holding that the appellants could be duly charged and tried for offences under section 5(2) read with sections 5(1)(c) and 5(1)(d) of the Act. The validity of the charge under section 120B cannot be challenged. Counsel for appellant No 1 and counsel for appellant No 2 then appealed to the Court seeking a reduction of the sentences imposed on their clients. They argued that although the charge related to a large sum of Rs 1,555, the evidence proved misappropriation of only Rs 218, a considerably smaller amount. The Court did not consider that the actual amount shown to have been misappropriated had a decisive or material impact on the question.

The Court observed that the lower tribunals had carefully examined the positions that each appellant occupied, the relationship that existed between the appellants and the Class IV servants, the manner in which the appellants had carried out the alleged misconduct, and all other relevant circumstances before they imposed the sentences on the appellants simultaneously. The Court emphasized that the appellate jurisdiction did not extend to re-evaluating the factual matrix that had already been resolved by the lower tribunues, and that the law applied by those tribunals was consistent with the statutory provisions governing the offence. The Court further noted that the presence of multiple aggravating factors, including the hierarchical positions of the accused and their collaboration with subordinate officials, justified the severity of the sentences as originally imposed. Having reviewed the material placed on record, the Court formed the view that there was no reason to disturb the sentences that had been ordered by the lower courts. Accordingly, the Court concluded that the appeals made by the two appellants could not be allowed. The Court therefore directed that the appeals be dismissed and that the appellants be required to present themselves and surrender to the conditions of their bail bonds. The order for the appellants to surrender to their bail bonds meant that they must appear before the appropriate authority and comply with any conditions attached to their release. In sum, the Court dismissed the appeals and ordered the surrender of the appellants on bail.