Safiya Malik

The Allahabad High Court Division Bench of Justice Abdul Moin and Justice Babita Rani has declined to quash an FIR against an employee of a government-aided Co-operative Bank facing allegations of disproportionate assets. The bench decided that the technical exoneration in a departmental inquiry — where the Inquiry Officer recorded a lack of competence to investigate the charge — cannot prevent police from registering an FIR on the same allegations. The Court has also clarified that employees of co-operative banks controlled or aided by the government fall within the definition of a public servant under the Prevention of Corruption Act, 1988. The bench directed that the investigation continue and rejected the challenge

The matter concerns a challenge to an FIR dated 19.09.2025 registered under Sections 13(1)(b) and 13(2) of the Prevention of Corruption Act, alleging that the petitioner, an officer of the Uttar Pradesh Sahkari Gram Vikas Bank Ltd, possessed assets disproportionate to his known sources of income. It was alleged that while the petitioner had earned approximately Rs. 2,52,45,522.88 from legal sources, he had spent around Rs. 6,30,30,925.52, resulting in an unexplained excess of Rs. 3,77,85,372.64.

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The petitioner contended that the same allegations had earlier been examined in a departmental inquiry initiated through a charge sheet dated 06.09.2018. He asserted that charge No. 2, which related to disproportionate assets, had resulted in an inquiry report dated 15.10.2018 accepting his explanation, and a disciplinary order dated 14.12.2018 that exonerated him. On that basis, it was argued that a criminal case could not be pursued. He further submitted that he was not a “public servant” under Section 2(c) of the 1988 Act and that the FIR was motivated to prevent his promotion to the post of General Manager.

The respondents argued that the FIR was valid in law, relying on the definition of “public servant” under Section 2(c)(iii) of the 1988 Act, judgments of the Supreme Court, and Sections 31-A and 124 of the Uttar Pradesh Co-operative Societies Act, 1965. It was submitted that departmental findings did not include any inquiry into disproportionate assets, as the inquiry officer had recorded that he lacked competence to examine such allegations. They further denied any mala fide intent.

The Court recorded that “the petitioner was earlier working as a Manager, Gr-III in the bank and presently working as Deputy General Manager in the same bank.” It noted the petitioner’s reliance on the prior departmental inquiry but stated that the primary argument rested on disputing his status as a public servant.

The Bench stated that this issue had been “considered threadbare” by the Supreme Court in P. Venku Reddy, quoting: “employees or servants of a co-operative society which is controlled or aided by the government, are covered by Sub-clause (iii) of clause (c) of Section 2 of the 1988 Act.” The Court further recorded: “the respondent… is in service of a co-operative Central Bank which is an ‘authority or body’ controlled and aided by the government.”

After reproducing Sections 31-A and 124 of the 1965 Act, the Court stated that Section 124 “clinches the issue”, noting that “every officer of a cooperative society shall be deemed to be a Public Servant within the meaning of Section 21 of the Indian Penal Code.” It also referred to the Statement of Objects and Reasons of the 1990 Amendment, observing: “a decision has been taken to amend Section 124… to declare the officers of the co-operative societies as Public Servants.”

The Court referred to Ramesh Gelli, citing the Supreme Court’s explanation that the Act was intended “to widen the scope of the definition of ‘public servant’.” It also recorded the interpretation of “public duty” as “a duty in the discharge of which the State, the public or the community at large has an interest.”

The Court observed: “From a perusal of the report on the inquiry officer, it emerge that so far as the complaints pertaining to having exploited the employees, no proof was found. Thus, it is apparent that no finding has been given by the inquiry officer pertaining to the disproportionate assets for which the petitioner had been charged in the charge sheet. The said inquiry report has been accepted by the disciplinary authority vide order dated 14.12.2018. Thus, it is apparent that no inquiry was in fact conducted for the charge of disproportionate assets which was a charge in the charge sheet and thus there is no restraint or bar now in the respondents in lodging the First Information Report under the provisions of the Act, 1988. Accordingly, none of the judgments over which reliance has been placed by the learned Senior Advocate appearing on behalf of the petitioner would have any applicability in the facts of the instant case. Thus, the said ground is also rejected.

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On the allegation of mala fide, the Court stated in detail: “it cannot be said that any malice has been occasioned on the part of the respondents in lodging the said First Information Report and thus the ground that the said First Information Report has only been lodged in order to deprive the petitioner from being promoted to the post of General Manager is patently misconceived and accordingly rejected.”

The Court recorded that “keeping in view the aforesaid discussion, no case for interference is made out. Accordingly, the writ petition is dismissed.”

Advocates Representing The Parties

For the Petitioner: Sharad Pathak, Senior Advocate; Abhijeet Mishra, Advocate

For the Respondents: Gaurav Mehrotra, Advocate; Akbar Ahmad, Advocate

Case Title: Subhash Chandra vs. State of U.P. Thru. Addl. Chief Secretary, Deptt. of Vigilance, Lko. and Others
Neutral Citation: 2025: AHC-LKO:73862-DB
Case Number: Criminal Misc. Writ Petition No. 9586 of 2025
Bench: Justice Abdul Moin and Justice Babita Rani