Is a Resolution Professional a Public Servant under Section 2(c) of the Prevention of Corruption Act, 1988?
Hon’ble Supreme Court has issued notice to Central Bureau of Investigation, as respondent, vide order dated 28.06.2023 on the SLP1 filed against the judgment of Jharkhand High Court.
Hon’ble Jharkhand High Court in the order dated 05.04.2023 in the matter Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad, reported at (2023) ibclaw.in 209 HC held that resolution professional will come within the meaning of a public servant under Section 2(c) the Prevention of Corruption Act, 1988 for the reason that definition of public servant as given under the Prevention of Corruption Act, 1988 is very wide and expansive. It is not limited to those serving under the Government or its instrumentalities and drawing salary from the public exchequer. Apart from the list of the functionaries given in Section 2(c), the definition also lays down the functional criteria to include within its fold those discharging public duty or any duty authorized by a court of justice, in connection with administration of justice.
The appointment of Resolution Professional is made during the resolution process before the Company Law Tribunal with its approval, he will be a public servant under Section 2(c)(v) of the Prevention of Corruption Act, 1988.
The High Court also held that functions and obligations of Insolvency Professionals are as set out under Section 208 of IBC which are public in nature. These functions intimately relate to matters relating to loans extended by the Banks which is investments from public at large and therefore will come within the meaning of public duty as provided under Section 2-c(viii) of the Prevention of Corruption Act, 1988.
The High Court on the issue, provisions of IBC give protection to a resolution professional held that it is true that Resolution Professional do not figure among the officers enumerated under Section 232 of IBC deemed to be a public servant within the meaning under section 21 of the IPC. Those who are deemed to be a public servant enjoy certain immunities from criminal prosecution for IPC offences under section 197 of Cr.P.C, as the cognizance cannot be taken without the previous sanction of the Central or State Government as the case may be. But this does not refer to, any immunity from criminal prosecution for offences committed under the Prevention of Corruption Act, 1988.
Section 233 of IBC gives protection to a resolution professional from criminal prosecution for acts in good faith, and not where he has been apprehended red-handed with the bribe amount. Insolvency and bankruptcy code is self-contained code but only with respect to the matter provided therein. It does not cover the matters like the present, where a Resolution Professional takes bribes in order to favour a party for which Prevention of Corruption Act, 1988 is squarely applicable. Section 232 does not exclude operation of Prevention of Corruption Act, 1988.
Read here complete summary of the High Court’s judgment: Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad (2023) ibclaw.in 209 HC.
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1. Special Leave to Appeal (Crl.) No(s). 7029/2023.
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