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Saturday, 26 March 2016 07:30
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Extending definition of public servant dangerous


The Supreme Court ruling that senior employees of even private sector banks are to be considered as ‘public servants’ as far as the Prevention of Corruption Act is concerned is fraught with danger even though this particular case may have required the particular interpretation given by the Court. In the case before the Supreme Court, Ramesh Gelli and Sridhar Subasri, employees of the private sector Global Trust Bank (GTB), were alleged to have borrowed money from a group of individuals—in order to raise their share of the capital in the bank—and then got GTB to lend money to them without following due process; indeed, part of the loans made by GTB were alleged to have been siphoned off. Since the lower courts had taken the view that the duo could not be prosecuted under the Prevention of Corruption Act as they were not public servants, the Supreme Court interpreted the law as saying they were, in fact, public servants and that public duty meant ‘a duty in the discharge of which the State, the public or the community at large has an interest’.

The problem with this definition, however, is that it is so broad it can include almost anyone, ranging from doctors to engineers to almost all large private firms and even public private partnerships involved in construction of roads or airports or running of power plants and metro railways. Indeed, in the context of the large NPAs in both public and private sector banks, if all loans that have turned bad are to be deconstructed, it will be possible to prosecute bank officials under the Prevention of Corruption Act. In fact, with the NPA issue getting bigger with each passing day, the need of the hour was to protect PSU bank officials from harassment and bring them on a par with private bankers—what the Court has done, however, is to bring even private banks under the ambit of the Prevention of Corruption Act.

While it is critical to prosecute corrupt officials, one of the of changes the government is planning to the Prevention of Corruption Act—finance ministerArun Jaitley has spoken of the need for this on various occasions in the recent past—is to remove the automatic suspicion of corruption for decisions that went bad; bank loans go bad for a variety of reasons and malfeasance is only one of them. Under the proposed law, if a person does not perform a public function dishonestly, s/he cannot just be accused of having taken a bribe without any concrete proof of this. By insisting that not only must the intention to acquire assets disproportionate to income illicitly be proved in addition to the disproportionate assets themselves, the Bill raises the bar on prosecution of public servants. While this will be a welcome change when it happens, the implications of the SC judgment needs to be addressed since the purpose of bringing in the private sector, or of privatisation/PPP, was to remove many of the restrictions under which public functionaries have to operate.


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