N. Krishnaswamy Reddy, J.
1. This appeal has been preferred by the learned Public Prosecutor against the order of acquittal of the two respondents, by the Special Judge, Madras, in C.C. No. 2 of 1967.
2. The two respondents were tried by the Special Judge, Madras, under fifteen charges, the main charge being conspiracy. They were acquitted of all the charges.
3. The substance of the main charge of conspiracy is that the respondents during the period between April, 1964 and February, 1966 being public servants were parties to a criminal conspiracy at Madras and other places by agreeing to commit or cause to be committed offences punishable under Section 165 of the Indian Penal Code and under Section 5 (1) (d) read with Section 5 (2) of the Prevention of Corruption Act, 1947 by obtaining large sums of money from firms and persons with whom both of them had official dealings, either without consideration or for consideration which both of them knew to be inadequate and by otherwise abusing their official positions as public servants and which offences were committed (by the first respondent) in pursuance of the said criminal conspiracy and thereby committed an offence punishable under Section 120-B, Indian Penal Code.
4. Charges 2 to 13 are specific charges framed under Section 165, Indian Penal Code, and Section 5 (2) read with Section 5 (1) (d) of the Prevention of Corruption Act against the first respondent. Charges 14 and 15 were framed against the second respondent for having abetted the first respondent in committing the specific offences mentioned in charges Nos. 2 to 13 against the first respondent.
5. This appeal presents a very simple point, namely, whether the loans taken by the first respondent from various persons with whom he and the second respondent had official dealings would come within the mischief of Section 5 (1) (d) of the Prevention of Corruption Act in that, they have either by corrupt or illegal means or otherwise abused their position as public servants and obtained pecuniary advantage to them.
6. The facts of the prosecution case are these: The two respondents, during the relevant period of conspiracy, were working as Technical Investigators (non-gazetted post) in the Regional Office of the Textile Commissioner, Madras. They were friends. It appears that one P.S. Babu, the brother of the second respondent and one Chitti Babu, the elder brother of Ushakumari (P.W. 6), a cine actress in whom the second respondent was interested, were partners of a film company called ' Suganth Pictures.' It is stated that though the partnership firm stood in the name of the brother of the second respondent and the brother of P.W. 6, the firm was really promoted by the second respondent who was deeply interested in P.W. 6. It is the prosecution case that as money was required for the production of the picture, the second respondent and his friend the first respondent entered into an agreement by which the first respondent was to get moneys from persons who were doing export business and who were coming into contact with the respondents as they had to inspect the goods of the exporters in their capacity as textile inspectors.
7. The duty of the first respondent as Technical Investigator was to inspect the goods under the Export Promotion Scheme intended to be exported to foreign countries and issue a fitness certificate for shipment. The prosecution alleged that the first respondent in six instances took moneys totalling Rs. 57,000 from various parties whose goods he had already inspected or he was likely to inspect.
8. Instance No. 1:--(Charges Nos. 2 and 3): Dhanapal Chetty (P.W. 10) and one V. A. Ramaswami, the elder brother of V. A. Bharathan (P.W. 9) were partners of a firm called Dhanalakshmi Textiles. P.W. 9 was assisting his brother in managing the affairs of the said firm. They were manufacturing handloom and art silk goods and exporting them under the Export Promotion Scheme. Their firm was at Tiruppur, but they were having an office in Madras where their goods to be exported would be brought for the purpose of pre-shipment inspection.
9. The first respondent inspected the goods of the said firm in their Madras premises on 16th December, 1963 and 17th December, 1963. In April, 1964, the first respondent asked P.W. 9 to pay him a sum of Rs. 8,000 saying that he would return it within two or three days. P.W. 9 paid the amount. Two or three days after he paid Rs. 8,000, the first respondent asked him again to pay him another sum of Rs. 5,000 as a matter of accommodation promising that he would pay the entire amount within two or three days. P.W. 9 waited for four or five days, but the first respondent did not return the amount. P.W. 9 did not charge any interest as the amount was given to the first respondent as accommodation for two days. After four or five days, P.W. 9 met the first respondent and asked him about the amount. Though he promised to pay within four or five days, he did not pay. He met him on several occasions and asked him to pay the amount, but he never paid. Four or five months latter, P.W. 9 learnt that the first respondent had left Madras for Bombay on transfer. To some of his letters, the first respondent replied. P.W. 10 who happened to got to Bombay, contacted the first respondent personally. The first respondent then promised him that he would repay the amount. Only in February, 1966 after the case was registered against the first respondent, he sent a draft to P.W. 9 for a sum of Rs. 2,050 only. In this transaction, the balance was due. P.W. 9 stated that the first respondent was moving in a friendly way with him and asked him for accommodation. He paid Rs. 13,000 without any interest. He also stated that the money paid by him was his personal money. The first respondent admitted this transaction but stated that though there was no stipulation of interest when he took the same from P.W. 9, as it was taken as accommodation for a short period he offered to pay interest later when the repayment was delayed due to unavoidable circumstances.
10. Instance No. 2:--(Charges Nos. 4 and 5) : P. W. 12 Munuswamy Chetty is the sole proprietor of the firm called Y. Munuswami Chetty at Madras, which was doing export business in handloom fabrics. The first respondent inspected the goods of this firm on 24th April, 1966, and made another inspection on 15th May, 1966. P.W. 12 stated that about 10 or 15 days after the second inspection which was in the end of May, 1964, the first respondent went to the house of P.W. 12 and asked him for Rs. 4,000 saying that he urgently needed the money, promissing to repay the same within fifteen days. P.W. 12 paid Rs. 4,000, to the first respondent without interest. P.W. 12 further stated that the first respondent took him in a taxi to Thambu Chetty Street Branch of the Canara Bank and on the way, he wrote out a chit on one page on which he noted his own address and on the other the address of P. S. Babu (brother of second respondent), handed over the chit to the witness and requested him to go into the bank and send the sum of Rs. 4,000 by draft to the said P. S. Babu. This evidence has been let in to show that the amount borrowed by the first respondent was for the benefit of the second respondent as the amount was sent to the brother of the second respondent by draft. The evidence of P.W. 12 does not seem to be true as no draft was sent through the Canara Bank of Thambu Chetty Street Branch on that day. On the other hand, a draft for Rs. 4,000 was sent from Triplicane Branch. The first respondent admits that he borrowed Rs. 4,000 from P.W. 12 with a promise to repay and he further admits that this amount was sent to P. S. Babu at Hyderabad by telegraphic transfer. It also appears that P. S. Babu received this draft and the amount was credited to his current account on 30th May, 1964.
11. P.W. 12 stated that the first respondent did not keep up his promise and, therefore, he had been making demands for payment, but with no effect. After having come to know that the first respondent was under orders of transfer to Bombay, he met him in a hotel where he was staying since he was a bachelor, and got a pro-note executed by him for the sum of Rs. 4,000 on 20th September, 1964, promising to repay the same with interest at 6 per cent. per annum. After the first respondent left for Bombay, P. W. 12 was writing several letters demanding repayment. The first respondent replied to some of those letters promising that he would repay but. he did not pay.
12. It was contended by the first respondent that he did not borrow Rs. 4,000 in May, but he borrowed it only on 20th September, 1964, namely, the date of the execution of the pronote. The time of borrowing may not be very relevant excepting for the fact that the first respondent borrowed after inspection was made by him.
13. Instance No. 3:--(Charges Nos. 6 and 7): P.W. 11 Kandaswami Chetty is the Manager of Sundaram Textiles, Vambadithalam, a firm which manufactures handloom and art silk fabrics. On 19th August, 1963, the goods of the firm which had been brought to Madras were inspected by the second respondent. The same goods were inspected by the first respondent on 20th August, 1963. In March or April, 1964, P.W. 11 went to the Textile Commissioner's Office, Madras. The first respondent asked him to pay him a sum of Rs. 5,000 saying that the amount was urgently needed by him. P.W. 11 wanted to consult his brother Venkatachalapathy who is one of the partners of the said firm viz., Sundaram Textiles, and after consulting him, again met the first respondent at Madras on 18th May, 1964 and paid the sum of Rs. 5,000 and got a pronote executed by him, by which he agreed to pay interest at the rate of 12 per cent, per annum. The first respondent promised to repay the amount within six months thereafter. In spite of several reminders, he did not pay the amount though he promised to pay, taking time. On 6th February, 1966, after the residence of the first respondent was searched by the Police he sent a sum of Rs. 5,550 by draft to P.W. 11, Rs. 550 being towards interest for Rs. 5,000 at the rate of 6 per cent. per annum. The first respondent admitted this transaction.
14. Instance Mo. 4:--(Charges Nos. 8 and 9): This relates to the transaction of first respondent taking a sum of Rs. 25,000 from S. S. M. Lingappan (P.W. 2) out of which he repaid Rs. 4,000 within a few days but failed to repay the balance of Rs. 21,000.
15. The prosecution has let in evidence to show that before the period of conspiracy the second respondent borrowed a sum of Rs. 50,000 from P. Ws. 1 and. 2 in December, 1963 and it is the prosecution case that since the second respondent had exhausted his credit, having borrowed a sum of Rs. 50,000 from P.Ws. 1 and 2, he entered into an agreement with the first respondent for getting more moneys for the purposes of the Suganthi Pictures.
16. P.W. 1 Subramaniam and his younger brother P.W. 2 Lingappan are merchants of Kumarapalayam in Salem District. They were interested in several firms doing export business under the Export Promotion Scheme. The two respondents had become friends of P.Ws. 1 and 2 as they happened to inspect their goods.
17. In May or June, 1964, the first respondent met P.W. 2 in his house at T. Nagar and wanted a sum of Rs. 10,000 urgently representing that the amount was needed by the second respondent for his family film business and that the witness should not inform the second respondent of his taking money from him, as otherwise he (second respondent) would not pay. P.W. 2 paid the amount on the first respondent promising to repay the same within a week or ten days. No interest was charged. Within 4 or 5 days after receiving the amount, the first respondent again wanted another sum of Rs. 15,000 for the same purpose and P.W. 2 paid that amount without any stipulation for interest. About a week after receipt of Rs. 15,000, the first respondent paid a sum of Rs. 4,000 to P.W. 2. In spite of repeated requests, the first respondent had been only making promises, but he did not pay. After the first respondent was transferred to Bombay, P.W. 2 had written him several letters. In one of the replies sent by the first respondent, dated 6th August, 1965, the first respondent informed P.W. 2 that he was making every effect to repay the amount and that he was awaiting a reply from ' B'. According to the prosecution, the letter ' B' referred to the second respondent. According to the first respondent, the letter ' B ' referred not to the second respondent but his brother Babu to whom he had given moneys. The sum of Rs. 21,000 was still due to P.W. 2. The first respondent admitted having received the money from P.W. 2 but he would say that he never represented to him that the money was required for the film business of the second respondent and he added that the second respondent had nothing to do with the transaction.
18. Instance No. 5:--(Charges Nos. 10 and 11): P.W. 15 Sundaravelu is the Proprietor of Nagavedu Lungi Company, Madras. This firm was exporting the fabrics called 'Bleeding Madras' under the Export Promotion Scheme. The first respondent made pre-shipment inspection of the goods of P.W. 15 in May, July, August and September, 1964. On 23rd June, 1964, the first respondent went to the business premises of P.W. 15 in Tondiarpet and asked him for a sum of Rs. 5,000 saying that the money was needed urgently for a friend of his and that the same would be returned within a month or two. P.W. 15 obliged and issued a cheque for a sum of Rs. 5,000 on the Indian Bank, Sowcarpet Branch, Madras and had taken the signature of the first respondent on the counterfoil of the cheque and also took a receipt for the sum of Rs. 5,000 from him. There was no talk of payment of interest. The first respondent did not repay the amount as promised by him. However, on 12th April, 1965, this amount was paid by the first respondent, but no interest was paid on the amount.
19. Last Instance:--(Charges Nos. 12 and 13): P.W. 4 Lakshmanan and his father in-law one Mari Chettiar were partners of the firm called K. M. S. Mari Chettiar and Company which was doing export business in textile fabrics in the year 1962-64 P.W. 4 knew the two respondents as they inspected the goods of the firm. in their capacity of Textile Inspectors. On 16th July, 1964, the first respondent wanted Rs. 5,000 from him saying that he had some family trouble and was in urgent need of money. On the first respondent executing a pronote and promising to pay the amount with interest at the rate of 6 per cent. per annum, he lent Rs. 5,000 to the first respondent. This amount was not repaid for a long time. On 27th January, 1966, very much after the present case, the first respondent sent a draft for Rs. 5,450 to the father-in-law of P.W. 4. This transaction is admitted by the first respondent.
20. Thus, we see in all these six transactions, the first respondent had borrowed moneys from the witnesses with a promise to repay, same within a short time and some on pronotes. We have also noted that in respect of the moneys which were borrowed with a promise to repay within a short time, no interest was stipulated. But in respect of the moneys borrowed on promissory notes, interest Was stipulated. Even in respect of certain hand loans, in delayed repayment, interest was paid. We have noted that in regard to the second instance, a sum of Rs. 2,060 alone was paid, that too after the case was registered. In the third instance, the entire amount was paid by draft on 6th February, 1966, after the residence of the first respondent was searched. In the fourth instance, the first respondent paid only Rs. 4,000. In the fifth instance, the entire amount was paid but without interest, even before the case was registered. In the last instance, the entire amount had been paid, after the case was registered.
21. It is not disputed by the prosecution that the respondents obtained moneys from various witnesses only as loan. The learned Advocate-General contended that the respondents being public servants who were in a position to do favour in their capacity as such public servants to the witnesses from whom they obtained loan and especially when certain amounts were obtained either before inspection or after inspection of the pre-shipment goods, it should be deemed that they obtained such loans by abusing their position as public servants by corrupt or illegal means or otherwise. It, therefore, becomes necessary to examine the scope of Section 5 (1) (d) of the Prevention of Corruption Act (hereinafter called 'the Act'). Section 5 (1) (d) of the Act runs thus:
5. Criminal misconduct in discharge of official duty:
(1) A public servant is said to commit the offence of criminal misconduct.
(a) * * *(b) * * *(c) * * *(d) if he by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage....
There is no doubt that this provision is wider in scope than Sections 161, 162 and 163, Indian Penal Code, which refer to a motive or reward for doing or forbearing to do something showing favour or disfavour to any person, or for inducing such conduct by the exercise of personal influence. Under Section 5 (1) (d) of the Act, if a public servant abuses his position as a public servant and obtains for himself any pecuniary advantage irrespective of motive or reward for showing favour, can be punished under Section 5 (2) of the Act. To bring within the mischief of this provision, the prosecution must prove the following ingredients:
(1) that the person accused is a public servant;
(2) that he obtained a valuable thing or pecuniary advantage either for himself or for any other person;
(3) that he obtained the same by corrupt or illegal means or otherwise by abusing his position as public servant.
22. The first respondent is a public servant and he obtained a valuable thing, namely, money, either for himself or for the second respondent. But the question to be considered in whether he obtained money by absuing his position as -public servant. It is made clear in Section 5 (1) (d) of the Act by introduction of words ' by corrupt or illegal means or by otherwise abusing his position as public servant' that a dishonest element on the part of the public servant while obtain in a valuable thing should be established. The words ' otherwise abusing his position as public servant ' must be read in the same context and in the same degree of culpability as the words ' corrupt or illegal means ' convey. It must be read in juxtaposition with the words '' corrupt or illegal means '. The words 'otherwise abusing his position as public servant' do not confine merely to misuse of his position as public servant, but such misuse must be with a dishonest mind. A public servant may be in need of money. There is no prohibition for his taking a loan. But, if he takes loan from a person with whom he has got official dealings, it may be improper. It may even amount to misuse of his position since it is likely to create an impression in the mind of the person from whom he obtains the loan that he (the public servant) is likely to do favour to him or withhold doing a favour if loan is not given. Unless it is established that the public servant obtained such loan by corrupt or illegal means, or by dishonestly misusing his position as public servant, the offence under Section 5 (1) (d) of the Act will not be made out. The essential ingredient for the offence is obtaining valuable (thing or) money by corrupt or illegal means or dishonestly misusing his position as public a servant.
23. In M. Narayanan v. State of Kerala : (1963)IILLJ660SC , while dealing with the scope of Section 5 (1) (d) of the Act, the Supreme Court made the following observations:
The phraseology (' by otherwise absuing the position of a public servant') is very comprehensive. It covers acts done ' otherwise ' than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is', that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. ' Abuse ' means misuse i.e., using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word ' otherwise ' has wide connotation and if no limitation is placed on it, the words 'corrupt', 'illegal', and 'otherwise' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause....The juxtaposition of the word 'otherwise' with the words ' corrupt or illegal means', and the dishonesty implicit in the word ' abuse ' indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause.
24. Thus, it is clear that a dishonest intention on the part of the public servant while obtaining a valuable thing is the essential requisite for punishment to be imposed The dishonest intention has to be inferred depending upon the facts of each case. In this case, I do not find from the evidence of any one of the witnesses or from the conduct of the respondents that they had dishonestly misused their position for obtaining loan. It is not the case of the prosecution witnesses that the first respondent reminded them of his position and obtained loans from them. To some of the witnesses, the first respondent was already known and they had accommodated him with money as a hand loan. Others lent money on a pronote. It may be said that some of the witnesses had not charged interest and some of them had charged less interest than ordinarily charged. This does not take us any where. For a hand loan, no interest is generally charged. For a pronote, it depends upon the person Who lends money who may even show concession depending upon the capacity of the person to repay and the time stipulated for repayment. I, therefore, do not see that the respondents had dishonestly abused their position as public servants while the loans were obtained from the witnesses.
25. The learned Advocate General drew my attention to Rule 13 of the Central Civil Services (Conduct) Rules, 1955. Rule 13 (5) reads thus:
No Government servant shall in the ordinary course of business with a bank or a firm of standing borrow money from or otherwise place himself under pecuniary obligation to any person within the local limits of his authority or any other person with whom he is likely to have official dealings, nor shall he permit any member of his family, except with the previous sanction of the Government to enter into any such transaction:Provided that a Government servant may accept a purely temporary loan of small amount, free of interest, from a personal friend or relative or operate a credit account with a bona fide tradesman.
It is true that this rule prohibits a Government servant from borrowing money from a person with whom he is likely to have official dealings. It may be that the first respondent had contravened this rule by borrowing money from the person with whom he had official dealings. But unless, as already pointed out by me, he had borrowed such money by dishonestly misusing his position as a public servant, he cannot be convicted under Section 5 (2) of the Act. That element is absent in this case. It is of course left to the authorities to take action against the respondents for violation of Rule 13 (5) of the Central Civil Services (Conduct) Rules.
26. On the view I have taken that no offence has been committed by the first respondent, the charge under the other offences, namely Sections 165 and 120-B, Indian Penal Code, fails.
27. The appeal is, therefore, dismissed.