New Delhi [India], June 29 : The Supreme Court issued notice to concerned respondents on a petition challenging the the order of Jharkhand High Court which held that a Resolution Professional will be considered a public servant under the provisions of graft laws observing that Resolution Professional performs public duty.
The Supreme Court, on Wednesday, issued notice in a plea challenging the ruling of the Jharkhand High Court that a Resolution Professional (RP) will be considered a 'public servant' under Section 2(c)(v) and Section 2(c)(viii) of the Prevention of Corruption Act, 1988 (PC Act).
A vacation Bench comprising Justice AS Bopanna and Justice Prashant Kumar Mishra issued notice to the respondents.
The court was hearing a petition filed by Sanjay Kumar Agarwal challenging the Jharkhand High Court order dated May 5.
Jharkhand High Court has rejected Agarwal's plea that the petitioner was not a public servant within the meaning of the Prevention of Corruption Act and quashed entire criminal proceedings instituted against him for the offence under Section 7 of the Prevention of Corruption Act, 1988 (PC Act).
The High Court had opined that the RP performs 'public duty' within the meaning of Section 2(b) of the PC Act and hence is a 'public servant' liable to be prosecuted under the PC Act.
The impugned judgment was passed by the High Court while rejecting the petition praying for quashing of the entire criminal proceeding instituted against an Insolvency Professional, as well as the FIR registered for the offence under Section 7 (public servant taking gratification other than legal remuneration in respect of an official act) of the PC Act.
The petitioner was an 'Insolvency Professional' as defined under Section 3(19) of the Insolvency and Bankruptcy Code, 2016 (Insolvency and Bankruptcy Code) enrolled under Section 207 of the Insolvency and Bankruptcy Code.
National Company Law Tribunal (NCLT) vide its order dated Nov 22, 2019, and Jan 6, 2020, appointed the petitioner, as interim Resolution Professional (IRP) for a dispute between two companies in terms of Section 7(3)(b) r/w Section 16 of Insolvency and Bankruptcy Code.
According to the complainant, petitioner Agarwal had demanded a bribe of Rs. 2,00,000 per month for showing leniency in the insolvency resolution process and also demanded Rs 20,00,000 for obtaining a favourable forensic audit/valuation report from his chosen Forensic Auditor/Valuer and for helping in re-possession of plant/company.
The Central Bureau of Investigation laid a trap and alleged that they caught Agarwal red-handed on February 11, 2020, in the presence of independent witnesses accepting the illegal gratification from the complainant.
The petitioner Agrawal claimed that Section 7 of the PC Act will not apply to him as a 'Resolution Professional' is not a public servant within the meaning of Section 2(C) of the Prevention of Corruption Act or under Section 21 of the IPC. He further argued that he is neither a public servant nor is appointed by any Court or is performing any public duty.
The appointment process of the resolution professional is provided under Section 22 of the Code, 2016 under which he is appointed by the committee of the creditors. The duty which has been detailed in Section 25 is not in the nature of public duty as contemplated under Section 2(c)(viii), the petitioner claimed.
But the Jharkhand High Court said that the appointment of resolution professionals is made by the National Company Law Tribunal, which is the Adjudicating Authority for the insolvency resolution process of the companies under the Insolvency and Bankruptcy Code 2016.
Resolution Professional has a key role to play in the insolvency resolution process and to protect the assets of the corporate debtors. From his nature of assignment and duty to be performed his office entails the performance of functions that are in the nature of public duty and therefore will come within the meaning of public servant both under sections 2 (c) (v) and (viii) of the PC Act, the Jharkhand High Court ruled.
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