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Are Deemed Universities covered under the scope of the Prevention of Corruption Act? Supreme Court answers

Shruti Mahajan

In a judgment delivered on Monday, the Supreme Court held that Deemed Universities will be covered under the purview of the definition of "University" under the Prevention of Corruption Act (PC Act) [State of Gujarat v. Mansukhbhai Kanjibhai Shah]

The Supreme Court was deciding the question whether a trustee of a trust that runs a Deemed University is a "public servant" as under Section 2(c) of the PC Act in relation to being prosecuted under the Act on charges of bribery. This also raised the larger question of whether Deemed Universities are covered under the provisions of the PC Act.

It was pointed out that the term "University", as defined under the PC Act, leaves room for ambiguity as regards the inclusion of Deemed Universities under it. For assessing the same, the Court delved into the rules of interpretation and the object and purpose of the PC Act.

The Court also made pertinent observations regarding small-scale corruption.

"Corrupt societies often spring from the examples set at the highest levels of government, but small­scale corruption can be equally insidious. In this regard, the PC Act was formulated to bring about transparency and honesty in public life, as indicated by its objects and reasons."
Supreme Court

The Court went on to observe that enforcement of the PC Act is not as effective as hoped for. While rules of interpretation state that penal laws have to be interpreted stringently and that an ambiguity should be construed to give benefit to the accused, stringent interpretation does not mean a literal interpretation, the Court said.

By way of background, the Gujarat High Court had ruled, among other things, that "University" as defined under Section 2(c)(xi) of the PC Act would not cover an institution "deemed to be a University".

A Deemed University and a university are treated differently and the University Grants Commission Act (UGC Act) makes the distinction in all aspects barring funding, the High Court had held.

The Supreme Court was considering an appeal against this judgment.

The respondent in the case had argued before the Supreme Court that the word "University" needs to be read strictly in accordance with the provisions of the UGC Act, which defines "University" and a "Deemed University" differently and separately. However, the Apex Court unambiguously held that it does not subscribe to this view.

"The UGC Act and the PC Act are enactments which are completely distinct in their purpose, operation and object...As such, the extension of technical definitions used under one Act to the other might not be appropriate, as the two Acts are not in pari materia with one another."

Citing the precedent laid down by the Court in Bangalore Turf Club Ltd. v. Regional Director, ESI Corporation, the Court said that when the scope and object of enactments is different, the meaning accorded to a term in one statute cannot be used in strict sense for cases under another statute.

In this regard, the Court concluded that definitions cannot be borrowed from the UGC Act while deciding a case under the PC Act.

While assessing the independent meaning of "University" as under the PC Act, the Court was mindful of the rise in the number of Deemed Universities in India, and the fact that this service sector has seen a number of scandals.

The Court noted that the term "public servant" as under Section 2(c) of the PC Act does not give an exhaustive list of the posts to be covered under this umbrella. Rather, it gives a general meaning to the nature of the public duty performed. This aided the Court in deciding on the meaning of the term "University".

The Court also considered the debates held prior to passing of the PC Act, during which stress was laid on curbing corruption in the education sector. It is also taken note of that the PC Act aims to shift the focus from public servants in the traditional sense to a broader scope to include individuals that perform public duties. The Court thus concluded,

"...it cannot be stated that a “Deemed University” and the officials therein, perform any less or any different a public duty, than those performed by a University simpliciter, and the officials therein."

Supreme Court

The Court, therefore, held that the High Court was incorrect in excluding Deemed Universities from the meaning of "University" under the PC Act.

On whether the respondent trustee in the case would be covered under the definition of "public servant" under Section 2(c) of the PC Act, the Court took note of the word "public duty" under Section 2(b) of the Act and various precedents of the Court. Emphasis was laid on the second explanation to Section 2.

"The second explanation further expands the ambit to include every person who de facto discharges the functions of a public servant, and that he should not be prevented from being brought under the ambit of public servant due to any legal infirmities or technicalities."

The respondent was accused of asking for a bribe of Rs. 20 lakh to allow an MBBS student to write her examination. He argued in his defence that since he was only a trustee of a charitable trust, he had no role to play in the Deemed University.

However, the Supreme Court noted that the lower courts failed to analyse the connection between the trust and the Deemed University. It thus observed,

"Prima facie, a grave suspicion is made out that the respondent was rendering his service by dealing with the students and the examination aspect of the University."

The Court, therefore, ruled that this was not a fit case for it to discharge the respondent from the case using its powers under Section 227 of the Code of Criminal Procedure (CrPC). While doing so, the Court made it clear that it was not expressing any views on the merits of the case.

The majority opinion in the case was penned by Justice NV Ramana for himself and Justice Mohan M Shantanagoudar. A separate, concurring opinion was written by Justice Ajay Rastogi.

The State of Gujarat was represented by ASG Aman Lekhi, while the respondent was represented by Senior Advocates Mukul Rohtagi.

Read Judgment:

State of Gujarat vs Mansukhbhai Kanjibhai Shah.pdf
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