Under the Prevention of Corruption Act, is Resolution Professional, a 'public servant' Supreme Court To Examine

Under the Prevention of Corruption Act, is Resolution Professional, a ‘public servant’? Supreme Court To Examine

Wednesday, the Supreme Court issued a notice in a petition challenging the Jharkhand High Court’s ruling that a Resolution Professional (RP) is 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 composed of Justices AS Bopanna and Prashant Kumar Mishra notified the respondents of the Special Leave Petition and the requested interim relief.

The High Court opined that the RP performs ‘public duty’ within Section 2(b) of the PC Act and is, therefore, a ‘public servant’ subject to prosecution under the PC Act. The impugned judgement was rendered by the High Court when it rejected the petition praying for the quashing of the entire criminal proceeding instituted against an Insolvency Professional, as well as the FIR registered for the offence under Section 7 of the PC Act (public servant accepting a bribe in exchange for an official act).

The Single Judge, Justice Gautam Kumar Choudhary, clarified that the ‘public servant’ definition in Section 2(c) of the PC Act is not limited to those who work for the government or its agencies and are paid from the public treasury. He emphasised that one’s status as a ‘public servant’ is determined by the nature of the assignment and duty to be performed. In the case of Resolution Professional, the sole judge concluded that they perform ‘public duty’-like functions. Even though the Insolvency and Bankruptcy Code of 2016 (IBC) is self-contained, the PC Act would apply if a Resolution Professional accepted favouritism gratuities.

The SLP, filed by Record Counsel Vaibhav Niti, argues that the RP neither performs public duty nor occupies an office that authorises or requires him to perform ‘public duty. It argues that the essence of the RP’s duty is contractual and voluntary. It also asserts that the Corporate Insolvency Resolution Process (CIRP) initiated by the RP is an ‘assignment’, a professional service for which the RP is paid a ‘professional fee’.

The petition argues that the present issue is pending adjudication before multiple High Courts and seeks the Supreme Court’s indulgence because the interpretation of the status of the RP appointed by the Committee of Creditors under Section 22(3)(a) of the IBC would have far-reaching implications.

[Case Note: Sanjay Kumar Agarwal v. Central Bureau of Investigation SLP(Crl) No.7029/2023]

[READ FULL JUDGEMENT]

 

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