HIGHCOURTOFJUDICATUREATALLAHABAD,LUCKNOWBENCH
AFR
Reserved
Case:-U/S482/378/407No.-679of2001
Applicant:-C.N.VelankarOthers
OppositeParty:-StateOfU.P.ThroughSecy,HomeAffairs,VidhanBhawan,Lko.
CounselforApplicant:-T.C.Gupta,AjaiSingh,ArunSinha,Dr.AshokNigam,ManindraSingh,NagendraMohan
CounselforOppositeParty:-Govt.Advocate,Dr.L.P.Misra,ManishBajpai,ManishSingh,P.L.Misra
Hon’bleDineshKumarSingh,J.
1.ThepresentpetitionunderSection482Cr.P.C.hasbeenfiledbythepetitionersforquashingofproceedingsofCriminalCaseNo.238of2000/CriminalCaseNo.377of2001,PoliceStationSandila,DistrictHardoipendingintheCourtofJudicialMagistrate,Hardoiandorderofcognizancedated05.03.2001passedbyII-AdditionalChiefJudicialMagistrate,Hardoiandallotherconsequentialproceedingsoftheaforesaidcase.
2.ThepetitionersareformeremployeesofCreditAgricoleCorporateandInvestmentBank(CA-CIB)earlierknownasCreditAgricoleIndosuez/CalyonBank(hereinafterreferredtoas’theBank’)havingitsheadofficeatParis,France.TheBankhasitsoperationsinIndia.ItpossessesthestatusofaScheduledBankinIndiahavingitsmainBranchOfficeatMumbai.IthasalsobranchesatPune,Bombay,DelhiandChennai.ThepetitionerswerepostedatMumbaiBranchoftheBankattherelevantpointoftime.
3.OppositepartyNo.2-SAFYeastCo.Ltd.(hereinafterreferredtoas’theCompany’)isacompanyincorporatedundertheSectionCompaniesActhavingitsregisteredofficeatMumbai.ThecompanyhadopenedacurrentaccountwithMumbaiBranchoftheBankinrelationtoitsbusinessdealingfromitsregisteredofficeatMumbai.ThecompanyhastwounitsinIndia,oneatChipluninMaharashtraandtheotherisatSandila,U.P.
4.Necessaryfactsinbrief,fordisposalofthepresentpetitionarethatonarequestmadebythecompanyon06.02.1997,theBankagreedtoactasadvisingBankandNotifiedSightofLetterofCreditNo.11R1708411dated04.02.1997foranamountofUSD7,02,000/-issuedbyMeespiersonN.V.AmsterdaminNetherlandsonbehalfoftheimporter-M/sSchurmannsEnVanGinekinB.V.
5.On20.02.1997,thecompanyforwardedtheoriginalLetterofCreditalongwiththeirinvoicesdated15.02.1997inthesumofUSD5,59,621.92withallrelevantoriginaldocuments.AcheckingbriefwaspreparedbytheBank.Mr.Nene,anemployeeofthecompany,confirmedthattherewasnodeductionontheinvoicevalue.Thereafter,theBankissuedtheCreditAdvicecreditingtheCurrentAccountoftheCompanywithatotalamountofRs.1.98crores(USD559,621.92)afterdeductingtheBank’snegotiatedinterest,commissionandcouriercharges,withtheadvice”underreserveforanydiscrepanciesthatmaybepointedoutbytheissuingbank”.TheaforesaidamountofRs.1.98crores(USD559,621.92)waswithdrawnbytheCompanyon28.02.1997.On28.02.1997invoicewasraisedbySVGstatingthatanamountofUSD101,535.25hadbeendebitedonaccountofdemurrage.
6.On03.03.1997onsubmissionofdocumentsunderLCbytheBanktotheissuingBankatAmsterdam,theissuingBanksentatelextotheBankinformingitthatUSD101,535.25wastobepaidtothesaidBank.
7.TheBankon04.03.1997informingtheCompany,forwardedtheTelexmessagedated03.03.1997receivedfromAmsterdamthatanamountofUSD1,01,531.25hadbeendeductedbytheissuingBankonaccountofdemurrage.TheBank,thereafter,on08.03.1997sentanotherletterandtelextotheCompanycallingupontheCompanytofunditsaccounttomeetthedeficitamountofUSD1,01,531.25.
8.On11.03.1997,theCompanywrotetotheBankstatingthatanothercompanybynameNCSEstatehadtopaydemurragechargesandtheyhadbeencalledupontoreimbursetheamountinquestiontotheBank.
9.On14.03.1997,theCompanywroteanotherlettertotheBankforwardingachequeissuedbyNCSEstateforanamountofRs.36.60Lakhstomeettheamountdeductedonaccountofdemurragecharges.
10.On17.03.1997,theBankinformedtheCompanythatshortfallinreceiptofexportproceedswasreportedtoRBI.TheCompanywasrequiredtosignFormA-2asprescribedundertheapplicablenorms.ItwasalsoinformedthatadebitentryforanamountofapproximatelyRs.36Lakhs(USD1,01,531.25)hadbeenmade.AchequeofRs.36LakhsissuedbyNCSEstatewaspresentedbutitwasreturnedunpaid.
11.AfterthechequeissuedbyNCSwasreturnedunpaidwiththeremark”paymentstoppedbydrawer”bankwrotetotheCompanyon02.04.1997informingthatthechequeofNCShadbeenreturnedunpaidandtheBankwasnotconcernedwithanythirdpartyanditcalledupontheCompanytoprovidefundstoadjustthedebitbalanceinitscurrentaccountwhichwasaround38Lakhsbythattimeonaccountofaccruinginterest.Thereafter,severalcommunicationswereexchangedbetweenthepartiesandtheBank.TheBankhadbeeninsistingtheCompanytomakegoodthedebitentryinitscurrentaccount.
12.DuringtheperiodfromApril,1997toJuly,1998,someexportproceedsapproximatelyRs.12.86LakhshadbeenreceivedinCompany’saccountwiththeBank.TheBankhadclaimedthattheexportproceedsofRs.12.86LakhshadbeenadjustedagainsttheoutstandingdebitentryintheCompany’saccountwhichwasinaccordancewiththetermsandconditionsoftheBankaccountoperationaswellasletterdated29.11.1995toadjustthebalancefundamountinCompany’saccountagainstalloranyindebtednessoftheCompanytowardstheBank.
13.TheBank,thereafter,filedasummarysuitforrecoveryofRs.45,76,832/-whichincludedRs.36,42,703.34/-Principalamountandinterestthereon@13%perannum.ThissuitwaslaterontransferredtoDRT,Mumbai.ItisclearthattheBankdidnotgiveadjustmentoftheamountofRs.12,86,115.80/-+Rs.98,681.34/-i.e.totalsumofRs.13,84,797.14/-whichwasreceivedintheaccountoftheCompanywiththeBankandthesuitwasfiledfortheentireamount.
14.TheCompanywrotetotheBankon20.11.1999thatitwouldbepresentingachequeforRs.13,79,710.42attheSBI,SandilaBranch.TheCompanysaidthatsincetheBankhadclaimedtheentireamountofRs.36Lakhsinthesummarysuit,theassumptionwouldbethatthefundswouldbeavailableinCompany’saccountwiththeBankand,thesaidamounthadnotbeenadjustedbytheBank.TheCompanythreatenedtheBanktoinitiatecriminalproceedingsifitschequeforamountofRs.13.79LakhswasnothonouredbytheBank.Anothersimilarletterwaswrittenon22.11.1999bytheCompanytotheBank.
15.Onreceiptoftheaforesaidletters,theBank’sAdvocatesaddressedcommunicationdated24.11.1999totheCompanystatingthatexportproceedsreceivedintheaccountoftheCompanyhadbeenadjustedagainstitsoutstandingdebitbalancefromtimetotime,andduetooversighttheamountadjustedtowardstheoutstandingdebitbalancehadalsobeenclaimedintherecoverysuit.TheBankwouldbetakingnecessarystepsforamendingtheplaintsoastorectifythesaiderrorandtheamountadjustedtowardstheoutstandingdebitbalancewouldbedeductedfromtheclaiminthesuit.
16.TheCompanyrespondedtothesaidcommunicationoftheBankvideletterdated26.11.1999andonceagainthreatenedtheBanktoinitiatelegalproceedings,ifthechequewasnothonouredbytheBank.Similarthreateningletterswerewrittenon03.12.1999and04.12.1999.ChequeforRs.13.79LakhspresentedbytheCompanywasreturnedunpaidbytheBankforreason”notarrangedfor”.
17.Afterthechequegotdishonoredon24.07.2000,theCompanyfiledcomplaintunderSection156(3)Cr.P.C.beforethelearnedC.J.M.,Hardoi.Videorderofthesamedayi.e.24.07.2000,learnedC.J.M.,HardoidirectedtheS.H.O.,Sandilatoregisterandinvestigatetheoffence.Thus,anFIRatCaseCrimeNo.238of2000atPoliceStation,Sandilacametoberegisteredon08.08.2000againsttheBankandfiveotherpersons,employeesoftheBank,whoarethepetitionersinthepresentpetition.TheallegationsintheFIRwerethattheCompanyhaddepositedachequeequivalenttotheexportproceedsreceivedforvaluableconsiderationon22.11.1999forRs.13,79,710.42/-withnoticetotheBankthatthechequewouldbepresentedtoStateBankofIndia,SandilaBranchon22.11.1999.TilldateofnoticetherewasnointimationfromtheBankthatanyfundfromtheaccountoftheCompanyhadbeenappropriatedtowardsBank’sclaim.TheclaimoftheBankwassubjudicebeforetheBombayHighCourt.TheBankhadfiledasuiton20.03.1999whichdidnotindicatethatanymoneyfromtheaccountoftheCompanyhadbeenappropriatedtowardstheclaiminquestion,lesttheamountclaimedwouldhavebeensubstantiallyless.AstheBankhadnotadjustedtheamountlyingintheBankaccountoftheCompany,theCompanyhadrighttowithdrawthesame.
18.ThechequedepositedatSBI,SandilaBranchon22.11.1999forRs.13,79,710.42bytheCompanygotdishonoredwithremark”insufficientfund”.ItwasfurtherallegedthattheBankhadintimatedtotheCompanythattheamountlyingintheBankaccountoftheCompanyhadbeenappropriatedtowardsitsclaimagainsttheCompanybutthesamehadnotbeendisclosedinthesuitfiledbytheBankregardingitsallegedclaimagainsttheCompany.ItwasallegedthattheactsoftheBankandtheotheraccusedconstitutecriminaloffencepunishableunderSection409IPC.ItwasfurthersaidthatwhentheBankhadfiledtheclaimforentireamountalongwithinterest,theamountlyingintheBankaccountoughttohavebeenallowedtobewithdrawnbuttheBankhadillegallymisappropriatedthesaidamountoftheCompany.AnFIRunderSections409,Section420,Section477-A,Section467,Section471/Section34IPCgotregisteredasmentionedfortheseallegations.
19.On21.08.2000,theinvestigatingofficerobtainednon-bailablewarrantsandordersunderSection82Cr.P.C.againsttheaccusedpersonsfromthepresidingofficer.Itisallegedthatnon-bailablewarrantsandordersunderSection82Cr.P.C.hadbeenobtainedbytheinvestigatingofficerinabsenceofanyapplication.Nonbailablewarranthadbeenissuedagainstone,Ms.PoonamSandhuaswellthoughshewasnotnamedasaccusedintheFIRandtherewasnoallegationagainsther.
20.On13.10.2000,officersoftheBanknamely,Mr.WilliamsRoberts,Ms.RitaKothare,Mr.PoonamSandhuwerearrestedbytheinvestigatingofficer.ThepetitionerscametoknowforthefirsttimewhenthearrestwasaffectedthatsomecriminalcasehadbeenlodgedbytheCompanyatSandila,Hardoi.Uponarrest,officerswerereleasedonbailontheapplicationforremandmovedbytheinvestigatingofficerbeforethelearnedMetropolitanMagistrate,Mumbai.
21.Thereafter,on21.10.2000theCompanywrotetotheBank,interalia,statingthattheycouldconsiderputtingthemattertorestifcorrectiveactionwastakenbytheBankandthattheBankshouldrestoretheamountadjustedbyit.Ifthatwasdone,theCompanywouldmakeanapplicationtotheappropriateCourtandauthoritiestoclosetheongoingcriminalproceedings.ItwasalsostatedthattheCompanywaswillingtohaveameetingwiththeBankbutnotwiththeirlawyers.
22.TheBankfiledWritPetitionNo.5238(MB)of2000beforethisCourtprayingforquashingoftheFIR.On20.11.2000theBankfiledanapplicationbeforeD.R.T.foramendmentoftheclaimagainsttheCompanywhichwasoriginallyfiledbeforetheBombayHighCourtforreducingitsclaimbytheamountforwhichadjustmentsweremadeintheaccountoftheCompanyduringtheperiodfromApril1997toJuly1998.
23.ADivisionBenchofthisCourton22.11.2000passedadetailedorderintheWritPetitionNo.5238(MB)of2000takingnoteofthefactthatthedaywhentheapplicationunderSection156(3)Cr.P.C.wasmovedbeforetheC.J.M.,Hardoi,onthesamedayhepassedanorderdirectingthepolicetoregisterthecaseandinvestigatethesame.TheinvestigatingofficerobtainedwarrantsofarrestaswellaswarrantsunderSection82/Section83Cr.P.C.showingpetitionerNos.2to6asabscondersandavoidingarrest.Onwarrants,therewerenosignaturesorsealofthelearnedMagistrateandSmt.PoonamSandhuwasnotnamedintheFIRbutthewarrantwasalsoissuedagainsther.TheinvestigatingofficerhadalsosentanoticetothepetitionersinwhichhedirectedthepetitionerstoappearbeforehimalongwiththerecordandalsoproduceRs.13,79,710.40incashatSandilaon25.11.2000.LearnedGovernmentAdvocatewasdirectedtoensurepresenceoftheinvestigatingofficeralongwiththerecord.RegistrarofthisCourtwasdirectedtosendamassagetoDistrictJudge,HardoiimmediatelydirectinghimtosealthefileinrespectofCrimeNo.238of2000,PoliceStationSandila,DistrictHardoipendingintheCourtof1stA.C.J.M.,Hardoi.DistrictJudgewasalsodirectedtosendfileaswellasorderofC.J.M.,HardoiallegedtohavebeenpassedonapplicationunderSection156(3)Cr.P.C.on27.07.2000.
24.On14.12.2000,DivisionBenchdealingwithwritpetitionafterlookingattherecordofthecasewhichwascalledfornotedthattherewasnoapplicationmovedbytheInvestigatingOfficerforissuanceofnon-bailablewarrantsunderSections82/Section83Cr.P.C.againstthepetitioners.ApplicationmovedunderSection156(3)Cr.P.C.hadnoentrytoshowastowhetherthesamewasmovedintheCourtorsomewhereelse.DivisionBenchopinedthatitappeardthattheapplicationwashandedovertothe1stA.C.J.M.andA.C.J.M.passedorderontheapplicationdirectingthepolicetoregisterthecase.
25.AletterwhichwasallegedtohavebeensenttotheCommissionerofPolice,MumbaiwasallegedlywrittenbyC.J.M.butthesealwasofA.C.J.M.-I.TheCourtwassurprisedtofindoutthattherewasnothingonrecordtoshowthatonwhatgroundnonbailablewarrantswereissueddirectlyinthecaseandhowunderSection82/Section83Cr.P.C.proceedingswereinitiatedwithoutanyapplicationorrequestbytheInvestigatingOfficer.DivisionBenchalsonotedthatthejurisdictionofSandilaPoliceStationwaswithA.C.J.M.-I,thenhowC.J.M.passedorderon24.07.2000andA.C.J.M.-Iissuednon-bailablewarrantdirectlyagainstthepetitioners.Themannerinwhichtheproceedingstookplacecreateddoubts,therefore,theDivisionBenchdirectedtheDistrictJudge,HardoitolookintothematterandsubmitareporttothisCourtwithintwoweeks.DistrictJudge,Hardoisubmittedinquiryreportdated15.01.2001asdirectedbyDivisionBenchinWritPetitionNo.5238(MB)of2000.
26.DistrictJudgeinhisreporthadsaidthatthejurisdictionforentertainingtheapplicationunderSection156(3)SectionCr.P.C.waswithA.C.J.M.-IandnotwithC.J.M.On24.07.2000,whenC.J.M.passedorderontheapplicationunderSection156(3)Cr.P.C.relatingtoPoliceStationSandila,A.C.J.M.-Iwaspresentinthecourtonthatdayandwasworkinganddischarginghisjudicialduties.TheoffencementionedintheapplicationdidnotfallwithintheexclusivejurisdictionofC.J.M.asperdistributionofworkamongsttheMagistratesandoffencesallegedlywererelatedtothejurisdictionofA.C.J.M.-IwhowasonlycompetentofficertopassanyorderontheapplicationunderSection156(3)Cr.P.C.TheC.J.M.wasdevoidofthejurisdictiontoentertainapplicationunderSection156(3)Cr.P.C.filedbytheCompany.Theorderdated24.07.2000waswithoutjurisdiction.InrespectofthematterthathowthenonbailablewarrantsandprocessunderSection82Cr.P.C.wereissuedagainsttheaccusedpersonson21.08.2000,theDistrictJudgeinhisenquiryreportsubmittedthattill21.08.2000,theinvestigatingofficerdidnotmakeanyefforttoarresttheaccusedandtheissuanceofnonbailablewarrantsandprocessunderSection82Cr.P.C.couldnotbejustifiedjustbecausetheaccusedbelongedtodifferentState.Further,learnedMagistrateignoringtheprovisionsofSection82Cr.P.C.headsimultaneouslyissuednonbailablewarrants,andprocessunderSection82Cr.P.C.withoutsatisfyinghimselfthatwhethertheaccusedwereabscondingandhidingandwarrantscouldnotbeexecuted.LearnedDistrictJudgewasfurtheroftheopinionthattheexplanationofthelearnedMagistratewhoissuedwarrantsandprocessunderSection82Cr.P.C.againstPoonamSandhuthatinthestatementsrecordedunderSection161Cr.P.C.bytheinvestigatingofficer,hernameappearedand,therefore,thewarrantwasissuedagainstherwasnotjustifiable.
27.RegardingletterwhichhadbeensenttotheCommissionerofPolice,Mumbai,nocommentwasofferedbytheC.J.M.orbylearnedMagistratewhoissuedwarrantandprocessunderSection82Cr.P.C.Theseofficershadtenderedanapologyandsaidthatanyorderpassedbythemifitwasinviolationoftheirjurisdiction,thesamehadbeenpassedingoodfaithandhadprayedtobeexcusedbythisCourt.LearnedDistrictJudgesaidthattheapologytenderedbythemintheircommentswasforthisCourttolookintoandconsider.
28.On07.02.2001aftertheBanksubmittedallthedocumentswhichweredesiredbytheinvestigatingofficer,theinvestigatingofficersubmittedchargesheet.Theinvestigatingofficerdidnottakeintoconsiderationthedocumentssubmittedbythepetitioners.Thepetitionerswerenamedasaccusedinthecharge-sheet.On05.03.2001,ACJM-IItookcognizanceofthecharges.
29.TheDivisionBenchofthisCourtwhiledealingwithWritPetitionon16.03.2001afterconsideringthereportsubmittedbytheDistrictJudgewasoftheopinionthatafullfledgeenquirywasneededinthematterfortakingaction,ifnecessary,againstthepersonsconcerned.TheDivisionBenchalsodirectedtheRegistrarofthisCourttosendacopyoftheordersandreportsubmittedbyDistrictJudge,HardoialongwithcopyoforderspassedbyDivisionBenchon22.11.2000and14.12.2000totheHon’bleTheChiefJusticeforinformationandnecessaryaction.CopiesoftheseordersweredirectedtobesenttoDirectorGeneralofPolicetolookintothematterincludingtheconductoftheinvestigatingofficerwhohadissuednoticedirectingthepetitionerstodepositRs.13lacsandoddandthereafter,ifnecessary,takesuitableactionagainsttheguiltypersons.
30.On17.04.2001,anotherDivisionBenchdealingwithWritPetitionNo.5238(MB)2000tooknoteofthefactthatcharge-sheethadbeenfiledintheCourtandcognizancehadbeentakenon05.03.2001,givinglibertytothepetitionerstofileapetitionunderSection482Cr.P.C.,disposedofthewritpetitionasafterfilingofcharge-sheet,thecourtwasnotinclinedtointerfereinthematteranyfurther.Thereafter,thepresentpetitionwasfiled.
31.On13.03.2003theamendmentapplicationfiledbythebankbeforetheD.R.T.wasallowedandtheclaimwasreducedbyasumofRs.12,86,115.80/-.
32.TheCompanyfiledanappealagainsttheorderofallowingtheamendmentapplication.Theappealwasdismissed.However,therelevantobservationoflearnedD.R.A.T.isreproducedhereunder:-
“However,thebank’sconductcertainlycannotbesaidtobethatofaccountabilityandresponsibility.Thebankhasadmittedthat’inadvertently’,thebankhaslodgedclaimforamuchhigheramountthoughitsclaimwascertainlyforamuchlesseramount.Thisadmissionalsohascomemuchbelatedlywhenthedefendantslodgedcriminalprosecutionagainstit.Theconductofthebankisblameworthy.Iamthereforeinclinedtosaddlethebankwiththecoststobepaidtothedefendants,thoughIamdismissingtheappeal…”
33.On30.09.2003,thebankfiledareviewapplicationagainstorderdated14.07.2003.However,thereviewapplicationwasdismissed.
34.TheBankfiledWritPetitionNo.2502of2003againsttheorderoftheD.R.A.T.whichwasdisposedofon21.12.2003withanobservationthattheMagistratetryingthecriminalcaseatHardoishouldnotgetinfluencedbytheobservationmadebytheD.R.A.T.
35.D.R.T.,Mumbaipassedthefinaljudgmenton01.04.2004ontheclaimoftheBankagainsttheCompany.TheD.R.T.allowedtheclaimoftheBank.However,D.R.T.heldthatcreditforasumofRs.98,681.34/-wastobegiventotheCompany.
36.HeardMr.ManinderSingh,Dr.AshokNigam,Mr.ArvindVerma,learnedSeniorAdvocatesassistedbySriNagendraMohan,SriAarohiBhalla,SriPrabhasBajaj,SriAjaiSingh,learnedcounselsappearingonbehalfofthepetitionersandMr.SanjayR.Hegde,Mr.JyotindraMishra,learnedSeniorAdvocatesandMr.ManishSinghandPranjalKishore,learnedcounselsappearingonbehalfoftherespondents.
37.Mr.ManinderSingh,learnedSeniorAdvocateappearingforthepetitionershassubmittedthattheentiredisputebetweenthepartieswasofacivilinnature.Itwasthecompanywhohadbecomeliabletoreturntheexcessamountcreditedtoitsaccountonthebasisoffalserepresentationmadebyitsrepresentativetothebank.Civilsuitwasfiledbythebankon10.03.1999andwhenthecivilproceedingswerependingbetweentheparties,therewasnooccasionforthecompanytofileacriminalcomplaintinvokingprovisionsofSection156(3)SectionCr.P.C.on24.07.2000.
38.ItisfurthersubmittedthatfromthedateofopeningofthecurrentaccountoftheCompanyintheyear1983tillthedisputeinquestionaroseintheyear1997,alltransactions/correspondence/exchangeofdocumentsbetweenthepartieshadtakenplaceatMumbai,whichistheplaceofoperationofCompany’sBankaswell.TheCompanyisregisteredinMumbai.AddressoftheCompanyinitsaccountopeningformismentionedthatofMumbai.SubsequentcommunicationhadalsobeenfromitsMumbaioffice.ThefirstevercommunicationfromSandila,Hardoi,U.P.wasaddressedbytheCompanyon25.01.2000withmalafideintentiontocreateanonexistentcauseofactionatHardoi.He,therefore,submitsthatnocauseofactionhadarisenatSandilaandtheproceedingsfiledincourtatHardoiarenothingbutanabuseofprocessoftheCourtandlawactuatedwithmalice.
39.Hehasfurthersubmittedthatduetooversightandbyaninadvertentmistake,theamountofexportproceedsreceivedinthecurrentaccountoftheCompanyfromApril1997to1998wasnotmentionedintherecoverysuitfiledbytheBankbeforetheBombayHighCourt.However,itwasinformedtothecompanybythebankthattheamendmentapplicationwouldbefiledforreducingthesaidamountfromtotalclaimedamountinthesuit.Despitereceiptofthelettersdated24.11.1999and22.2.2000fromtheAdvocatesoftheBankinthisregard,theCompanyhadfiledmalafidecomplaintunderSection156(3)SectionCr.P.C.on24.07.2000.AnamendmentapplicationforreducingtheamountofRs.12,86,115/-adjustedbytheBanktowardsitsclaimagainsttheCompanywasfiledintheD.R.T.whichwasallowedbytheD.R.T.intermsoftheprayerintheamendmentapplication.Thus,noamountevercreditedintheaccountoftheCompanywiththeBankwasmisappropriated.InthedecreepassedbyD.R.T.infavouroftheBank,theamountofRs.12,86,115/-receivedintheaccountoftheCompanyalongwithinteresthadbeenadjusted.He,therefore,submitsthattherewasneveranyentrustmentbytheCompanyinfavouroftheBankandnooffenceeitherbytheBankorbythepetitionershadbeencommittedeitherunderSection409IPCor420SectionIPC.PendingproceedingsareingrossabuseoftheprocessoftheCourt.
40.Thecomplaintdidnotdisclosetrueandcorrectfactsinrelationtoletterofcreditinquestionandthedocuments/correspondenceexchangedbetweenthepartiesincludingtheadmissionbythecompany.ThecorrespondencefromSandilawasengineeredbythecompanyasapartofmalafidedesigntocreateacauseofactionatHardoianditpresentedachequeforRs.13,79,710.42/-atStateBankofIndia,SandilaBranchatHardoiknowingfullywellthatthefundswerenotintheiraccountforthepurposeofissuingnoticeundertheSectionNegotiableInstrumentActtothebankandthentojustifythefilingofthecomplaintatHardoi.TheBankvidetwolettersdated24.11.1999and20.2.2000,hadspecificallyinformedtheCompanyregardingadjustmentmadefromitsaccountfromtimetotimeandthatthebankwastakingstepstocorrect/amendtheclaimforwhichtheadjustmentwasinadvertentlyleftoutbecauseofoversight.Thecomplaintwasfiledinsuppressionofthematerialfactsbymakingfalseassertions.ThelearnedMagistratedidnotapplyjudiciousmindbeforeissuingdirectionsforregistrationoftheFIR.TheMagistratedidnotconsiderfactsandcircumstanceswhileentertainingapplicationunderSection156(3)Cr.P.C.Further,underSection156(3)SectionCr.P.C.,proceedingsshouldnotbeencouragedforunscrupulousandunprincipledlitigants.
41.Tobuttresstheaforesaidsubmissions,learnedSeniorAdvocatehadreliedonthejudgmentoftheSupremeCourtinthecaseofSectionPriyankaSrivastavav.StateofU.P.:(2015)6SCC287.Paragraphs27and28oftheaforesaidjudgmentarereproducedhereinbelow:-
“27.Regardbeinghadtotheaforesaidenunciationoflaw,itneedstobereiteratedthatthelearnedMagistratehastoremainvigilantwithregardtotheallegationsmadeandthenatureofallegationsandnottoissuedirectionswithoutproperapplicationofmind.Hehasalsotobearinmindthatsendingthematterwouldbeconducivetojusticeandthenhemaypasstherequisiteorder.ThepresentisacasewheretheaccusedpersonsareservinginhighpositionsintheBank.Weareabsolutelyconsciousthatthepositiondoesnotmatter,fornobodyisabovethelaw.But,thelearnedMagistrateshouldtakenoteoftheallegationsinentirety,thedateofincidentandwhetheranycognizablecaseisremotelymadeout.ItisalsotobenotedthatwhenaborrowerofthefinancialinstitutioncoveredundertheSarfaesiAct,invokesthejurisdictionunderSection156(3)CrPCandalsothereisaseparateprocedureundertheRecoveryofDebtsDuetoBanksandFinancialInstitutionsAct,1993,anattitudeofmorecare,cautionandcircumspectionhastobeadheredto.
28.Issuingadirectionstating”aspertheapplication”tolodgeanFIRcreatesaveryunhealthysituationinsocietyandalsoreflectstheerroneousapproachofthelearnedMagistrate.Italsoencouragesunscrupulousandunprincipledlitigants,likeRespondent3,namely,PrakashKumarBajaj,totakeadventurousstepswithcourtstobringthefinancialinstitutionsontheirknees.Asthefactualexpositionwouldreveal,Respondent3hadprosecutedtheearlierauthoritiesandafterthematterisdealtwithbytheHighCourtinawritpetitionrecordingasettlement,hedoesnotwithdrawthecriminalcaseandwaitsforsomekindofsituationwherehecantakevengeanceasifheistheemperorofallhesurveys.ItisinterestingtonotethatduringthetenureofAppellant1,whoispresentlyoccupyingthepositionofVice-President,neitherwastheloantaken,norwasthedefaultmade,norwasanyactionundertheSectionSarfaesiActtaken.However,theactionundertheSectionSarfaesiActwastakenonthesecondtimeattheinstanceofthepresentAppellant1.WeareonlystatingaboutthedevilishdesignofRespondent3toharasstheappellantswiththesoleintenttoavoidthepaymentofloan.Whenacitizenavailsaloanfromafinancialinstitution,itishisobligationtopaybackandnotplaytruantorforthatmatterplaypossum.Aswehavenoticed,hehasbeenabletodosuchadventurousactsashehastheembeddedconvictionthathewillnotbetakentotaskbecauseanapplicationunderSection156(3)CrPCisasimpleapplicationtothecourtforissueofadirectiontotheinvestigatingagency.WehavebeenapprisedthatacarboncopyofadocumentisfiledtoshowthecompliancewithSection154(3),indicatingithasbeensenttotheSuperintendentofPoliceconcerned.”
42.ThemannerinwhichtheorderwaspassedunderSection156(3)Cr.P.C.,nonbailablewarrantswereissued,orderforissuingprocessunderSections82andSection83oftheCr.P.C.andissuingwarrants,havebeennoticedandcommenteduponbythisCourtinordersdated22.11.2000,14.12.2000and16.03.2001passedinWritPetitionNo.5238(MB)of2000filedbytheBankwhicharemuchlessthandesired.
43.Hefurthersubmitsthatnoevidenceatallwascollectedbeforefilingthecharge-sheet.ItwasfiledinhurriedmannerjustforcreatingasituationsothatWritPetitionNo.5238(MB)of2000wasdisposedofastheHighCourtusuallydoesnotentertainwritpetitionafterthecharge-sheetisfiled.
44.IthasfurtherbeensubmittedthattheBankwasarrayedasaccusedNo.1inthecomplaintfiledon24.07.2000,however,inthecharge-sheettheBankhasbeendroppedfromthearrayoftheaccused.He,therefore,submitsthatinabsenceofthebankhavingbeenchargesheetedanddroppedasaccused,criminalproceedingsagainstthepetitionerswhoaretheemployeesofthebankcannotbecontinuedanddeservestobequashed.
45.HefurthersubmitsthatthereisnoconceptofvicariousliabilityinSectiontheIndianPenalCode.TheconceptofvicariousliabilityhasbeenincorporatedbytheLegislatureinspeciallawssuchasCompanyLaws,SectionNegotiableInstrumentActetc.Inabsenceofspecificallegationagainstthepetitioners,toconstituteoffencesunderSections409,Section420readwith120SectionIPCagainstthem,andtheBanknotbeinganaccused,thepresentproceedingsevenotherwisecannotbecontinuedandareliabletobequashed.
46.He,therefore,submitsthattheimpugnedproceedingsarenothingbutanabuseofprocessofthecourtandlawandtosecuretheendsofjustice,thisCourtinexerciseofitspowerunderSection482Cr.P.C.shouldquashtheimpugnedproceedings.
47.Ontheotherhand,Mr.SanjayR.Hedge,learnedSeniorAdvocatefortherespondentshassubmittedthatavermentsmadeinthecomplaintclearlydisclosecommissionofoffencecommittedbytheaccusedunderSections409,Section420,Section120BIPC.HefurthersubmitsthatexportproceedsoftheCompanyfromitsSandilaFactorywereregularlycollectedanddepositedincurrentaccountoftheCompanywiththeBankfrom1996to1998.ThebankfiledSummarySuitNo.1758of1999againstthecompanyforrecoveryofRs.45,76,832/-(Rs.36,42,703.63/-beingtheprincipalamountandinterestthereon@13%perannum).Thus,itisevidentthatexportproceedsfromSandilafactorydepositedinthecurrentaccountoftheCompanywiththeBankwerenotadjustedbytheBankandthus,thesaidamountmustbepresumedtohavebeenlyinginthecurrentaccountoftheCompany.TheCompanywroteletterstotheBankintimatingthatacheque(CheckNo.408468)equivalenttoexportproceedreceiptswouldbepresentedtotheStateBankofIndia,Sandilabranch.TheBankanditsDirectorsweretrusteesofthefundsofitsaccountholders.ThesaidchequegotdishonouredbeforethattheCompanyhadnotreceivedanyinformationregardinganyofitsfundbeingadjustedbythebanktowardsitsclaim.ThisfactwasnotmentionedinthesuitfiledbytheBankbeforetheBombayHighCourtagainstthecompanyandifthemoneylyinginthecurrentaccountoftheCompanyhadbeensetoff,theclaimamountundersuitwouldhavegotsubstantiallyreduced.HefurthersubmitsthatthequestionwhichisrelevanttobeconsideredbythisCourtiswhethertheavermentsinthecomplaintspelloutingredientsofcriminaloffenceornot.
48.RevisionalpowersorinherentpowersforquashingcriminalproceedingsatinitialstageshouldbeexercisedsparinglyandonlywheretheallegationsmadeinthecomplaintorFIReveniftakenatthefacevalueareacceptedintotalitydonotprimafaciedisclosecommissionofanoffence.He,therefore,submitsthattheBankandthepetitionersdishonestlyhadmisappropriatedtheamountofRs.12,86,115/-whichwaslyingintheaccountoftheCompanywiththeBankinfraudulentmannerand,therefore,theyhadcommittedoffencesunderSections409,Section420,Section120BIPC.HefurthersubmitsthatfilingoftherecoverysuitbytheBankisofnoconsequencefortheallegationsinthecomplaintdisclosecommissionoftheoffencebythepetitioners.Itiswellsettledthatatransactionmayhavecivilaswellascriminalcontoursandiftheavermentsinthecomplaintmakeoutcommissionofcriminaloffence,proceedingscannotbequashedmerelyonthegroundofcivildisputeorproceedingsis/arependingbeforeaCivil/competentCourt.Thepowerofquashingofcriminalproceedingshouldbeexercisedsparinglyintheexceptionalcases.ThecourtshouldnotembarkuponanenquiryastoreliabilityorgenuinenessorotherwiseregardingallegationsmadeintheFIR/complaintinexerciseoftheextraordinaryorinherentpowersunderArticle226/227oftheConstitutionofIndiaandSection482Cr.P.C.
49.HefurthersubmitsthattheofficesofboththeBankandCompanywerelocatedintheBombaysincethechequewasdishonouredintheSandilabranchoftheS.B.I.,CourtsatHardoihavejurisdictiontotrythecase.HefurthersubmitsthatChapterXIIIoftheSectionCr.P.C.providesforjurisdictionofcriminalcourtsininquiriesandtrialsandSection177Cr.P.C.providesthateveryoffenceshallordinarilybeinquiredintoandtriedbyacourtwithinwhoselocaljurisdictionitwascommitted.UndertheprovisionsofSection178Cr.P.C.,itisprovidedthatwhenanoffenceconstitutesofseveralactsdoneindifferentlocalareas,itmaybeinquiredintoortriedbythecourthavingjurisdictionoveranyofsuchlocalarea.
50.Further,Section181(4)oftheCr.P.C.providesthatanoffenceofcriminalmisappropriation,breachoftrustwillbeenquiredintoortriedbythecourtwithinwhosejurisdictionaccusedwasboundbylaworbycontracttorenderaccountsorreturntheentrustedproperty,butfailedtodischargethatobligation.
51.PoliceafterinvestigatingtheoffenceandcollectingtheevidenceagainsttheaccusedhasfiledchargesheetandlearnedMagistrateafterconsideringthepolicereportandotherdocumentsandsatisfyinghimselfthatthereissufficientgroundforproceedingagainsttheaccusedhasissuedsummons.Therefore,thisCourtisnotrequiredtointerferewiththeongoingcriminalproceedingsagainsttheaccused.
52.HefurthersubmitsthatdroppingoftheBankinthecharge-sheetdoesnotrendertheproceedingsagainstthepetitionersnonmaintainable.Thepetitionerswereofficebearersofthebankandhavebeenarraignedasaccusedintheircapacityasemployeesofthebank.CriminalbreachofTrustcanbemaintainedagainsttheofficebearersofthebankevenifthebankisnotapartyintheproceedings.Section409IPCenvisagescrimebyaBankerandnotbyaBank.AnemployeeofthebankcanbeprosecutedunderSection409IPCindividually.ForanoffenceunderSection409IPC,itistheintentofanemployeewhichisimputedand,therefore,theemployeescanbeheldindependentlyliableforsuchoffence,evenifsuchintentcannotbeimputedtotheCompanyorthebank.
53.Insupportoftheaforesaidsubmission,hehasplacedrelianceonthejudgmentoftheSupremeCourtinthecaseofIridiumIndiaTelecomLtd.versusMotorolaInc.,(2011)1SCC744.Para63oftheaforesaidjudgmentreadsasunder:-
“63.Fromtheaboveitbecomesevidentthatacorporationisvirtuallyinthesamepositionasanyindividualandmaybeconvictedofcommonlawaswellasstatutoryoffencesincludingthoserequiringmensrea.Thecriminalliabilityofacorporationwouldarisewhenanoffenceiscommittedinrelationtothebusinessofthecorporationbyapersonorbodyofpersonsincontrolofitsaffairs.Insuchcircumstances,itwouldbenecessarytoascertainthatthedegreeandcontrolofthepersonorbodyofpersonsissointensethatacorporationmaybesaidtothinkandactthroughthepersonorthebodyofpersons.ThepositionoflawonthisissueinCanadaisalmostthesame.Mensreaisattributedtocorporationsontheprincipleof”alterego”ofthecompany.”
54.HehasfurthersubmittedthatthefactualdisputeanddefenceoftheaccusedcannotbeconsideredwhiledecidingapetitionfiledunderSection482Cr.P.C.forquashingofthecriminalproceedings.Thedocumentsplacedonrecordbythepetitionersareinrespectofunrelatedtransactionandarenotsufficientforquashingoftheproceedings.
55.InsupportoftheaforesaidsubmissionhehasplacedrelianceonthejudgmentoftheSupremeCourtinthecaseofStateofBiharversusP.P.Sharma1992Supp1SCC222.Paras16and68ofaforesaidjudgmentreadasunder:-
“16.Itisthusobviousthat”theannexures’wereneitherpartofthepolicereportsnorwererelieduponbytheInvestigatingOfficer.ThesedocumentswereproducedbytherespondentsbeforetheHighCourtalongwiththewritpetitions.Bytreating”theannexures’andaffidavitsasevidenceandbyconvertingitselfintoatrialcourttheHighCourtpronouncedtherespondentstobeinnocentandquashedtheproceedings.TheleastwecansayisthatthiswasnotatallacasewhereHighCourtshouldhaveinterferedintheexerciseofitsinherentjurisdiction.ThisCourthasrepeatedlyheldthattheappreciationofevidenceisthefunctionofthecriminalcourts.TheHighCourt,underthecircumstances,couldnothaveassumedjurisdictionandputanendtotheprocessofinvestigationandtrialprovidedunderthelaw.SincetheHighCourtstronglyreliedupon”theannexures”insupportofitsfindings,wemaybrieflyexaminethesedocuments.
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68.AnothercrucialquestioniswhethertheHighCourt,inexerciseofitsextraordinaryjurisdictionunderSectionArticle226oftheConstitution,wouldinterfereandquashthecharge-sheet.TheHighCourtfoundthatthedocumentsreliedonbytherespondents/accusedwerenotdeniedbytheStatebyfilingthecounter-affidavit.Therefore,theymustbedeemedtohavebeenadmitted.OnthatpremisetheHighCourtfoundthatnoprimafaciecasewasmadeoutonmeritsandchancesofultimateconvictionis”bleak”.Thecourtisnotpassivespectatorinthedramaofillegalitiesandinjustice.TheinherentpowerofthecourtunderSectionArticle226oftheConstitutionofIndiaispermittedtoberesortedto.Whenthedocumentsreliedonbytherespondents”demonstratethatnoprimafacieoffenceismadeoutonthefacevalueofthosematerials,thenthecriminalprosecutionshouldnotbeallowedtocontinueandsoitshouldbequashed”,and”insuchasituationandcircumstancesthepetitionerswhohadgotarightundertheConstitutionfortheprotectionoftheirlibertyhaverightlyapproachedthisCourtandthisCourtinthesecircumstanceshasnooptionbuttograntthereliefbyquashingtheFIRandboththecharge-sheets”.Accordinglyitquashedthem.Ifthisdecisionisupheld,inmyconsideredviewstartlinganddisastrousconsequencewouldensue.Quashingthecharge-sheetevenbeforecognizanceistakenbyacriminalcourtamountsto”killingastillbornchild”.Tillthecriminalcourttakescognizanceoftheoffencethereisnocriminalproceedingspending.IamnotallowingtheappealsonthegroundthatalternativeremediesprovidedbySectiontheCodeasabar.Itmayberelevantinanappropriatecase.Myviewisthatentertainingthewritpetitionsagainstcharge-sheetandconsideringthematteronmeritintheguiseofprimafacieevidencetostandanaccusedfortrialamountstopre-trialofacriminaltrialunderSectionArticle226or227evenbeforethecompetentMagistrateortheSessionsCourttakescognizanceoftheoffence.Oncetheproceedingsareentertainedthefurtherproceedingsgetstayed.Expeditioustrialofacriminalcaseisthecardinalrule.Delayfeedsinjusticetosocialorderandentertainingwritpetitionswouldencouragetodelaythetrialbydiversetricks.Itisnottosuggestthatundernocircumstancesawritpetitionshouldbeentertained.AswasrightlydonebyRajasthanHighCourtinthiscaseattheinstanceofthedirectorsofthecompany,wisdomliestokeepthehandsbackandrelegatetheaccusedtopursuetheremedyunderSectiontheCode.InseveralcasesthisCourtquashedthecriminalproceedingsonthesolegroundofdelay.InacaseFIRfiledin1954forviolationoftheprovisionsoftheSectionCustomsActandSectionForeignExchangeRegulationActwaschallengedintheAllahabadHighCourt.ItwasdeliberatelykeptpendingintheHighCourtandinthisCourttill1990.Theaccusationwasviolationoflawbynamedpersonsinthenameofnon-existingfirm.TheFIRwasquashedintheyear1990byanotherBenchofwhichIwasamembersolelyonthegroundofdelay.Heachievedhisobjectofavoidingpunishment.Thiswouldshowthatanaccusedwithaviewtodelaythetrial,resortstowritproceedings,raisesseveralcontentionsincludingoneonmeritasvehementlypersistedbySriJaintoconsiderthiscaseonmeritsandhavetheproceedingskeptpending.Theresultwouldbethatthepeoplewouldlosefaithintheefficacyofruleoflaw.Documentsreliedonbytherespondentsaresubjecttoproofatthetrialandrelevancy.Ifprovedtobetrueandrelevantthentheymayserveasadefencefortherespondentsatthetrial.TheStatequitelegitimatelyandinmyviewrightlydidnotchoosetofilethecounter-affidavitdenyingorcontradictingtheversionoftherespondents,inthosedocuments.Thecommissionofoffencecannotbedecidedonaffidavitevidence.TheHighCourthastakenshortcourse”inannihilatingthestillbornprosecution”bygoingintothemeritsonthepleaofproofofprimafaciecaseandadvertedtothosefactsandgavefindingsonmerits.GrossesterroroflawhasbeencommittedbytheHighCourtinmakingpre-trialofacriminalcaseinexercisingitsextraordinaryjurisdictionunderSectionArticle226.Afterthecharge-sheetwasfiled,theFIRnolongerremainssheet-anchor.Thecharge-sheetandtheevidenceplacedinsupportthereofformthebasetotakeorrefusetotakecognizancebythecompetentcourt.Itisnotthecasethatnooffencehasbeenmadeoutinthecharge-sheetsandthefirstinformationreport.Itis,therefore,notnecessarytoconsiderallthedecisionsdealingwiththescopeofthepoweroftheHighCourteitherunderSection482CrPCorSectionArticle226oftheConstitutiontoquashthefirstinformationreport.”
56.HehasplacedrelianceonthejudgmentoftheSupremeCourtinthecaseofRavindraMadanlalGoenkaversusRamRaghavSpinners(P)Ltd.,(2009)11SCC529.Paras18and19oftheaforesaidjudgmentreadasunder:-
“18.WhileentertainingapetitionunderSection482CrPC,thematerialsfurnishedbythedefencecannotbelookedintoandthedefencematerialscanbeentertainedonlyatthetimeoftrial.Itisawell-settledpositionoflawthatwhenthereareprimafaciematerialsavailable,apetitionforquashingthecriminalproceedingscannotbeentertained.Theinvestigatingagencyshouldhavehadthefreedomtogointothewholegamutoftheallegationsandtoreachaconclusionofitsown.Pre-emptionofsuchinvestigationwouldbejustifiedonlyinveryextremecases.
19.Whileconsideringthefactsofthepresentcase,weareoftheconsideredopinionthatthepresentcaseisnotoneofthoseextremecaseswherecriminalprosecutioncanbequashedbytheCourtattheverythreshold.Adefencecaseispleadedbutsuchdefenceisrequiredtobeconsideredatalaterstageandnotatthisstage.Theappellantswouldhaveampleopportunitytoraisealltheissuesurgedinthisappealatanappropriatelaterstage,wheresuchpleaswouldbeandcouldbeproperlyanalysedandscrutinised.”
57.HehasfurtherplacedrelianceonthejudgmentoftheSupremeCourtinthecaseofMd.AllauddinKhanversusStateofBiharandOrs.:2019SCCOnlineSC539.Para17oftheaforesaidjudgmentisreproducedhereinbelow:-
“17.Inourview,theHighCourthadnojurisdictiontoappreciatetheevidenceoftheproceedingsunderSection482oftheCodeOfCriminalProcedure,1973(forshort”SectionCr.P.C.”)becausewhethertherearecontradictionsor/andinconsistenciesinthestatementsofthewitnessesisessentiallyanissuerelatingtoappreciationofevidenceandthesamecanbegoneintobytheJudicialMagistrateduringtrialwhentheentireevidenceisadducedbytheparties.Thatstageisyettocomeinthiscase.”
58.Ihaveconsideredthesubmissionscarefullyandgonethroughtherecord.
59.Thefactsarenotmuchindispute.SumandsubstanceofallegationsinthecomplaintisthattheBankfiledrecoverysuitforitsadmittedclaimagainsttheCompanywithoutadjustingtheamountofRs.12,86,115/-whichwasreceivedasexportproceedsinthecurrentaccountofthecompanyduring1996and1998.TheCompanydepositedachequedrawnonitsCurrentAccountattheStateBankofIndia,BranchatSandila,DistrictHardoi.ThesaidchequegotdishonouredastheBankhadadjustedtheamountlyinginthecurrentaccountoftheCompany.ThestandoftheBankisthatbyaninadvertentmistakeandoversightthesaidamountwasnotinitiallysetofffromitstotalclaimagainstthecompanyinthesuitfiledbythebankbeforetheBombayHighCourtbutbeforefilingthecomplaint,itwasintimatedinwritingtotheCompanythatbyanoversightandinadvertentmistaketheclaimofthebankwasnotreducedbytheamountadjustedandtheBankwouldbetakingappropriatestepstoamenditsclaimandthesaidclaimgotamendedbeforetheD.R.T.
60.Thequestionforconsiderationisthatwhetherthepetitionershadmensreaforcommittingtheallegedoffences.ConsideringthefactssetoutintheprecedingparagraphswhetherthepetitionershadcommittedtheoffenceunderSection409IPCoritcanbesaidthattheyhaddishonestlymisappropriatedthefundsofexportproceedsreceivedinthecurrentaccountoftheCompanywiththeBankasthebankfailedinitiallytoadjustthesaidamountandreduceditsclaimagainsttheCompanyinthesuitfiledbeforeBombayHighCourtandwhetheranyoffencehadbeencommittedwithintheterritorialjurisdictionoftheCourtsatHardoi.InviewoftheadmittedfactthattheexportproceedsoftheCompanytothetuneofRs.12,86,115/-weredepositedinthecurrentaccountmaintainedwiththeBankandtheallegedmisappropriationhadtakenplaceatMumbai.
61.Section409IPCisreproducedhereinbelow:-Section409IPCdealswithcriminalbreachoftrustbyapublicservant,orbyabanker,merchantoragent.Inordertobringanapplicationofthesaidprovision
“409.Criminalbreachoftrustbypublicservant,orbybanker,merchantoragent.–Whoever,beinginanymannerentrustedwithproperty,orwithanydominionoverpropertyinhiscapacityofapublicservantorinthewayofhisbusinessasabanker,merchant,factor,broker,attorneyoragent,commitscriminalbreachoftrustinrespectofthatproperty,shallbepunishedwith1[imprisonmentforlife],orwithimprisonmentofeitherdescriptionforatermwhichmayextendtotenyears,andshallalsobeliabletofine.
Section409IPCdealswithcriminalbreachoftrustbypublicservant,orbybanker,merchantoragent.Inordertobringanapplicationofthesaidprovision,entrustmenthastobeproved.InordertosustainconvictionunderSection409IPC,twoingredientsaretobeproved:-(a)theaccused,apublicservant,orbankeroragentwasentrustedwithpropertyofwhichheisdutybondtoaccountfor;and(b)theaccusedhascommittedcriminalbreachoftrust.
62.Thedefinitionof’criminalbreachoftrust’isprovidedunderSection405IPC.Section409IPCisinessencecriminalbreachoftrustbycategoryofpersonsmentionedinSection409IPCitself.Ingredientsofcriminalbreachoftrustare:-
(i)entrustinganypersonwithproperty,orwithanydominionoverproperty;
(ii)thepersonentrusted(a)dishonestlymisappropriatingorconvertingtohisownusethatproperty;or(b)dishonestlyusingordisposingofthatpropertyorwilfullysufferinganyotherpersonsoastodoinviolation(i)ofanydirectionoflawprescribingthemodeinwhichsuchtrustistobedischarged;or(ii)ofanylegalcontractmadetouchingthedischargeoftrust.
Thus,tobringhometheaccusationsunderSection405IPC,itisrequiredtoproveconjointly;(i)entrustmentand(ii)whetheraccusedwasactuatedbydishonestintentionornot,misappropriateditorconvertedittohisownusetothedetrimentofthepersonswhoentrustedit.
63.Comingtothefactsofthepresentcase,itwouldbeapttonotethatthecomplaintfiledbytheCompanydoesnotdisclosethatinwhatmannerthepetitionerswhoaretheemployeesoftheBankhavemisappropriatedtheproceedsdepositedinitscurrentaccountmaintainedwiththeBank.AllegationsareagainsttheBankandthebankhasbeendroppedbytheinvestigatingofficerwhilefilingthechargesheet.
64.TheSupremeCourtinthecaseofAnandKumarMohattaversusState(Govt.ofNCTofDelhi):2018SCCOnLineSC2447inrespectofcriminalbreachoftrustinparas23to28hasobservedasunder:-
23.Theessenceoftheoffenceliesintheuseofthepropertyentrustedtoapersonbythatperson,inviolationofanydirectionoflaworanylegalcontractwhichhehasmadeduringthedischargeofsuchtrust.Inthepresentcase,theamountofRs.Onecrorewaspaidbythecomplainant-RespondenttotheAppellantsasaninterestfreedepositonthesigningoftheagreement.Itwasliabletoberefundedtothecomplainantsimultaneouslyonhandingoverofpossessionoftheareaoftheowner’ssharetotheownerinthegrouphousingcomplexvideClause30(b)oftheagreementdated03.06.1993.
24.Twothingsaresignificantinthetransactionbetweentheparties.Firstly,thattheoccasionforreturningtheamounti.e.thedeveloperhandingoverthepossessionoftheareaoftheowner’ssharetotheownerinthegrouphousingcomplex,hasnotoccurred.AccordingtotheAppellants,thecontractstandsfrustratedbecausenogrouphousingcanbelegallybuilton20FerozShahRoad,NewDelhisinceitfallsintheLutyensBungalowZone.AppellantNo.1hastherefore,terminatedthecontract.Further,theamounthasbeenretainedbyhimasasecuritybecausenotonlyisthereanyhandingoverofconstructedportion,thecomplainanthasalsogotintopartpossessionofthepropertyandhasnothandeditback.Also,thecomplainanthasfailedtogetthepropertyvacatedfromthetenant’spossession.
25.We,thusfindthatitisnotpossibletoholdthattheamountofRs.OnecrorewhichwaspaidalongwiththedevelopmentagreementasadepositcanbesaidtohavebeenentrustmentofpropertywhichhasbeendishonestlyconvertedtohisownuseordisposedofinviolationofanydirectionoflaworcontractbytheAppellant.TheAppellantshavenotusedtheamountnormisappropriateditcontrarytoanydirectionoflaworcontractwhichprescribeshowtheamounthastobedealtwith.
26.Goingbytheagreementdated03.06.1993,theamounthastobereturneduponthehandingoveroftheconstructedareaoftheownerwhichadmittedlyhasnotbeendone.MostsignificantlytheRespondentNo.2hasnotdemandedthereturnoftheamountatanypointoftime.Infact,itisthespecificcontentionoftheRespondentNo.2thathehasnotdemandedtheamountbecausetheagreementisstillinsubsistence.
27.WedonotseehowitcanbecontendedbyanystretchofimaginationthattheAppellantshavemisappropriatedtheamountordishonestlyusedtheamountcontrarytoanylaworcontract.Inanycase,wefindthatthedisputehasthecontoursofadisputeofcivilnatureanddoesnotconstituteacriminaloffence.
28.Havinggivenouranxiousconsideration,weareoftheviewthatassumingthatthereisasecuritydepositofRs.OneCroreandthathehasmisappropriatedthedisputebetweenthetwopartiescanonlybeacivildispute.
65.Consideringtheallegationsinthecomplaint,itwouldbedifficulttoconcludethatthepetitionershavemisappropriatedtheamountdepositedinthebankaccountoftheCompanyasexportproceedsortheyhaddishonestlyusedtheamountcontrarytoanylaworcontract.
66.TheSupremeCourtinthecaseofPunjabNationalBankversusSurendraPrasadSinha:(1993)Suppl1SCC499inParas5and6hasheldasunder:-
“5.Admittedly,astheprincipaldebtordidnotrepaythedebt.ThebankascreditoradjustedatmaturityoftheF.D.R.,theoutstandingdebtduetothebankintermsofthecontractandthebalancesumwascreditedtotheSavingsBankaccountoftherespondent.Therulesoflimitationarenotmeanttodestroytherightsoftheparties.Section3oftheLimitationAct36of1963,forshort”theAct”onlybarstheremedy,butdoesnotdestroytherightwhichtheremedyrelatesto.Therighttothedebtcontinuestoexistnotwithstandingtheremedyisbarredbythelimitation.Onlyexceptioninwhichtheremedyalsobecomesbarredbylimitationisthattherightitselfisdestroyed.ForexampleunderSection27oftheActasuitforpossessionofanypropertybecomingbarredbylimitation,therighttopropertyitselfisdestroyed.Exceptinsuchcaseswhicharespeciallyprovidedundertherighttowhichremedyrelatesinothercasetherightsubsists.ThoughtherighttoenforcethedebtbyjudicialprocessisbarredunderSection3readwiththerelevantarticleintheschedule,therighttodebtremains.ThetimebarreddebtdoesnotceasetoexistbyreasonofSection3.Thatrightcanbeexercisedinanyothermannerthanbymeansofasuit.Thedebtisnotextinguished,buttheremedytoenforcetheliabilityisdestroyed.WhatSection3refersisonlytotheremedybutnottotherightofthecreditors.Suchdebtcontinuestosubsistsolongasitisnotpaid.Itisnotobligatorytofileasuittorecoverthedebt.Itissettledlawthatthecreditorwouldbeentitledtoadjust,fromthepaymentofasumbyadebtor,towardsthetimebarreddebt.Itisalsoequallysettledlawthatthecreditorwhenheisinpossessionofanadequatesecurity,thedebtduecouldbeadjustedfromthesecurityinhispossessionandcustody.Undoubtedlytherespondentandhiswifestoodguarantorstotheprincipaldebtor,jointlyexecutedthesecuritybondandentrustedtheF.D.R.assecuritytoadjusttheoutstandingdebtfromitatmaturity.Therefore,thoughtheremedytorecoverthedebtfromtheprincipaldebtorisbarredbylimitation,theliabilitystillsubsists.Intermsofthecontractthebankisentitledtoappropriatethedebtdueandcreditthebalanceamounttothesavingsbankaccountoftherespondent.Therebytheappellantdidnotactinviolationofanylaw,norconvertedtheamountentrustedtothemdishonestlyforanypurpose.ActionintermsofthecontractexpresslyorimpliedisanegationofcriminalbreachoftrustdefinedinSection405andpunishableunderSection409IPC.Itisneitherdishonest,normisappropriation.Thebankhadinitspossessionthefixeddepositreceiptasguaranteeforduepaymentofthedebtandthebankappropriatedtheamounttowardsthedebtdueandpayablebytheprincipaldebtor.Further,theF.D.R.wasnotentrustedduringthecourseofthebusinessofthefirstappellantasaBankeroftherespondentbutinthecapacityasguarantor.Thecomplaintdoesnotmakeoutanycasemuchlessprimafaciecase,aconditionprecedenttosetcriminallawinmotion.TheMagistratewithoutadvertingwhethertheallegationinthecomplaintprimafaciemakesoutanoffencechargedfor,obviously,inamechanicalmanner,issuedprocessagainstalltheappellants.TheHighCourtcommittedgraveerrorindecliningtoquashthecomplaintonthefindingthattheBankactedprimafaciehigh-handedly.
6.Itisalsosalutarytonotethatjudicialprocessshouldnotbeaninstrumentofoppressionorneedlessharassment.ThecomplaintwaslaidimpleadingtheChairman,theManagingDirectoroftheBankbynameandahostofofficers.ThereliesresponsibilityanddutyontheMagistracytofindwhethertheconcernedaccusedshouldbelegallyresponsiblefortheoffencechargedfor.Onlyonsatisfyingthatthelawcastsliabilityorcreatesoffenceagainstthejuristicpersonorthepersonsimpleadedthenonlyprocesswouldbeissued.Atthatstagethecourtwouldbecircumspectandjudiciousinexercisingdiscretionandshouldtakealltherelevantfactsandcircumstancesintoconsiderationbeforeissuingprocesslestitwouldbeaninstrumentinthehandsoftheprivatecomplaintasvendettatoharassthepersonsneedlessly.Vindicationofmajestyofjusticeandmaintenanceoflawandorderinthesocietyaretheprimeobjectsofcriminaljusticebutitwouldnotbethemeanstowreakpersonalvengeance.Consideredfromanyanglewefindthattherespondenthadabusedtheprocessandlaidcomplaintagainstalltheappellantswithoutanyprimafaciecasetoharassthemforvendetta.”
67.TheSupremeCourtintheparas21to23inthecaseofSectionAsokeBasakv.StateofMaharashtra,(2010)10SCC660hasheldasunder:-
21.Itisplainthatforconstitutinganoffenceofcriminalbreachoftrust,thefollowingingredientsmustbesatisfied:
a)apersonshouldhavebeenentrustedwithproperty,orentrustedwithdominionoverproperty;
(b)thatpersonshoulddishonestlymisappropriateorconverttohisownusethatproperty,ordishonestlyuseordisposeofthatpropertyorwilfullysufferanyotherpersontodoso;
(c)thatsuchmisappropriation,conversion,useordisposalshouldbeinviolationofanydirectionoflawprescribingthemodeinwhichsuchtrustistobedischarged,orofanylegalcontractwhichthepersonhasmade,touchingthedischargeofsuchtrust.
(SectionSeeIndianOilCorpn.v.NEPCIndiaLtd.[(2006)6SCC736:(2006)3SCC(Cri)188],SCCp.751,para22,SectionOnkarNathMishrav.State(NCTofDelhi)[(2008)2SCC561:(2008)1SCC(Cri)507],SectionPratibhaRaniv.SurajKumar[(1985)2SCC370:1985SCC(Cri)180],SectionRashmiKumarv.MaheshKumarBhada[(1997)2SCC397:1997SCC(Cri)415]andSectionR.Venkatkrishnanv.CBI[(2009)11SCC737:(2010)1SCC(Cri)164].)
22.Intheinstantcase,weareunabletogatherfromthecomplaintanyavermentwhichmaysuggestthatRs.5lakhswasentrustedtotheappellant,eitherinhispersonalcapacityorastheChairmanofMSEBandthathemisappropriateditforhisownuse.ThebasisoftheallegationisthattheappellanthadcausedMSEBtorefusereturnofthemoneytothecomplainantinordertowilfullyanddishonestlydeprivethecomplainantofitsuse.Inthisregard,itwouldbeusefultorefertothefollowingobservationsinS.K.Alaghcase[(2008)5SCC662:(2008)2SCC(Cri)686]:(SCCp.667,para19)
“19.As,admittedly,draftsweredrawninthenameoftheCompany,eveniftheappellantwasitsManagingDirector,hecannotbesaidtohavecommittedanoffenceunderSection406ofthePenalCode.Ifandwhenastatutecontemplatescreationofsuchalegalfiction,itprovidesspecificallytherefor.Inabsenceofanyprovisionlaiddownunderthestatute,aDirectorofacompanyoranemployeecannotbeheldtobevicariouslyliableforanyoffencecommittedbythecompanyitself.”
23.Admittedly,inthepresentcase,thesaidamountwasdepositedbythecomplainantcompanywithMSEBandthereisnothinginthecomplaintwhichmayevenremotelysuggestthatthecomplainanthadentrustedanypropertytotheappellantorthattheappellanthaddominionoverthesaidmoneyofthecomplainant,whichwasdishonestlyconvertedbyhimtohisownuse,soastosatisfytheingredientsofSection405IPC.Intheabsenceofanysuchspecificavermentdemonstratingtheroleoftheaccusedinthecommissionoftheoffence,wefinditdifficulttoholdthatthecomplaint,evenexfacie,disclosesthecommissionofanoffencebytheappellantunderSection409IPC,punishableunderSection406IPC.
68.TheSupremeCourtinparas15and16inthecaseofSectionGHCLEmployeesStockOptionTrustv.IndiaInfolineLtd.,(2013)4SCC505followinghasheld:-
15.SectionInMadhavraoJiwajiraoScindiav.SambhajiraoChandrojiraoAngre[(1988)1SCC692:1988SCC(Cri)234]thisCourtheldasunder:(SCCp.695,para7)
“7.Thelegalpositioniswellsettledthatwhenaprosecutionattheinitialstageisaskedtobequashed,thetesttobeappliedbythecourtisastowhethertheuncontrovertedallegationsasmadeprimafacieestablishtheoffence.Itisalsoforthecourttotakeintoconsiderationanyspecialfeatureswhichappearinaparticularcasetoconsiderwhetheritisexpedientandintheinterestofjusticetopermitaprosecutiontocontinue.Thisissoonthebasisthatthecourtcannotbeutilisedforanyobliquepurposeandwhereintheopinionofthecourtchancesofanultimateconvictionarebleakand,therefore,nousefulpurposeislikelytobeservedbyallowingacriminalprosecutiontocontinue,thecourtmaywhiletakingintoconsiderationthespecialfactsofacasealsoquashtheproceedingeventhoughitmaybeatapreliminarystage.”
16.SectionInPunjabNationalBankv.SurendraPrasadSinha[1993Supp(1)SCC499:1993SCC(Cri)149:AIR1992SC1815],acomplaintwaslodgedbythecomplainantforprosecutionunderSections409,Section109andSection114IPCagainsttheChairman,theManagingDirectoroftheBankandahostofofficersalleging,interalia,thatasagainsttheloangrantedtooneSrimanNarainDubey,thecomplainantandhiswifestoodasguarantorsandexecutedsecuritybondandhandedoverfixeddepositreceipt.Sincetheprincipaldebtordefaultedinpaymentofdebt,theBranchManageroftheBankonmaturityofthesaidfixeddepositadjustedapartoftheamountagainstthesaidloan.Thecomplainantallegedthatthedebtbecamebarredbylimitationand,therefore,theliabilityoftheguarantorsalsostoodextinguished.Itwas,therefore,allegedthattheofficersoftheBankcriminallyembezzledthesaidamountwithdishonestintentiontosavethemselvesfromfinancialobligation.TheMagistratewithoutadvertingwhethertheallegationsinthecomplaintprimafaciemakeoutanoffencechargedfor,inamechanicalmanner,issuedtheprocessagainstalltheaccusedpersons.TheHighCourtrefusedtoquashthecomplaintandthematterfinallycametothisCourt.Allowingtheappealandquashingthecomplaint,thisCourtheldasunder:(SurendraPrasadSinhacase[1993Supp(1)SCC499:1993SCC(Cri)149:AIR1992SC1815],SCCpp.504-05,para6)
“6.Itisalsosalutarytonotethatjudicialprocessshouldnotbeaninstrumentofoppressionorneedlessharassment.ThecomplaintwaslaidimpleadingtheChairman,theManagingDirectoroftheBankbynameandahostofofficers.ThereliesresponsibilityanddutyontheMagistracytofindoutwhethertheaccusedconcernedshouldbelegallyresponsiblefortheoffencechargedfor.Onlyonsatisfyingthatthelawcastsliabilityorcreatesoffenceagainstthejuristicpersonorthepersonsimpleadedthenonlyprocesswouldbeissued.Atthatstagethecourtwouldbecircumspectandjudiciousinexercisingdiscretionandshouldtakealltherelevantfactsandcircumstancesintoconsiderationbeforeissuingprocesslestitwouldbeaninstrumentinthehandsoftheprivatecomplaintasvendettatoharassthepersonsneedlessly.Vindicationofmajestyofjusticeandmaintenanceoflawandorderinthesocietyaretheprimeobjectsofcriminaljusticebutitwouldnotbethemeanstowreakpersonalvengeance.Consideredfromanyanglewefindthattherespondenthadabusedtheprocessandlaidcomplaintagainstalltheappellantswithoutanyprimafaciecasetoharassthemforvendetta.”
69.TheSupremeCourtinthecaseofSectionBinodKumarv.StateofBihar,(2014)10SCC663inparas14to18hasheldasunder:-
14.Atthisstage,weareonlyconcernedwiththequestionwhethertheavermentsinthecomplainttakenattheirfacevaluemakeouttheingredientsofcriminaloffenceornot.Letusnowexaminewhethertheallegationsmadeinthecomplaintwhentakenontheirfacevalue,aretrueandconstitutetheoffenceasdefinedunderSection406.
15.Section405IPCdealswithcriminalbreachoftrust.AcarefulreadingofSection405IPCshowsthatacriminalbreachoftrustinvolvesthefollowingingredients:
(a)apersonshouldhavebeenentrustedwithproperty,orentrustedwithdominionoverproperty;
(b)thatpersonshoulddishonestlymisappropriateorconverttohisownusethatproperty,ordishonestlyuseordisposeofthatpropertyorwilfullysufferanyotherpersontodoso;
(c)thatsuchmisappropriation,conversion,useordisposalshouldbeinviolationofanydirectionoflawprescribingthemodeinwhichsuchtrustistobedischarged,orofanylegalcontractwhichthepersonhasmade,touchingthedischargeofsuchtrust.
16.Section406IPCprescribespunishmentforcriminalbreachoftrustasdefinedinSection405IPC.FortheoffencepunishableunderSection406IPC,prosecutionmustprove:
(i)thattheaccusedwasentrustedwithpropertyorwithdominionoverit;and
(ii)thathe(a)misappropriatedit,or(b)convertedittohisownuse,or(c)usedit,or(d)disposedofit.
Thegistoftheoffenceismisappropriationdoneinadishonestmanner.Therearetwodistinctpartsofthesaidoffence.Thefirstinvolvesthefactofentrustment,whereinanobligationarisesinrelationtothepropertyoverwhichdominionorcontrolisacquired.Thesecondpartdealswithmisappropriationwhichshouldbecontrarytothetermsoftheobligationwhichiscreated.
17.Section420IPCdealswithcheating.TheessentialingredientsofSection420IPCare:
(i)cheating;
(ii)dishonestinducementtodeliverpropertyortomake,alterordestroyanyvaluablesecurityoranythingwhichissealedorsignedoriscapableofbeingconvertedintoavaluablesecurity,and
(iii)mensreaoftheaccusedatthetimeofmakingtheinducement.
18.Inthepresentcase,lookingattheallegationsinthecomplaintonthefaceofit,wefindthatnoallegationsaremadeattractingtheingredientsofSection405IPC.Likewise,therearenoallegationsastocheatingorthedishonestintentionoftheappellantsinretainingthemoneyinordertohavewrongfulgaintothemselvesorcausingwrongfullosstothecomplainant.Exceptingthebaldallegationsthattheappellantsdidnotmakepaymenttothesecondrespondentandthattheappellantsutilisedtheamountseitherbythemselvesorforsomeotherwork,thereisnoiotaofallegationastothedishonestintentioninmisappropriatingtheproperty.Tomakeoutacaseofcriminalbreachoftrust,itisnotsufficienttoshowthatmoneyhasbeenretainedbytheappellants.Itmustalsobeshownthattheappellantsdishonestlydisposedofthesameinsomewayordishonestlyretainedthesame.Themerefactthattheappellantsdidnotpaythemoneytothecomplainantdoesnotamounttocriminalbreachoftrust.
70.TheSupremeCourtinthecaseofSectionStateofHaryanav.BhajanLal,1992Supp(1)SCC335whiledelineatingthepowersofHighCourtunderSection482Cr.P.C.forquashingthecriminalproceedingsinpara102hasillustrativelyenumeratedthecircumstanceswheretheHighCourtshouldexercisethepowertoquashtheproceedings.
“102.InthebackdropoftheinterpretationofthevariousrelevantprovisionsSectionoftheCodeunderChapterXIVandoftheprinciplesoflawenunciatedbythisCourtinaseriesofdecisionsrelatingtotheexerciseoftheextraordinarypowerunderSectionArticle226ortheinherentpowersunderSection482oftheCodewhichwehaveextractedandreproducedabove,wegivethefollowingcategoriesofcasesbywayofillustrationwhereinsuchpowercouldbeexercisedeithertopreventabuseoftheprocessofanycourtorotherwisetosecuretheendsofjustice,thoughitmaynotbepossibletolaydownanyprecise,clearlydefinedandsufficientlychannelisedandinflexibleguidelinesorrigidformulaeandtogiveanexhaustivelistofmyriadkindsofcaseswhereinsuchpowershouldbeexercised.
(1)Wheretheallegationsmadeinthefirstinformationreportorthecomplaint,eveniftheyaretakenattheirfacevalueandacceptedintheirentiretydonotprimafacieconstituteanyoffenceormakeoutacaseagainsttheaccused.
(2)Wheretheallegationsinthefirstinformationreportandothermaterials,ifany,accompanyingtheFIRdonotdiscloseacognizableoffence,justifyinganinvestigationbypoliceofficersunderSection156(1)oftheCodeexceptunderanorderofaMagistratewithinthepurviewofSection155(2)oftheCode.
(3)WheretheuncontrovertedallegationsmadeintheFIRorcomplaintandtheevidencecollectedinsupportofthesamedonotdisclosethecommissionofanyoffenceandmakeoutacaseagainsttheaccused.
(4)Where,theallegationsintheFIRdonotconstituteacognizableoffencebutconstituteonlyanon-cognizableoffence,noinvestigationispermittedbyapoliceofficerwithoutanorderofaMagistrateascontemplatedunderSection155(2)oftheCode.
(5)WheretheallegationsmadeintheFIRorcomplaintaresoabsurdandinherentlyimprobableonthebasisofwhichnoprudentpersoncaneverreachajustconclusionthatthereissufficientgroundforproceedingagainsttheaccused.
(6)WherethereisanexpresslegalbarengraftedinanyoftheprovisionsSectionoftheCodeortheconcernedAct(underwhichacriminalproceedingisinstituted)totheinstitutionandcontinuanceoftheproceedingsand/orwherethereisaspecificprovisioninSectiontheCodeortheconcernedAct,providingefficaciousredressforthegrievanceoftheaggrievedparty.
(7)Whereacriminalproceedingismanifestlyattendedwithmalafideand/orwheretheproceedingismaliciouslyinstitutedwithanulteriormotiveforwreakingvengeanceontheaccusedandwithaviewtospitehimduetoprivateandpersonalgrudge.”
71.ItwouldalsoberelevanttomentionthejudgmentontheissuerenderedbytheSupremeCourtofIndiainSectionRajivThapparandothersvs.MadanLalKapoor(2013)3SCC330.InRajivThappar’scase(supra),thefollowinghasbeenheld:-
29.TheissuebeingexaminedintheinstantcaseisthejurisdictionoftheHighCourtunderSection482CrPC,ifitchoosestoquashtheinitiationoftheprosecutionagainstanaccusedatthestageofissuingprocess,oratthestageofcommittal,orevenatthestageofframingofcharges.Theseareallstagesbeforethecommencementoftheactualtrial.Thesameparameterswouldnaturallybeavailableforlaterstagesaswell.ThepowervestedintheHighCourtunderSection482CrPC,atthestagesreferredtohereinabove,wouldhavefar-reachingconsequencesinasmuchasitwouldnegatetheprosecution’s/complainant’scasewithoutallowingtheprosecution/complainanttoleadevidence.Suchadeterminationmustalwaysberenderedwithcaution,careandcircumspection.ToinvokeitsinherentjurisdictionunderSection482CrPCtheHighCourthastobefullysatisfiedthatthematerialproducedbytheaccusedissuchthatwouldleadtotheconclusionthathis/theirdefenceisbasedonsound,reasonable,andindubitablefacts;thematerialproducedissuchaswouldruleoutanddisplacetheassertionscontainedinthechargeslevelledagainsttheaccused;andthematerialproducedissuchaswouldclearlyrejectandoverruletheveracityoftheallegationscontainedintheaccusationslevelledbytheprosecution/complainant.Itshouldbesufficienttoruleout,rejectanddiscardtheaccusationslevelledbytheprosecution/complainant,withoutthenecessityofrecordinganyevidence.Forthisthematerialrelieduponbythedefenceshouldnothavebeenrefuted,oralternatively,cannotbejustifiablyrefuted,beingmaterialofsterlingandimpeccablequality.Thematerialrelieduponbytheaccusedshouldbesuchaswouldpersuadeareasonablepersontodismissandcondemntheactualbasisoftheaccusationsasfalse.Insuchasituation,thejudicialconscienceoftheHighCourtwouldpersuadeittoexerciseitspowerunderSection482CrPCtoquashsuchcriminalproceedings,forthatwouldpreventabuseofprocessofthecourt,andsecuretheendsofjustice.
30.Basedonthefactorscanvassedintheforegoingparagraphs,wewoulddelineatethefollowingstepstodeterminetheveracityofaprayerforquashmentraisedbyanaccusedbyinvokingthepowervestedintheHighCourtunderSection482CrPC:
30.1.Stepone:whetherthematerialrelieduponbytheaccusedissound,reasonable,andindubitablei.e.thematerialisofsterlingandimpeccablequality?
30.2.Steptwo:whetherthematerialrelieduponbytheaccusedwouldruleouttheassertionscontainedinthechargeslevelledagainsttheaccusedi.e.thematerialissufficienttorejectandoverrulethefactualassertionscontainedinthecomplainti.e.thematerialissuchaswouldpersuadeareasonablepersontodismissandcondemnthefactualbasisoftheaccusationsasfalse?
30.3.Stepthree:whetherthematerialrelieduponbytheaccusedhasnotbeenrefutedbytheprosecution/complainant;and/orthematerialissuchthatitcannotbejustifiablyrefutedbytheprosecution/complainant?
30.4.Stepfour:whetherproceedingwiththetrialwouldresultinanabuseofprocessofthecourt,andwouldnotservetheendsofjustice?
30.5.Iftheanswertoallthestepsisintheaffirmative,thejudicialconscienceoftheHighCourtshouldpersuadeittoquashsuchcriminalproceedingsinexerciseofpowervestedinitunderSection482CrPC.Suchexerciseofpower,besidesdoingjusticetotheaccused,wouldsavepreciouscourttime,whichwouldotherwisebewastedinholdingsuchatrial(aswellasproceedingsarisingtherefrom)speciallywhenitisclearthatthesamewouldnotconcludeintheconvictionoftheaccused.
72.Consideringtheavermentsofthecomplaint,IamoftheviewthatthefactsnarratedintheprecedingparagraphsdonotdisclosecommissionofoffencesbythepetitionersunderSections409,Section420readwith120-BSectionIPC.Further,causeofactionforfilingthecomplaintatHardoialsodidnotariseinviewofthefactthattheallegedmisappropriationdidnottakeplaceatSandila,HardoibutifatallitwasinMumbaiand,therefore,learnedMagistratedidnothavejurisdictiontoentertaintheapplicationfiledunderSection156(3)Cr.P.C.anddirectregistrationandinvestigationoftheoffence.CivildisputewasalreadypendingwhenthecurrentproceedingswereinitiatedbyfilingcomplaintunderSection156(3)Cr.P.C.andthemannerinwhichtheproceedingswereinitiatedhavebeencommenteduponbythisCourtinthreeordersdated22.11.2000,14.12.2000and16.03.2001passedintheWritPetitionNo.5238(MB)of2000and,therefore,Idonotwanttosayanythingfurtherontheissue.
73.ConsideringtheentiretyofthefactsofthecaseandthelawlaiddownbythetheSupremeCourt,continuanceoftheproceedingsagainstthepetitionerwouldbeinabuseofprocessoftheCourtandininterestofjustice,proceedingsofCriminalCaseNo.238of2000/CriminalCaseNo.377of2001,PoliceStationSandila,DistrictHardoipendingintheCourtofJudicialMagistrate,Hardoiandorderofcognizancedated05.03.2001passedbyII-AdditionalChiefJudicialMagistrate,Hardoiandallotherconsequentialproceedingsareherebyquashed.
74.Thus,thepetitionisallowed.
OrderDate:-02.07.2019
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