Gujarat High Court
M/S. Woodstar India Private Limited ... vs Kailashchandra Sharma on 23 June, 2023
NEUTRAL CITATION
R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 9925 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S. WOODSTAR INDIA PRIVATE LIMITED THRO ROHIT BABUBHAI
PATEL
Versus
KAILASHCHANDRA SHARMA
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Appearance:
RITESH D PATADIA(6460) for the Applicant(s) No. 1,2,3
BHASKAR SHARMA(9209) for the Respondent(s) No. 1
JUHI D CHAVDA(8626) for the Respondent(s) No. 1
MR RC KODEKAR(1395) for the Respondent(s) No. 2
MR. SOAHAM JOSHI, APP for the Respondent(s) No. 3
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 23/06/2023
ORAL JUDGMENT
1. Rule, waived by learned advocates appearing for the Page 1 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined respective respondents and matter is taken up for final disposal. When the matter is called out, learned senior advocate Mr. I.H. Saiyed has tendered the affidavit dated 23.6.2023 which is sworn by Mr. Rohit Babubhai Patel - applicant No.2 along with some other documents. Copy of the same is served to learned advocate Mr. Bhaskar Sharma for the respondent No.1 - Complainant Bank and the same is not served to learned advocate Mr. R.C. Kodekar appearing for the respondent No.2 - CBI.
2. On 21.6.2023, this Court has passed following order:-
"Heard learned advocates for the respective parties at length.
Learned senior advocate Mr. I.H. Saiyed prays for time to place on record some judgments. For this limited purpose, the matter is adjourned to 23.6.2023."
3. Today, learned senior advocate Mr. I.H. Saiyed appearing with Mr. Ritesh Patadia, learned advocate for the applicants has tendered some judgments prior to submitting aforesaid affidavit and has argued the point Page 2 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined of law by citing those judgments.
4. On the last occasion i.e. 21.6.2023, this Court had heard the parties and all the parties had made their respective submissions by way of materials available on record at that point of time and the matter was argued at length and for dictation of judgment at that point of time, learned senior advocate Mr. I.H. Saiyed had requested that he will produce some judgments and the matter was kept today for the limited purpose only.
5. Considering the above, this Court is restraining from observing about such conduct of advocate on record as well as arguing counsel for the petitioners by tendering affidavit at such a belated stage where the arguments are over and kept for production of some judgments. Hence the Court is not taking the said affidavit on record as the arguments were already concluded before the Court, however, this Court has heard further arguments of learned senior advocate Mr. I.H. Saiyed in the interest of justice and after considering the submissions made at the bar, more particularly, the judgments cited at the bar by the rival Page 3 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined parties, this Court is not inclined to grant any relief prayed in the present application, as prima facie case is made out against the applicant.
6. Learned senior advocate Mr. I.H. Saiyed has invited the reasoned order, and therefore, the matter is kept for dictation of the order. The present application is not entertained on merits. Hence, this application is dismissed.
7. The present application is filed for seeking following prayers:
"8.(A) Your Lordships may kindly be pleased to quash the FIR no. RC0292020A0014 registered with ACB Gandhinagar Police Station, CBI as well as all consequential proceedings arising out of the said FIR/complaint;
(B) Pending admission, hearing and final disposal of this petition, Your Lordships may kindly be pleased to stay investigation as well as the proceedings of FIR no. RC0292020A0014 registered with ACB Gandhinagar Police Station, CBI as well as all consequential proceedings arising out of the said FIR/complaint;
Page 4 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023
NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined 8(AA) YOUR LORDSHIPS may be please to quash and set aside issuance of process by Ld. Additional Chief Judicial Magistrate & CBI Judge, Ahmedabad in CBI Criminal Case No. 3 of 2022 arising out of Final Report dated 15.12.2021 filed by Respondent No.
2. 8(BB) Pending hearing and final disposal of this Petition, YOUR LORDSHIP may be pleased to stay further proceedings before Ld. Additional Chief Judicial Magistrate & CBI Judge, Ahmedabad in CBI Criminal Case No. 3 of 2022.
(C) The Hon'ble Court may be pleased to grant such other and further relief and/or order in the interest of justice in favour of the applicants." 8.1 Brief facts as per the case of the applicants in this application are as such that on 19.03.2019, the respondent no.1 addressed a communication to the applicants for the irregularities observed in accounts of the applicant no.1 in forensic audit stating that account of the applicant no.1 was NPA since 10.01.2014 and forensic audit was carried out and as per the forensic audit of M/s. Delloitte dated 07.02.2019, some serious Page 5 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined irregularities have been observed and enumerated in the said communication that during the analysis of the Bank account statement, it was noted that 24 payment transactions aggregating to Rs.0.24 crores from the borrowers' account which appeared to be repayment towards loan/finances availed by borrower from HDFC Bank. It is further the case of the applicants in this application that 29 instances found aggregating to Rs.6.36 crores were received by the borrowers from various private parties and the applicant no.3 and there were subsequent payment on the same day aggregating to Rs.6.36 crores by the borrowers to the aforementioned related party M/s. Timsy Traders. Further, similarly, there were 17 instances where fund amount of Rs.3.67 crores were received by the said party - M/s. Timsy Traders from M/s. Green Gold Timber Pvt. Ltd. This was received by the aforesaid related party M/s. Timsy Traders from M/s. Green Gold Timber Pvt. Ltd. etc. and noted that there were subsequent payment on the same day aggregating to Rs.3.67 crores from the account of the borrowers.
8.2 It is further the case of the applicants in this Page 6 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined application that as per the forensic audit report, 19 instances were different between actual receipt from the said party in the account of the applicant no.1 viz-a-viz fund which should have been received from the said party as per the outstanding debtors' statement was Rs.31.01 crores. That, in absence of accounting record of the applicant no.1, the auditor could not consult to ascertain whether the said receipt from the debtor party were received by the applicant no.1 in the Bank account maintained by the borrower in the Bank other than Bank of Baroda. It is further the case of the applicants in this application that there were differences in rates of the same products for the same month in statement submitted for CC and PC account. That, average unit rate of the component of inventory viz. wooden flooring as per stocks statement for PC account was Rs.349.22 as compared to per unit rate of Rs.158.78 for same component mentioned in stocks statement submitted by the applicant no.1 for CC account. That, the forensic auditor has also stated that it came across 7 instances, where the unit rate of closing inventory for certain type in the given current month was more than 49.98% to 139.54 per unit rate of the same component of closing Page 7 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined inventory as per the stocks statement for the preceding month. It is therefore, felt by the respondent no.1 that offence has been committed by the applicants and some unknown public servant.
8.3 It is further the case of the applicants in this application that another communication was received by the applicants, where a show cause notice dated 31.01.2019 was issued declaring the applicants as willful defaulters and in response to the said show cause notice, the applicants requested for personal hearing before the Committee of willful defaulter headed by executive Director and accordingly, they were afforded personal hearing on 19.07.2019 with certain conditions. It is further the case of the applicants in this application that pursuant to the aforesaid letter dated 02.07.2019 and also in response to another letter, the applicant no.1 submitted its reply stating that the report was not acceptable to the applicants because forensic auditors had not verified their books of accounts and they had reached to the same conclusion only on the basis of the statements of Bank accounts of the applicant no.1 and that the forensic auditors have never visited the business Page 8 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined premises of the applicant no.1 including the factory. It is further the case of the applicants in this application that the forensic auditors had never provided any opportunity to make representations on the findings of the forensic auditors and therefore, the report was half-hearted. It is further the case of the applicants in this application that observations of the forensic auditors did not mention the period covered under the forensic audit. However, the applicants presumed that the audit report was pertaining to financial years 2011-12, 2012-13 covering the 2013-14 and period from 01.04.2011 to 31.03.2014. It is further the case of the applicants in this application that the applicants strongly resisted that the Directors of the Company had neither siphoned out nor diverted any funds from the Company. In fact, the applicant no.2 had raised unsecured loans from his personal sources which had been introduced in the business from time to time which comes to Rs.7.63 crores during the period 01.04.2011 to 31.03.2014. Similarly, the applicant no.3 also raised unsecured loans from her personal sources and introduced the funds in the Company during the period from 01.04.2011 to 31.03.2014 to the tune of Rs.9.51 crores. It is further the case of the applicants in Page 9 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined this application that HOF Furniture Systems Pvt. Ltd. was sold woods by the Company for the above-mentioned period to the tune of Rs.4,48,85,857/- and full payments were received from the said party, whereas Ambica Timber Mart was also sold woods worth Rs.1,21,36,509/- during the said period and payments were received from the said customers leaving a debit balance of only Rs.8,14,180/-. It is further the case of the applicants in this application that Timbor Home Ltd. was also sold goods and outstanding was Rs.3.05 crores as 31.03.2014. That Malu Tradelink Pvt. Ltd. is an associate concern of Timbor Home Ltd. and it has a debit balance of Rs.3.13 crores. That, another party namely Star Enterprise and Industries has a credit balance of Rs.49.40 lacks as on 31.03.2014 and credit balance of applicant no.3 has also credit balance of Rs.95.46 lacks as on 31.03.2014 which shows that applicants no.2 and 3 had introduced large funds from time to time with the paucity of working capital which was not adequately supplanted by the Bank's funds and therefore, the report of the forensic auditor has lost sight of the fact of the funds of huge amount introduced by the applicants no.2 and 3 by way of unsecured loans or from customers respectively and at Page 10 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined the end of period of 31.03.2014, the balance showed an aggregate credit balance of Rs.4.18 crores. Thus, the applicants no.2 and 3 have made sincere efforts by raising unsecured loans from their personal resources and had introduced funds in the Company to run the Company smoothly and therefore, the report of the forensic auditor is not prepared after completing investigation.
8.4 It is further the case of the applicants in this application that on 16.11.2019, the respondent no.1 addressed another communication to the applicants and M/s. Timsy Traders with respect to compromise proposal of (1) applicant no.1 (2) M/s. Timsy Traders (3) Housing loan of the applicants no.2 and 3 and another. It is stated in the said communication that the One Time Settlement proposal given by the applicants was approved by the higher authority by accepting compromise offer for Rs.15.25 crores as a final settlement of the accounts. The applicants no.1 and 2, by letter dated 03.06.2020, addressed letters to the respondent no.1 for extension of time period for full and final settlement under the OTS proposal due to COVID-19. By letter dated 03.09.2020, Page 11 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined the respondent no. 1 accepted request for extension of payment due to COVID-19 with certain conditions. It is further the case of the applicants in this application that the respondent no.1 addressed communication dated 09.09.2020 to the applicants and another and issued provisional No Objection Certificate for release of mortgage property of the applicants to the tune of Rs.14.40 crores plus interest as per the compromise terms and conditions. It is further the case of the applicants in this application that the respondent no.1 addressed communication dated 24.02.2021 stating that NPA account of the applicant no.1 was compromised with its two associate concern M/s. Timay Traders and Mr. Dhruvikbhai Babubhai Patel for Rs.15.25 lacks and the pending dues to be recovered in the accounts till 28.2.2021 is Rs.10,94,03,945/-. It is further the case of the applicants in this application that provisional No Objection Certificate was issued by letter dated 09.09.2020 and the account of the applicant no.1 along with other two accounts would be liquidated after receiving the amount as per the terms of OTS and settled dues of the mortgaged property shall be released. It is further the case of the applicants in this Page 12 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined application that after the said communication, the entire due amount as per the terms of OTS has been paid by the applicants and final no due certificate has been issued by the Bank. To the utmost surprise of the applicants that during the OTS settlement procedure was going on, the respondent no.1 filed a complaint as aforesaid. Thereafter, being aggrieved and dissatisfied by the F.I.R., the applicants have filed this application.
9. Heard learned senior advocate Mr. I.H. Saiyed appearing with Mr. Ritesh Patadia for the applicants, learned advocate Mr. Bhaskar Sharma for the respondent No.1 - Complainant Bank, learned advocate Mr. R.C. Kodekar for the respondent No.2 - CBI and learned APP Mr. Soaham Joshi for the respondent No.3 - State.
10. Though learned senior advocate Mr. I.H. Saiyed had sought time to show some judgments on last occasion, as the Court was not inclined to grant any relief. Today, surprisingly he has tried to tender affidavit with some other documents and copy of which is also not served to learned advocate Mr. R.C. Kodekar for the respondent No.2 - CBI as the matter was fully argued on last Page 13 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined occasion and the matter is kept today for the limited purpose only i.e. to show one or two judgments only and therefore, it is not appropriate to accept any affidavit on record at this stage.
11.1 Learned senior advocate Mr. I.H. Saiyed for the applicants has submitted that on bare reading of the complaint, it seems that F.I.R. is filed under the provisions of Section 406, 420 of the Indian Penal Code and thereafter, charge-sheet is filed under Sections 420 and 120B of the Indian Penal Code and therefore, he has submitted that when charge-sheet is filed only under Section 420 and 120B of the India Penal Code in the facts and circumstances of the case, no case is made out whereby the ingredients of Section 420 is satisfied. He has drawn my attention towards provisions of Section 420 of the Indian Penal Code and has submitted that there must be a dishonest inducement to deceive a person to deliver any property to any other person or there must be intention to deceive person from very inception. He has drawn my attention towards the certain facts of the matter, whereby the applicants have availed the lone with the bank viz., Bank of Baroda. He Page 14 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined has further submitted that pursuant to the non- transaction which is availed in the year 2013, the applicants have paid substantial amount and the account become NPA in the year 2014 and after forensic audit was carried out, and as per the forensic audit of M/s. Delloitte dated 07.02.2019, some serious irregularities have been observed and enumerated in the communication dated 19.3.2019 that during the analysis of the Bank account statement. It was noted that 24 payment transactions aggregating to Rs.0.24 crores from the borrowers' account which appeared to be repayment towards loan/finances availed by borrower from HDFC Bank. It transpires that pursuant to the said communication, another communication was received by the applicants whereby show cause notice dated 31.1.2019 was issued declaring the applicants as willful defaulters and applicants have also responded that communication by asking for personal hearing. They were afforded personal hearing on 19.7.2019 with certain conditions. He has further submitted that thereafter on 16.11.2019, the respondent no.1 addressed another communication to the applicants and M/s. Timsy Traders with respect to compromise proposal of (1) applicant no.1 (2) M/s. Timsy Page 15 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined Traders (3) Housing loan of the applicants no.2 and 3 and another and in the said communication that the One Time Settlement proposal given by the applicants was approved by the higher authority by accepting compromise offer for Rs.15.25 crores as a final settlement of the accounts. Applicants have addressed the letter dated 3.6.2020 to the respondent No.1 for extension of time period for full and final settlement under the OTS proposal due to COVID-19. Thereafter, on 9.9.2020 the respondent no.1 addressed a communication to the applicants and another and issued provisional No Objection Certificate for release of mortgage property of the applicants to the tune of Rs.14.40 crores plus interest as per the compromise terms and conditions. Respondent no.1 addressed communication dated 24.02.2021 stating that NPA account of the applicant no.1 was compromised with its two associates concern M/ s. Timay Traders and Mr. Dhruvikbhai Babubhai Patel for Rs.15.25 lacks and the pending dues to be recovered in the accounts till 28.2.2021 is Rs.10,94,03,945/-. Thereafter, entire due amount as per the terms of OTS has been paid by the applicants and final no due certificate has been issued by the Bank by no due Page 16 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined certificate dated 22.3.2021. He has further submitted that surprisingly for the applicants, when the OTS procedure was going on, respondent no.1 filed a complaint which is impugned in this application and therefore, he has submitted that no case is made out as no intention from inception to deceive neither there is iota of evidence as to illegal transaction of siphoned out of funds by the applicants.
11.2.1 He has drawn attention of this Court towards the judgment of the Hon'ble Apex Court in the case of Vesa Holdings Private Limited and Another versus State of Kerala and Others reported in (2015) 8 SCC 293, and para 12 is as under:
"12. From the decisions cited by the appellant, the settled proposition of law is that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. If the intention to cheat has developed later on, the same cannot amount to cheating. In other words for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest Page 17 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out."
12.2.2 He has drawn attention of this Court towards the judgment of the Hon'ble Apex Court in the case of Rekha Jain vs. The State of Karnataka & Anr. reported in 2022 LiveLaw (SC) 468 and para 8 is as under:
"8. At the outset, it is required to be noted that the offence alleged against the appellant - accused - Rekha Jain is for the offence under Section 420 of IPC. She has been now charged sheeted for the said offence. However, considering the allegations in FIR/complaint, it can be seen that the entire and all the allegations are against the accused Kamalesh Mulchand Jain. In the complaint/FIR, there are no allegations whatsoever to the effect that the accused Rekha Jain induced the complainant to part with the gold jewellery. Therefore, in the absence of any allegation of inducement by the accused Rekha Jain, she cannot be prosecuted for the offence under Section 420 of IPC. There must be a dishonest inducement by the accused. Page 18 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023
NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined As per Section 420 of IPC, whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, can be said to have committed the offence under Section 420 of IPC. Therefore, to make out a case against a person for the offence under Section 420 of IPC, there must be a dishonest inducement to deceive a person to deliver any property to any other person. In the present case, there is no allegation at all against accused - Rekha Jain of any inducement by her to deceive and to deliver the gold jewellery. The allegations of dishonest inducement and cheating are against her husband - accused - Kamalesh Mulchand Jain. Therefore, considering the allegations in the FIR/complaint as they are, and in the absence of any allegation of dishonest inducement by Rekha Jain, it cannot be said that she has committed any offence under Section 420 of IPC for which she is now charge sheeted. Therefore, the High Court has committed a grave error in not quashing the criminal proceedings against Rekha Jain for the offence under Section 420 of IPC. This is a fit case where the High Court could have exercised its powers under Section 482 of Cr.PC and to quash the criminal proceedings against Rekha Jain for the offence under Section 420 of IPC."
12.2.3. He has drawn attention of this Court towards Page 19 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined the judgment of this Hon'ble Court in the case of Nirav Ajay Mehta versus State of Gujarat reported in Criminal Misc. Application (For Quashing & Set Aside F.I.R./Order) No.14324 of 2015 dated 27.10.2015, para 6 is as under:
"5. Mr. Thakkar, the learned counsel appearing for the Corporation submitted that pursuant to a settlement arrived at between the Corporation and the applicants, a figure was arrived at and the entire amount according to the understanding has been deposited by the applicants. He also invited my attention to the No- due Certificate issued by the Corporation in favour of the applicants dated 16th April, 2015 which is at Annexure-C to this petition. He further pointed out that the accusation even according to the charge-sheet against the applicants is only with regard to failure to repay the amount of loan availed of from the Corporation. There are no allegations of any forgery or any false representation by the applicants at the time when the loan was availed of.
6. Taking into consideration the nature of the offence and the fact that the Corporation, pursuant to a settlement, has been able to recover the amount from the applicants and the Corporation itself does not want to proceed further, no useful purpose would be served Page 20 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined to continue with the prosecution so far as the applicants are concerned."
11.3 By relying on above judgments, he has submitted that there must be specific ingredients of mesne rea and there must be specific ingredients which can satisfy the provisions of Section 420 of the Indian Penal Code. Looking to the entire transaction which is substantially towards the commercial transaction with the bank by way of loan, no where it is the case of the Bank that applicants are having intention from the very inception to deceive the Bank by way of due of the Bank. He has drawn the attention of this Court towards Section 415 of the Indian Penal Code to show that since ingredients of Section 415 of the Indian Penal Code is not satisfied in the facts and circumstances of the present case, no offence can be made out in view of Section 420 of the Indian Penal Code. He has further submitted that neither there is dishonest inducement to deceive a person to deliver any property and therefore, proceeding of the present case is required to be quashed in view of the judgment of the Hon'ble Apex Court in the case of State of Haryana V/s Bhajan Lal reported in Page 21 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined AIR 1992 SC 604 and another subsequent judgments of the Hon'ble Apex Court by which this Court should exercise the powers under Section 482 of the Criminal Procedure Code, 1973 to prevent the abuse of process of law.
12. Per contra, learned advocate Mr. R.C. Kodekar for the respondent No.2 - CBI has strongly objected the submissions made at the bar and has submitted that there are judgments of the year 2019 whereby the Hon'ble Apex Court has taken view and also in recent judgment in the case of C.B.I vs A.Ravishankar Prasad & Ors. reported in (2009) 6 SCC 351 and more particularly, paragraphs 40 to 43 and 46 are relevant. He has heavily relied on the judgments of the Hon'ble Apex Court in the case of Paramjeet Batra vs State Of Uttarakhand & Ors reported in (2013) 11 SCC 613. He has also drawn my attention towards the judgment of the Hon'ble Apex Court in the case of R. Nagender Yadav Vs. The State Of Telangana reported in (2023) 2 SCC 195, and has submitted that where the compliant disclosing the civil complaint, there may also have criminal texture and considering the totality of facts and Page 22 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined circumstances of each case, the Court should examine the powers. He has lastly relied upon the judgment of the Hon'ble Apex Court in the case of Neeharika Infrastructure Pvt. Ltd. versus State of Maharashtra and Others reported in 2021 SCC OnLine SC 315, and more particularly para 80 is relevant and has submitted that Court would not thwart any investigation into the cognizable offences and therefore, he has submitted that extraordinary inherent powers of the Court do not confer any arbitrary jurisdiction on the Court to act according to its whims or caprice and has prayed to dismiss the present application.
13. Learned advocate Mr. Bhaskar Sharma for the respondent No.1 - Complainant Bank has submitted that merely because Bank has accepted the amount towards OTS proposal, do not absolve the applicants from criminal liability. He has submitted that there is specific allegation in the F.I.R. as well as charge-sheet, which constitute prima facie offence under Section 420 of the Indian Penal Code and it clearly transpires that there is a case of diversion of funds and though the applicants are not submitting that they are co-operating the Bank Page 23 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined by repaying the due amount, if that would be real facts of the matter, their account would not have become NPA. No bank has to file compliant and then only the matter will be settled and during the process of OTS, Bank has to file complaint. Therefore, he has submitted that prima facie there is larger conspiracy under Section 120B of the Indian Penal Code as well as there is prima facie material available on the record which constitute offence under Section 420 of the Indian Penal Code and therefore, this Court should not exercise powers under Section 482 of the Criminal Procedure Code, which should be exercised very sparingly, in a case where the Court finds that there is absolute abuse of process of law. He has submitted that let the applicants may face the proceeding of trial and defend their case there.
14. Learned APP Mr. Soaham Joshi for the respondent No.3 - State has supported and adopted the arguments advanced by learned advocate Mr. R.C. Kodekar for the respondent No.2 - CBI as well as learned advocate Mr. Bhaskar Sharma for the respondent No.1 - Complainant Bank and has opposed the granting any prayer made in this application to the applicants as prima facie case is Page 24 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined made out against the applicants and the Court should not exercise its powers under Section 482 of the Criminal Procedure of Code at this stage and more particularly, when the chare-sheet is filed in this application.
15.1 I have considered the rival submissions made at the bar. I have also considered the judgments cited at the bar. It appears that the learned advocate is much harping non-satisfaction of the elements of Section 420 of the Indian Penal Code in the current case's facts and circumstances. Furthermore, it is necessary to refer to Sections 415 and 420 of the Indian Penal Code, which read as follows:"
"Section 415 in The Indian Penal Code:-
415. Cheating.--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, Page 25 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined reputation or property, is said to "cheat". Explanation.--A dishonest concealment of facts is a deception within the meaning of this section. Illustrations
(a) A, by falsely pretending to be in the Civil Service, intentionally deceives Z, and thus dishonestly induces Z to let him have on credit goods for which he does not mean to pay. A cheats.
(b) A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article. A cheats.
(c) A, by exhibiting to Z a false sample of an article, inten- tionally deceives Z into believing that the article corresponds with the sample, and thereby, dishonestly induces Z to buy and pay for the article. A cheats.
(d) A, by tendering in payment for an article a bill on a house with which A keeps no money, and by which A expects that the bill will be dishonored, intentionally deceives Z, and thereby dishonestly induces Z to deliver the article, intending not to pay for it. A cheats.
(e) A, by pledging as diamonds article which he knows are not diamonds, intentionally deceives Z, and thereby dishonestly induces Z to lend money. A cheats.
(f) A intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly induces Z to lend him money. A not intending Page 26 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined to repay it. A cheats.
(g) A intentionally deceives Z into a belief that A means to deliver to Z a certain quantity of indigo plant which he does not intend to deliver, and thereby dishonestly induces Z to advance money upon the faith of such delivery. A cheats; but if A, at the time of obtaining the money, intends to deliver the indigo plant, and afterwards breaks his contract and does not deliver it, he does not cheat, but is liable only to a civil action for breach of contract.
(h) A intentionally deceives Z into a belief that A has performed A's part of a contract made with Z, which he has not performed, and thereby dishonestly induces Z to pay money. A cheats.
(i) A sells and conveys an estate to B. A, knowing that in consequence of such sale he has no right to the property, sells or mortgages the same to Z, without disclosing the fact of the previous sale and conveyance to B, and receives the purchase or mortgage money from Z. A cheats. Section 420 in The Indian Penal Code:-
420. Cheating and dishonestly inducing delivery of property.
--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall Page 27 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
15.2 Furthermore, upon considering the First Information Report (F.I.R.) and the charge-sheet filed by the C.B.I. against the applicants in the present proceeding, it becomes evident that the manager of the bank has lodged a complaint against the applicants. After a thorough investigation, the C.B.I. has found substantial evidence supporting the offense under Section 120B read with Section 420 of the I.P.C., as well as the substantive offense of Section 420 of the I.P.C., which is made out. It is also apparent from the charge-sheet documents that the applicants are undeniably involved in the entire transaction. The charge-sheet contains numerous documents that clearly indicate the applicants' involvement. From the paper of charge-sheet with the help of some of the officers of the Bank, the applicants have also observed that there is substantial cash withdrawal and deposit of more than Rs.1 crore from the Cash Credit Account of Bank of Baroda and accused Nos.2 and 3 have acted in criminal conspiracy. By conspiracy, they have cheated the Bank of Baroda by Page 28 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined diverting funds of credit facilities of M/s WIPL to the tune of Rs.2.6 crores. It also transpires that in the aforesaid criminal acts of commission and omission, (i) Shri Rohit Babubhai Patel - accused No.2, Director of M/s Woodstar India Private Limited, (ii) Smt. Dipti Rohit Patel - accused No.3, Director of M/s Woodstar India Private Limited have caused a rankful loss to Bank of Baroda and correspondence wrongful loss to Bank of Baroda as well as correspondence wrongful gain to themselves during the period 2008-14. Thus, Shri Rohit Babubhai Patel - accused No.2, Director of M/s Woodstar India Private Limited, and Smt. Dipti Rohit Patel - accused No.3, Director of M/s Woodstar India Private Limited have committed offence under Section 420 of the I.P.C. This is sum and substances of the charge-sheet. 15.3 Taking into account the fact that the Bank has accepted the O.T.S. (One Time Settlement) proposal, which is significantly lower than the principal amount outstanding from the applicants, and considering that the Bank had to file criminal complaints while processing the applicants' OTS proposal, it indicates the behavior of the applicants. From the very beginning, the applicants have Page 29 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined attempted to divert funds starting from 2008-14 by making withdrawals and transferring funds to other accounts, resulting in substantial losses for the Bank. Even with the OTA (One Time Settlement) arrangement, the Bank has not received the actual outstanding amount of money, which ultimately constitutes a significant loss to the public exchequer. The Bank entered into a compromise and accepted the money through the OTS proposal, which is offered in accordance with the policies of the Government of India and the Reserve Bank of India. However, this does not imply that the the applicants have ultimately repaid the dues pursuant to the proceeding initiated in the D.R.T and pursuant to the OTS proposal. Therefore, at the best, it can be said that they have at present complied with the liability incurred by way of civil proceedings but that itself does not construed that even criminal liability accrued is, for which the necessary proceedings are initiated and investigation was also carried out by the competent, required to be quashed and set aside. For that purpose, this Court has referred to the judgment of the Hon'ble Apex Court in the case of C.B.I versus A. Ravishankar Prasad & Ors. reported in (2009) 6 SCC 351 and more Page 30 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined particularly, paragraphs 40 to 43 and 46 are relevant, which is as under;
"40. Careful analysis of all these judgments clearly reveals that the exercise of inherent powers would entirely depend on the facts and circumstances of the each case. The object incorporating inherent powers in the Code is to prevent abuse of the process of the Court or to secure ends of justice.
41. Both English and the Indian Courts have consistently taken the view that the inherent powers can be exercised in those exceptional cases where the allegations made in the first information report or the complaint, even if are taken on their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
42. When we apply the settled legal position to the facts of this case it is not possible to conclude that the complaint and charge-sheet prima facie do not constitute any offence against the respondents. It is also not possible to conclude that material on record taken on face value make out no case under Section 120-B read with Sec. 420 IPC against the respondents. Prima facie, we are of the opinion that Page 31 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined this is one case where adequate material is available on record to proceed against the respondents.
43. In our considered view it was extremely unfortunate that the High Court in the impugned judgment has erroneously invoked inherent power of the Court under Sec. 482 of the Code of Criminal Procedure. The High Court ought to have considered the entire material available to establish a case against the respondents under Sec. 120-B read with Sec. 420 IPC. It is significant that the respondents and the other bank officials share the charges under Sec. 120-B read with Sec. 420 IPC. Quashing the charges against the respondents would also have very serious repercussions on the pending cases against the other bank officials.
46. Before parting with the case we would like to observe that mere re-payment of loan under a settlement cannot exempt the accused from the criminal proceeding in the facts of this case."
15.4 Further, in the judgment of the Hon'ble Apex Court in the case of Neeharika Infrastructure Pvt. Ltd. versus State of Maharashtra and Others reported in 2021 SCC Page 32 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined OnLine SC 315, and more particularly para 80 is relevant, which is as under:
"80. In view of the above and for the reasons stated above, our final conclusions on the principal/core issue, whether the High Court would be justified in passing an interim order of stay of investigation and/or "no coercive steps to be adopted", during the pendency of the quashing petition under Section 482 Cr.P.C and/or under Article 226 of the Constitution of India and in what circumstances and whether the High Court would be justified in passing the order of not to arrest the accused or "no coercive steps to be adopted" during the investigation or till the final report/chargesheet is filed under Section 173 Cr.P.C., while dismissing/disposing of/not entertaining/not quashing the criminal proceedings/complaint/FIR in exercise of powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India, our final conclusions are as under:
i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;
ii) Courts would not thwart any investigation into the Page 33 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined cognizable offences;
iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on;
iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases (not to be confused with the formation in the context of death penalty).
v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule;
viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of Page 34 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined the State operate in two specific spheres of activities and one ought not to tread over the other sphere;
ix) The functions of the judiciary and the police are complementary, not overlapping;
x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;
xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the Page 35 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;
xiii) The power under Section 482 Cr.P.C. is very wide, but conferment of wide power requires the court to be more cautious. It casts an onerous and more diligent duty on the court;
xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint;
xv) When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR; Page 36 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023
NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined xvi) The aforesaid parameters would be applicable and/or the aforesaid aspects are required to be considered by the High Court while passing an interim order in a quashing petition in exercise of powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. However, an interim order of stay of investigation during the pendency of the quashing petition can be passed with circumspection. Such an interim order should not require to be passed routinely, casually and/or mechanically. Normally, when the investigation is in progress and the facts are hazy and the entire evidence/material is not before the High Court, the High Court should restrain itself from passing the interim order of not to arrest or "no coercive steps to be adopted" and the accused should be relegated to apply for anticipatory bail under Section 438 Cr.P.C. before the competent court. The High Court shall not and as such is not justified in passing the order of not to arrest and/or "no coercive steps" either during the investigation or till the investigation is completed and/or till the final report/chargesheet is filed under Section 173 Cr.P.C., while dismissing/disposing of the quashing petition under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. xvii) Even in a case where the High Court is prima facie Page 37 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined of the opinion that an exceptional case is made out for grant of interim stay of further investigation, after considering the broad parameters while exercising the powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India referred to hereinabove, the High Court has to give brief reasons why such an interim order is warranted and/or is required to be passed so that it can demonstrate the application of mind by the Court and the higher forum can consider what was weighed with the High Court while passing such an interim order. xviii) Whenever an interim order is passed by the High Court of "no coercive steps to be adopted"
within the aforesaid parameters, the High Court must clarify what does it mean by "no coercive steps to be adopted" as the term "no coercive steps to be adopted" can be said to be too vague and/or broad which can be misunderstood and/or misapplied."
15.5 It is also fruitful to refer the judgment of the Hon'ble Apex Court in the case of State Of Tamil Nadu versus R. Vasanthi Stanley reported in 2016 (1) SCC 376 and more particularly para 11 to 14 are relevant, which are as under:
11. After distinguishing many a decision, the Court relied Page 38 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined upon Central Bureau of Investigation v. Jagjit Singh wherein the court being moved by the CBI had overturned the order of the High Court quashing the criminal proceeding and in that backdrop had taken note of the fact that accused persons had dishonestly induced delivery of the property of the bank and had used forged documents as genuine. Thereafter, the Court proceeded to state that:-
"23......availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the chargesheet cannot be put in the compartment of an individual or personal wrong. It is a social wrong and it has immense societal impact. It is an accepted principle of handling of finance that whenever there is manipulation and cleverly conceived contrivance to avail of these kind of benefits it cannot be regarded as a case having overwhelmingly and predominantingly of civil character. The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong. It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity Page 39 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a "no due certificate" and enjoy the benefit of quashing of the criminal proceeding on the hypostasis that nothing more remains to be done. The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction Under Article 226 of the Constitution or Under Section 482 of the Code and quash the proceeding. It is not legally permissible. The Court is expected to be on guard to these kinds of adroit moves. The High Court, we humbly remind, should have dealt with the matter keeping in mind that in these kind of litigations the accused when perceives a tiny gleam of success, readily invokes the inherent jurisdiction for quashing of the criminal proceeding. The court's principal duty, at that juncture, should be to scan the entire facts to find out the thrust of allegations and the crux of the settlement. It is the experience of the Judge comes to his aid and the said experience should be used with care, caution, circumspection and courageous prudence."
12. Recently, in CBI v. Maninder Singh18, the allegation against the accused was that bill of lading presented by the proprietors of the accused firms were found forged and cases were registered under Section 120-B IPC read with Section 420 IPC and Section 5(2) read with Section 5(1) (d) of Page 40 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined Prevention of Corruption Act, 1947 and further substantive offences under Sections 420, 467, 468 and 471 IPC. The accused person arrived at a settlement with the Bank and thereafter moved the High Court under Section 482 CrPC for quashing of the FIR. The High Court placed reliance on the decision in Nikhil Merchant (supra) and allowed the petition and directed for quashing of the criminal proceedings. This Court placed reliance on Vikram Anantrai Doshi and others (supra) and came to hold as follows:-
"10. The allegation against the respondent is 'forgery' for the purpose of cheating and use of forged documents as genuine in order to embezzle the public money. After facing such serious charges of forgery, the Respondent wants the proceedings to be quashed on account of settlement with the bank. The development in means of communication, science & technology etc. have led to an enormous increase in economic crimes viz. phishing, ATM frauds etc. which are being committed by intelligent but devious individuals involving huge sums of public or government money. These are actually public wrongs or crimes committed against society and the gravity and magnitude attached to these offences is concentrated at public at large.
11. The inherent power of the High Court Under Section 482 Code of Criminal Procedure should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or Page 41 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy."
13. Testing the present controversy on the anvil of the aforesaid principles, we are disposed to think that the High Court has been erroneously guided by the ambit and sweep of power under Section 482 CrPC for quashing the proceedings. It has absolutely fallaciously opined that the ccontinuance of the proceeding will be the abuse of the process of the Court. It has been categorically held in Janta Dal v. H.S. Chowdhary19, that the inherent power under Section 482 CrPC though unrestricted and undefined should not be capriciously or arbitrarily exercised, but should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. In Inder Mohan Goswami (supra), it has been emphasised that inherent powers have to be exercised sparingly, carefully and with great caution. Page 42 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023
NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined
14. We will be failing in our duty unless we advert to the proponements propounded with regard to other aspects. They are really matters of concern and deserve to be addressed. The submission as put forth is that the first respondent is a lady and she was following the command of her husband and signed the documents without being aware about the transactions entered into by the husband and nature of the business. The allegation in the chargesheet is that she has signed the pronotes. That apart, as further alleged, she is a co-applicant in two cases and guarantor in other two cases. She was an Assistant Commissioner of Commercial Taxes and after taking voluntary retirement she has joined the public life, and became a member of the 'Rajya Sabha'. Emphasis is also laid that she is a lady and there is no warrant to continue the criminal proceeding when she has paid the dues of the banks, and if anything further is due that shall be made good. The assertions as regards the ignorance are a mere pretence and sans substance given the facts. Lack of awareness, knowledge or intent is neither to be considered nor accepted in economic offences. The submission assiduously presented on gender leaves us unimpressed. An offence under the criminal law is an offence and it does not depend upon the gender of an accused. True it is, there are certain provisions in CrPC relating to exercise of jurisdiction under Section 437, etc. therein but that altogether pertains to a different sphere. A person committing a murder or getting involved in a financial scam or forgery of documents, cannot claim discharge or acquittal on the ground of her gender as that is neither constitutionally nor statutorily a valid argument. The Page 43 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined offenceis gender neutral in this case. We say no more on this score."
15.6 Based on the completion of the investigation and the filing of the charge-sheet, I am of the opinion that there is sufficient evidence against the applicants to proceed with the trial on the charges under Sections 420 and 120B of the I.P.C. I am of the opinion that the judgments cited by the learned advocate for the applicants, but they are not applicable in the context of the present case whereby, the records clearly indicate that from the very beginning, after obtaining the loan, the applicants' intention was to deceive the Bank by diverting funds to other accounts by siphoning out funds and also withdrawing the substantial amount. Subsequently, when the Bank initiated recovery proceedings under civil law, an OTS proposal was submitted, accompanied by a relatively small payment compared to the liability incurred through the loan account.
15.7 Taking into account all these factors, I found that this is not an fit case for the Court to exercise its powers under Section 482 of the Criminal Procedure Page 44 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023 NEUTRAL CITATION R/CR.MA/9925/2021 JUDGMENT DATED: 23/06/2023 undefined Code, 1973. Considering the conduct of the applicants over the years, as well as the conduct of certain bank officers against whom the Bank is also taking necessary action, it is evident that protecting public funds is of utmost importance. Moreover, there is substantial material indicating a prima facie offense committed by the applicants. Therefore, I found no reason to interfere in the proceedings initiated based on the F.I.R. and the charge-sheet filed by the CBI in the aforementioned F.I.R. Consequently, the present application deserves to be dismissed.
16. Accordingly, the present application is dismissed with no order as to costs.
(SANDEEP N. BHATT,J) DIWAKAR SHUKLA Page 45 of 45 Downloaded on : Sat Sep 16 20:33:25 IST 2023