Calcutta High Court (Appellete Side)
Nabarun Bhattacharjee & Ors vs S.P. Cbi on 24 September, 2014
Author: Subrata Talukdar
Bench: Subrata Talukdar
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
APPELLATE SIDE
PRESENT:
The Hon'ble Mr. Justice Subrata Talukdar
CRR 277 of 2014
Nabarun Bhattacharjee & Ors.
-vs.-
S.P. CBI, EOW, Kolkata
For the Petitioner : Mr. Pratik Kr. Bhattacharya
Mr. Sourav Mukherjee
For the Opposite Party : Mr. Himangshu De
Mr. Mritunjoy Chatterjee
Heard on : 25.02.2014 & 04.03.2014
Judgement on : 24/09/2014
Subrata Talukdar, J.: In this application under Article 227 of the
Constitution of India read with Section 482 of the Code of Criminal
Procedure (for short CrPC) the petitioners pray for quashing of the
impugned proceeding including the Order No. 63 dated 5th October,
2013 passed by the Ld. 3rd Special Court, CBI in Special Case No. 06
of 2004 arising out of RC Case No. 03/E/2002 dated 28th June, 2002
under Sections 120B read with 406/420/468/471 of the Indian Penal
Code (for short IPC) read with Sections 13(2) and 13(1)(d) of the
Prevention of Corruption Act, 1988 (for short the 1988 Act).
By the said impugned Order No. 63 dated 5th October, 2013 the
Ld. Special CBI Court was pleased to dismiss the application for
discharge filed by the present petitioner under Section 239 CrPC in
connection with the said pending proceeding.
Taking this Court to the contents of the said application under
Section 239 CrPC which is annexed to the present CRR, Shri Pratik
Kumar Bhattacharya, Ld. Counsel for the petitioners has argued as
follows:-
i) That on the basis of a complaint dated 27th June, 2002 lodged
by one Shri N. Zeevagan, Deputy General Manager, Canara
Bank, Circle Office, Kolkata an FIR was started and RC Case
No. 3/E/2002 was registered by the CBI against the present
petitioner. Thereafter charge sheet was filed in connection with
the said case being charge sheet no. 10 dated 19th April, 2004
recording the above noted offences.
ii) It has been alleged against the petitioner no. 1, the proprietor of
one M/s Machinery and Allied Products that credit facilities
were being enjoyed by the firm of the petitioner no. 1 from the
UCO Bank Branch, Sadananda Road, Kolkata. Such facilities
were being enjoyed during the incumbency of one Shri Manash
Basu, the then Branch Manager of UCO Bank.
Thereafter the said firm was converted into a Pvt. Ltd. Company
on the 8th of October, 1997 with the petitioner no.1 and the petitioner
nos. 2 & 3 as the three directors of the said company being M/s.
Machinery and Allied Products Pvt. Ltd. The company then applied
for credit facilities at Canara Bank Lower Circle Road Branch,
Kolkata. Such credit facilities were sanctioned by the Kolkata Circle
Office of Canara Bank.
iii) One of the accused in the criminal proceedings, being the
accused no. 4, Shri K. Unikrishnan, Branch Manager, Canara
Bank vide his letter dated 10th February, 1988 while
communicating the sanction of loan by the Canara Bank
requested the said company to apprise the Canara Bank on the
extent of the total liability of the company with UCO Bank. It
was also requested that title deeds of the company be handed
over to Canara Bank for creating equitable mortgage.
The letter dated 10th February, 1988 was replied to by the said
Manash Basu of UCO Bank on 13th February, 1988 intimating that
the property documents/title deed of the company will be released in
favour of Canara Bank subject to the clearance by the company of
their liability to UCO Bank under cash credit account to the extent of
Rs. 91.91 lacs. Responding to such request the Canara Bank
forwarded a demand draft of the said amount and on the basis of such
demand draft dated 14th February, 1998 the title deed of the said
company were released in favour of Canara Bank and subsequently
mortgage was created on 6th May, 1988.
Shri Bhattacharya points out that it has been alleged in the
criminal proceeding that the said Shri K. Unikrishnan did not take
steps to inspect the stock/audit of the company nor created equitable
mortgage of the properties within the given period, thereby allowing
the company to overdraw cash credit to the extent of Rs. 80 lacs.
Neither the said Shri K. Unikrishnan ensure closure of the account of
the company maintained with UCO Bank by obtaining 'No dues
Certificate' after payment of Rs. 91.91 lacs was received by UCO Bank.
Thus it has been alleged that the petitioners were facilitated with dual
finance from both the Banks.
iv) It has been also alleged that stock inspection of the factory
premises of the company by Canara Bank revealed a physical
stock of Rs. 4-5 lacs against that declared stock of Rs. 162.52
lacs. Subsequently the petitioners/accused deposited a sum of
Rs. 15.92 lacs. to the cash credit of the company and thereby
allegedly misappropriated the stock of Rs. 1, 52, 36, 071/-
which was hypothecated for availing credit facilities.
It is also alleged that due to connivance of both the Brach
Managers of Canara and UCO Bank respectively, wrongful loss was
caused to Canara Bank to the tune of Rs. 200.47 lacs.
v) The Canara Bank thereafter filed recovery proceedings before
the Ld. Debts Recovery Tribunal -2 (for short DRT -2) against
the present petitioners and the company being OA 26 of 2001.
The said case has been settled by the petitioners in terms of one
time settlement payment against the dues of the said company
with Canara Bank. The Canara Bank has also issued a 'No
dues Certificate' in favour of the company.
vi) Shri Bhattacharya therefore submits that the matter is purely
civil in nature and for this reason the Canara Bank filed
recovery proceedings before the ld. DRT -2. The outstandings of
the company have been settled in the civil proceedings and the
petitioners have paid the entire compromise amount with
interest of Rs. 29.95 lacs to the Bank.
Shri Bhattacharya asserts that the petitioners at no point of time
committed any fraud or mis-representation with either UCO or Canara
Bank and did not commit any forgery for the purpose of cheating. On
the contrary, according to the Shri Bhattacharya, the company
suffered huge losses by parking its deposits with other companies and
thereby suffered loss.
Placing reliance on the judgment of the Hon'ble Apex Court in
Nikhil Merchant's Case reported in 2008 Volume 3 SCC (Cri) Page
858 and in Duncans Agro Industries Case reported in 1996
Volume 5 Supreme Page 462, Shri Bhattacharya submits that
taking note of the compromise arrived at between the petitioners and
the Bank and also taking note of the purely civil nature of the
proceedings, this Court in exercise of its present jurisdiction is
competent to quash the proceedings.
vii) Distinguishing the judgment of the Hon'ble Apex Court in the
matter of CBI Vs. Jagjit Singh reported in 2014 Volume 1
SCC (Cri) Page 29 and referring to the judgment in Gian Singh
Vs. State of Punjab and anr. reported in 2013 Volume 1 CLR
(SC) Page 356, Shri Bhattacharya has argued that the Hon'ble
Apex Court has made a distinction between offences of a public
character and offences which are purely bilateral in nature. In
the present case the transaction between the parties was purely
bilateral in nature and, once the entire outstandings have been
paid, the further continuance of the criminal proceedings would
amount to an abuse of the process of law. He submits that this
Court in exercise of its inherent and plenary jurisdiction can
take note of the purely civil and bilateral nature of the
transaction between the parties and, in the absence of any mens
rea quash the same. Shri Bhattacharya also draws the
attention of this Court to the reasoning applied by the Ld.
Special Court and submits that the Ld. Special Court merely
recognized the limitation of its own jurisdiction under Section
239 CrPC compared to the jurisdiction of the superior courts
and therefore restrained itself from discharging the petitioners.
He submits that the Ld. Special Court ought to have considered
that the loan document or the book debt statement prepared for
the purpose of obtaining loan cannot be considered to be on the
same footing as a KVP/NSC certificates. In CBI Vs. Jagjit
Singh (supra) the Hon'ble Apex Court was of the opinion that
forgery of KVP/NSC certificates is a serious public offence.
However, the documents in the present case do not warrant that
they should be placed on the same pedestal and Mr.
Bhattacharya submits that the Ld. Trial Court committed an
error by not appreciating the same.
He argues that the facts of the present case are placed on a
better footing than in Nikhil Merchant's Case (supra) and the Ld.
Trial Court ought to have given due importance to the fact that the
entire outstanding has been repaid by the petitioners.
Per contra Shri Himangshu De, Ld. Senior Counsel appearing for
the CBI has argued as follows:-
a) That the probative value of the evidence produced before the Ld.
Trial Court must be assessed at the trial. Shri De submits that
complex questions of fact have emerged in the present case which
must be weighed at the trial.
b) Shri De emphatically relies upon the judgment of the Hon'ble Apex
Court in CBI Vs. Jagjit Singh. He also relies upon an unreported
decision of this Hon'ble Court in CRR 2688 of 2013 decided on
2nd December, 2013 in the matter of A. Bhaskaran Vs. CBI.
c) Relying on all the above decisions Shri De submits that in the facts
of the present case the transactions were entered into with
Nationalised Banks holding public money. Merely because the
outstandings have been settled pursuant to recovery proceedings
launched by the Bank, the criminal aspects of the present
proceedings cannot be ignored qua the petitioners. He therefore
submits that the present criminal proceedings cannot be quashed
and CRR 277 of 2014 should be dismissed.
By the order impugned no. 63 dated 5th October, 2013 this
Court notices that the Ld. Special Court considered the following:-
1. The Ld. Special Court found in respect of both the Branch
Managers of Canara and UCO Banks, being the accused nos. 4 & 5
respectively, prima facie existence of criminal conspiracy. The Ld.
Special Court applied its mind fully to the acts of commission and
omission on the part of the said accused nos. 4 & 5 and arrived at
the conclusion that both the Branch Managers cannot be
discharged under Section 239 CrPC and, having regard to the
complex nature of the facts the same deserve to be sifted in a full-
fledged trail.
2. With regard to the present petitioners being the accused nos. 1,
2 & 3 the Ld. Special Court found that the materials on record
indicate that the petitioners have fraudulently used certain
documents showing them to be genuine while fully knowing that
the said documents are false. According to the Ld. Special Court
the said documents are the letter dated 24th August, 1998,
statement of sundry debtors dated 30th September, 1999, 31st
October, 1999, 31st November, 1999 and lastly 31st December,
1999.
3. The Ld. Special Court found that charge sheet was filed by the
CBI on 20th April, 2004. After filing of charge sheet cognizance was
taken by the Ld. Special Court and, the present
petitioners/accused only to get rid of their criminal liability
compromised the matter with the Bank on 26th August, 2009. The
Ld. Special Court therefore found evidence of mens rea against the
present petitioners and refused to discharge them under Section
239 CrPC.
Heard the parties. Considered the material on record.
This Court notices the judgment in Gian Singh' Case (supra).
Para 61 of Gian Singh reads as follows:-
"The position that emerges from the above discussion
can be summarised thus: the power of the High Court in
quashing a criminal proceeding of FIR or complaint in
exercise of its inherent jurisdiction is distinct and different
from the power given to a criminal court for compounding
the offences under Section 320 of the Code. Inherent
power is of wide plenitude with no statutory limitation but
it has to be exercised in accord with the guideline
engrafted in such power viz.: (i) to secure the ends of
justice, or (ii) to prevent abuse of the process of any court.
In what cases power to quash the criminal proceeding or
complaint or FIR may be exercised where the offender and
the victim have settled their dispute would depend on the
facts and circumstances of each case and no category can
be prescribed. However before exercise of such power, the
High Court must have due regard to the nature and
gravity of the crime. Heinous and serious offences of
mental depravity or offences like murder, rape, dacoity etc.
cannot be fittingly quashed even though the victim or
victim's family and the offender have settled the dispute.
Such offences are not private in nature and have a serious
impact on society. Similarly, any compromise between the
victim and the offender in relation to the offences under
special statutes like the Prevention of Corruption Act or the
offences committed by public servants while working in
that capacity, etc.; cannot provide for any basis for
quashing criminal proceedings involving wuch offences.
But the criminal cases having overwhelmingly and
predominatingly civil flavour stand on a different footing
for the purposes of quashing, particularly the offences
arising from commercial, financial, mercantile, civil,
partnership or such like transactions or the offences
arising out of matrimony relating to dowry, etc. or the
family disputes where the wrong is basically private or
personal in nature and the parties have resolved their
entire dispute. In this category of cases, the High Court
may quash the criminal proceedings if in its view, because
of the compromise between the offender and the victim,
the possibility of conviction is remote and bleak and
continuation of the criminal case would put the accused to
great oppression and prejudice and extreme injustice
would be caused to him by not quashing the criminal case
despite full and complete settlement and compromise with
the victim. In other words, the High Court must consider
whether it would be unfair or contrary to the interest of
justice to continue with the criminal proceeding or
continuation of the criminal proceeding would tantamount
to abuse of process of law despite settlement and
compromise between the victim and the wrongdoer and
whether to secure the ends of justice, it is appropriate that
the criminal case is put to an end and if the answer to the
above question(s) is in affirmative, the High Court shall be
well with its jurisdiction to quash the criminal proceeding."
This Court also notices the judgment in CBI Vs. Jagjit Singh
(supra). The relevant paragraphs read as follows:-
9. "From the impugned order, it would be evident that
in view of such amicable settlement made between the
respondent and the bank officials, the learned Judge of the
High Court by the impugned order set aside the criminal proceedings with following observation:
"Be that as it may, there cannot be any rigid formula in regard to permitting the parties to effect a compromise. The offences alleged are undoubtedly non-compoundable and certainly, of serious nature.
The question that arises is whether in view of such amiable settlement between the parties, any fruitful purpose is likely to be served by allowing the criminal proceedings to proceed further.
In the present case, as indicated earlier and that too, being rightly shown by the learned Senior Counsel, Mr. De, for reasons not known, the principal accused, Sanjib Kumar Chatterjee, had been left out.
In the aforesaid facts and circumstances, I am inclined to hold that further proceedings of the case before the learned trail court is not likely to serve any fruitful purpose and, as such, in exercise of this Court's inherent jurisdiction, the same be quashed bond at one.
This disposes of CRR No. 719 of 2010."
14. In the present case, the specific allegation made against the respondent-accused is that he obtained the loan on the basis of forged document with the aid of officers of the Bank. On investigation, having found the ingredients of cheating and dishonestly inducing delivery of property of the Bank (Section 420 IPC) and dishonestly using as genuine a forged document (Section 471 IPC), charge-sheet was submitted under Section 420/471 IPC against the accused persons.
15. The debt which was due to the Bank was recovered by the Bank pursuant to an order passed by the Debts Recovery Tribunal. Therefore, it cannot be said that there is a compromise between the offender and the victim. The offences when committed in relation with banking activities including offences under Sections 420/471 IPC have harmful effect on the public and threaten the well- being of the society. These offences fall under the category of offences involving moral turpitude committed by public servants while working in that capacity. Prima facie, one may state that the bank is the victim in such cases but, in fact, the society in general, including customers of the bank is the sufferer. In the present case, there was neither an allegation regarding any abuse of process of any court nor anything on record to suggest that the offenders were entitled to secure the order in the ends of justice." In the considered view of this Court the observations in Gian Singh' Case (supra) to the effect that criminal cases having overwhelmingly and predominantly (emphasis supplied) civil flavour stand on a different footing for the purposes of quashing need to be kept in mind. From the facts of the present case the Ld. Special Court has found prima facie complicity by of the accused nos. 4 & 5, i.e. the respective Bank Managers.
The Ld. Trial Court has also found prima facie evidence of mens rea on the part of the petitioners dishonestly inducing the Banks to grant them credit accommodation. The Ld. Trial Court correctly noticed that after investigation was completed, charge sheet filed and cognizance taken, the petitioners compromised the matter with the Bank to get rid of their criminal liability.
Therefore, in the further considered view of this Court the present case cannot qualify to be one having an overwhelming and predominantly civil flavour. Furthermore the ratio laid down in Jagjit Singh' Case (supra) to the effect that criminal trial should be allowed to continue in respect of offences committed in relation to banking activities bears its imprint on the facts of this case.
On the touchstone of the of the above reasoning this Court is not inclined to accept the rather forceful submission of Shri Bhattacharya that the documents discussed by the Ld. Special Court being the letter dated 24th August, 2008 and the list of Sundry Debtors do not fall within the same class of public documents such as KVPs/NSCs in Jagjit Singh' Case (supra) and therefore the instant proceeding deserves to be quashed. Prima facie satisfaction of connivance with bank officials and obtaining credit accommodation on doubtful documents coupled with allegation of wilful misrepresentation do point in the direction of a full-fledged trial. Merely because the one- time settlement amount was paid during pendency of proceedings before the DRT, albeit long after charge sheet was filed and cognizance taken does not vitiate the criminal flavour of the transaction. In the backdrop of the above discussion the prayer for quashing of the impugned proceeding in Special Case No. 06 of 2004 arising out of RC Case No. 03/E/2002 dated 28th June, 2002 including the order no. 63 dated 05th October, 2013 and charge sheet no. 10 dated 19th April, 2004 pending before the Ld. 3rd Special CBI Court is refused. CRR 277 of 2014 is accordingly dismissed.
There will be, however, no order as to costs.
Registry is directed to communicate this order to the Ld. 3rd Special CBI Court.
Urgent certified photocopies of this judgement, if applied for, be given to the learned advocates for the parties upon compliance of all formalities.
(Subrata Talukdar, J.)