Madras High Court
C.Edward vs The State Rep. By on 22 August, 2017
Author: P. Velmurugan
Bench: P.Velmurugan
IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 18.07.2017 PRONOUNCED ON : 22.08.2017 CORAM : THE HONOURABLE MR. JUSTICE P.VELMURUGAN Crl.OP.No.11317 of 2017 and Crl.MP.No.7439 of 2017 C.Edward ... Petitioner Vs. The State rep. by Deputy Superintendent of Police, CBI, Chennai. ... Respondents PRAYER : Criminal Original Petition is filed under Section 482 of the Criminal Procedure Code, to call for the records in CC.No.4 of 2017 on the file of the XI Additional Special Judge for (CBI cases), Chennai and quash the same. For petitioner : Mr.S.Prabakaran, SC for Mr.P.S.Amalraj For Respondent : Mr.K.Srinivasan, Spl.Public Prosecutor, CBI Cases O R D E R
This Criminal Original Petition is filed under Section 482 of the Criminal Procedure Code, to quash the criminal proceedings in CC.No.4 of 2017 pending on the file of the XI Additional Special Judge for (CBI Cases), Chennai.
2. The brief facts of the case are as follows :-
The defacto complainant/Dinesh Kumar Vishnoi, Deputy General Manager-cum-Regional Manager, Oriental Bank of Commerce, Regional Office, Spencer Plaza, Chennai filed criminal complaint against the named persons viz., V.Ganesh/A1 the then Branch Manager, Oriental Bank Of Commerce, Adyar, Chennai; J.Prabakaran, Proprietor Kavaya Associates/A2; S.Senbagavalli w/o.Prabakaran Proprietrix of J.P.Associates/A3; S.P.Ravi Chander, Proprietor of SPSR Traders/A4; S.Lakshmi Devi w/o.Saravanan, Proprietrix of SJS Associates/A5; Sriram Prabhu, Partner of Sunsree Corporation/A6; M.Pasupathy, Partner of Sunsree Corporation/A7; Vijayaraghavalu, Proprietor of Ultimate Solutions/A8, N.Asokan, Proprietor of ARK Enterprises/A9; S.Jayakanthan, Proprietor Gen Power Services/A10; Subha J Bhaskar, Proprietrix of Banyan Tree Family Saloon Spa/A11 on the allegation that during the period from November 2011 to August 2014, A1 in conspiracy with the other accused borrowers A2 to A8 had sanctioned various credit facilities to them for their business purpose which were not utilized by them, but diverted the loan amount for other purposes, thereby misappropriated the funds and thereby cheated the Bank to the tune of Rs.397.06lakhs which is undue wrongful loss to Oriental Bank of Commerce and corresponding undue wrongful gain to themselves.
3. During investigation, it is found that Saravanan, Proprietor of Kavya Advertising and marketing Pvt Ltd is the main conspirator and beneficiary in this case and substantial amount of loan disbursed to them had gone directly and indirectly to the account of A12. The role played by Arockiamary/A13 and the petitioner/Edward/A14 came to light that they have received the amount which is diverted for other purposes, i.e., for repayment of loan to A14 and there is no record to show that A13 has taken a loan from A14. Further, the amount came to the possession of A13 and A14 are proceeds of the crime out of criminal breach of trust.
4. The allegations against A8 was subjected in the investigation of RC 44(A)2015 of this branch and separate charge sheet is being filed against him. Thus the acts of the accused persons A1 to A9 have caused a wrongful loss to the tune of Rs.61,22,698/- in this loan account to OBC, Adyar Branch, Chennai and corresponding wrongful gain to themselves the acts of the accused persons the commission of criminal conspiracy, cheating by dishonest intention to induce delivery of property, criminal breach of trust by banker, forgery for the purpose of cheating, dishonestly receiving of stolen property and criminal misconduct by public servants are punishable under Sections 120B r/w.420, 409, 468 r/w.471 and 411 IPC and Section 13(2) r/w.13(1) of Prevention of Corruption Act, 1988 and substantive sentences thereof.
5. On filing of the final report under Section 173(2) Cr.PC the charge sheet No.3 of 2016 is taken on the file of IX Additional Special Judge for CBI Cases, Chennai as CC.No.04 of 2017 dated 07.04.2017 and wherein the accused were arrayed as A1 to A9.
6. The learned senior counsel appearing for the petitioner would submit that the A8/Arokiamary is the relative of the petitioner and she was in urgent need of monetary help for medical treatment of her mother Santhana Mary aged about 75yers suffering from chronic kidney diseases. The petitioner decided to help her and made a request to the department for disbursement of the interest free loan. The details for the source of funds raised for helping his relative was also submitted by the petitioner to the higher authority. The respondent filed charge sheet against the petitioner/A9, the Special Judge took cognizance of the case and issued summons to the petitioner and other accused. The A1 with a dishonest intention processed/appraised/dispersed the loan amount of Rs.34,96,611/- to A2/SPSR traders without carrying out proper due diligence of the borrower accounts and also knowing fully well that no business activity was carried out for the said loan and the said amount was diverted to other purposes. The A8 had some loan transaction with A7 in her private capacity and a sum of Rs.4.5lakh was received through RTGS and repaid the said amount to A9 for the loan transaction. The prosecution has examined 40 witnesses and none of them had spoken about A9 and witnesses 19 and 31 have stated that while discussing loan transaction with Saravanan/A7, at that time, A9 was also discussing about the loan transaction with his relative Arokiamary/A8.
7. The allegation made in the complaint and in the final report do not prima facie constitute any offence or make out a case against the petitioner. The present criminal proceeding is manifestly attended with mala fide and maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. Hence, the learned counsel prays this Court to exercise the inherent jurisdiction under Section 482 of the Code to quash the present criminal proceedings.
8. The learned senior counsel for the petitioner has also relied on the following judgments of the English Court and the Judgment of the Hon'ble Apex Court, in the grounds of criminal original petition for consideration, which are listed hereunder :-
1.Connelly v. Director of Public Prosecutions (1964) Ac 1254.
2.Director of Public Prosecution v. Humphrys (1977) AC 1.
3.The State of Haryana and others V. Bhajanlal and others - 1992 (supp) 1 SCC 335.
9. The learned Special Public Prosecutor for CBI Cases would submit that the main allegation is that a sum of Rs.34,96,611/- was transferred from M/s.Digital Hub on 05.08.2013 from M/s.SPSR Traders/A2 loan account and out of the said amount a sum of Rs.16.5lakhs was transferred to Sriram Prabhu/A4 and a sum of Rs.4.5.lakhs was transferred to Arokiamary/A8, in turn A8 issued cheque to A9 towards interest free loan obtained from A9 for her mother's treatment. Thus, A9 committed criminal breach of trust by receiving a sum of Rs.4.5.lakhs knowing fully aware that the transfer of amount is illegal. The petitioner being a Government Servant, it is the duty of him to obtain prior permission or to intimate every transaction to the department, but the petitioner failed to do so. The transactions of the petitioner was elaborately furnished in the final report with valid documents and witnesses. The details of the charges and the role played by the petitioner in the said transaction is also stated in the final report. The case is in initial stage and the charges were not framed against the accused including the petitioner/A9 and the sanction order also was not obtained as against the petitioner/A9, since the offence committed by the petitioner comes under the provisions of IPC and Prevention of Corruption Act. The learned Special Public prosecutor submits that the prosecution has convincing materials to made out a prima facie case against the petitioner and other accused and prays for dismissal of the petition.
10. Heard the rival submissions made on both sides and perused the available records.
11. The learned senior counsel for the petitioner submitted that A1 to A7 floated companies in various names in order to obtain loan from OBC with the connivance of the A1/then Branch Manager. A1 to A7 obtained loan in their so called respective companies and cheated the bank. A7 was known to Arokiamary/A8 and further the said A9 has helped her at her tough time by pledging her jewels to the tune of Rs.4,50,000/-. The A8 is the relative of the petitioner and she is in urgent need of money to treat her mother Santhana Mary aged about 75 years suffering from Chronic Kidney diseases. The petitioner decided to help her and made a request to the petitioner's department for disbursement of interest free loan to the tune of Rs.4,50,000/- and submitted a letter dated 01.07.2013 to the DIG, CBCID (SIT), Chennai intimating the department for lending interest free hand loan for helping his relative, the source for funds was also submitted to the department. A1 being the then Senior Manager in the OBC with a dishonest intention processed/appraised/dispersed the loan amount of Rs.34,96,611/- to one SPSR Traders represented by A2 without carrying out proper due diligence of the borrower accounts and also knowing fully well that no business activity was carried out for the said loan and the said amount was directed to other purposes which the loan amount was sanctioned. It is the case of the prosecution that the sum of Rs.4.5lakhs was received by A9 knowing fully well that the amount was diverted from the loan amount. The learned counsel submitted that the petitioner being a senior police official and have no business contact with A7 or his firms and had no financial dealing with A7 or his business firms. The amount received by the petitioner is nothing but the amount lent by him to A8 for her mother's medical treatment. In the charge sheet the prosecution has stated that one J.Saravan Kumar is the owner of the M/s.Digital Hub through whom the funds flown in the account of Arokiamary/A8, thereafter, A8 issued a cheque to A9 for a sum of Rs.4.5lakhs towards repayment of loan amount. The prosecution has not chosen to enquire about one J.Saravan Kumar, Proprietor of M/s.Digital hub, who is let scot free and the CBI has not chosen to enquire about the said person or to add the Digital Hub as one of the accused in the charge sheet.
12. The learned Special Public Prosecutor for CBI cases has submitted that the prosecution has filed the charge sheet, the Special Court has taken up the same on file as CC.No.4 of 2017 on 07.04.2017. Originally, FIR was filed as against the 14 named persons, the acts of the other accused persons i.e, A1, A3, A7 and A11 except A8 were established during the investigation along with others in other loan transactions and against them charge sheets are being filed separately in this case itself. The allegation against Vijayaraghavalu/A8 was subjected in the investigation of RC.44(A)/2015 of this branch and separate charge sheet is being filed against him.
13. During the course of investigation it is revealed that a sum of Rs.34,96,611/- was transferred from M/s.Digital Hub on 05.08.2013 from SPSR Traders loan and the said amount was transferred to A4 for Rs.16.5lakhs; Rs.4.5lakhs to A8/Arokiamary who inturn paid to the petitioner/A9; Rs.4.46lakhs to A3; Rs.6.7lakhs to A5 and Rs.2.26lakh to one Jayakanthan. Hence, it is proved that the account is used only for routing the diversion of funds. The acts of A8 and A9 is nothing but receipt of the illegal amount which is out of the proceeds of criminal breach of trust that they have received knowing fully well that the amount received by them is diverted loan amount.
14. Thus, the acts of the accused persons A1 to A9 have caused a wrongful loss to the tune of Rs.61,22,698/- in this loan account to OBC, Adyar Branch, Chennai and corresponding wrongful gain to themselves the acts of the accused persons the commission of criminal conspiracy, cheating by dishonest intention to induce delivery of property, criminal breach of trust by banker, forgery for the purpose of cheating, dishonestly receiving of stolen property and criminal misconduct by public servants are punishable under Sections 120B r/w.420, 409, 468 r/w.471 and 411 IPC and Section 13(2) r/w.13(1) of Prevention of Corruption Act, 1988 and substantive sentences thereof. The case is in initial stage and the charges were not framed against the accused including the petitioner/A9 and the sanction order also was not obtained as against the petitioner/A9, since the offence committed by the petitioner comes under the provisions of IPC and Prevention of Corruption Act.
15. In the charge sheet the prosecution has shown the loan amount sanctioned to SPSR Traders/A2 and the diversion of funds to different accounts and finally the diverted amounts comes to the account of J.Saravanan/A7, the details are given hereunder :-
A/c.Opened on 3.8.13 sanctioned Rs.64,00,000/- released Rs.51,53,811/-. On 5.8.13, 23.8.13, 6.9.13 and 1.10.13 in 4 instalment.
On 5.8.13 Rs.34,96,611/- transferred to A/c.No.9991100000040- Digital Hub maintained with Punjab & Sind Bank, Ashok Nagar, Chennai On 23.08.2013 Rs.9,50,000/- on 01.10.2013 at Rs.2,81,000/- transferred to A/c.No.45102000031222 Sivi Software and infrastructure maintained with IDBI Bank, Nelson Manickam Road, Chennai On 6.9.13 Rs.4,26,200/- transferred to A/c.No.733351000006990 M/s.Gen Power Services Power Diesel Sales and Services, Lakshmi Vilas Bank, Trichy, Tamilnadu.
On 5.8.13 Rs.4.5 lakhs to Arokiamary (A8) at SBP, Chn On 5.8.13 Rs.4.46 to Lakshmidevi (A3) On 5.8.13 Rs.4.25 lakh On 6.8.13 Rs.7.7 lakh to M/s.ARK. Enterprises (A5) Rs.16.5lakh to Sriram Prabhu (A4) On 1.10.13 Rs.3.75 lakh by cash On 23.8.13 Rs.9 lakh by cash On 7.9.12 Rs.2lakh On 7.9.13 Rs.2.26lakh to Jayakanthan (A6) On 6.8.13 Rs.4.5.lakh to Shri Edward (A9) by cheque.
M/s.Kavya Advertising & Marketing Pvt Ltd., - J.Saravanan (A7)
16. The learned senior counsel for the petitioner in support of his contention placed the reliance on the following judgments :-
1.(1999) 3 SCC 54 Vijayan v. State of Kerala.
2.(1995) 1 SCC 142 P.K.Narayanan v. State of Kerala.
3.(2012) 9 SCC 512 CBI, Hyderabad v. K.Naryana Rao.
17. The statement given by the witnesses 19 and 31 have categorically spoken about the connection between the J.Saravanan/A7 and Edward/A9 and the loan transaction between the Arokiamary/A8 and the petitioner/A9. The statement of LW19 shows that the petitioner requested one Ganesh to sanction loan to Saravanan as early as possible, so that the loans will be repaid by Saravanan to Arokiamary. The statement of LW31 also stated the petitioner used to come to the office of the J.Saravanan and spoke about the financial transaction between the Sararavan and her relative Arokiamary. The statement of LW16 clearly shows the bank details of the Arokiamary and stated that on 05.08.2013 a sum of Rs.4.5lakh was credited to the account through RTGS transfer from Punjab and Sind Bank and the same amount was withdrawn through cheque No.586080 by the petitioner/A9.
18. On perusal of the entire records viz., the charge sheet and the documents annexed thereto and the statement of witnesses, the allegation raised against the petitioner, the witnesses have categorically spoken about the involvement of the petitioner with the above diversion of funds from A2 to Digital Hub and from Digital Hub to A8 and thereafter to the petitioner/A9. The said amount is received by the petitioner from A8 for the alleged interest free loan transaction. The petitioner has not made out any prima facie case to invoke the inherent power under Section 482 Cr.PC to quash the proceedings.
19. The limits within which the jurisdiction under Section 482 can be exercised was again precisely stated in the case of Divine Retreat Centre v. State of Kerala reported in AIR 2008 SC 1614 : (2008) 2 SCC (cr.) 9, wherein the Hon'ble Apex Court observed, there is nothing like unlimited arbitrary jurisdiction conferred on the High Court under Section 482 of the Code. The power has to be exercised sparingly, carefully and with caution only where such exercise is justified by the tests laid down in the section itself. It is well settled that Section 482 does not confer any power on the High Court but only saves the inherent power which the Court possessed before the enactment of the Code. There are three circumstances under which the inherent jurisdiction may be exercised, namely (i)to give effect to an order under the Code, (ii)to prevent abuse of the process of the Court, and (iii)to otherwise secure the ends of justice.
20. As stated earlier, the SPSR Traders/A2 has transferred the major portion of the loan amount in favour of the M/s.Digital Hub , then the Digital Hub has delinked the amount to various account including A8, inturn A8 issued cheque to A9 for the tune of Rs.4.5lakhs for the interest free loan transaction. The defacto complainant failed to implead the said Digital Hub as one of the party in the complaint and the prosecution/CBI, during the course of investigation and from the statement recorded from the witnesses also not enquire the said Digital Hub or taken any steps to add the Digital Hub as one of the accused in the charge sheet, failure on the part of the prosecution to do so, which goes to the root of the case. The real truth behind the transaction can be seen only if the Digital hub is impleaded as one of the party in the present case.
21.For impleading M/s.Digital Hub as one of the accused, the CBI has to further investigate the matter under Section 173(8) of the Code, to bring out the real truth and involvement of the Digital Hub in diversification of funds. The power of the police to conduct further investigation, after laying final report, is recognized under Section 173(8) of the Code. Even after the Court took cognizance of any offence on the strength of the police report first submitted, it is open to the police to conduct further investigation. This has been so stated by the Court in Ram Lal Narang v. state (Delhi Admn.) reported in (1979) 2 SCC 322. The only rider provided by the aforesaid decision is that it would be desirable that the police should inform the Court and seek formal permission to make further investigation.
22. Thus, for the discussions held above and considering the circumstances and serious nature of the offences involved in this case and also the allegations made against the petitioner, this Court is not inclined to invoke the provisions under Section 482 of the Code to quash the criminal proceedings in CC.No.4 of 2017 pending on the file of the XI Additional Special Judge for CBI cases, Chennai.
23. In the result, the criminal original petition stands dismissed. Consequently, connected miscellaneous petition is closed. The respondent/CBI is directed to conduct further investigation with regard to involvement of the M/s.Digital Hub in the alleged transactions, after obtaining formal permission from the Special Court, for conducting further investigation.
22.08.2017.
tsh Index : Yes/No. Internet : Yes/No. To
1.The XI Additional Special Judge for (CBI Cases), Chennai.
2.The Special Public Prosecutor, CBI Cases, High Court, Madras.
3.The Deputy Superintendent of Police, CBI, Chennai.
P. VELMURUGAN, J.
tsh Pre - Delivery Order in Crl.OP.No.11317 of 2017 22.08.2017.