Telangana High Court
K. Srinivas vs The State Of Telangana, Cbi on 22 September, 2022
Author: G. Radha Rani
Bench: G. Radha Rani
THE HON'BLE Dr. JUSTICE G. RADHA RANI
CRIMINAL REVISION CASE No.489 OF 2019
ORDER:
This Criminal Revision Case is filed by the petitioner-Accused No.14 aggrieved by the order dated 30.11.2018 passed by the I-Additional Special Judge, CBI Cases, Hyderabad in Crl.M.P. No.239 of 2016 in CC No.17 of 2009 in dismissing the petition filed by him under Section 239 of Cr.P.C. seeking his discharge for the offences punishable under Sections 120-B, 419, 420, 467, 468 and 471 IPC.
2. The case of the prosecution, in brief, was that A1 connived with A2 to A7 (borrowers), A14 (builder), A15 (Land owner), A16 (Panel Valuer), A17 (Legal Expert) and A8 (CEO of MACT Society) by abusing his official position to cheat the Indian Overseas Bank (IOB), Basheerbagh Branch, Hyderabad. The borrowers A9 to A12 had connived with the CEO of MACT Society A8 and cheated the Indian Overseas Bank, Basheerbagh Branch, Hyderabad and received housing loans to an extent of Rs.50.44 lakhs. The borrowers A2 to A7 furnished false documents for obtaining housing loans. The borrowers A9 to A12 had furnished fake salary slips and availed housing loans.
Dr.GRR,J 2 Crlrc No.489 of 2019 The bankers' cheques were issued in favour of the builders Smt. N. Subbamma and Sri B. Rama Rao. The CEO Sri M.V. Rao had opened a current account in the name of the Vardhaman MACT Society with Laxmi Vilas Bank, Malkajgiri Branch, Kukatpally Branch, Hyderabad. The CEO Sri MV Rao had obtained permission from the Laxmi Vilas Bank to discount the cheques issued in favour of the builders. After discounting the cheques, he deposited the bankers' cheques into his account and siphoned off the entire amount by giving self cheques. All the accounts became NPAs and there was a wrongful loss to a tune of Rs.50.44 lakhs. A case was registered under Section 120-B read with 419, 420, 467, 468 and 471 IPC and Section 13(2) read with 13(1) (d) of the Prevention of Corruption Act, 1988.
2.1 The specific case alleged against the petitioner was that one VNSC Bose (A7) availed three housing loans from three different banks i.e. (1) HDFC Bank, Basheerbagh branch, Hyderabad, (2) Indian Overseas bank, Basheerbagh branch, Hyderabad and (3) Canara Bank, Nallakunta branch, Hyderabad to purchase a single flat. He mentioned the single flat as G-1, G-2 and G-3 of Pooja Residency, 496/2RT, SR Nagar, Hyderabad and availed loans from Dr.GRR,J 3 Crlrc No.489 of 2019 the respective banks. To facilitate the said loan transactions, the owner of the subject land late Sri Muniswamy (A13) and builder K. Srinivas (petitioner-A14) got registered the subject flat in the name of A7 in the office of the Sub-Registrar at Sanathnagar, Hyderbad.
3. Heard learned counsel for the petitioner-A14 and the learned Special Public Prosecutor for CBI for the respondent-complainant.
4. The learned counsel for the petitioner submitted that the petitioner was a builder and constructed a residential complex for which A13 was the original owner. While undertaking construction, the ground floor was constructed into three separate and distinct apartments by adjusting the plinth area. On the offer and acceptance received from A7 to purchase three distinct flats, the sale deeds were executed at the behest of the original owner and upon execution, necessary changes were also made in the Register of Encumbrances by clearly mentioning the extent of area sold. The petitioner had neither approached the bank seeking loan nor obtained the loan. He was unnecessarily implicated in the criminal prosecution which was an abuse of process of law. The petitioner came to know that the said housing loan account No.350100264 obtained by A7 was Dr.GRR,J 4 Crlrc No.489 of 2019 subsequently closed under One Time Settlement. A7 had repaid the entire loan amount and accordingly, the Indian Overseas Bank had issued no dues certificate to A7 in the month of November, 2007 itself i.e. even prior to completion of investigation and much prior to filing of the charge sheet. However, the CBI officials, without gathering such information filed the charge sheet including the name of the petitioner as accused without there being any specific allegation made against him. As such, the charges leveled against the petitioner were absolutely unsustainable. There was not even a single instance stated in the entire charge sheet to prima facie prove the participation of the petitioner in the commission of any of the offences. The sale deeds were duly registered by the registering authority after satisfying with the required information. The sale deeds would reflect that property sold under each of the sale deeds was distinct and separate with varying extent of area. While sanctioning loan, the banks obviously would take into consideration the extent of area mentioned in each of the sale deeds and the market value as on the date of sanctioning the said loans. As such, the said act of registering three separate sale deeds could not be linked to obtain loans which were obtained after completion of registration and not for the purpose of registration. No Dr.GRR,J 5 Crlrc No.489 of 2019 loan amount was credited into petitioner's account and the petitioner was no way benefitted under the alleged loan transactions. The police had thoroughly investigated to know if the petitioner was benefitted in any way out of these loans. The police verified the bank accounts of the petitioner and found that no amounts were parted with the petitioner. The petitioner never received any illegal enrichment in his accounts.
4.1 He further contended that the trial court while dismissing the discharge petition failed to appreciate that it was not the case of prosecution that the petitioner was in any way benefitted out of the said loan transactions. The fact that the three properties were separable was clearly evident not only from the perusal of the sale deeds, but also on perusal of the encumbrance record as well as the property tax assessment carried out by the GHMC. Three property tax identification numbers were assigned, that too, after physical verification of three separate flats on the basis of the extent of the flats. As such, the allegation of registration of sale deeds conveying the non-existent flats would not arise. Apart from repaying the loan amount by A7, the allegations in the charge sheet would not disclose Dr.GRR,J 6 Crlrc No.489 of 2019 the commission of any offence by the petitioner. So far as the deviations in the construction were concerned, the same would not fall under the category of any of the offences and prayed to allow the revision by setting aside the order dated 30.11.2018 passed by the I- Additional Special Judge for CBI cases in Crl.M.P. No.239 of 2016 in CC No.17 of 2018 and to discharge the petitioner.
5. Learned Special Public Prosecutor for CBI submitted that the investigation revealed that the borrower Sri V.N.S.C. Bose (A7) purchased Flat No.G-2 by taking housing loan for an amount of Rs.7.00 lakhs from IOB, Basheerbagh branch, Hyderabad by submitting fabricated sale deed No.1588 of 2001 registered with Sub- Registrar, S.R. Nagar. The borrower had purchased Flat No.G-3 by taking another housing loan for Rs.8.35 lakhs from Canara Bank, Nallakunta branch, Hyderabad by changing the boundaries in the sale deed for the same flat and submitted fabricated sale deed No.21 of 2002 registered with SRO, SR Nagar, Hyderabad. The borrower purchased Flat No.G-1 by taking housing loan for Rs.8.65 lakhs from HDFC Bank, Basheerbagh branch, Hyderabad. The petitioner-A14 conspired with the borrower-A7 and executed sale deed No.1587 of Dr.GRR,J 7 Crlrc No.489 of 2019 2001. The petitioner-A14 executed three sale deeds in pursuance of criminal conspiracy hatched with the other accused including A7, who availed three housing loans to a tune of Rs.24.10 lakhs from three different banks by mortgaging a single flat in Pooja Residency, SR Nagar, Hyderabad. The petitioner-A14 being well aware that the flats G-1 and G-3 were non-existing, registered the said flats in furtherance of conspiracy with the accused persons and helped A7 in getting the loan. The petitioner-A14 acted hand-in-glove with the other accused.
5.1 He further submitted that the petitioner-A14 had already availed an opportunity under Section 239 Cr.P.C. vide Crl.M.P. No.950 of 2014 seeking discharge and the trial court rightly dismissed the said petition as there was prima facie case made out against the petitioner-A14. The petitioner-A14, inspite of dismissal of the petition under Section 239 Cr.P.C. on 15.12.2014, filed Crl.P. No.619 of 2016 before this Court seeking quash of the entire proceedings on the ground that A7 paid the entire loan amount. This Court vide order dated 15.02.2016 disposed of the petition giving liberty to the petitioner to file discharge petition afresh before the trial court. In pursuance of the orders of this court, the petitioner once again filed a Dr.GRR,J 8 Crlrc No.489 of 2019 petition under Section 239 Cr.P.C., seeking his discharge from the case vide Crl.M.P. No.239 of 2016. The learned Special Judge in the light of principles laid down by the Hon'ble Apex Court in Gyan Singh as well as Sadhuram Singhla and others, dismissed the discharge petition filed by the petitioner. The Hon'ble Apex Court on number of occasions categorically held that in cases which involved serious fraudulent transactions with the bank, the settlement entered in such transactions could not absolve the accused from criminal liability. The oral evidence of witnesses cited as LWs.16, 17, 21, 23, 25 and 26 as well as the documentary evidence i.e. Exs.D35 to D49 filed along with the charge sheet would establish the guilt of the petitioner in cheating the banks to a tune of Rs.24.1 lakhs by executing fake sale deeds as a part of criminal conspiracy. The petitioner approached this court with unclean hands. This is the second round of litigation, the trial Judge dismissed the discharge petitions on two earlier occasions. The Hon'ble Apex Court on different occasions held that in cases involving serious economic fraud, the settlement with bankers would not absolve from criminal liability and prayed to dismiss the petition.
Dr.GRR,J 9 Crlrc No.489 of 2019
6. Perused the record. As seen from the record, the petitioner had filed discharge petition earlier vide Crl.M.P. No.950 of 2014 and the trial court dismissed the said petition on 15.12.2014. The petitioner filed Crl.P.No.619 of 2016 before this court for quashing of the proceedings before the trial court on the ground that A7 paid the entire loan amount. But, this court vide order dated 15.02.2016 observed that the change of circumstances could not be a ground to quash the proceedings and disposed the petition granting liberty to the petitioner to bring the fact of paying loan amount by A7 before the trial court.
7. The petitioner again preferred discharge petition vide Crl.M.P. No.239 of 2016 and brought the said fact before the trial court. But, the trial court observing that A7 had not filed any document before the court that he paid the entire amount due to the banks, so also the victim banks had not filed any document before the court stating that A7 had paid all the amounts covered by loans taken from the victim banks and the offences under Section 120-B, 468 and 471 IPC were non-compoundable and they were serious crimes committed in relation with banking activities having harmful effect on Dr.GRR,J 10 Crlrc No.489 of 2019 the society and these offences would fall under the category of offences involving moral turpitude, dismissed the petition once again.
8. The learned counsel for the petitioner contended that though A7 or the banks had not filed the document before the court, he filed the certificate issued by the Chief Manager of Indian Overseas Bank dated 17.10.2013 before the court wherein it was stated that Mr. V.N.Subhash Chandra Bose, R/o. Flat No.G-2, 496/2RT, Pooja Residency, S.R. Nagar, Hyderabad, had availed housing loan in their branch on 07.08.2001 and the account was classified as NPA on 30.06.2003 and the same was closed under OTS on 08.07.2008. He also relied upon the judgment of this court in Crl.P. No.613 of 2013, wherein this court had allowed the petition quashing proceedings against A1 to A3 and A9 in CC No.7 of 2007 for the offences registered under Sections 120-B reads with 409, 419, 420, 467, 468 and 471 IPC and Section 13(2) read with Sections 13(1) (c) & (d) of the Prevention of Corruption Act, placing reliance upon the judgments of the Hon'ble Apex Court in Narender Singh v. State of Punjab1, Nikhil Merchant v. C.B.I. and another2, CBI, ACB, Mumbai v. 1 (2014) 6 SCC 466 2 (2008) 2 ALD (Crl.) 591 (SC) Dr.GRR,J 11 Crlrc No.489 of 2019 Narendra Lal Jain and other3 and Central Bureau of Investigation, New Delhi v. B.B. Agarwal and others4.
9. In the above case, the Court had taken into consideration the fact that during pendency of investigation, the matter had been settled in terms of compromise and the entire amount was paid and the complainant banks had also issued certificates stating that there were no outstanding dues payable and that the entire case involved default in repayment of debt to the bank and even before filing of the charge sheet, the liability to make good the monetary loss suffered by the complainant-bank had been mutually settled between the parties, and even if trial was commenced, the material witnesses would not support the prosecution case and more time would be consumed to conclude the trial which was of no use except resulting in wastage of the court's time and public money, considered the continuation of proceedings against the petitioners therein i.e. A1 to A3 and A9 would be an abuse of process of law and allowed the petition.
10. As seen from the facts of this case also, the name of the petitioner was not found in the FIR. The FIR was registered against 3 (2014) 5 SCC 364 4 (2019) 15 SCC 522 Dr.GRR,J 12 Crlrc No.489 of 2019 eleven (11) persons. Subsequently, during the course of investigation, the name of the petitioner was shown as A14. The subject property was registered in the name of one Mr.VNSC Bose (A7) in the year 2001 through three registered sale deeds. A7 obtained housing loans in the year 2001. In the FIR it was alleged that the offence took place in the year 2001 and 2003. But, the FIR was registered on 30.05.2006 after lapse of 5 years from the date of alleged offences. Thus, there was an abnormal delay of five years in lodging the FIR and no explanation was given for the said delay. The allegation against A7 was that he obtained housing loans from 3 different banks and failed to repay the said loans. The genesis of registration of FIR was committing default of payment of subject loan amounts. But, the said loan amounts were repaid to the respective banks and the corresponding banks also issued clearance certificates.
11. The allegation against A7 was that he purchased a single flat by mentioning it as G-1, G-2 and G-3, and A13 (owner of the land) and A14 (petitioner-builder) had facilitated in executing the registered sale deeds. The total extent of the ground floor was 1669 sq. ft.; Flat No.G-1 was admeasuring 500 sft., Flat No.G-2 was 669 Dr.GRR,J 13 Crlrc No.489 of 2019 sft., and Flat No.G-3 was admeasuring 500 sft., as per the registered sale deeds. In all the three sale deeds, it was specifically mentioned that all the subject flats were in semi finished condition. The sale deeds were executed to the extent of available land. Loans were sanctioned basing on the extent of land mentioned in the registered sale deeds. The banks had sanctioned the loans basing on the extent of land, but not on flat basis and the chartered engineers and panel valuers of the bank also gave a report about availability of the land.
12. If the allegations made in the charge sheet are to be believed, the entire extent of all the three flats ought to have been mentioned in all the three sale deeds so as to believe the allegation that for one flat, three separate sale deeds were executed fraudulently. Not only three different sale deeds were registered, but the encumbrance record also would disclose that they were three different properties and the GHMC also had assigned three separate property tax identification numbers, after physical verification of the flats on the basis of extent of each flat. As such, the allegation of registration of sale deeds conveying non-existent flats mentioned in the three sale deeds appears to be not correct. The charge sheet would not disclose Dr.GRR,J 14 Crlrc No.489 of 2019 that the petitioner had acted dishonestly or that he had gained anything from the said transaction. No specific overt acts were attributed against him. Mere execution of the sale deeds by virtue of subsisting title over the property would not amount to execution of false document under Section 464 IPC. If the registered sale deeds could not be considered as false or forged documents, then the offences alleged under Sections 420, 467, 468 and 471 IPC also would not attract.
13. As the subject loan amount was already paid by A7, continuation of proceedings against the petionter-A14 was nothing but abuse of process of law. The judgments relied by this Court in Crl.P. No.613 of 2013 for quashing the proceedings against some of the accused in the said case are also applicable to the petitioner in this case.
14. The Hon'ble Apex court in Narender Singh v. State of Punjab (1 supra) had given guidelines while exercising power under Section 482 Cr.P.C. in reference to non-compoundable offence. It observed that when the parties have reached the settlement and on that basis, petition for quashing the criminal proceedings is filed, the Dr.GRR,J 15 Crlrc No.489 of 2019 guiding factor in such cases would be to secure: (a) ends of justice, or
(b) to prevent abuse of the process of any Court. It was also stated that such a power is not be exercised in those prosecutions which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc.
15. In Nikhil Merchant v. C.B.I. and another (2 supra), where a civil dispute is involved in a prosecution and the dispute is ended in compromise, the Hon'ble Apex Court observed that prosecution of criminal proceedings would be in futility and therefore, the High Court is justified in quashing the charge sheet under Section 482 of the Code.
16. In C.B.I, ACB, Mumbai v. Narendra Lal Jain and others (3 supra) the Hon'ble Apex Court held as under:
"10. In the present case, as already seen, the offence with which the accused-respondents had been charged are under Section 120- B/420 of the Indian Penal Code. The civil liability of the respondents to pay the amount to the bank has already been settled amicably. The terms of such settlement have been extracted above. No subsisting grievance of the bank in this regard has been brought to the notice of the Court. While the offence under Section 420 IPC is compoundable the offence under Section 120- B is not. To the latter offence the ratio laid down in B.S. Joshi (supra) and Nikhil Merchant (supra) would apply if the facts of the given case would so justify.
Dr.GRR,J 16 Crlrc No.489 of 2019 The observation in Gian Singh (supra) (para 61) will not be attracted in the present case in view of the offences alleged i.e. under Sections 420/120B IPC."
17. In Central Bureau of Investigation, New Delhi v. B.B.Agarwal and others (4 supra), the Hon'ble Apex Court held as under:
"12. The High Court was of the view that on resettlement of accounts, the parties obtained the consent decree from DRT and paid the entire sum, therefore, there is no live issue, which now survives. The High Court then examined the question as to whether the issue of criminality is involved so as to allow the trial Court to continue on its merits. After examining this issue with reference to charges and documents, the High Court held that no criminality issue is found involved notwithstanding the settlement of the case between the parties."
18. This Court in Crl.P. No.613 of 2013 also by considering the judgment of this Court in Ch. Sridhar v. V.S. Rajamannar, Manager (Credit) Regional Office, Punjab National Bank, Saifabad, Hyderabad and another [Crl.P. No.1510 of 2009 (AP High Court)], held that when the substantive offences sunder I.P.C. are not made out in the F.I.R. and the complaint, there is absolutely no ground to proceed against the private individuals for the offences under the Prevention of Corruption Act.
Dr.GRR,J 17 Crlrc No.489 of 2019
19. Thus, for the reasons stated above and as the entire amount due to the bank was paid, it is considered fit to allow the revision by setting aside the orders of the I-Additional Special Judge for CBI Cases in Crl.M.P. No.239 of 2016 vide order dated 30.11.2018, discharging the petitioner-A14 for the offences alleged against him in CC No.17 of 2009.
20. In the result, the Criminal Revision Case is allowed setting aside the order dated 30.11.2018 passed in Crl.M.P. No. 239 of 2016 in CC No.17 of 2009 by the I Additional Special Judge for CBI Cases, Hyderabad and the petitioner - A14 is discharged for the offences alleged against him in CC No.17 of 2009.
Pending miscellaneous petitions, if any, shall stand closed.
_____________________ Dr. G. RADHA RANI, J September 22, 2022 KTL