Karnataka High Court
Sri Jamsheed M Panday @ Jimmy Panday vs Special Police Establishment on 8 November, 2012
Author: A.N.Venugopala Gowda
Bench: A.N.Venugopala Gowda
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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 8th DAY OF NOVEMBER, 2012
BEFORE
THE HON'BLE MR. JUSTICE A.N.VENUGOPALA GOWDA
CRL.R.P.NO.70/2012
BETWEEN:
SRI JAMSHEED M.PANDAY
@ JIMMY PANDAY
S/O MINCHER S.PANDAY
EX-DIRECTOR OF
M/S. GREAT WESTERN INDUSTRIES LIMITED
NESBIT HALL, NESBIT ROAD
MAZAGAON
MUMBAI - 400 010.
... PETITIONER
[BY SRI VIVEK S.REDDY FOR
SRI K.N.SUBBA REDDY, ADV.)
AND:
1. SPECIAL POLICE ESTABLISHMENT
CENTRAL BEREAU OF INVESTIGATION
ECONOMIC OFFENCES WING
III FLOOR, A WING
RAJAJI BHAVAN
BESANT NAGAR
CHENNAI - 600 090.
2. M/S. GREAT WESTERN INDUSTRIES LIMITED
NO. 14TH WARD, 20/B
C.D. MUKKUDAL VILLAGE
TIRUNELVELI - 627 601
TAMILNADU
REP. BY MR. M.NARAYANAN
2
3. SRI M.NARAYANAN @
UNNI NARAYANAN
AGED ABOUT 51 YEARS
S/O LATE C.J.MENON
DIRECTOR OF M/S. GREAT WESTERN
INDUSTRIES LIMITED
AISA WINDSOR
NO.4, KOTHARI ROAD
CHENNAI - 600034.
4. MR. MATHEW SEBASTIAN
S/O P.M. SEBASTIAN
B.DON JON, 23,
EAST CLUB ROAD
SHENOY NAGAR
CHENNAI - 600 030.
5. MR. H.JAYASURYA
S/O B. HANUMANTHARAJ
FORMERLY PANEL COMPANY
SECRETARY FOR CANARA BANK
R/O "SREE RAMA KRUPA"
NO.17/F, 2ND MAIN,
1ST BLOCK, R.T.NAGAR
BANGALORE.
6. MR. GURURAJA RAO
S/O SUNDARRAJA RAO
FORMERLY ACCOUNT RELATIONSHIP
MANAGER, HDFC BANK
CHENNAI (ERSTWHILE TIMES BANK
LTD, CHENNAI)
R/O B-4, GANESHA APARTMENTS
NEW NO.14, BEEMANNA GARDEN STREET
ALWARPET CHENNAI - 600 018.
7. MR. K.A.MENON
S/O C.ACHUTHA MENON
FORMERLY VICE PRESIDENT
HDFC BANK, CHENNAI
(ERSTWHILE TIMES BANK LTD. CHENNAI)
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R/O "SOPANAM",
JANAGEEYA PADASALE LANE
TIRUVEMBADI
THRISSUR - 1
PERMANENT R/O 'DEEPAM'
CHALAPPURAM P.O.
CALICUT - 2.
... RESPONDENTS
(BY SRI C.H.JADHAV, Sr. ADV.)
THIS CRL.RP IS FILED UNDER S.397 READ WITH
SECTION 401 CR.P.C PRAYING TO SET ASIDE THE ORDER
DATED:1.10.2011 PASSED BY THE XVII ACMM,
BANGALORE IN C.C.NO.31722/2005.
THIS PETITION COMING ON FOR ADMISSION THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner is accused No.3 in C.C.No.31722/2005 pending on the file of the XVII Additional Chief Metropolitan Magistrate (Special Court for CBI cases), Bangalore. This petition has been filed to set aside an order dated 01.10.2011 passed in the said case rejecting the applications filed by the accused seeking their discharge in the case.
2. Canara Bank filed a complaint which was investigated and a police report was filed under S.173(2) 4 of Cr.P.C., wherein the petitioner has been arrayed as accused No.3 i.e., Ex-Director of the Company, M/s. Great Western Industries Limited, which has been arrayed as accused No.1. It has been alleged that the petitioner entered into a criminal conspiracy with the other accused with the aim of dishonest cheating of the complainant-Bank to avail additional enhanced credit facilities by way of suppressing material fact of availing credit facilities with Times Bank Limited, Chennai during the period of 1997-2001. Specific allegations of acts of conspiracy has been enumerated in the charge sheet filed for the offences punishable under S.420 r/w 120 B of IPC. The Trial Court has noticed in brief, the contents of the charge-sheet, in para 11 of its Order.
3. The petitioner filed an application in the Trial Court seeking discharge from the case. Accused Nos.2, 4 to 7 also filed applications seeking discharge from the case, on the ground that, there is no material collected by the prosecution and placed on record 5 against them for the alleged offences. The prosecution through the public prosecutor has filed objections to the said applications. Learned Trial Judge having considered the prosecution record, finding that, "there are serious allegations as against the accused for the commission of alleged offences under Ss.120 B and 420 IPC and by observing that the truth and proof of which can be ascertained after recording of the evidence and specifically on marking the exhibits, finding prima-facie case as having been made out by the prosecution so as to frame charges against accused Nos.1 to 7 for both the offences," the applications filed by accused Nos.2 to 7, seeking their discharge from the case was dismissed by a common Order. Assailing the said Order, accused No.3, in so far as he is concerned, has filed this criminal revision petition.
4. Sri Vivek S. Reddy, learned advocate, contended that the materials collected during investigation do not make out a prima facie case against 6 the petitioner. He submitted that the learned Trial Judge has failed to sift and weigh the materials to find out whether a prima facie case has been made out or not. He submitted that, there being no prima facie material leading to a strong suspicion about the involvement of the petitioner with the alleged crime, the petitioner ought to have been discharged from the case. He further contended that, the order passed being illegal, warrants interference.
5. Sri C.H.Jadhav, learned Sr. advocate appearing for respondent No.1, on the other hand, supported the view taken by the learned Trial Judge. Placing reliance on the decisions in the case of SANGHI BROTHERS (INDORE) PVT. LTD. vs. SANJAY CHOUDHARY & OTHERS, 2008 AIR SCW 6848 and HEM CHAND vs. STATE OF JHARKHAND, (2008) 5 SCC 113, learned counsel sought dismissal of the criminal revision petition. 7
6. Learned counsel on both sides made available for my perusal, copies of the relevant prosecution papers. I have perused the same.
7. The point for consideration is:
" Whether on the record of the case in hand, the learned Trial Judge was correct in law in declining to discharge the petitioner / accused No.3 from the case?
8. It is trite that, at the stage of framing charge, the Court is required to evaluate the material and the documents on record produced by the prosecution with a view to finding out, if the facts emerging there from, taken at their face value, discloses the existence of the ingredients constituting the alleged offence. At this stage of the case, the Court is not expected to delve deep into the matter for the purpose of appreciation of evidence. At this stage, the Court cannot be expected to weigh the evidence, but can only see, whether a prima facie case is made out i.e., whether a case of probable 8 conviction for commission of offences is made out on the basis of the materials found during investigation. The Court is not expected to go deep into the probative value of the materials placed on record. What needs to be considered is, whether there is a ground for presuming that the offence has been committed and not a ground for convicting the accused has been made out or not. Strong suspicion founded on materials which leads the Court to form a presumptive opinion as to the existence of factual ingredients constituting the offence alleged would justify the framing of charge against the accused in respect of the commission of the alleged offences.
9. The prosecution case shows that the petitioner along with respondent Nos.3 and 4/accused Nos.2 and 4, representing the company - M/s. Great Western Industries Limited/accused No.1, with a dishonest intention availed credit facilities from both Canara Bank and Times Bank, got the facilities 9 enhanced from time to time, by hypothecation of same stocks and other movables of the company. It has been alleged that, accused Nos.1 to 3 had entered into a criminal conspiracy with the officials of the Times Bank/HDFC Bank and joined accused No.1- company, with an idea to shift the liabilities of M/s. Zen Global Finance Limited, to accused No.1. It has been alleged that in the criminal conspiracy with each other, the accused have cheated Canara Bank by causing a wrongful loss to the tune of Rs.5.08 crores. Precise details have been incorporated in the charge-sheet.
10. The statement of prosecution witnesses;
a) P. Sanjay and K. Manohar Raj shows that Rs.1.28 crores, out of Rs.1.5 crores taken from the Times Bank by hypothecating the stocks and movables including machinery without obtaining paripassu agreement with Canara Bank was transferred to the account of M/s. Zen Global Finance Limited at Times Bank Limited. It has been stated that the accused were 10 authorised signatories of accused No.1 and also the signatories on the hypothecated agreements and that the accused have obtained enhanced credit facilities on different dates from 1997 to 2001 from Canara Bank without disclosing their dealing with the Times Bank.
b) K. Venkataramaiah shows that the complaint lodged by him to CBI with regard to the irregularities committed by the petitioner and other Directors of accused No.1.
c) V.Swamidason shows that registration of accused No.1 was done both at Bangalore and Chennai and about the appointment and resignation of the Directors of accused No.1.
d) K.S.Ramasubramanian shows that the registration of accused No.1 at Bangalore and Chennai and the investment made by the petitioner in accused No.1 and regarding the opening of account at Canara Bank.
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e) Shankar Raja shows that the investment made by M/s. Zen Global Finance Limited in accused No.1 and the involvement of the petitioner and other Directors of both companies.
f) K.S.Ramajayam shows that the formation of M/s. Zen Global Finance Limited and its involvement in accused No.1.
g) N.Kabilan shows that the types of credit facilities, the procedure of sanction of credit facilities, etc. in Canara Bank and the terms and conditions of Multiple Banking Arrangements, Consortium, Stock inspections, hypothecation of stocks, etc.
h) S. Ramanathan shows that the internal investigation conducted by him on the irregularities in the accounts of accused No.1 and the irregularities committed by the Directors of accused No.1.
i) B.Nagaraja shows the details of credit facilities and the opening of accused No.1's account at Canara Bank, A.F.Branch, Bangalore. His statement further 12 shows about the accounts of accused No.1, sanction of credit facilities at various stages, taking over of accused No.1 by accused Nos.3 and 4 of Zen Global Group in February, 1997 and the corporate guarantee offered by Zen Global Finance Limited to accused No.1 and the personal guarantee given by the petitioner/accused No.3 and other Directors. The statement also shows about the hypothecation of stocks, plant and machinery, book-debts, etc. to Canara Bank from 1994 onwards and collateral security of 10.15 acres of land at Sriperumbudur, Tamil Nadu. He has stated about the credit opinion letter issued by him to the Times Bank Limited in October, 1997 and no permission being required from the sanctioning authority for issuing of the opinion letter. He has stated about the non-receipt of Times Bank letter regarding sanction of credit facilities to accused No.1 in October, 1997 and about accused No.2 taking over the management of accused No.1 during later part of 1998.
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j) H.K.Shetty shows that the management of accused No.1 and about the Times Bank letter requesting credit opinion against accused No.1 and about the credit opinion letter sent to Times Bank by the Canara Bank. He has also stated about the credit opinion letter issued as per the guidelines in the prescribed format and no permission required from the sanctioning authority for issuing the opinion letter. He has also stated about the non-receipt of Times Bank letter regarding sanction of credit facilities to accused No.1 in October, 1997.
k) B.A.Shetty shows that the credit facilities sanctioned to accused No.1 by Canara Bank and about the export bills discounted with Times Bank in 1999 and the remittance of proceeds of export bills discounted with Times Bank in the current account of accused No.1 in Canara Bank and also regarding the credit facilities of Times Bank having not been reflected in the balance sheets of accused No.1.
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l) Manjunath G.Bhat shows that the credit facilities sanctioned by Canara Bank and about the hypothecation of the stock and collateral security and the documents executed between the Canara Bank and accused No.1.
m) D.Vijayakumar shows about the sanction of credit facilities by Canara Bank to accused No.1.
n) S.Paneerselvan shows about the removal of stock by accused No.1, which was hypothecated to Canara Bank and about the occupation of accused No.1 premises by Southern Gardens India Pvt. Ltd. at Bangalore and also about the filing of suit against accused No.1 before DRT, Bangalore and the recovery related matters.
o) Khysroo F.Engineer shows that the nature of work of M/s. Zen Global Finance Limited, Chennai and accused No.1 and about the relationship of the petitioner and also the role of the petitioner and accused No.4 in M/s. Zen Global Finance Limited and 15 accused No.1. He has also stated about credit facilities availed from Canara Bank, A.F.Branch, Bangalore and the reason for sanction of credit facilities by Times Bank in the name of accused No.1 in October, 1997 and the role of the petitioner and others for sanction of credit facilities. He has stated about the reason with regard to the petitioner and accused No.4 becoming the Directors of accused No.1 and the relationship of accused Nos.2, 3 and 4 and about the credit facilities of Times Bank having not been reflected in any of the balance sheets of accused No.1, submitted to Canara Bank and Times Bank/HDFC Bank.
p) R.Raghavan shows the involvement of the petitioner and accused No.4 as Directors of both M/s. Zen Global Finance Limited and accused No.1 and about the involvement of accused No.2 in accused No.1. His statement also shows that he had worked under the petitioner and accused No.2 in accused No.1 and about the affixing of his signature in the account opening 16 forms of Times Bank as per the instructions of the petitioner. He has stated about the export bills discounted with Times Bank and as per the instructions of Sri. Khusroo Engineer, G.M.Finance of accused No.1 and about the standing instructions issued to the buyer regarding payment to be routed through Times Bank.
q) T.Srinivasan shows his inspection of the records of accused No.1 at ROC Office, Chennai and submission of such report to Canara Bank and about the charges registered by Canara Bank and Times Bank against accused No.1 property. He has stated that the registered charges ought to have reflected out of secured loan in the balance sheet.
r) Miss A.Usha shows the charges credited by Times Bank Limited, Chennai on the properties of accused No.1 in 1997 and 1999 and registration with ROC, Chennai. She has stated about the search report submitted by her to Times Bank Limited.
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s) P.K.Samapath shows the credit facilities sanctioned by Times Bank in the name of accused No.1 in October, 1997 without obtaining paripassu agreement from Canara Bank and also the reason for sanction of the said facilities. He has stated about the charges created by Times Bank on the properties of accused No.1 and registered with ROC, Chennai and about the status report prepared by Gururaja Rao and the reason for release of loan to accused No.1. He has stated that the credit facilities given to accused No.1 as having not reflected in the balance sheets of accused No.1 and other matters.
t) J.Jayakumar shows the transactions made in the current account of accused No.1 maintained with Times Bank and about the diversion of Packing Credit Funds from the current account of accused No.1 to M/s. Zen Global Finance Limited and M/s. Janzen Castametals Limited from October, 1997 to 31.03.1999. 18
11. Prosecution has relied upon several documents with regard to the alleged acts and deeds of accused No.1, the petitioner and other accused persons. Prosecution has produced along with charge sheet voluminous documents to prove the charges levelled against the accused persons. At this stage it is unnecessary to make any detailed reference to the contents of the documents, since it may cause prejudice to the case of either of the parties, at the trial.
12. The statements of the prosecution witnesses and the documents produced by the prosecution, prima facie shows that there was acts of conspiracy and cheating as alleged in the charge sheet, by the accused persons. The charge-sheet discloses the commission of the offences by the petitioner under Ss.120 B and 420 IPC.
13. The essential ingredients of the offence of "criminal conspiracy", defined in S.120-A IPC, is the 19 agreement to commit an offence. It is trite that, in a case where the agreement is for accomplishment of an overtact which by itself constitutes an offence, then in that event, unless the statute so requires, no overtact is necessary to be proved by the prosecution, because, in such a fact situation, criminal conspiracy is established by proving such an agreement.
14. At the stage of framing of charge, consideration is limited for sifting the evidence to decide, if, the facts emerging from the record constituting the offence which the accused has been charged. At this stage, the Court has to see whether the material brought on record would reasonably connect the accused with the crime. Probative value of the materials placed on record cannot be gone into and the materials brought on record, at this stage, has to be presumed as true.
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15. From the materials produced on record by the prosecution, briefly noticed supra, the petitioner can be reasonably connected with the alleged crime. The materials on record produced by the prosecution shows the involvement of the petitioner in the banking transaction of accused No.1. Having regard to the alleged modus operandi adopted by the accused, as projected in the charge-sheet, to which, the learned Trial Judge has made a brief reference (relevant statements and documents), in para 18 of the Order passed by him, the learned Trial Judge is justified in declining to discharge the petitioner from the case.
16. In the light of the statements which the Investigation Officer has recorded and the documents collected and filed along with the charge sheet, there is a strong suspicion about the involvement of the petitioner in the commission of the crime in question. Consequently, I do not find any ground to interfere with the impugned order.
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In the result, criminal revision petition is dismissed by making it clear that, the observations made herein are limited for consideration of prima-facie case and availability of material for framing of charge against the petitioner. The observations made herein shall not be construed as an expression of opinion on the merits of the charge-sheet and it is for the prosecution to establish the charge against the accused in accordance with law.
Sd/-
JUDGE ca