Bombay High Court
Mr. Mohan Bansilal Agrawal & Anr vs The State Of Maharashtra on 30 October, 2018
Author: V. K. Jadhav
Bench: V. K. Jadhav
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
CRIMINAL WRIT PETITION NO. 555 OF 2015
1. Mr. Mohan Bansilal Agrawal
Age: 70 years, Occ: Chartered Accountant,
Resident of Bhusawal, Dist: Jalgaon.
Maharashtra.
(Original Accused No.34)
2. Mr. Anant N. Sabadra
Age: 54 years, Occ: Chartered Accountant,
Resident of Nasik, Dist: Nasik.
Maharashtra.
(Original Accused No.35) ... Petitioners
Versus
The State of Maharashtra
At the instance of,
Zilla Peth Police Station, Jalgaon,
Dist. Jalgaon, Maharashtra. ... Respondent
WITH
CRIMINAL WRIT PETITION NO. 716 OF 2015
Sachin s/o Madhukar Patil
Age: 33 years, Occu.: Service,
R/o. Plot No.6, New Bhushan
Colony, Jalgaon,
Tq. & Dist. Jalgaon. ... Petitioner
Versus
The State of Maharashtra
Through Zilla Peth Police Station,
Jalgaon, Tq. & Dist. Jalgaon. ... Respondent
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.....
Mr. Shrish Gupte, Senor Advocate i/by Mr. Joydeep Chatterji,
Advocate with Mr. A. D. Ostwal, Advocate for the Petitioners in
CriWP/555/2015.
Ms. Nima R. Suryawanshi, Advocate for the Petitioner in
CriWP/716/2015.
Mr. V. M. Kagne, APP for Respondent-State in both WPs.
.....
CORAM : V. K. JADHAV, J.
RESERVED ON : 07.09.2018
PRONOUNCED ON : 30.10.2018
PER COURT:-
1. Being aggrieved and dissatisfied by the common order dated
12.12.2012 below Exhibits 142 and 201 passed by learned Chief
Judicial Magistrate, Jalgaon dismissing thereby the discharge
applications of the petitioners in criminal writ petition no. 555 of
2015 and the order dated 13.12.2012 passed below Exhibit 228
thereby framing charge in Regular Criminal Case No.151 of 2012,
and the judgment and order dated 24.03.2015 passed by the
Additional Sessions Judge, Jalgaon in Criminal Revision No. 31 of
2013, thereby confirming the order of rejection of discharge
applications as aforesaid, the petitioners/original accused nos. 34
and 35 in Regular Criminal Case No.151 of 2012 have preferred
Criminal Writ Petition No. 555 of 2015.
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2. Similarly, being aggrieved and dissatisfied by the common
order dated 12.12.2012 below Exhibit 147 passed by learned Chief
Judicial Magistrate, Jalgaon dismissing thereby the discharge
application of the petitioner in criminal writ petition no. 716 of
2015 and the order dated 13.12.2012 passed below Exhibit 228
thereby framing charge in Regular Criminal Case No.151 of 2012,
and the judgment and order dated 20.03.2015 passed by the
Additional Sessions Judge, Jalgaon in Criminal Revision No. 7 of
2013, thereby confirming the order of rejection of discharge
application as aforesaid, the petitioner/original accused no. 19 in
Regular Criminal Case No.151 of 2012 has preferred Criminal Writ
Petition No. 716 of 2015.
3. Brief facts giving rise to these Criminal Writ Petitions are as
follows:
a. The petitioners in Criminal Writ Petition No. 555 of 2015 are
the accused in connection with crime no. 1 of 2011 registered with
Zilla Peth Police Station, Jalgaon for the offences punishable under
Sections 406, 408, 409, 420, 467, 468, 471, 471(A), 477(A), 201,
120(B) r/w 34 of IPC. The said crime came to be registered on the
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basis of a complaint lodged by one Santosh Waghchoure in his
capacity as Special Auditor of Cooperative Societies, Class-I,
Jalgaon. There are in all 35 accused arraigned in the crime. After
due investigation in the crime, charge sheet has been submitted
and the case is registered as Regular Criminal Case No. 151 of
2012. The petitioners in Criminal Writ Petition No. 555 of 2015 are
Chartered Accountants by profession. There is a Society, namely,
Tapi Co-operative Credit Society Limited, Chopda (for short,
"Credit Society"). The said Credit Society has many branches. An
audit of the said Credit Society is carried out by the Government
auditors as well as by the Chartered Accountants. The informant
Santosh Waghchoure, Special Auditor of Cooperative Societies,
Class-I, Jalgaon has carried out audit of the said Credit Society on
the basis of directions issued to him by the Registrar of Co-
operative Societies. As per the audit report, the Directors, Officers,
employees, borrowers, sureties, Government Auditors and also
Chartered Accountants conspired together and shared a common
intention to commit offences punishable as detailed in the FIR. The
Chairman alongwith 12 Directors, 13 employees, 4 borrowers, 4
guarantors and 2 Chartered Accountants/Auditors are alleged to
have been involved in commission of the crime. The period of
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commission of the crime is from the year 2007 to 2009 and the
total misappropriated amount is near about Rs.8,70,16,635/-. The
complainant/Special Auditor Mr. Santosh Waghchoure has noted
about the said misappropriation under various heads. The said
misappropriation is committed in three branches of the said Credit
Society. It has been alleged that an amount of Rs.3,09,88,131/- has
been misappropriated from Visanji Nagar Branch, an amount of
Rs.28,98,000/- has been misappropriated at Prabhat Colony Branch
and an amount of Rs.5,31,30,504/- has been misappropriate from
Ganesh Colony Branch.
b. The petitioners in Criminal Writ Petition No. 555 of 2015 had
submitted applications Exhibits 142 and 201 respectively, seeking
discharge. The learned Chief Judicial Magistrate, Jalgaon, by the
common order dated 12.12.2012 passed below Exhibits 142, 147,
201 and 202, held that no case is made out to discharge the
accused and thus, rejected the applications. Further, by order dated
12.12.2012 passed below Exhibit 1, the learned Chief Judicial
Magistrate, Jalgaon has recorded his opinion that there is ground
for presuming that the accused had committed an offence and
accordingly, framed charge against the accused under various
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penal Sections vide Exhibit 228. Being aggrieved by the same, the
petitioners in Criminal Writ Petition No. 555 of 2015 preferred
Criminal Revision No.31 of 2013. The learned Additional Sessions
Judge, Jalgaon, by judgment and order dated 24.03.2015,
dismissed the Criminal Revision No.31 of 2013.
c. The petitioner in Criminal Writ Petition No. 716 of 2015 was
one of the employees working in the said Credit Society at the
relevant time. He has been arraigned as accused no.19 in the
crime. He has also filed an application Exhibit 147 seeking
discharge which also came to be rejected by the learned Chief
Judicial Magistrate, Jalgaon, by the aforesaid common order dated
12.12.2012. The Criminal Revision No. 7 of 2013 preferred by the
petitioner came to be dismissed by learned Additional Sessions
Judge, Jalgaon by judgment and order dated 24.03.2015.
4. The learned senior counsel for the petitioners in Criminal
Writ Petition No.555 of 2015 submits that petitioner no.1/accused
no.34 was appointed as Auditor for the purpose of carrying out
audit of the said Credit Society for the period from 01.04.2005 to
31.03.2006. The audit was completed and the report was
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submitted on 25.09.2006. The petitioner no.2/accused no.35 was
appointed as Auditor for the purpose of carrying out audit of the
said Credit Society for the period from 01.04.2006 to 31.03.2007
and the audit was completed by him on 04.08.2007 and the report
was submitted on 09.08.2007. The period of commission of crime,
as alleged in the complaint, is between 01.04.2007 to 31.03.2009.
The said period of commission of crime is subsequent to the audits
carried out and completed by the petitioners. Learned senior
counsel submits that the allegations in the FIR would show that the
Chairman, Directors and employees of the said Credit Society have
misused and misappropriated the funds for their personal gain by
sharing common intention. Learned senior counsel submits that the
petitioners have no dominion over the property of the said Credit
Society and they were not having any control over the funds of the
Credit Society as such. Thus, the question of committing breach of
trust and misappropriation does not arise at all.
5. Learned Senior Counsel further submits that the petitioners
have conducted audit in accordance with the auditing standards
generally accepted. Those standards require the auditor to perform
audit to obtain reasonable assurance about the financial statements
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are free from material mis-statement. An audit includes examining,
on a test basis, the evidence supporting the amount and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by the
management as well as evaluating overall financial statements
presentation. In fact, the petitioners were the first auditors of the
said Credit Society who have reported a loss for the said Society.
Learned Senior Counsel submits that role of the petitioners is as a
watchdog and nothing more. The petitioners, in their role as a
watchdog, are not supposed to go through each and every entry
and transaction of the Society and they are supposed generally, in
their role as auditor, to supervise the volume of work on sample
basis or test check basis and to express an opinion. The petitioners
were required to carry out the statutory audit and during the
course of the audit, it was necessary to refer to and rely on the
accounts as well as the audit of the internal auditors. The learned
senior counsel submits that in fact, the institution of Chartered
Accounts of India has prepared guidelines and those are binding
upon the auditor and even there is a proforma prescribed by the
institution. In the light of the same, the liability of the auditor is
limited.
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6. Learned senior counsel submits that there is nothing in the
entire charge sheet to show as to how the present petitioners have
shared the common intention with the other accused persons.
There is nothing to show as to how the petitioners were responsible
for the acts of cheating, breach of trust, misappropriation, forgery
and falsification of the accounts. There are no grounds of
conspiracy. There is no prima facie case to proceed against the
petitioners. Learned senior counsel submits that the Special
Auditor, Co-operative Societies, Chalisgaon was informed vide
letter dated 18.12.2010 as to the persons required to be prosecuted
with reference to the three branches among the other branches. In
para 2, the Commissioner for Co-operation and Registrar,
Cooperative Societies, Maharashtra State, Pune has observed that
the Chairman, Board of Directors, concerned employees and
Officers are responsible and accordingly, directions have been
issued to prosecute those persons. The said category of concerned
persons as worked out in the said communication does not include
the auditor/statutory auditor. Learned senior counsel submits that
the prosecution of the present petitioners is unwarranted and
uncalled for. The present petitioners are not public servants and
the offence under Section 409 is not attracted against them.
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7. Learned senior counsel submits that the Chief Judicial
Magistrate has not considered the allegations made as against the
petitioners. The learned Additional Sessions Judge has also
dismissed the revision in a very casual manner. Before framing of
charge, the Court must apply judicious mind on the material placed
on record and must be satisfied that the commission of offence by
the accused was possible. Learned senior counsel submits that an
order of framing charge affects a person's liberty substantially and
therefore, it is the duty of the Court to consider judiciously whether
the material warranted framing of charge. It cannot blindly accept
the decision of the prosecution that the accused be asked to face a
trial. Learned senior counsel submits that so far as the ingredients
of the offence of criminal conspiracy, there should be an agreement
between the persons as to conspire and the said agreement should
be for doing of an illegal act or for doing, by illegal means, an act
which by itself may not be illegal. In other words, the essence of
criminal conspiracy is an agreement to do an illegal act and such an
agreement can be proved either by direct evidence or by
circumstantial evidence or by both and it is a matter of common
experience that direct evidence to prove conspiracy is rarely
available. In other words, an offence of conspiracy cannot be
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deemed to have been established on mere suspicion and surmises
or inferences which are not supported by cogent and acceptable
evidence. Learned senior counsel submits that there is absolutely
no evidence about conspiracy hatched by the present petitioners
with the other accused persons like Chairman, Directors and
employees of the said Credit Society. Learned senior counsel
submits that the impugned orders are not sustainable in the eyes of
law. Even the learned Chief Judicial Magistrate has made undue
haste in framing charge on the date of rejection of the applications
filed by the petitioners seeking discharge. Learned senior counsel
submits that the impugned orders are thus liable to be quashed and
the applications filed by the petitioners seeking discharge deserve
to be allowed.
8. Learned senior counsel, in order to substantiate his
contentions, placed reliance on the following cases:
1. Central Bureau of Investigation, Hyderabad vs K.
Narayana Rao reported in (2012) 9 SCC 512.
2. Subramanian Swamy vs A. Raja reported in (2012)
9 SCC 257.
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3. Baldev Singh vs State of Punjab reported in (2009)
6 SCC 564.
4. State and etc. vs Siddarth Vashisth alias Manu
Sharma and others reported in 2001 Cri.L.J. 2404.
5. Dr. Dattatraya Narayan Samant and others vs
State of Maharashtra reported in 1982 Cri.L.J.
1025.
6. State of Karnataka vs L. Muniswamy and others
reported in (1977) 2 SCC 699.
7. L. Krishna Reddy vs State by Station House Officer
and others reported in (2014) 14 SCC 401.
8. P. Vijayan vs State of Kerala and Another, reported
in (2010) 2 SCC 398.
9. Rukmini Narvekar vs Vijaya Satardekar and others
reported in (2008) 14 SCC 1.
10. Yogesh alias Sachin Jagdish Joshi vs State of
Maharashtra, reported in (2008) 10 SCC 394.
11. Dilawar Balu Kurane vs State of Maharashtra,
reported in (2002) 2 SCC 135.
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12. Century Spinning and Manufacturing Co. Ltd. and
others vs State of Maharashtra, reported in (1972)
3 SCC 282.
13. Vinay Tyagi vs Irshad Ali alias Deepak and others,
reported in (2013) 5 SCC 762.
14. Niranjan Singh Karam Singh Punjabi, Advocate vs
Jitendra Bhimraj Bijjaya and others reported in
(1990) 4 SCC 76.
15. Sunilkumar s/o Gayaprasad Mishra vs State of
Maharashtra, reported in 2009 All MR. (Cri) 2038.
9. Learned counsel for the petitioner in Criminal Writ Petition
No.716 of 2015 submits that the petitioner was working in the
branch of the said Credit Society at Visanji Nagar in the capacity as
a Peon and he was promoted subsequently as a Clerk. So far as
grant of loans to various persons, firms etc., the petitioner was not
in any manner concerned with sanction, grant, allotment or
disbursement of the amount. The petitioner, in the capacity as a
Clerk, was merely recording entries of transactions. He had no
authority or discretion or choice to make or refuse any such entry.
The petitioner has taken entries as per the vouchers and documents
on record. There is no evidence against him about the alleged
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conspiracy for commission of the crime attracting the ingredients of
fraud, cheating, misappropriation, criminal breach of trust or
falsification of the accounts. The petitioner had worked under the
thumb of his superiors mechanically. His act, thus, cannot be
labeled as deliberate action. However, the learned Chief Judicial
Magistrate has not considered the same and rejected his application
seeking discharge. The learned Additional Sessions Judge has also
dismissed the revision in a very casual manner. Learned counsel
submits that the impugned orders are not sustainable in the eyes of
law. Even the learned Chief Judicial Magistrate has made undue
haste in framing charge on the date of rejection of the application
filed by the petitioner seeking discharge. Learned counsel submits
that the impugned orders are thus liable to be quashed and the
application filed by the petitioner seeking discharge deserve to be
allowed.
10. Learned counsel for the petitioner in Criminal Writ Petition
No. 716 of 2015 has also placed reliance on the cases as relied
upon by learned senior counsel for the petitioners in Criminal Writ
Petition No. 555 of 2015.
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11. Learned APP submits that there are in all 35 accused persons
involved in the alleged commission of criminal breach of trust,
cheating, forgery, falsification of accounts with conspiracy and also
under the provisions of the Maharashtra Co-operative Societies Act,
1960. Learned APP submits that the Chairman alongwith 12
Directors, 13 employees, 4 borrowers, 4 guarantors and 2
Chartered Accountants/Auditors are involved in the alleged
commission of crime. He submits that the said misappropriation
has been committed in three branches of the said Credit Society
and total amount of misappropriation comes to Rs.8,70,16,635/-.
The management of the Credit Society, with the help of the
employees, their relatives as borrowers and close relatives as
guarantors, have committed these offences in collusion, involving
the element of conspiracy. Learned APP submits that the audit
done by three Government Auditors clearly discloses that the
Chairman and the Directors of the Credit Society, by using the
brain and skill of appointed Chartered Accountants and their
employees, have siphoned the amount more than Rupees eight
crores. The Credit Society has disbursed loan in crores to the close
relatives and friends without complying the due process for
sanctioning loan. The involvement of borrowers and guarantors
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cannot be overlooked. They have played active role in seeking
wrongful gain with the help of the management of the Credit
Society. Learned APP submits that it appears form the report of the
complainant/Special Auditor that the Credit Society has disbursed
loans in crores to their nearest persons. A loan to the tune of
Rupees one crore has been sanctioned to M/s. Tapi Software
Private Limited which is run by the Managing Directors of the
Credit Society. A loan to the tune of Rupees one crore has been
sanctioned to the managing committee member Ramkrishna Dhake
on the guarantee of his wife Jyotsana. Similarly, a loan of Rupees
one crore has been sanctioned to the said Jyotsana on the
guarantee of her husband Ramkrishna Dhake. Similarly, a loan of
Rs.25,00,000/- has been given to one of the accused Rajendra
Pande on the guarantee of his mother Kamlabai. These are the
examples and in almost all the transactions, the management of the
Credit Society committed contravention of the bylaws of the Credit
Society while following the procedure for grant of loan. Learned
APP submits that from the said report of the complainant/Special
Auditor, it also reveals that the petitioners in Criminal Writ Petition
No.555 of 2015, being Chartered Accountants and appointed as
auditors of the Credit Society for the years 2005-06 and 2006-07,
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failed to point out the correct financial position of the Credit
Society. On the other hand, they have tried to show the sound
economical condition of the Society as a developing society which
ultimately induced the common investors to invest their hard-
earned money. The petitioners have failed to perform their
expected duties as a watchdog and ultimately, are involved in the
alleged conspiracy in commission of the crime.
12. Learned APP further submits that the said Credit Society was
established in the year 1990 and there was only one branch of the
said society. Since 1990 to 2000, the other branches were not
established. However, suddenly in the year 2000, four branches
came to be established. In the year 2001, one additional branch
was opened and in the year 2002, four branches, in the year 2003,
16 branches and surprisingly in the year 2004, 71 branches came
to be opened. Thus, through the period between 1990 to 2005, the
Credit Society has opened near about 99 branches and attracted
the common investors to invest their money in the Credit Society.
Learned APP submits that the petitioners have deliberately shown
Credit Society as "A" category though the Credit Society was facing
loss. Thus, the present petitioners have played an active role in
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showing swelling of the economic condition as progress of the
Credit Society and the same is not possible without there being any
conspiracy hatched by them.
13. The learned APP submits that the petitioner in Criminal Writ
Petition No.716 of 2015 (original accused no.19) was working with
the said Credit Society and there is strong prima facie evidence in
the form of documents as against him. Learned APP submits that
even the strong suspicion is sufficient to frame charge against the
accused persons. There is sufficient material to proceed against the
accused persons. Learned Chief Judicial Magistrate has rightly
dismissed the applications seeking discharge and also the learned
Additional Sessions Judge has rightly confirmed the order of
rejection of applications seeking discharge. Learned APP submits
that there is not substance in the Criminal Writ Petitions and both
the Criminal Writ Petitions are liable to be rejected.
14. So far as the case instituted on the police report, under
Section 239 of Cr.P.C., the trial court is required to see whether the
ground for presuming commission of offences exists or whether the
charge is groundless; whether a prima facie case pertaining to the
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commission of the offence is made out or not. After considering the
entire material referred to in Section 239, if the trial court is of the
opinion that the accused has committed an offence, which is
competent to try and adequately punish, then he shall frame in
writing a charge as provided under Section 240 of Cr.P.C. So far as
Sections 227 and 228 of Cr.P.C. are concerned, the language may
be different to some extent about the discharge and framing of the
charge, however, what is important is the requirement whether
there is sufficient ground for proceeding or not. Sections 239 and
240 of the Cr.P.C. are reproduced herein below:
"239. If, upon considering the police report and the
documents sent with it under section 173 and making such
examination, if any, of the accused as the Magistrate thinks
necessary and after giving the prosecution and the accused
an opportunity of being heard, the Magistrate considers the
charge against the accused to be groundless, he shall
discharge the accused, and record his reasons for so doing.
240. (1) If, upon such consideration, examination, if any,
and hearing, the Magistrate is of opinion that there is
ground for presuming that the accused has committed an
offence triable under this Chapter, which such Magistrate is
competent to try and which, in his opinion, could be
adequately punished by him, he shall frame in writing a
charge against the accused.
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(2) The charge shall then be read and explained to the
accused, and he shall be asked whether he pleads guilty of
the offence charged or claims to be tried."
15. In the case of L. Krishna Reddy (supra), relied upon by
learned senior counsel for the petitioners, in para 11 of the
judgment, the Supreme Court has made the following observations:
"11. The court is neither a substitute nor an adjunct of the
prosecution. On the contrary, once a case is presented to it
by the prosecution, its bounden duty is to sift through the
material to ascertain whether a prima facie case has been
established which would justify and merit the prosecution of
a person. The interest of a person arraigned as an accused
must also be kept in perspective lest, on the basis of flippant
or vague or vindictive accusations, bereft of probative
evidence, the ordeals of a trial have to be needlessly suffered
and endured. We hasten to clarify that we think the
statements of the complainant are those of an anguished
father who has lost his daughter due to the greed and
cruelty of his son-in-law. As we have already noted, the
husband has taken his own life possibly in remorse and
repentance. The death of a child even to avaricious parents
is the worst conceivable punishment."
16. In the case of P. Vijayan (supra), the Supreme Court in para
10 of the judgment has made the following observations:
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"10. Before considering the merits of the claim of both the
parties, it is useful to refer to Section 227 of the Code of
Criminal Procedure, 1973, which reads as under:-
"227. Discharge.--If, upon consideration of the
record of the case and the documents
submitted therewith, and after hearing the
submissions of the accused and the prosecution
in this behalf, the Judge considers that there is
not sufficient ground for proceeding against
the accused, he shall discharge the accused and
record his reasons for so doing."
If two views are possible and one of them gives rise to
suspicion only, as distinguished from grave suspicion, the
Trial Judge will be empowered to discharge the accused and
at this stage he is not to see whether the trial will end in
conviction or acquittal. Further, the words "not sufficient
ground for proceeding against the accused" clearly show
that the Judge is not a mere Post Office to frame the charge
at the behest of the prosecution, but has to exercise his
judicial mind to the facts of the case in order to determine
whether a case for trial has been made out by the
prosecution. In assessing this fact, it is not necessary for the
Court to enter into the pros and cons of the matter or into a
weighing and balancing of evidence and probabilities which
is really the function of the Court, after the trial starts."
17. In Rukmini Narvekar's case (supra), in paragraphs 22, 23,
32 and 38, the Supreme Court has made the following
observations:
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(Markandey Katju, J.)
"22. Thus in our opinion, while it is true that ordinarily
defence material cannot be looked into by the Court while
framing of the charge in view of D.N. Padhi's case (supra),
there may be some very rare and exceptional cases where
some defence material when shown to the trial court would
convincingly demonstrate that the prosecution version is
totally absurd or preposterous, and in such very rare cases
the defence material can be looked into by the Court at the
time of framing of the charges or taking cognizance. In our
opinion, therefore, it cannot be said as an absolute
proposition that under no circumstances can the Court look
into the material produced by the defence at the time of
framing of the charges, though this should be done in very
rare cases, i.e. where the defence produces some material
which convincingly demonstrates that the whole prosecution
case is totally absurd or totally concocted.
23. We agree with Shri Lalit that in some very rare cases the
Court is justified in looking into the material produced by
the defence at the time of framing of the charges, if such
material convincingly establishes that the whole prosecution
version is totally absurd, preposterous or concocted.
However, in this case it cannot be said that the evidence in
the Civil Suit which was produced by the defence before the
trial court established convincingly that the prosecution case
is totally absurd or preposterous. In our opinion this is a
matter which has to be looked into by the trial Court."
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(Altamas Kabir, J.) (concurring)
"32. While referring to Sections 227 and 228 Cr.P.C.
relating to Sessions triable cases, the three-Judge Bench (in
Debendra Nath Pathi case) also considered the provisions of
Sections 239 and 240 Cr.P.C. relating to trial of warrant
cases by Magistrates, which are almost identical to Sections
227 and 228 Cr.P.C. The decision rendered in Debendra
Nath Padhi's case (supra) makes it very clear that the
dominant issue being dealt with in the case was with regard
to the right enjoyed by an accused to produce evidence for
the consideration of the Court at the stage of framing of
charge.
38. In my view, therefore, there is no scope for the accused
to produce any evidence in support of the submissions made
on his behalf at the stage of framing of charge and only such
materials as are indicated in Section 227 Cr.P.C. can be
taken into consideration by the learned magistrate at that
stage. However, in a proceeding taken therefrom under
Section 482 Cr.P.C. the Court is free to consider material
that may be produced on behalf of the accused to arrive at a
decision whether the charge as framed could be maintained.
This, in my view, appears to be the intention of the
legislature in wording Sections 227 and 228 the way in
which they have been worded and as explained in Debendra
Nath Padhi's case (supra) by the larger Bench therein to
which the very same question had been referred."
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18. In the case of Yogesh alias Sachin Jagdish Joshi (supra), the
Supreme Court in para 16 of the Judgment has made the following
observations:
"16. It is trite that the words "not sufficient ground for
proceeding against the accused" appearing in the Section
postulate exercise of judicial mind on the part of the Judge
to the facts of the case in order to determine whether a case
for trial has been made out by the prosecution. However, in
assessing this fact, the Judge has the power to sift and weigh
the material for the limited purpose of finding out whether
or not a prima facie case against the accused has been made
out. The test to determine a prima facie case depends upon
the facts of each case and in this regard it is neither feasible
nor desirable to lay down a rule of universal application. By
and large, however, if two views are equally possible and
the Judge is satisfied that the evidence produced before him
gives rise to suspicion only as distinguished from grave
suspicion, he will be fully within his right to discharge the
accused. At this stage, he is not to see as to whether the trial
will end in conviction or not. The broad test to be applied is
whether the materials on record, if unrebutted, make a
conviction reasonably possible. [See: State of Bihar Vs.
Ramesh Singh and Prafulla Kumar Samal (1977) 4 SCC 39]"
19. In the case of State of Karnataka vs L. Muniswamy and
Others (supra), in para 10 of the judgment, the Supreme Court has
made the following observations:
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"10. On the other hand, the decisions cited by learned
counsel for the respondents in Vadilal Panchal v. D.D. Gha-
digaonkar and Century Spinning & Manufacturing Co. v.
State of Maharashtra show that it is wrong to say that at
the stage of framing charges the court cannot apply its
judicial mind to the consideration whether or not there is
any ground for presuming the commission of the offence by
the accused. As observed in the latter case, the order
framing a charge affects a person's liberty substantially and
therefore it is the duty of the court to consider judicially
whether the material warrants the framing of the charge. It
cannot blindly accept the decision of the prosecution that
the accused be asked to face a trial. In Vadilal Panchal's
case, section 203 of the old Code was under consideration,
which provided that the Magistrate could dismiss a
complaint if after considering certain matters mentioned in
the section there was in his judgment no sufficient ground
for proceeding with the case. To an extent Section 327 of
the new Code contains an analogous power which is
conferred on the Sessions Court. It was held by this Court,
while considering the true scope of Section 203 of the old
Code that the Magistrate was not bound to accept the result
of an enquiry or investigation and that he must apply his
judicial mind to the material on which he had to form his
judgment. These decisions show that for the purpose of
determining whether there is sufficient ground for
proceeding against an accused the court possesses a
comparatively wider discretion in the exercise of which it
can determine the question whether the material on the
record, if unrebutted, is such on the: basis of which a
conviction can-be said reasonably to be possible."
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20. In view of the observations of the Supreme Court in the
aforesaid cases and also the other cases relied upon by the learned
senior counsel for the petitioners, broadly the following principles
emerge:
(i) The Judge while considering the question of framing
the charges under Section 227 of the Cr.P.C. has the
undoubted power to sift and weigh the evidence for
the limited purpose of finding out whether or not a
prima facie case against the accused has been made
out. The test to determine prima facie case would
depend upon the facts of each case.
(ii) Where the materials placed before the Court disclose
grave suspicion against the accused which has not
been properly explained, the Court will be fully
justified in framing a charge and proceeding with the
trial.
(iii) The Court cannot act merely as a Post Office or a
mouthpiece of the prosecution but has to consider the
broad probabilities of the case, the total effect of the
evidence and the documents produced before the
Court, any basic infirmities etc. However, at this stage,
there cannot be a roving enquiry into the pros and
cons of the matter and weigh the evidence as if he was
conducting a trial.
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(iv) If on the basis of the material on record, the Court
could form an opinion that the accused might have
committed offence, it can frame the charge, though
for conviction the conclusion is required to be proved
beyond reasonable doubt that the accused has
committed the offence.
(v) At the time of framing of the charges, the probative
value of the material on record cannot be gone into
but before framing a charge the Court must apply its
judicial mind on the material placed on record and
must be satisfied that the commission of offence by
the accused was possible.
(vi) At the stage of Sections 227 and 228, the Court is
required to evaluate the material and documents on
record with a view to find out if the facts emerging
therefrom taken at their face value discloses the
existence of all the ingredients constituting the alleged
offence. For this limited purpose, sift the evidence as it
cannot be expected even at that initial stage to accept
all that the prosecution states as gospel truth even if it
is opposed to common sense of the broad probabilities
of the case.
(vii) If two views are possible and one of them gives rise to
suspicion only, as distinguished from grave suspicion,
the trial Judge will be empowered to discharge the
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accused and at this stage, he is not to see whether the
trial will end in conviction or acquittal.
(viii) The order framing a charge affects the person's liberty
substantially and therefore it is the duty of the Court
to consider judicially whether the material warrants
the framing of the charge.
(ix) In some very rare exceptional cases, where some
defence material, when shown to the trial court,
would convincingly demonstrate that the prosecution
version is totally absurd or preposterous, and in such
very rare cases, the defence material can be looked
into by the Court at the time of framing of the charge
or taking cognizance.
21. In the instant case, the learned senior counsel for the
petitioners in Criminal Writ Petition No. 555 of 2015 vehemently
submits that both the accused persons were not having any
dominion over the property of the said Credit Society. They had no
control over the funds of the Credit Society as such. They are not
the beneficiaries of any of the funds of the Credit Society. Their
role is of a Chartered Accountant/Auditor and in that capacity, they
are at the most a watchdog and nothing more. They can not go into
details of each and every entry and transaction of the Credit
Society. They are supposed to generally supervise in their capacity
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as auditor to maintain all the accounts. Learned senior counsel has
also vehemently submitted that the audit was completed prior to
filing of the report dated 09.08.2007. Both the petitioners have
raised the points which were required to be raised by them as an
auditor. It seems that those objections have not been duly
considered by the Credit Society, by the informant and also by the
Investigating Officer. There is no evidence about the conspiracy on
the part of the petitioners to abet the commission of crime.
22. I have carefully gone through the Special Audit Report
prepared by the complainant Mr. Santosh Waghchoure. The
petitioners are the Chartered Accountants. They were appointed as
Auditors of the Credit Society for the financial years 2005-06 and
2006-07 respectively. It has been specifically pointed out in the
Special Audit Report that at the time of establishment of the Credit
Society, there was only one branch. However, since 1990 to 2005,
the Credit Society has opened near about 99 branches. The Credit
Society has succeeded in attracting the common investors to invest
their money in the Credit Society. Prima facie, it appears that
instead of pointing out the economical condition of the Credit
Society in plain and clear words, the petitioners, being Chartered
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Accountants, have shown the economical condition of the Credit
Society as progress of the Society. The petitioners have arranged
the marks of appreciation in such a manner justifying the "A"
category as alloted by them to the Credit Society. On page no. 23 of
the Special Audit Report of the complainant, the complainant has
made the following observations in respect of both the petitioners:
"उपररक तकतययततल करर चयरत, ससचयलक, अधधकयरत ययशशवयय
करर दयर, रयरतनदयर व सन २००५/२००६ व २००६/२००७
यय दरन वरयरचच शयसककय लचखयपरतकण करणयरच सनदत लचखयपयल
शत अनसत सयबदय व तययसचयय कसपनतचच करर चयरत, पयरर नर व शत.
ररहन बत. अगवयल, सनदत लचखयपयल व तययसचयय कसपनतचच करर चयरत
हच सससथचचच सन २००५-२००६ व २००६-२००७ यय २ वरयरचच
शयसककय लचखयपरतकक कयरण यय दरनहत लचखयपरतककयसनत सससथचचत
आधथर क ससथतत तरटयत असतयनय तत सपष रयसडलत नयहत,
सससथचस गगणपतकयचत चगककचत रयसडणत करन अ वगर शदलय व
सभयसद, ठच वतदयर, रनतय ययसनय असच दशर शवलचलत शक, सयथ उतर
आहच, छयन आहच, आधथर क सकर आहच. अहवयलयत रयसडलच रयत
दयखलययवर सपषपणच तररय आहच असच नरमद कचलच नयहत शह
लचखयपरतककयसचत रनतय, ठच वतदयर, सभयसद, सससथचचत फसवणमक व
शदशयभमल करणयरत आहच. वयसतशवक ९८ शयखचचच लचखयपरतकण यय
लचखयपरतककयसनत रयत २३ कययर रत शदवसयत ससपशवणच शह बयबच
सवर सवयससपष करतच शक लचखयपरतकण पयरयशणक, वयरवत व सतय
इ. झयलचलच नयहत."
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Translated
"The employees, director, officers apart from debtors,
guarantors mentioned in the above statement who have
undertaken these two years government audit i.e.
2005/2006 to 2006/2007 through Shri Anant Sabdra,
Charted Account and employees of his Company, partner
and Shri Mohan B. Agrawal, Charted Accountant and
employees of his Company who have not shown the
correct financial condition of the society which was in loss
while making audit of the society. However, they have
shown wrong information in their Statement of Accounts
to the members, depositors and public that society is in
good, excellent and in financially viable condition and
awarded category "A" to the society. But, they did not
clearly shown in their certificate that society is in loss and
thus cheated the depositors and members of the society.
Actually, audit verification of 98 branches have been done
only in 23 working days by these auditors, which itself
clearly indicates that the audit verification of accounts
have not been done honestly, properly and correctly."
23. It has been specifically noted by the complainant at the end
of the above para that within 23 days only, the present petitioners
have carried out the audit of 98 branches of the Credit Society
which itself demonstrates that the audit has not been done honestly
etc.
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24. On going through the Special Audit Report of the
complainant minutely, I was shocked and disturbed. Loans of huge
amounts came to be alloted to the relatives and close persons
without following due procedure and even in some of the cases,
without obtaining the surety, guarantee, mortgage etc.. The said
loan amount varies from Rs.25,00,000/- to Rs.4.75 Crores. Though
the petitioners had carried out the audit of the said Credit Society
prior to most of the said transactions, however, it was a beginning
and prima facie it appears that with the help of the skill and brains
of the petitioners, the co-accused persons being Directors and
employees, have looted the hard earned amounts of the investors.
25. So far as the charge under Section 120-B is concerned, it is
well settled that a conspiracy is always hatched in secrecy and it is
impossible to adduce direct evidence of the common intention of
the conspirators. The meeting of minds of the conspirators can be
inferred from the circumstances proved by the prosecution. It is
also well settled that to establish a charge of conspiracy, knowledge
about indulgence in either an illegal act or a legal act by illegal
means is necessary. Bearing in mind all the essential features of the
offence of a criminal conspiracy, if we advert to the facts of the
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instant case, in the light of the Special Audit Report submitted by
the complainant and the observations made therein, prima facie it
appears that the petitioners alongwith the co-accused persons
hatched the conspiracy to commit the alleged offences.
26. So far as the petitioner in Criminal Writ Petition No. 716 of
2015 is concerned, there is sufficient evidence against him to frame
a charge. The petitioner was serving as a Clerk with the Tapi Co-
operative Credit Society Limited, Jalgaon in its Visanji Nagar
Branch. There are several documents on record pointing out the
illegalities committed by the said branch and those are serious in
nature. The petitioner has served in the said Society in between
09.01.2006 to 04.03.2008. I do not find that the role of the
petitioner is limited to the extent of obeying the orders of the
superiors. No case is made out to interfere in the orders passed by
the Courts below.
27. Hence, considering the ratio laid down by the Supreme Court
in the cases as discussed above and also adverting the said ratio
laid down by the Supreme Court to the facts of the instant case and
after going through the Special Audit Report prepared by the
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complainant, I am of the view that both the Courts below have
rightly passed the orders. There is no substance in the writ
petitions. Hence the following order:
ORDER
Criminal Writ Petition No. 555 of 2015 (Mr. Mohan Bansilal Agrawal & another vs. The State of Maharashtra) and Criminal Writ Petition No.716 of 2015 (Sachin s/o Madhukar Patil vs. The State of Maharashtra) are hereby dismissed.
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