Orissa High Court
Kulamani Parida vs State Of Odisha .... Opp. Party on 9 November, 2022
Author: Chittaranjan Dash
Bench: Chittaranjan Dash
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No.3756 of 2016
Kulamani Parida .... Petitioner
Mr. R.K. Rout, Advocate
-versus-
State of Odisha .... Opp. Party
Mr. J. Katikia, AGA
CORAM:
JUSTICE CHITTARANJAN DASH
DATE OF JUDGMENT : 09.11.2022
Chittaranjan Dash, J
1. Heard learned counsel for the parties.
2. By means of this application, the Petitioner seeks to quash the order
dated 17th October, 2015 passed in C.T. Case No.3664 of 2014 by the
S.D.J.M., Bhubaneswar whereby the court took cognizance of offence
under Sections 420/467/468/471/120-B IPC involving the Petitioner
along with others.
3. The background facts of the case is that on 22nd September, 2014 the
complainant, K. Jagannathan, Chief Manager, State Bank of Travancore,
Bhubaneswar Branch situated over Plot No.N-1/40, IRC Village,
Nayapalli, Bhubaneswar, Dist. Khurda alleged that the State Bank of
Travancore, Bhubaneswar Branch had sanctioned financial assistance to
the tune of Rs.600 lakhs (working capital limit of Rs.500 lakhs and letter
of credit limit of Rs.100 lakhs) to M/s. Chhotray Suppliers, a partnership
firm having its office at Plot No.2008/1199, Nayapalli, Bhubaneswar.
Mr. Siba Narayan Chhotray is the Managing partner and Mrs. Swapna
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Chhotray is the partner of the firm. Mr. Siba Narayan Chhotray is also
the Managing Director of M/s. Srabani Constructions Pvt. Ltd wherein
Mrs. Swapna Chhotray is the Director. Necessary security and
documents were executed by Mr. Siba Narayan Chhotray and Mrs.
Swapna Chhotray in favour of State of Bank of Travancore,
Bhubaneswar Branch as per the terms and conditions laid down in the
sanction letter given by the complainant, inter alia, on mortgage of
immovable property belonging to Mrs. Swapna Chhotray and M/s.
Srabani Constructions Pvt. Ltd. , Nayapalli, Bhubaneswar. M/s. Srabani
Constructions Pvt. Ltd. had mortgaged the property situated over Plot
No.89, pertaining to Khata No.82/23 measuring Ac.0.721 decimals in
Mouza-Damodarpur, Khandagiri, Bhubaneswar in favour of State of
Bank of Travancore, Bhubaneswar Branch belonging to M/s. Srabani
Constructions Pvt. Ltd. which they obtained through sale deed bearing
No.4872, dated 24th September, 2004 of SRO, Khandagiri. The mortgage
was created by Sri Siba Narayan Chhotray in the capacity as the
Managing Director of the company vide Resolution dated 18th
December, 2012. Mr. Siba Narayan Chhotray and Mrs. Swapna
Chhotray remained guarantors to the facility granted in favour of M/s.
Chhotray Suppliers and executed guarantee documents in favour of State
of Bank of Travancore, Bhubaneswar Branch. Mr. Siba Narayan
Chhotray in the capacity as Managing Director of M/s. Srabani
Constructions Pvt. Ltd. registered the charge in respect of the mortgaged
property in favour of the Bank with Registrar of Companies, Cuttack on
20th December, 2012 by filing Form No.8. During the course of
operation of working capital account for the cash credit limit to the tune
of Rs.500 lakhs, M/s. Chhotray Suppliers serviced the interest charge
regularly. Bank in regular course of business for search report on 16th
June, 2014 noticed that at Registrar of Companies, Bank's charge over
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the mortgaged property has been shown as satisfied on 12th June, 2013.
That the alleged accused persons in the above referred C.T.Case stated to
have submitted a scanned letter of "No Objection Certificate"
purportedly issued by the Bank stating that M/s. Chhotray Suppliers
have repaid the entire dues to the Bank (working capital Rs.500 lakhs
and letter of credit limit of Rs.100 lakhs) in full and there is no
outstanding from M/s. Chhotray Suppliers along with charge
satisfaction in Form No.17 digitally signed by Sathua Laxmidhar, (an
employee working under Mr. Siba Narayan Chhotray,). as Chief
Manager of the State Bank of Travancore, Bhubaneswar Branch to the
Registrar of Companies satisfying corporate guarantee of M/s. Srabani
Constructions Pvt. Ltd. to secure cash credit/letter credit limit is
lifted/cancelled. The contents of the charge satisfaction Form No.17 are
certified by one Kulamani Parida, the Chattered Accountant of M/s.
Chhotray Suppliers (the Petitioner in the present application).
4. Whereas, no such letter has been issued and signed by the Chief
Manager, State Bank of Travancore, Bhubaneswar Branch. The loan was
never satisfied as on 12th June, 2013. When the matter of forgery and
impersonation was brought to the notice of the accused persons such as
Mr. Siba Narayan Chhotray, Mrs. Swapna Chhotray, Kulamani Parida,
the present Petitioner, M/s. Chhotray Suppliers, M/s. Srabani
Constructions Pvt. Ltd. they admitted the forgery orally and had
submitted letters. However, the total dues to the Bank had been fully
remitted by them on 25th August, 2014. The above said persons being
accused of the above act connived and conspired in siphoning off the
public money with an intention to defraud the Bank and accordingly the
case was registered and investigated into.
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5. On the basis of the complaint of the Bank as narrated above, received
by EOW, Bhubaneswar, the EOW P.S. Case No.23/14 under Sections
467/468/471/420/120-B IPC was registered and on the direction of the
S.P. E.O.W, investigation commenced into the matter.
6. The Investigating Officer having taken up the investigation, examined
the complainant and the witnesses, seized the connected documents from
State Bank of Travancore, Bhubaneswar Branch as well as from M/s.
Srabani Constructions Pvt. Ltd. verified the Form No.8 and Registrar of
Companies, received the certified computer generating documents from
the Registrar of Companies under requisition. On scrutiny of Bank
statements of M/s. Chhotray Suppliers, it is ascertained that M/s.
Chhotray Suppliers closed their Account No.67205271336 with State
Bank of Travancore, Bhubaneswar Branch on 25th August, 2015 and that
the said Bank to have given a certificate on 23rd September, 2014.
7. It further revealed that on 10th June, 2013 the said persons submitted
Form No.17 before the Registrar of Companies, Cuttack claiming that
they have repaid the loan amount to State Bank of Travancore,
Bhubaneswar Branch and declaring that there is no outstanding against
the company whereas on scrutiny it is ascertained that on 10th June, 2013
M/s. Chhotray Suppliers was having outstanding of Rs.4,99,85,793.41 to
be paid to the State Bank of Travancore, Bhubaneswar Branch in the
said Account No.67205271336. On scrutiny of Form No.17 at the
Registrar of Companies it is also ascertained that Sri Siba Narayan
Chhotray puts his digital signature on Form No.17 showing that the
company namely M/s. Srabani Constructions Pvt. Ltd. satisfying the
corporate guarantee on 12th June, 2013 including a scanned letter of "No
Objection Certificate" purportedly issued by the Bank on 10th June, 2013
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stating that M/s. Chhotray Suppliers have repaid the entire dues to the
Bank in full and there is no outstanding from M/s. Chhotray Suppliers
and copy of the extract of the minutes of the meeting of Board of
Directors as on 10th June, 2013 at the office of the company at 11 a.m.
regarding closure of the said loan. One Sathua Laxmidhar an employee
under M/s. Chhotray Suppliers puts his digital signature as Chief
Manager, State Bank of Travancore, Bhubaneswar Branch. The present
Petitioner, namely, Kulamani Parida, Chattered Accountant of M/s.
Chhotray Suppliers also to have put his digital signature certifying the
satisfaction of charge in Form No.17. Allegedly, therefore, all the above
persons submitted forged documents created purposefully.
8. It is further alleged that during interrogation of Kulamani Parida,
Chattered Accountant of M/s. Srabani Constructions Pvt. Ltd. it is
ascertained that on 10th June, 2013 Mr. Siba Narayan Chhotray of M/s.
Srabani Constructions Pvt. Ltd. gave letter to him (Kulamani Parida)
enabling him to file Form No.17 before the Registrar of Companies,
Cuttack in favour of M/s. Srabani Constructions Pvt. Ltd. along with a
scanned letter of 'No Objection Certificate" purportedly to have been
issued by State Bank of Travancore, Nayapalli, Bhubaneswar and other
connected documents of the said company. Accordingly, the present
Petitioner Kulamani Parida submitted Form No.17 before the Registrar
of Companies regarding satisfaction of charge over the mortgaged
property but examination of Form No.17 reveals that he had not verified
from the concerned Bank regarding issue of "No Objection Certificate"
in favour of M/s. Chhotray Suppliers. The investigation further revealed
that the certificate enrollment form regarding application for digital
signature in favour of Kulamani Parida, Sri Siba Narayan Chhotray and
Laxmidhar Sathua, has been registered by Tata Consultancy Pvt. Ltd.,
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Hyderabad in favour of Kulamani Parida vide Enrollment No.2672765
valid for two years, Laxmidhar Sathua vide Enrollment No.2823689 and
Sri Siba Narayan Chhotray created two digital signature vide Certificate
Enrollment Form No.2914143 and 2698034 respectively valid for two
years. Laxmidhar Sathua also changed his name as Sathua Laxmidhar.
9. During investigation, it is further revealed from the document that the
seized documents were sent for examination and opinion of the hand
writing bureau and opinion was obtained and on verification, it is found
that documents were forged.
10. Be that as it may, the investigation revealed that the present
Petitioner Kulamani Parida in connivance and conspiracy with Sri Siba
Narayan Chhotray, Mrs. Swapna Chhotray and M/s. Chhotray Suppliers
and M/s. Srabani Constructions Pvt. Ltd. along with Laxmidhar Sathua
created fake "No Objection Certificate" and got the signature of the
Chief Manager, State Bank of Travancore, Nayapalli, Bhubaneswar
Branch forged and in a fraudulent manner submitted the form before the
Registrar of Companies, Cuttack representing the same to be charged in
documents. Consequent upon registration of the case against the above
said persons, the learned S.D.J.M., Bhubaneswar took cognizance of the
offences involving the Petitioner and others as impugned herein.
11. It is submitted by learned counsel for the Petitioner that in due
discharge of his professional duty the Petitioner submitted the "No
Objection Certificate" in Form No.17 before the Registrar of Companies
as was supplied to him by his client M/s. Chhotray Suppliers. According
to the learned counsel it is the duty and responsibility of the client to
supply the document necessary for compliance for its onward
submission before the competent authority and there is no scope for the
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Chattered Accountant to go behind the document to ensure that the
documents in question supplied by the client is genuine or not. As a
professional, the Chattered Accountant discharged his duty on good faith
and submitted the form before the Registrar of Companies not being
aware of the manner in which the document in question asked to be
submitted before the Registrar of Companies was procured by the client.
Consequently, nothing can be attributed to the Chattered Account as
regards the duty discharged by him as required of him professionally as
instructed/directed by the client. Relying upon the decision in the cases
of Nrusinghnath Mishra - v. Republic of India, reported in (2010) 46
OCR 623, Nimain Charan Mohanty v. Republic of India reported in
(2015) I ILR, Cuttack 1122 and Central Bureau of Investigation,
Hyderabad v. K. Narayan Rao, reported in (2013) I OLR SC 74.
Learned counsel for the Petitioner seeks quashing of the order of
cognizance vis-à-vis the Petitioner.
12. Learned Additional Government Advocate for the State, on the other
hand, vehemently opposed the contention raised by the learned counsel
for the Petitioner and inter alia submitted that the documents submitted
before the Registrar of Companies by the Petitioner as a Chartered
Accountant ought to have verified its genuineness before being
submitted and cannot escape the rigor of law on the plea of his discharge
of duty as professional on good faith and submitted the impugned order
taking cognizance to be just and proper.
10. In the case of Central Bureau of Investigation v. K. Narayana Rao,
the Apex Court held as under :
23) A lawyer does not tell his client that he shall win
the case in all circumstances. Likewise a physician
would not assure the patient of full recovery in every
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case. A surgeon cannot and does not guarantee that the
result of surgery would invariably be beneficial, much
less to the extent of 100% for the person operated on.
The only assurance which such a professional can give
or can be given by implication is that he is possessed of
the requisite skill in that branch of profession which he
is practicing and while undertaking the performance of
the task entrusted to him, he would be exercising his
skill with reasonable competence. This is what the
person approaching the professional can expect.
Judged by this standard, a professional may be held
liable for negligence on one of the two findings, viz.,
either he was not possessed of the requisite skill which
he professed to have possessed, or, he did not exercise,
with reasonable competence in the given case, the skill
which he did possess.
24) In Jacob Matghew vs. State of Punjab &
Anr. (2005) 6 SCC 1 this court laid down the standard
to be applied for judging. To determine whether the
person charged has been negligent or not, he has to be
judged like an ordinary competent person exercising
ordinary skill in that profession. It is not necessary for
every professional to possess the highest level of
expertise in that branch which he practices.
25) In Pandurang Dattatraya Khandekar vs. Bar
Council of Maharashtra & Ors (1984) 2 SCC 556, this
Court held that "...there is a world of difference
between the giving of improper legal advice and the
giving of wrong legal advice. Mere negligence
unaccompanied by any moral delinquency on the part
of a legal practitioner in the exercise of his profession
does not amount to professional misconduct.
26) Therefore, the liability against an opining advocate
arises only when the lawyer was an active participant
in a plan to defraud the Bank. In the given case, there is
no evidence to prove that A-6 was abetting or aiding
the original conspirators.
27) However, it is beyond doubt that a lawyer owes an
"unremitting loyalty" to the interests of the client and it
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is the lawyer's responsibility to act in a manner that
would best advance the interest of the client. Merely
because his opinion may not be acceptable, he cannot
be mulcted with the criminal prosecution, particularly,
in the absence of tangible evidence that he associated
with other conspirators. At the most, he may be liable
for gross negligence or professional misconduct if it is
established by acceptable evidence and cannot be
charged for the offence under Sections 420 and 109 of
IPC along with other conspirators without proper and
acceptable link between them. It is further made clear
that if there is a link or evidence to connect him with
the other conspirators for causing loss to the institution,
undoubtedly, the prosecuting authorities are entitled to
proceed under criminal prosecution. Such tangible
materials are lacking in the case of the respondent
herein.
28) In the light of the above discussion and after analyzing all the materials, we are satisfied that there is no prima facie case for proceeding in respect of the charges alleged insofar as respondent herein is concerned. We agree with the conclusion of the High Court in quashing the criminal proceedings and reject the stand taken by the CBI.
13. In the case of Nrusinghnath Mishra - v. Republic of India, this Court while dealing with the matter in respect to the professional duty of an Advocate held as under:
At this juncture, it would be profitable to note that the other co-accused is an advocate, who was engaged by the New India Assurance Company Ltd. to investigate the case and while performing such professional work, he sent a report that he could not trace out any records regarding hospitalization of the petitioner at S.C.B. Medical College, Hospital. There is no material whatsoever to show prima facie that the co- accused in order to cause an illegal gain to either himself or the petitioner or to cause illegal loss to the company gave such a report. A report or opinion rendered by an advocate, to his client, if found to be Page 9 of 14 // 10 // incorrect, cannot constitute an offence when nothing is shown that such report or opinion is purposefully given to commit any offence. The prosecution has also not come out with any material disclosing meeting of mind between the two accused persons to bring home the charge under section 120-B IPC. Rather, the allegation in the F.I.R. was made that the co-accused conspired with one Beni Madhan Dwivedi, who was functioning as a Divisional Manager and the said Beni Madhab Dwivedi is not an accused in the charge sheet filed.
5. The impugned order passed by the learned C.J.M. taking cognizance of the offence under sections 420/120-B IPC ex-facie shows non-application of judicial mind by the learned C.J.M. It is a settled position of law that when a charge sheet is filed after investigation against the accused persons alleging commission of offence, the court taking cognizance is to apply his judicial mind to find out as to whether there is any material showing that such offence has been committed.
6. The Court, while exercising jurisdiction under section 482 Cr.P.C. to quash a criminal proceeding, no doubt, should exercise such power sparingly and with circumspection. If, however, it is found that on accepting the materials produced by the prosecution, which were collected during investigation along with the F.I.R. in its entirety, do not disclose commission of any offence, the court is to quash the criminal proceeding in order to prevent abuse of the process of the court and to secure the ends of justice. (See State of West Bengal and others v. Swapan Kumar Guha and others , AIR 1982 SC 949, State of Haryana and others v. Ch. Bhajan Lal and others, AIR 1992 SC 604, Sanu Das and another v. State of Orissa and another , 1999 (I) OLR 442, G. Sagar Suri and another v. State of U.P. and others , (2000)18 OCR (SC) 355, Ajaya Mitra v.
State of M.P. and others (2003) 25 OCR (SC) 226, Uma Shankar Mishra v. State of Orissa, (2003) 25 OCR 611 and Hira Lal Hari Lal Bhagwati v. CBI New Delhi, (2003) 25 OCR (SC) 770).
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7. In the instant case, accepting the entire materials produced by the prosecution along with the charge sheet in its entirety, no offence is made out against the petitioner as well as the co-accused. Allowing the case to continue would only amount to abuse of the process of the court as the chance of conviction is bleak. Hence, to secure the ends of justice, this Court finds that this is a fit case where the entire proceeding is to be quashed to secure the ends of justice.
14. In the case of Nimain Charan Mohanty v. Republic of India, this Court relying on the deceision reported in the case of Central Bureau of Investigation, Hyderabad v. K. Narayana Rao held as under:
"9. Having gone through the order of the learned Special Judge, C.B.I., it appears that the learned Special Judge has entered into conjectures and surmises and has held that the petitioner has submitted a false legal opinion about the genuineness of the document in question. This finding regarding the legal opinion about the genuineness of the document in question does not arise in this case. The moot question that is to be decided at this stage is, if there are sufficient materials on record to find out if the present petitioner has entered into a criminal conspiracy with other accused persons to return the N.S.Cs. in favour of main accused and in pursuance to such criminal conspiracy he deliberately rendered an illegal opinion. In the case of Central Bureau of Investigation, Hyderabad v. K. Narayana Rao (supra), the Supreme Court has held that a lawyer owes an "unremitting loyalty" to the interests of the client. The Supreme Court has further held that merely because his opinion may not be acceptable he cannot be mulcted with the criminal prosecution, particularly, in absence of tangible evidence that he associated with other conspirators. The Supreme Court has further held that at the most, he may be liable for gross negligence of professional misconduct if it is established by acceptable evidence and cannot be charged of the offence under Sections 420 and 109 of the I.P.C. along with other conspirators without proper and acceptable Page 11 of 14 // 12 // link between them. It is further made clear by the Supreme Court that if there is a link or evidence to connect him with the other conspirators for causing loss to the institution, undoubtedly, the prosecuting authorities are entitled to proceed under criminal prosecution. Such tangible materials were lacking in the reported case.
11. In this case, having gone through the records produced by the learned Retainer Counsel for the C.B.I., this Court has come to the conclusion that there is not an iota of evidence to show that there is a conspiracy between the petitioner and the other accused persons. The only admitted fact is the opinion given by the petitioner appears to be illegal. The opinion given in the case may not be legal in view of the fact that investigation of the case was pending. However, even if the N.S.Cs are returned to the main accused after keeping copies thereof, the prosecution can well rely on the secondary evidence after laying foundation as envisaged under Section 65 of the Evidence Act and in no way the prosecution case can be weakened by the conduct of the petitioner. Nowhere in the charge-sheet filed by the C.B.I., the Investigating Agency, has clarified how and with whom the present petitioner has entered with a conspiracy as consequence of which he gave a wrong opinion to release the stolen/forged N.S.Cs. There is also no material, direct or circumstantial, to hold that the petitioner has entered into a criminal conspiracy with other accused."
15. In the case in hand, admittedly the present Petitioner is the Chattered Accountant of M/s. Chhotray Suppliers and M/s. Srabani Constructions Pvt. Ltd. In sequel, discharging his professional duty the Petitioner carried out the instructions given by the said firm for being complied with in his professional front. Admittedly, the document, i.e. the "No Objection Certificate" in question supplied by the client to the Petitioner for being annexed with the Form No.17. The declaration submitted in Form No.17 is one at the instruction of the client only. Needless to say Page 12 of 14 // 13 // that while discharging the professional duty as Chattered Accountant in submitting the compliance before the authority the Petitioner need to depend upon his client in procuring the document such as the statement of the Bank and other documents pertain to the compliance. Consequently, nothing can be attributed that the Chattered Accountant has any role either in preparing or procuring the document for being placed before the authority and to ascertain the genuinity thereof since consequence of supply or procurement of such document would obviously go to the client and not to the professional. It is in such view of the matter when the entire gamut of allegations is summed up would reveal that the action performed by the Petitioner in submitting the Form No.17 before the Registrar of Companies along with the documents such as "No Objection Certificate" is in due discharge of the compliance of the direction of the client and there cannot be a conspiracy allegedly to have been entered into by the Petitioner along with client. It is indeed true that the Court while exercising the jurisdiction under Section 482 Cr.P.C. need to circumspect the overall facts emerging the allegation and to arrive at a conclusion as to if there appears material constituting offence against the Petitioner.
16. In such view of the matter, the allegation appearing in the F.I.R. and the complaint of the Bank vis-à-vis the Petitioner does not make out a case constituting the offences under Sections 420/467/468/471/120-B IPC as neither the Petitioner is part of the business transaction allegedly to have conducted by the co-accused persons having interest therein nor that the document in question allegedly to have been forged and fabricated is attributed to the present Petitioner in absence of a material showing his personal interest in any gain/loss of the parties conducting business except that he retains his professional interest. This Court while Page 13 of 14 // 14 // dealing with the matter is alive of the fact that the offences alleged are the category of offence involving the moral aptitude and detrimental to the society in general but have strong conviction that the act of the Petitioner in discharging his professional duty is above all the allegations alleged save and except discharging part of his professional duty. Consequently, this Court finds no material to proceed against the Petitioner attributing the criminal liability so as to continue the proceeding. The learned court below having not specifically recorded any reasoning vis-à-vis the present Petitioner erroneously travelled in taking cognizance against the Petitioner and is as such liable for being interfered with exercising the jurisdiction under Section 482 Cr.P.C.
17. Accordingly the proceeding in C.T. Case No.3664 of 2014 passed by the S.D.J.M., Bhubaneswar is hereby directed to be quashed.
18. The CRLMC is disposed of.
(Chittaranjan Dash) Judge KC Bisoi /Secretary Page 14 of 14