Gujarat High Court
Anuj Ratanlal Jain vs State Thro Central Bureau Of ... on 7 August, 2025
NEUTRAL CITATION
R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025
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Reserved On : 08/07/2025
Pronounced On : 07/08/2025
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL REVISION APPLICATION (AGAINST ORDER PASSED BY
SUBORDINATE COURT) NO. 341 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE L. S. PIRZADA
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Approved for Reporting Yes No
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ANUJ RATANLAL JAIN
Versus
STATE THRO CENTRAL BUREAU OF INVESTIGATION & ANR.
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Appearance:
MR. RAHUL M BAROT(9965) for the Applicant(s) No. 1
SHIVANI RAJPUROHIT(5377) for the Applicant(s) No. 1
MR RC KODEKAR(1395) for the Respondent(s) No. 1
MR HK PATEL APP for the Respondent(s) No. 2
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CORAM:HONOURABLE MR.JUSTICE L. S. PIRZADA
CAV JUDGMENT
Date : 07/08/2025
1. Rule. Learned advocate Mr.R.C. Kodekar waives service of Rule for the respondent no.1 and learned A.P.P. Mr.H.K. Patel waives service of Rule for the respondent no.2.
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2. The present revision application, preferred by the applicant - original accused under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973 (for short, the "Code"), is directed against the order dated 30.12.2024 passed by the learned Additional Chief Judicial Magistrate, CBI Court No.1, Ahmedabad (Rural) in CBI Special Case No.22 of 2022, rejecting the discharge application of the present applicant - accused vide exh.19.
3. The short facts leading to the filing of the present revision application are that as per the case of the prosecution, the present applicant has been arraigned as an accused for the offence registered with Central Bureau of Investigation, Bank Securities and Fraud Cell, Mumbai on the basis of the written complaint filed by Mr.Dipankar Das, Deputy General Manager & Zonal Head, Allahabad Bank, Ahmedabad Zone, Ahmedabad in respect of the offence punishable under Sections 420 and 120B of the Indian Penal Code and Sections 13(2) read with 13(1)(d) Page 2 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined of the Prevention of Corruption Act, 1988 (for short, the "PC Act"), which came to be registered as RC23(E)/2016/BS&FC/CBI/Mumbai.
3.1. It is the case of the prosecution that one M/s.Sai Infosystem (India) Limited has taken financial facilities, more particularly, term loan and working capital loan (CC) amounting to Rs.1000 crores approximately from the years from 2008 to 2012 from Consortium of Banks led by SBI on the basis of certain government contracts of which, the major one was Internet Data Centre (IDC) Project in association with BSNL at four locations, namely, Bangalore, Hyderabad, Ernakulum and Ranchi. Upto the year 2012 and thereafter, by the end of year 2013, the company started facing financial crunches, which led to default in payment of few installments and non-payment of certain statutory dues and the employees of the company filed a complaint with police and other authorities and thereafter, the FIR came to be filed by one Mr.Dipankar Das, Deputy General Manager & Zonal Page 3 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined Head, Allahabad Bank, Ahmedabad Zone, Ahmedabad. 3.2. It is alleged in the FIR that the accused company and its directors did not repay the loans taken by them and siphoned away the funds availed from the bank with mala fide intentions and proceeds of the current assets were not deposited in the CC Account and Drawing power (DP) in the CC Account was manipulated by giving false debtors in stock statements and the company showed inflated dues from its debtors and the accused fraudulently and dishonestly diverted the funds and thereby, caused a wrongful loss to the Allahabad Bank to the tune of Rs.51.62 crores approximately and corresponding wrongful gain to the accused themselves during the period of 2010-2013.
3.3. Initially, the FIR came to be filed against M/s.Sai Infosystem (India) Limited and its Director - Mr.Sunil S. Kakkad, other unknown directors of M/s.Sai Infosystem (India) Limited and unknown public servants of the Page 4 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined Allahabad bank. Pursuant to the registration of the FIR, the investigation has been carried out by the CBI and subsequently, the chargesheet came to be filed before the Court and total 10 persons have been arraigned as accused and the present applicant has been shown as accused no.10 in the chargesheet. The allegation against the present applicant is that the present applicant - accused dishonestly and fraudulently, in pursuance of conspiracy with accused no.2 - Mr.Sunil Kakkad and other accused persons, submitted false audit reports of the accused company - M/s.Sai Infosystem (India) Limited knowing fully well that the debtors and outstanding amount reflected against each of them, were not genuine and thereby, induced the bank to continue with the disbursement of the funds to the tune of Rs.51.62 crores in order to cause pecuniary advantage to M/s.SIS and Mr.Sunil Kakkad and corresponding wrongful loss to the bank and the chargesheet has been filed against the accused persons for the offence punishable under Sections 120B, 420, 468 and 471 of the Page 5 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined Indian Penal Code and Sections 13(2) and 13(1)(d) of the PC Act and substantive offences thereof. 3.4. The present applicant - accused has preferred an application before the learned trial Court under Section 227 of the Code for discharge vide exh.19 and the same came to be rejected by the learned trial Court. Being aggrieved and dissatisfied by the same, the present revision application has been filed.
4. Learned advocate Ms.Shivani Rajpurohit for the applicant - accused has submitted written arguments. It is submitted that the present applicant is a partner of one Dharmesh Parikh & company and had conducted the audit of the accounts of M/s.Sai Infosystem (India) Limited for the financial years 2010-11, 2011-12 and 2012-13. It is submitted that as per the case of the prosecution, without verifying the list of creditors and debtors, the present applicant has made false submissions in the audit reports for the said three Page 6 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined consecutive years and in connivance with the director of the company, misled the bank and led to an unjustified increase of the drawing power allocation for M/s.SIS, which resulted into continuous and unauthorized withdrawal of the funds under the cash credit limit and ultimately caused wrongful loss to the bank and as the present applicant, in his capacity as a partner of Dharmesh Parikh & Company, is the accused of failing to verify the crucial financial records during the statutory audit for the aforesaid financial years, which allegedly misrepresented the financial position of M/s.SIS. As a result, the banks were misled into allowing inflated drawing powers, which facilitated the ongoing and improper withdrawal of the funds and ultimately, led to significant financial loss to the bank. It is submitted that the present applicant - accused has been falsely implicated in the commission of the alleged offence and erroneously made as an accused no.10. It is further submitted that the learned trial Court has rejected the discharged application despite the absence of cogent Page 7 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined evidence, linking the present applicant with the alleged fraudulent activity and discharge application was dismissed without due consideration. 4.1. It is submitted that the present applicant, as an independent auditor, was fulfilling his statutory obligation and had no role in the financial decision of the company or the bank and no evidence has been produced to establish that the present applicant was a part of any fraudulent scheme or conspired with the other accused mainly, the company officials. There is no material to establish the element of any fraudulent intent or gainful misconduct on the part of the present applicant. The auditors are relying upon the documents presented by the management and are not responsible for verifying the veracity or financial transactions and the present applicant has adhered to all the professional and ethical standards prescribed by the institution. 4.2. It is submitted that the chargesheet papers do not Page 8 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined provide any direct evidence, linking the present applicant with the alleged fraudulent activity. Further, it is submitted that the learned trial Court has also not appreciated the fact that the auditing profession in India is governed by the Standards on Auditing issued by the Institute of Chartered Accountants of India and these standards provide a framework for auditors to conduct their work with due diligence and professional skepticism. Further, it is submitted that the present applicant has acted in a good faith in accordance with his professional standards and fulfilled his professional duties. It is submitted that the proposals for extension of credit facility were required to be scrutinized by the branch manager and due diligence was to be ensured by him. It is submitted that the process note for the accused company was prepared by the then Chief Manager and AGM of the branch and after verifying the credibility and financial credentials of the company, they proposed business against the requested credit facility. Further, it is submitted that as per the request of the company, Page 9 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined limits were proposed by the branch after due diligence and the branch is also appearing in the appraisal note and the appraisals made by the delinquent has been accepted. So, most of the factors were taken from the SBI appraisal but, in some factors, such as calculation of working capital, internal rating/pricing, terms and conditions recommended for post and pre-disbursement, Allahabad bank had done its own calculations and recommendations and the banks also relied upon the Techno Economic Viability report of the said project, which was submitted under the instructions of the SBI by one M/s.Gajjar Techno Economic Consultations Private Limited, which was also on the penal of the SBI then. It is submitted that usually, the banks are relying upon TEV reports for the assessment and appraisal of the credit facilities. Further, at no point of time, the present applicant has verified or submitted any list of debtors or stock. It is submitted that the present applicant, on the basis of the assessed risk, has structured the audit process and also calculated the revenue from sales and Page 10 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined services, made inventory reports, prepared the list of receivables and also prepared analytical procedures and thereby, the present applicant has done his duty as an auditor with utmost sincerity and best of his ability regarding the Debtor Balances. It is submitted that in spite of the same, the present applicant has been falsely implicated in the commission of the alleged offence and erroneously named as an accused. It is submitted that the learned trial Court has not considered this aspect and there is no iota of evidence in the material produced along with the chargesheet and, therefore, the present revision application is required to be allowed. It is further submitted that the present applicant has been arraigned as an accused only on the basis of the statement of one Mr.Ajit Parmar and except this, no other witnesses have stated anything against the present applicant - accused and considering this, the present application is required to be allowed and the order passed by the learned trial Court may be quashed and set aside.
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5. On the other hand, learned advocate Mr.R.C. Kodekar for the respondent no.1 - CBI has vehemently opposed the present revision application and submitted that the order passed by the learned trial Court is just and proper and does not require any interference. It is submitted that so far as the role of the present applicant - accused is concerned, he is a chartered accountant and auditor of M/s.Sai Infosystem (India) Limited and conducted the audit of M/s.SIS for the period from 2010- 11 to 2012-13 and M/s.SIS i.e. accused no.1 submitted an application for term loan, cash credit facility and letter of credit to Allahabad bank and the Allahabad bank sanctioned the term loan and other facility of cash credit limit of Rs.25 crores. It is submitted that the Allahabad bank and consortium lead bank SBI showed that the company has to submit an audit balance-sheet of M/s.SIS and the audit of the account of M/s.Sai Infosystem (India) Limited was done by the present applicant - accused on behalf of Dharmesh Parikh & Company for the period 2010-11, 2011-12 and 2012-13 and it is coming on record Page 12 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined that the accused - M/s.SIS has submitted false debtors list on the instructions of accused no.2 - Mr.Sunil Kakkad, who is a director of the company and later on, the same was affirmed by the present applicant, who is an auditor of the company, in connivance with accused no.2 - Mr.Kakkad to the consortium bank. It is submitted that the investigation also revealed that the present applicant conducted the audit of the account of M/s.SIS and during that period, without verifying the list of creditors and debtors, made false submissions in the audit report for continuous three years and mislead the bank in conspiracy with accused no.2 - Mr.Kakkad, which resulted into higher drawing power allocation and continuous withdrawal of funds under the CC limits, which ultimately resulted into wrongful loss to the bank. It is further submitted that the present applicant in connivance with accused no.2, has dishonestly and fraudulently submitted false and incorrect audit balance- sheet to cheat the bank, showing that the debtors mentioned by M/s.SIS are correct, without verifying the Page 13 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined genuineness of the debtors.
5.1. It is submitted that investigation reveals that M/s.SIS, accused no.2 - director - Mr.Sunil Kakkad, Shri Bharat Gajjar of M/s.Gajjar Techno Economic Consultations Private Limited, M/s.Trimax IT Infrastructure & Services Private Limited and other accused persons have acted in criminal conspiracy with public servants i.e. Shri Bimalkumar Mitra, Smt.Shashi Singh and Sanjay Kumar Sharma, who in abuse of the official position, without public interest, disbursed the amount to the accused no.1 - company, without legal or genuine entitlement and thereby, cause wrongful loss to the Allahabad bank to the tune of Rs.51.62 crores and corresponding gains to themselves. It is submitted that the present applicant dishonestly and fraudulently submitted false audit reports in connivance with the accused persons and further, the applicant was fully aware that the debtors and outstanding amounts reflected against each of them of the company, were not Page 14 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined genuine and thereby, induced the bank to continue with the disbursement of the funds to the tune of Rs.51.62 crores and the said fact has already been narrated by the statement of Mr.Ajit Parmar. In the said statement, it is specifically stated that as per the audit report submitted by the present applicant - Mr.Anuj Jain, the company has shown higher outstanding against the actual outstanding and further helped the company by preparing audit report to obtain higher drawing power. It is submitted that considering the same, the learned trial Court has rightly come to the conclusion that sufficient material has been produced by the investigating agency along with the chargesheet to frame the charge against the present applicant and hence, no illegality has been committed by the learned trial Court and the present revision application is required to be dismissed.
6. After considering the rival submissions made by the learned advocates for the respective parties, perusing the impugned judgment passed by the learned trial court and Page 15 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined also perusing the documents of the chargesheet produced along with the present application, it is required to be considered that weather the present applicant has proved that the order passed by the learned trial court, rejecting the discharge application, is against the settled principles of law, perverse and against the facts and material produced along with the chargesheet and no offence has been made out against the present applicant for framing the charge.
7. The shorts facts of the case are already been narrated above. So far as the role attributed to the present applicant is concerned, as per the case of the prosecution, the present applicant, who is a partner of Dharmesh Parikh & company, is conducting the audit of the accounts of the accused no.1 - company dishonestly and fraudulently and in connivance with accused no.2 - Mr.Sunil Kakkad and other accused persons, submitted false audit reports of the accused no.1 - company, knowing fully well that the debtors and outstanding Page 16 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined amount reflected against each of them, were not genuine and thereby, induced the bank to continue with the disbursement of the funds to the tune of Rs.51.62 crores in order to cause pecuniary advantage to the accused no.1 - company and accused no.2 - Mr.Sunil Kakkad, corresponding wrongful loss to the bank and committed the offence.
8. In this regard, it is profitable to peruse the decision of the Hon'ble Apex Court in the case of State of Gujarat vs. Dilipsinh Kishorsinh Rao reported in 2023(17) SCC 688. In the said judgment, the Hon'ble Apex Court, while invoking the revisional jurisdiction for deciding the case against the discharge application, has observed regarding the power under Section 397 of the Code as under:-
7. It is trite law that application of judicial mind being necessary to determine whether a case has been made out by the prosecution for proceeding with trial and it would not be necessary to dwell Page 17 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined into the pros and cons of the matter by examining the defence of the accused when an application for discharge is filed. At that stage, the trial judge has to merely examine the evidence placed by the prosecution in order to determine whether or not the grounds are sufficient to proceed against the accused on basis of charge sheet material. The nature of the evidence recorded or collected by the investigating agency or the documents produced in which prima facie it reveals that there are suspicious circumstances against the accused, so as to frame a charge would suffice and such material would be taken into account for the purposes of framing the charge. If there is no sufficient ground for proceeding against the accused necessarily, the accused would be discharged, but if the court is of the opinion, after such consideration of the material there are grounds for presuming that accused has committed the offence which is triable, then necessarily charge has to be framed.
8. At the time of framing of the charge and taking cognizance the accused has no right to produce Page 18 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined any material and call upon the court to examine the same. No provision in the Code grants any right to the accused to file any material or document at the stage of framing of charge. The trial court has to apply its judicial mind to the facts of the case as may be necessary to determine whether a case has been made out by the prosecution for trial on the basis of charge-
sheet material only.
9. If the accused is able to demonstrate from the chargesheet material at the stage of framing the charge which might drastically affect the very sustainability of the case, it is unfair to suggest that such material should not be considered or ignored by the court at that stage. The main intention of granting a chance to the accused of making submissions as envisaged under Section 227 of the Cr.P.C. is to assist the court to determine whether it is required to proceed to conduct the trial. Nothing in the Code limits the ambit of such hearing, to oral hearing and oral arguments only and therefore, the trial court can consider the material produced by the accused Page 19 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined before the I.O.
10. It is settled principle of law that at the stage of considering an application for discharge the court must proceed on an assumption that the material which has been brought on record by the prosecution is true and evaluate said material in order to determine whether the facts emerging from the material taken on its face value, disclose the existence of the ingredients necessary of the offence alleged. This Court in State of Tamil Nadu Vs. N. Suresh Rajan And Others (2014) 11 SCC 709 adverting to the earlier propositions of law laid down on this subject has held:
"29. We have bestowed our consideration to the rival submissions and the submissions made by Mr. Ranjit Kumar commend us. True it is that at the time of consideration of the applications for discharge, the court cannot act as a mouthpiece of the prosecution or act as a post office and may sift evidence in order to find out whether or not the allegations made are groundless so as to pass an order of discharge. It is trite that at the stage of Page 20 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined consideration of an application for discharge, the court has to proceed with an assumption that the materials brought on record by the prosecution are true and evaluate the said materials and documents with a view to find out whether the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. At this stage, probative value of the materials has to be gone into and the court is not expected to go deep into the matter and hold that the materials would not warrant a conviction. In our opinion, what needs to be considered is whether there is a ground for presuming that the offence has been committed and not whether a ground for convicting the accused has been made out. To put it differently, if the court thinks that the accused might have committed the offence on the basis of the materials on record on its probative value, it can frame the charge; though for conviction, the court has to come to the conclusion that the accused has committed the offence. The law does not permit a mini trial at this stage."
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11. The defence of the accused is not to be looked into at the stage when the accused seeks to be discharged. The expression "the record of the case" used in Section 227 Cr.P.C. is to be understood as the documents and articles, if any, produced by the prosecution. The Code does not give any right to the accused to produce any document at the stage of framing of the charge. The submission of the accused is to be confined to the material produced by the investigating agency.
12. The primary consideration at the stage of framing of charge is the test of existence of a prima-facie case, and at this stage, the probative value of materials on record need not be gone into. This Court by referring to its earlier decisions in the State of Maharashtra Vs. Som Nath Thapa (1996) 4 SCC 659 and the State of MP Vs. Mohan Lal Soni (2000) 6 SCC 338 has held the nature of evaluation to be made by the court at the stage of framing of the charge is to test the existence of prima-facie case. It is also held at the stage of framing of charge, the court has to form a Page 22 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined presumptive opinion to the existence of factual ingredients constituting the offence alleged and it is not expected to go deep into probative value of the material on record and to check whether the material on record would certainly lead to conviction at the conclusion of trial.
13. The power and jurisdiction of Higher Court under Section 397 Cr.P.C. which vests the court with the power to call for and examine records of an inferior court is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings. It would be apposite to refer to the judgment of this court in Amit Kapoor Vs. Ramesh Chandra (2012) 9 SCC 460 where scope of Section 397 has been considered and succinctly explained as under:
"12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying Page 23 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well- founded error and it may not be appropriate for the court to scrutinise the orders, which upon the face of it bears a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, the finding recorded is based on no evidence, material evidence is ignored or judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes, but are merely indicative. Each case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory Page 24 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a much advanced stage in the proceedings under the CrPC."
15. The revisional court cannot sit as an appellate court and start appreciating the evidence by finding out inconsistency in the statement of witnesses and it is not legally permissible. The High Courts ought to be cognizant of the fact that trial court was dealing with an application for discharge."
9. Considering the above law laid down by the Hon'ble Apex Court, now, it is required to be considered whether the order passed by the learned trial Court, rejecting the Page 25 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined discharge application, is perverse and is against the settled principles of law.
10. At this stage, the material produced along with the chargesheet papers is required to be considered. From the chargesheet papers, it is coming on record that (i) the accused no.1 - company, through its chief promoter - accused no.2 - Mr.Sunil Kakkad, has availed the credit facilities from the bank being the CC facility of Rs.500 crores and TL facility worth Rs.50 crores from SP Nagar branch of Allahabad Bank, which was sanctioned to the accused company out of consortium allocated the limits to the complainant bank as TL of Rs.35 crores to part finance to the Internet Data Centre (IDC) Project in association with BSNL at four locations, namely, Bangalore, Hyderabad, Ernakulum and Ranchi at the project cost of Rs.240 crores under consortium arrangement led by SBI and CC of Rs.25 Crores as a share of total working capital limit of Rs.251.00 crores assessed by the consortium leader SBI. Page 26 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025
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(ii) The accused company and its directors did not repay the loans taken by them and siphoned away the funds availed from the bank with malafide intention and the proceeds of the current assets were not deposited in the CC account and Drawing Power (DP) in the CC account was manipulated by giving false debtors in stock statements. The accused no.1 - company showed inflated dues from its debtors and thereby, accused has fraudulently and dishonestly diverted the funds and thereby, caused a wrongful loss to the Allahabad Bank to the tune of Rs. 51.62 crores.
(iii) The present applicant, who has been shown as accused no.10 in the chargesheet, is a Chartered Accountant and auditor of accused no.1 - M/s.Sai Infosystem (India) Limited and conducted audit of the accused no.1 - company for the period 2010-11, 2011-12 and 2012-13.
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NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined
(iv) The audit of the account of accused no.1 - company was done by the present applicant on behalf of the firm Dharmesh Parikh & Co., Ahmedabad for the period 2010- 2011, 2011-2012, 2012-2013. It was found that the accused no.1 - company has submitted false debtors list on the instructions of the accused no.2 - Mr.Sunil Kakkad and later on, it was affirmed by the present applicant, who is the auditor of the company, in connivance with the other accused to the consortium banks. It appears that the audit conducted by the present applicant for the period 2010-11, 2011-12 and 2012-13, was without verifying the list of creditors and debtors and made false submission in the audit reports for continuous three years and thereby, misled the banks, which resulted into higher drawing power allocation and continuous withdrawal of the funds under CC limit and the accused no.1 - company submitted inflated and false debtors' list for the companies and the present applicant, in connivance with the other accused persons, has submitted false and incorrect audited balance-sheet, showing that the debtors Page 28 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined mentioned by accused no.1 - company are correct, without verifying the genuineness and he has not personally verified the exact number of the debtors and the amount.
11. Further, from the chargesheet papers, it appears that the present applicant, dishonestly and fraudulently, in pursuance of conspiracy with accused no.2 and other accused persons, submitted the false audit reports, which were not genuine and thereby, induced the Bank to continue with the disbursement of the funds to the tune of Rs. 51.62 crores in order to cause pecuniary advantage to accused nos.1 and 2. The present applicant has submitted the list of debtors without verifying the list of creditors and debtors and making false submissions in the audit report.
12. Further, the statements of the witnesses have been recorded by the investigation agency and as per the statement of one Mr.Ajit Parmar, who, at the relevant time, was a Senior Manager of Allahabad Bank, Rajkot, Page 29 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined after verifying the audit report of the accused no.1- company, conducted by the present applicant on behalf of firm of Dharmesh Parikh & company wherein, it is stated by the present applicant that as per the information and explanation given, the inventories have been physically verified the management, except for the stocks lying with the third parties, which have been confirmed by them and the debtors of the accused no.1 - company to whom, the stocks have been forwarded or delivered during the audit, outstanding were affirmed from them and a note has been made under the 'receivables' that the debtors of the company as well as the respective receivables are considered reasonable. As per the audit report of 31.03.2012, the audit of the accused no.1 - company was conducted by the present applicant. It is also mentioned that the inventories have been physically verified the management, except for the stocks lying with the third parties, which have been confirmed by them. It is also stated in the audit report that the debtor is required to affirm the outstanding directly from the debtors but, the Page 30 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined verification was done by the present applicant directly from the debtors on random basis and not through the borrower company.
13. From the audit report, it appears that the company has shown the higher outstanding against the actual outstanding and helped the accused no.1 - company in obtaining higher drawing power and because of that, it led to further disbursement to the accused no.1 - company and if it has been shown correct actual outstanding, in such eventuality, the bank would not have gone ahead for the further disbursement to the accused no.1- company.
14. Considering the material produced along with the chargesheet papers, prima facie involvement of the present applicant has been found and sufficient material has been produced along with the chargesheet and the role attributed to the present applicant is prima facie more than association and there is enough and sufficient Page 31 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025 NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined material to frame the charge against the present applicant.
15. I have also perused the findings recorded by the learned trial Court, while rejecting the discharge application. I do not find any jurisdictional error of law committed by the learned trial Court and the findings recorded by the learned trial Court are just and proper, considering the material produced by the prosecution. I also do not find any merits in the present revision application and, therefore, present revision application is devoid of merits and is required dismissed.
16. Accordingly, the present Criminal Revision Application No.341 of 2025 is hereby dismissed. The order dated 30.12.2024 passed by the learned Additional Chief Judicial Magistrate, CBI Court No.1, Ahmedabad (Rural) in CBI Special Case No.22 of 2022, rejecting the discharge application preferred the present applicant - Page 32 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025
NEUTRAL CITATION R/CR.RA/341/2025 CAV JUDGMENT DATED: 07/08/2025 undefined accused vide exh.19, is hereby confirmed. Rule is discharged.
(L. S. PIRZADA, J) Hitesh Page 33 of 33 Uploaded by PANCHAL HITESHKUMAR JAGDISHBHAI(HC00195) on Mon Aug 11 2025 Downloaded on : Mon Aug 11 22:11:10 IST 2025