Delhi District Court
Standard Chartered Bank vs Govt. Of Nct Of Delhi on 10 March, 2017
-1-
IN THE COURT OF SH. GURDEEP SINGH, SPECIAL JUDGE
(PC ACT), CBI-05, PATIALA HOUSE COURTS, NEW DELHI.
Criminal Revision No. :92/2017
CNR No. DLND01-002370-2017
1. Standard Chartered Bank
Through its Constituted Attorney
Shri Vijay Kumar
Narain Manzil
23, Barakhamba Road
New Delhi - 110001
.... Revisionist
Vs.
1. Govt. of NCT of Delhi
Through its Secretary
New Delhi.
2. M/s Adigear International
A-40, Mayapuri Industrial Area
New Delhi - 110064
3. Mr. P. N. Khanna
Partner
M/s Adigear International
A-40, Mayapuri Industrial Area
New Delhi - 110064
4. Mrs. Anju Khanna
Partner
M/s Adigear International
A-40, Mayapuri Industrial Area
New Delhi - 110064
CR No.92/2017 Standard Chartered Bank v. State Page 1 of 16
-2-
5. Mr. Sanjay Khanna
Partner
M/s Adigear International
A-40, Mayapuri Industrial Area
New Delhi - 110064
6. Mr. Sandeep Khanna
Partner
M/s Adigear International
A-40, Mayapuri Industrial Area
New Delhi - 110064
... Respondents
Date of Institution : 23.02.2017
Date of arguments : 03.03.2017
Date of pronouncement of order : 10.03.2017
ORDER
1. Vide this order, I shall dispose off the present revision petition, which is directed against order dated 10.11.2016 passed by the court of Dr. Pankaj Sharma, Learned Metropolitan Magistrate, Patiala House Courts, New Delhi in criminal complainant no. 252/1/15 whereby the application under S. 156(3) Cr.PC was dismissed.
2. The relevant facts for the disposal of the present revision petition are that complaint against accused persons (herein respondents no. 2 to 6) has been filed by complainant Standard Chartered Bank (herein revisionist) for offences punishable u/s 405, 406, 415, 417, 418, 420, 420 & 120-B of IPC read with S. 200 of Cr.PC before learned trial court alleging therein that the CR No.92/2017 Standard Chartered Bank v. State Page 2 of 16 -3- complainant bank is a scheduled bank within the meaning of the Reserve Bank of India Act, 1934 and accused no. 1 (herein respondent no.2) is a partnership firm and accused no.2 to 5 (herein respondent no.3 to 6) are partners of the firm and are responsible for the conduct of day to day business activities of respondent no.2 firm. The respondent firm through its partners respondents 3 to 6 approached the complainant bank for grant of certain credit facilities in the year 2003 and acceding to the request and representation of the respondent firm, the credit limit to the tune of Rs.5 crores was sanctioned by the complainant bank and the credit facilities were revised/ renewed upon the request of the accused firm time and again and lastly vide sanction letter dated 11.09.2012 and 26.03.2013, the credit facilities were renewed/ revised by the complainant bank in the nature of export invoice financing and overdraft facilities on certain terms and conditions. After the acceptance of the terms and conditions, respondents executed various documents.
3. It is stated that as per the terms and conditions of the Export Invoice financing facilities a customer of the bank is required to submit the invoices which have been raised by it upon its various buyers alongwith supporting documents for having received the goods covered under the invoices. Invoices alongwith supporting documents are submitted to the complainant bank for providing short term working capital CR No.92/2017 Standard Chartered Bank v. State Page 3 of 16 -4- finance. The complainant bank discounts the said invoices and credits the account of respondent firm. Thus the payment of the invoices is made by the complainant bank to its customer upfront. On the due date of the invoices, the complainant bank's customer is supposed to deposit the payment received from its buyer in repayment of the Export Invoice Discounted earlier. Accordingly respondents used to submit sales invoices raised on its buyers to the complainant bank based upon which, complainant bank used to discount the invoices and credit the proceeds into respondent's account maintained with the complainant bank towards the aforesaid credit facilities.
4. As per terms and conditions of the credit facilities, the respondents used to provide various invoices drawn at its buyers to the complainant bank and in tune of the credit facilities accorded to respondent, the complainant bank used to discount the invoices for providing working capital finance to the respondents. However, the respondent firm failed to maintain financial discipline and the payments due from the respondents firm in favour of the complainant bank towards various discounted invoices became overdue. Thereafter numerous follow-ups were made by the complainant bank with respondents for repayments of the dues towards the credit facilities utilized by respondents. However, on every such occasions, false promises and assurances were made by the CR No.92/2017 Standard Chartered Bank v. State Page 4 of 16 -5- respondents but till date no payment has been realised by the respondents.
5. It is also stated in the complaint that during the period from 25.03.2013 to 23.09.2013, the respondents time and again requested the complainant bank for discounting the invoices drawn on its purported buyers namely M/s A. N. Buying Services and M/s Secret Line Sourcing India, for which invoices aggregating to Rs.22.59 crores approx were provided to the complainant bank by the respondents. In order to discount the aforesaid invoices drawn on M/s A. N. Buying Services and M/s Secret Line Sourcing India respectively, the representatives of complainant bank intimated to the respondent that a confirmation is required from these companies that all payments due from these companies shall be made directly into the account of respondent firm maintained with the complainant bank. To this, in a meeting held on 02.09.2013 between the representatives of the complainant bank and respondents no. 5 & 6 two undated letters issued by these companies were submitted by respondents. Thereafter, to the utter shock and surprise of the complainant bank, two letters both dated 08.10.2013 were received by the complainant bank at its office on 10.10.2013 from the above two companies categorically stating that the respondent firm has been regularly misusing the names and details of both the said companies by raising false, CR No.92/2017 Standard Chartered Bank v. State Page 5 of 16 -6- frivolous and fabricated invoices in order to raise funds from various banks. The said letters also confirmed/ warned the complainant bank that in the event any such invoices raised by the respondent firm are received by the complainant bank, the said companies shall hold no responsibility towards the same.
6. On receipt of the aforesaid letters, the complainant bank carried out thorough internal investigation pertaining to the authenticity and genuineness of the invoices drawn on M/s A. N. Buying Services and M/s Secret Line Sourcing India which were submitted by the respondents to the complainant bank and it was revealed that the letter heads upon which both the undated letters of above mentioned two companies were different from the letter heads upon which the letters dated 8.10.2013 were received by the complainant bank. It is also stated that various others invoices were also discounted by the complainant bank aggregating to Rs.5.35 crores approx.
7. It is also stated that the complainant bank suspects that respondents has received the payment from the buyers against the same invoices but has diverted proceeds to some other bank.
8. It is alleged that these facts clearly establishes that respondent no.2 to 6 in active connivance with each other and with intention to cause wrongful loss to the complainant and wrongful gains to themselves, have cheated complainant bank CR No.92/2017 Standard Chartered Bank v. State Page 6 of 16 -7- for Rs.22.59 crores approx. and have misappropriated the amount so given by the complainant bank against documents fabricated for the purpose of obtaining finance facilities from the complainant bank and / or by diverting proceeds received against the said invoices.
9. On the basis of the said facts, a criminal complaint was filed before the SHO Police Station Barakhamba Road, New Delhi but no action was taken by the police and then complaint was filed before the Learned Metropolitan Magistrate praying direction to police authority for registering an FIR against the respondents nos.2 to 6. Learned Metropolitan Magistrate called for an Action Taken Report. Learned Metropolitan Magistrate vide order dated 10.11.2016, dismissed the application observing :-
"The facts disclose that accused no.1 firm could not maintain financial discipline and defaulted in repayment of the loan. Complainant bank suspects that letter heads of M/s A. N. Buying Services and M/s Secret Line Sourcing India and invoices submitted to complainant bank for getting the credit from the bank by the accused no.1 are forged for which complainant conducted an internal inquiry also. All the documents i.e. the letter heads and the invoices submitted by the accused no.1 are in the possession of complainant. Complainant is in reach of evidence and in the considered view of this court the present dispute appears to be a commercial one for which field investigation by the police is not required.CR No.92/2017 Standard Chartered Bank v. State Page 7 of 16 -8-
Accordingly application u/s 156(3) Cr.PC is dismissed."
10. Hence the present revision petition.
11. It is submitted by Ld. Counsel for the revisionist that notice is not required to be issued to respondents (respondents nos 2 to 6 herein) in criminal revision petition preferred against dismissal of application u/s 156 (3) Cr.PC and cited judgment of our own Hon'ble High Court in case of Rajesh Dubey v. State & Ors, MANU/DE/3221/2013.
12. Hon'ble High Court of Delhi in cited case of Rajesh Dubey (supra) held as under, to quote :-
12. Whenever a revision is filed either before the Sessions Court or this Court, it is not necessary to give notice to accused for affording him an opportunity of being heard, irrespective of the fact whether the order is prejudicial to him or not. For example, when a complaint is dismissed in default and for non-prosecution due to non appearance of complainant and not taking any steps by filing process fee etc. u/s 204 (4), in that eventuality, Section 401(2) would not be applicable and no notice is required to be issued as the order dismissing the complaint for default or non-prosecution does not touch upon the factual or legal merits of the complaint. The said order is a reflection on or about the conduct of the complainant in the proceeding before the Court and the opinion formed by the Court about the said conduct. Such order, if they do not reflect and take into consideration the merits of the case, when CR No.92/2017 Standard Chartered Bank v. State Page 8 of 16 -9- challenged in revision, does not require notice to opposite side as held in J. K. International vs. State, MANU/DE/1882/2001 : 96 (2002) DLT 795 and reiterated in Hindustan Domestic Oil & Gas Co.
(Bombay) Ltd. & Ors. vs. State & Anr., MANU/DE/3623/2012 : 2012 (4) JCC 2310.
14......... It is only when the Magistrate finds that there is no sufficient ground for proceeding with the complaint and dismisses the complaint u/s 203 of the Code, the question arises whether a person accused of crime in the complaint can claim right of hearing in a revision application preferred by the complainant against the order of the dismissal of the complaint. It was observed that the effect of such dismissal is termination of complaint proceedings. That being so, the accused has a right to be heard. Raghu Raj Singh Rousha (supra) relied upon by learned counsel for the petitioner is distinguishable inasmuch as in that case when the application u/s 156(3) Cr.PC was dismissed, in the revision filed before the High Court, the order was set aside with a direction to the Metropolitan Magistrate to examine the matter afresh after calling for a report from the police authorities. The police authorities were directed to hold a preliminary inquiry on the basis of the complaint made by the petitioner/ complainant and to submit a report to the learned Magistrate within three weeks. Things are entirely different in the instant case inasmuch as vide impuged order dated 27.02.2012, learned Additional Sessions Judge has not given any direction to the police to investigate the matter. The matter has simply been remanded back to the learned Metropolitan Magistrate for reconsidering the application u/s 156(3) Cr.P.C. and to pass orders afresh. The learned Metropolitan Magistrate, while deciding afresh may CR No.92/2017 Standard Chartered Bank v. State Page 9 of 16 -10- decide the matter as deemed appropriate. The petitioner cannot possibly anticipate what order the learned Metropolitan Magistrate is going to pass. Under the circumstances, such an order cannot be said to be prejudicial to the petitioner.....
..emphasis supplied.
13. Therefore in view of the said judgment of our own Hon'ble High Court, I am in agreement with the Ld. Counsel for the revisionist that notice is not required to be issued to respondents no.2 to 6 herein and hence the notice was issued to only respondent no.1 State.
14. I have heard Sh. Rajnish Gaur and Sh. Abhimanyu Nirula, Ld. Counsels for the revisionist and Sh. Arun Kumar, Ld. Addl. PP for State. I have also gone through the record.
15. Trial court record was also called for, received and perused.
16. The order of Learned Metropolitan Magistrate is assailed on the ground that if complaint discloses commission of a cognizable offences, the police must registered an FIR. Further, entire conspiracy is to be unearthed and the various documents and money trail, which is misappropriated by the accused is to be recovered, which cannot be done by the petitioner. Further the learned magistrate failed to appreciate that during the course of commercial transaction, the accused forged and fabricated various documents and also diverted the money given by the CR No.92/2017 Standard Chartered Bank v. State Page 10 of 16 -11- petitioner to misappropriate the same and use it for their own benefit. The nature of the complaint requires specialized investigation and to discover the utilization of money by the accused and the manner in which it is siphoned off, which cannot be done by leading evidence by way of a criminal complaint. Further it is submitted that learned metropolitan magistrate erroneously held that dispute appears to be a commercial one and no filed investigation by the police is required.
17. It is further submitted by Ld. Counsel for the revisionist that learned trial court failed to appreciate the action taken report (ATR), which specifically mentions that M/s A. N. Buying Services filed a criminal complaint in EOW, Gurgaon against the respondents nos. 2 to 6 for using the name of their company for the purpose of availing credit facility. However, they did not proceeds with the complaint and compromise the same.
18. In support of his submissions, Ld. Counsel for revisionist cited judgment of Hon'ble Supreme Court in case of Lalita Kumari v. Govt. of U.P., AIR 2014 SC 187.
19. It is necessary to have a look on action taken report filed by PS Barakhamba Road, New Delhi. As per the same, the police came to conclusion that the matter seems to be of civil nature, as basically it is a dispute over repayment of debt money CR No.92/2017 Standard Chartered Bank v. State Page 11 of 16 -12- obtained in the garb of credit facility from the Standard Chartered Bank by the alleged M/s Adigear International. Their case is presently pending in the Debt Recovery Tribunal for the purpose of recovery of debt money. It is also observed that third party M/s A N Buying also filed a criminal complaint against M/s Adigear International in EOW Gurgaon as the name of their company was used for the purpose of availing credit facility but the said complaint was filed by EOW, Gurgaon with the finding that wrong TIN number of the complainant party was used due to clerical error and no wrongful loss was caused to the complainant party. Sh. Ashish Sharma of M/s A N Buying also gave in writing in EOW, Gurgaon that he does not want any action on his complaint as he has compromised the issue with the directors of M/s Adigear International.
20. From the action taken report (ATR), it is apparent that the name of M/s A. N. Buying was wrongly used and therefore they have filed criminal complaint with EOW, Gurgaon. Invoices of these two companies which were submitted to the complainant bank are apparently forged. Further in this case, investigation required with respect to forgery as to who has forged these documents and how money discounted against invoices and was diverted, which the complainant bank cannot investigate. Further, although some documents are in the possession of the bank, yet in order to unearth the entire conspiracy and in the CR No.92/2017 Standard Chartered Bank v. State Page 12 of 16 -13- manner forged invoices were prepared and money taken from the bank on the the basis of forged invoices and how credit facility was siphoned off / used is required to be investigated. Moreover, a dispute can be civil as well as criminal and merely because recourse to civil proceeding is taken to recover the amount does not efface the criminal act. It is no more res integra that civil proceedings and criminal proceedings are different and pendency of civil proceeding does not bar criminal investigation. The same is authoritatively held by Constitution Bench of Hon'ble Apex Court in Iqbal Singh Marwah & Anr v. Meenakshi Marwah & Anr, (2005) 4 SCC 3702. Para No.32 to quote :-
32. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein. While examining a similar contention in an appeal against an order directing filing of a complaint under Section 476 of the old Code, the following observations made by a Constitution Bench in M. S. Shariff v. State of CR No.92/2017 Standard Chartered Bank v. State Page 13 of 16 -14- Madras give a complete answer to the problem posed : (AIR p. 399, para 15-16) "15. As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence.
There is some difference of opinion in the High Courts of India on this point. No hard-and-fast rule can be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of one court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant consideration here is the likelihood of embarrassment.
16. Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust.
This, however, is not a hard-and-fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil CR No.92/2017 Standard Chartered Bank v. State Page 14 of 16 -15- case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under Section 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished."
21. Therefore, I am of the considered opinion that Ld. Trial Court has arrived at wrong conclusion and apparently allegations contained in the complaint and documents disclose cognizable offences, which require to be investigated by the police.
22. As per discussion above, in my opinion, this is not a case in which no offence of any kind was made out. Further as mentioned above the complainant may not be able to collect the entire documents and evidence. The revision petition is allowed as the impugned order dated 10.11.2016 passed by Ld. MM suffers illegality and the same is hereby set aside. Ld. Trial Court is directed to reconsider the application u/s 156 (3) Cr.P.C. of the revisionist and pass order afresh.
23. In this case, the criminal complaint, filed with the police, pertains to the year 2013 and complaint before trial court was filed in the year 2015 and allegedly credit facility of huge amount approx Rs.22.59 Crores has been obtained on the basis of forged documents and misappropriated and therefore Ld. Trial Court is directed to pass order afresh preferably within CR No.92/2017 Standard Chartered Bank v. State Page 15 of 16 -16- two weeks from the receipt of the order.
24. Trial court record (TCR) be sent back alongwith copy of the order.
25. File be consigned to Record Room.
Announced in the open court on today i.e. 10.03.2017 (GURDEEP SINGH) Special Judge (PC Act): CBI-05 New Delhi : 10.03.2017 CR No.92/2017 Standard Chartered Bank v. State Page 16 of 16