Allahabad High Court
Badri Narayan Tiwari vs S.P., Cbi.,/Acb.,/Lucknow And Ors. on 25 November, 2019
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 13 1. Case :- U/S 482/378/407 No. - 2332 of 2012 Applicant :- Badri Narayan Tiwari Opposite Party :- S.P., Cbi.,/Acb.,/Lucknow And Ors. Counsel for Applicant :- Arun Sinha,Pranshu Agarwal Counsel for Opposite Party :- Bireshwar Nath,Himanshu Tiwari 2. Case :- U/S 482/378/407 No. - 5800 of 2013 Applicant :- Suresh Chandra Yadav @ Suresh Chandra Opposite Party :- C.B.I., / A.C.B., Thru S.P., And Ors. Counsel for Applicant :- Arun Sinha,Pranshu Agrawal Counsel for Opposite Party :- Bireshwar Nath Hon'ble Dinesh Kumar Singh,J.
1. Present petitions under Section 482 Cr.P.C. have been filed by the petitioners for quashing of the charge-sheet vide Case No.4056 of 2009: C.B.I. versus B.N.Tiwari and others arising out of FIR vide Crime No.RC0062008S011, under Sections 120B r/w 201, 420, 468, 471 IPC, Police Station C.B.I./A.C.B., Lucknow pending in the Court of Judicial Magistrate (C.B.I.), District Lucknow as well as qashing of the order of cognizance dated 11.08.2009 and further proceedings of the said case in pursuance of the charge-sheet.
2. The facts in brief of the case are that the Deputy Manager, UCO Bank, Zonal Office, Lucknow lodged an FIR on 29.08.2008 at Police Station C.B.I./A.C.B., at Crime No.RC0062008A0011 (shown in the Charge-sheet as RC0062008S011) under Sections 120B, 420, 467, 468, 471 IPC and 13(2)/13(1)(d) of the Prevention of Corruption Act, 1988 (hereinafter referred to as 'the Act, 1988').
3. It is alleged in the FIR that during the period between February, 2008 to April, 2008, M/s Marshall Tractors Limited, Lucknow and its directors, Mr. B.N. Tewari, Suresh Chandra and Jawahar Lal and its sister concern M/s Mars Equipments Limited, Lucknow and its directors Mr. Gaurav Twari, Prashant Kumar Dubey and Mohd. Hasan in connivance with Rakesh Kumar Sharma, the then Asstt. General Manager, UCO Bank, Hazratganj Branch, Lucknow cheated, defrauded and caused wrongful loss of Rs.125.18 lakh to the UCO Bank and corresponding gain to themselves.
4. It has been alleged that above mentioned two companies submitted 33 cheques/ documentary bills amounting to Rs.2,09,77,068/- during 29.02.2008 to 04.04.2008 for credit to the UCO Bank against their loan a/cs, which were declared as N.P.A. The Branch under the instructions of the then Assistant General Manager, Shri Rakesh Kumar Sharma purchased these cheques/ documentary bills. Out of these 33 cheques/documentary bills, 6 cheques and 5 bills amounting to Rs.1,25,18,150/- remained unrealized. The Branch made inquiry with the concerned banks/branches regarding fate of these instruments. It was revealed that the cheques were not genuine. Similarly, regarding five transport bills amounting to Rs. 29.55 lakh drawn on M/s United Sales Corporation, Moradabad, it could be known that the said firm did not exist at the given address.
5. Investigation had also revealed that M/s Mars Equipment Ltd, Lucknow opened a Current Bank A/C No.92403 in the UCO Bank, Main Branch Hazratganj, Lucknow on 15.09.2006 and, the Bank allowed overdraft facilities to the Company. Similarly, M/s Marshal Tractor Ltd. sister concern of M/s Mars Equipment Ltd, Lucknow was also maintaining Current Bank A/C No.92187 in the UCO Bank, Main Branch Hazratganj, Lucknow since 2006.
6. The cash credit account of M/s Mars Equipment Ltd, Lucknow became N.P.A. on 29.01.2008 as it crossed its sanctioned limit of Rs.90 lakhs. Mr R. K. Sharma, A.G.M. of the Bank allowed operation in the said N.P.A. Account within his lending power of rupees 1.5 crore to get the account upgraded from N.P.A. In June 2007, the then A.G.M. allowed Rs.20 Lakhs TOD (Temporary over Drawing) for two months in the account of M/s Mars Equipment Ltd, Lucknow. Subsequently, an understanding was arrived between the party and the Bank vide which the Bank allowed bill purchase of this party to upgrade the NPA account. Accordingly, 33 cheques/bills, all termed as documentary bills amounting to Rs.2,15,77,068 were purchased by the bank from 29.02.2008 to 04.04.2008. Out of these 33 bills, 22 bills amounting to Rs.90,58,918/- got realized and 11 bills amounting to Rs.1,25,18,150/- remained unpaid. These bills contained three cheques of S.B.I. Varanasi, two cheques of S.B.I. Fatehpur, one cheque of Bank of Baroda, Raebareli and five transport receipts of M/s Star Transport Co., Aish Bagh, Lucknow in favour of M/s United Sales Corporation of Moradabad details of which are given in the charge sheet.
7. When these bills remained unrealized, UCO Bank approached respective Banks to get to know status of these bills /instruments. The respective Banks namely S.B.I. Varanasi, Bank of Baroda, Raebareli and S.B.I., Fatehpur informed UCO Bank , Lucknow that they had not received these cheques and informed that these cheques appeared to be not genuine and were not issued by their Bank. In case of 5 unrealized transport receipts, the UCO Bank contacted their courier branch at Moradabad who reported that the consignee could not be traced at the given address. Thus, a fraud by way of presentation of forged bills was committed in the account of M/s Mars Equipment Limited. Both the companies i.e. M/s. Mars Equipment Ltd and M/s Marshall Tractors Ltd were in full control of B.N.Tiwari, the petitioner herein.
8. The C.B.I. after investigating the offence concluded that as per the information from the UCO Bank, the accused persons and the company had made the Bank to suffer loss of Rs.199.67 Lakhs without interest and Rs.230.47 Lakhs inclusive of interest before 20.01.2009.
9. Thus, impugned charge-sheet was submitted against Mr. B.N. Tiwari, Mr. Suresh Chandra Yadav and Ms. Mars Equipments Ltd., through its actual owner, founder director and authorized representative, Mr. B.N. Tiwari under Section 120B IPC r/w 201, 420, 468, 471 IPC and substantive offences thereof.
10. UCO Bank also filed Original Applications (O.A.) before D.R.T., vide O.A. No.128 of 2009 (UCO Bank vs Marshall Tractors Ltd.) and O.A. No.129 of 2009 (UCO Bank vs Mars Equipment Ltd.). The parties arrived at one time settlement for a sum of Rs.172 Lakhs. Out of said amount Rs.17.2 Lakh was paid to the Bank on 07.07.2011, however, rest of the amount was not paid as agreed in one time settlement. D.R.T., Lucknow passed an order on 27.02.2012 and it was directed that as per one time settlement agreement amount of Rs.154.8 Lakh in cash was to be paid within a period of three months from the date of passing of the consent decree in O.A. No.128 of 2009 and O.A. No.129 of 2009.
11. It appears that the Bank had issued no dues certificate after it had received, Rs.1,44,80,000/- from the accused and also sent letter to the S.P., C.B.I.(A.C.B.), Lucknow informing this fact that after receipt of the entire amount as per the one time settlement, offence against the accused should be compounded.
12. The present petition has been filed for quashing of the proceedings on the ground that since the settlement has been arrived at between the parties and the Bank has issued no dues certificate after receipt of the payment as per the one time settlement, the continuance of the proceedings before the trial Court would be a futile exercise and therefore, this Court in exercise of its powers under Section 482 Cr.P.C. should quash the charge-sheet and the proceedings in pursuance thereof.
13. On the other hand Mr. Bireswar Nath, learned counsel for the CBI has vehementally opposed quashing of the charge sheet and impugned proceedings on the ground that even if the accused have settled their civil liability with the Bank, they cannot be absolved in respect of the offence which they have committed. He has further submitted that the economic offences are against the society at large and, it affects the fiscal management of the country. It is clear from the charge-sheet that the petitioners had defrauded the Bank by submitting forged checks/bills which were not issued by the respective Banks and thus, by committing forgery, they had obtained loan from the public sector bank. Therefore, charge-sheet should not be quashed in exercise of powers under section 482 Cr.P.C.
14. I have considered the submissions and perused the record of the case.
15. Only ground for quashing of the charge sheet and the impugned proceedings is one time settlement arrived at between the accused and the Bank before the DRT Lucknow. The question which falls for consideration in these petitions is that whether on the basis of settlement of civil liabilities of the accused with the Bank, should criminal proceedings initiated on the basis of impugned charge sheet be quashed?
16. The Supreme Court in the case of State of Maharastra vs Vikram Anantrai Doshi : (2014) 15 SCC 29 in somewhat similar facts has held that availing money from a nationalized bank by committing fraud amounts to fiscal impurity and in way financial fraud. The offence of this nature travels far ahead from personal and private wrong. These kind of offences create a hazard in financial interest of the society and it creates a dent in the economic system of the country.
Para 26 of the aforesaid judgment is extracted herein below:-
"26. We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalised bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the charge-sheet cannot be put in the compartment of an individual or personal wrong. It is a social wrong and it has immense societal impact. It is an accepted principle of handling of finance that whenever there is manipulation and cleverly conceived contrivance to avail of these kinds of benefits it cannot be regarded as a case having overwhelmingly and predominatingly civil character. The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skilfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong. It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a "no dues certificate" and enjoy the benefit of quashing of the criminal proceeding on the hypostasis that nothing more remains to be done. The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction under Article 226 of the Constitution or under Section 482 of the Code and quash the proceeding. It is not legally permissible. The Court is expected to be on guard to these kinds of adroit moves. The High Court, we humbly remind, should have dealt with the matter keeping in mind that in these kinds of litigations the accused when perceives a tiny gleam of success, readily invokes the inherent jurisdiction for quashing of the criminal proceeding. The Court's principal duty, at that juncture, should be to scan the entire facts to find out the thrust of allegations and the crux of the settlement. It is the experience of the Judge that comes to his aid and the said experience should be used with care, caution, circumspection and courageous prudence. As we find in the case at hand the learned Single Judge has not taken pains to scrutinise the entire conspectus of facts in proper perspective and quashed the criminal proceeding. The said quashment neither helps to secure the ends of justice nor does it prevent the abuse of the process of the court nor can it be also said that as there is a settlement no evidence will come on record and there will be remote chance of conviction. Such a finding in our view would be difficult to record. Be that as it may, the fact remains that the social interest would be on peril and the prosecuting agency, in these circumstances, cannot be treated as an alien to the whole case. Ergo, we have no other option but to hold that the order [Vikram Anantrai Doshi v. State of Maharashtra, Criminal Application No. 2239 of 2009, order dated 22-4-2010 (Bom)] of the High Court is wholly indefensible."
17. Further, in the case of State of T.N. vs. R. Vasanthi Stanley : (2016) 1 SCC 376 the Supreme court has dealt with the powers of High Court under Section 482 Cr.P.C. for quashing of the criminal proceedings involving abuse of the financial system on the ground of settlement and no dues certificate from the Bank. It has been held that loan availed on the basis of mortgage based on forged documents has potentiality to create a dent in the financial heath of the institution and such offences should not be quashed on the ground of settlement. The view taken in the case of State of Mararastra vs Vikram Anantrai Doshi (supra) has been reiterated.
Para 13, 14 and 15 of the aforesaid judgment are extracted hereinbelow:-
"13. Testing the present controversy on the anvil of the aforesaid principles, we are disposed to think that the High Court has been erroneously guided by the ambit and sweep of power under Section 482 CrPC for quashing the proceedings. It has absolutely fallaciously opined that the continuance of the proceeding will be abuse of the process of the court. It has been categorically held in Janata Dal v. H.S. Chowdhary [(1992) 4 SCC 305 : 1993 SCC (Cri) 36] , that the inherent power under Section 482 CrPC though unrestricted and undefined should not be capriciously or arbitrarily exercised, but should be exercised in appropriate cases, ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist. In Inder Mohan Goswami [(2007) 12 SCC 1 : (2008) 1 SCC (Cri) 259] , it has been emphasised that inherent powers have to be exercised sparingly, carefully and with great caution.
14. We will be failing in our duty unless we advert to the proponements propounded with regard to other aspects. They are really matters of concern and deserve to be addressed. The submission as put forth is that the first respondent is a lady and she was following the command of her husband and signed the documents without being aware about the transactions entered into by the husband and nature of the business. The allegation in the charge-sheet is that she has signed the pronotes. That apart, as further alleged, she is a co-applicant in two cases and guarantor in other two cases. She was an Assistant Commissioner of Commercial Taxes and after taking voluntary retirement she has joined the public life, and became a Member of the Rajya Sabha. Emphasis is also laid that she is a lady and there is no warrant to continue the criminal proceeding when she has paid the dues of the Banks, and if anything further is due that shall be made good. The assertions as regards the ignorance are a mere pretence and sans substance given the facts. Lack of awareness, knowledge or intent is neither to be considered nor accepted in economic offences. The submission assiduously presented on gender leaves us unimpressed. An offence under the criminal law is an offence and it does not depend upon the gender of an accused. True it is, there are certain provisions in CrPC relating to exercise of jurisdiction under Section 437, etc. therein but that altogether pertains to a different sphere. A person committing a murder or getting involved in a financial scam or forgery of documents, cannot claim discharge or acquittal on the ground of her gender as that is neither constitutionally nor statutorily a valid argument. The offence is gender neutral in this case. We say no more on this score.
15. As far as the load on the criminal justice dispensation system is concerned it has an insegregable nexus with speedy trial. A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions, is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the load on the system. That can never be an acceptable principle or parameter, for that would amount to destroying the stem cells of law and order in many a realm and further strengthen the marrows of the unscrupulous litigations. Such a situation should never be conceived of."
18. In another judgment in the case of Parbatbhai Aahir v. State of Gujarat, (2017) 9 SCC 641, a three judge Bench of Supreme Court has laid down the guiding principles for exercise of powers under Section 482 Cr.P.C. for quashing of the proceedings.
Paras 16 to 18 of the aforesaid judgment is extracted hereinbelow:-
"16. The broad principles which emerge from the precedents on the subject, may be summarised in the following propositions:
16.1. Section 482 preserves the inherent powers of the High Court to prevent an abuse of the process of any court or to secure the ends of justice. The provision does not confer new powers. It only recognises and preserves powers which inhere in the High Court.
16.2. The invocation of the jurisdiction of the High Court to quash a first information report or a criminal proceeding on the ground that a settlement has been arrived at between the offender and the victim is not the same as the invocation of jurisdiction for the purpose of compounding an offence. While compounding an offence, the power of the court is governed by the provisions of Section 320 of the Code of Criminal Procedure, 1973. The power to quash under Section 482 is attracted even if the offence is non-compoundable.
16.3. In forming an opinion whether a criminal proceeding or complaint should be quashed in exercise of its jurisdiction under Section 482, the High Court must evaluate whether the ends of justice would justify the exercise of the inherent power.
16.4. While the inherent power of the High Court has a wide ambit and plenitude it has to be exercised (i) to secure the ends of justice, or (ii) to prevent an abuse of the process of any court.
16.5. The decision as to whether a complaint or first information report should be quashed on the ground that the offender and victim have settled the dispute, revolves ultimately on the facts and circumstances of each case and no exhaustive elaboration of principles can be formulated.
16.6. In the exercise of the power under Section 482 and while dealing with a plea that the dispute has been settled, the High Court must have due regard to the nature and gravity of the offence. Heinous and serious offences involving mental depravity or offences such as murder, rape and dacoity cannot appropriately be quashed though the victim or the family of the victim have settled the dispute. Such offences are, truly speaking, not private in nature but have a serious impact upon society. The decision to continue with the trial in such cases is founded on the overriding element of public interest in punishing persons for serious offences.
16.7. As distinguished from serious offences, there may be criminal cases which have an overwhelming or predominant element of a civil dispute. They stand on a distinct footing insofar as the exercise of the inherent power to quash is concerned.
16.8. Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations fall for quashing where parties have settled the dispute.
16.9. In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and 16.10. There is yet an exception to the principle set out in propositions 16.8. and 16.9. above. Economic offences involving the financial and economic well-being of the State have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance.
17. Bearing in mind the above principles which have been laid down in the decisions of this Court, we are of the view that the High Court was justified in declining to entertain the application for quashing the first information report in the exercise of its inherent jurisdiction. The High Court has adverted to two significant circumstances. Each of them has a bearing on whether the exercise of the jurisdiction under Section 482 to quash the FIR would subserve or secure the ends of justice or prevent an abuse of the process of the court. The first is that the appellants were absconding and warrants had been issued against them under Section 70 of the Code of Criminal Procedure, 1973. The second is that the appellants have criminal antecedents, reflected in the chart which has been extracted in the earlier part of this judgment. The High Court adverted to the modus operandi which had been followed by the appellants in grabbing valuable parcels of land and noted that in the past as well, they were alleged to have been connected with such nefarious activities by opening bogus bank accounts. It was in this view of the matter that the High Court observed that in a case involving extortion, forgery and conspiracy where all the appellants were acting as a team, it was not in the interest of society to quash the FIR on the ground that a settlement had been arrived at with the complainant. We agree with the view of the High Court.
18. The present case, as the allegations in the FIR would demonstrate, is not merely one involving a private dispute over a land transaction between two contesting parties. The case involves allegations of extortion, forgery and fabrication of documents, utilisation of fabricated documents to effectuate transfers of title before the registering authorities and the deprivation of the complainant of his interest in land on the basis of a fabricated power of attorney. If the allegations in the FIR are construed as they stand, it is evident that they implicate serious offences having a bearing on a vital societal interest in securing the probity of titles to or interest in land. Such offences cannot be construed to be merely private or civil disputes but implicate the societal interest in prosecuting serious crime. In these circumstances, the High Court was eminently justified in declining to quash the FIR which had been registered under Sections 384, 467, 468, 471, 120-B and 506(2) of the Penal Code."
19. Learned counsel for the petitioners has placed reliance on the judgment of the Supreme court in the case of CBI v. Narendra Lal Jain, (2014) 5 SCC 364 which has been considered by the Supreme Court in the judgments cited above and has held that offences involving fraud with the financial institution which have potential to damage the financial health of such institution ought not to be quashed on the ground of settlement.
20. The Supreme Court in the case of C.B.I. vs Maninder Singh : (2016) 1 SCC 389 after relying on the case of State of Maharastra vs Vikram Anantrai Doshi (supra) set aside the order passed by the High Court whereby the High Court quashed the criminal proceedings on the ground that the accused have arrived at settlement with the Bank.
Paras 16 and 17 of the aforesaid judgment are extracted hereinbelow:-
"16. The allegation against the respondent is "forgery" for the purpose of cheating and use of forged documents as genuine in order to embezzle the public money. After facing such serious charges of forgery, the respondent wants the proceedings to be quashed on account of settlement with the bank. The development in means of communication, science and technology, etc. has led to an enormous increase in economic crimes viz. phishing, ATM frauds, etc. which are being committed by intelligent but devious individuals involving huge sums of public or government money. These are actually public wrongs or crimes committed against society and the gravity and magnitude attached to these offences is concentrated at the public at large.
17. The inherent power of the High Court under Section 482 CrPC should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, the Court would quash the proceedings. In economic offences the Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned was well planned and was committed with a deliberate design with an eye on personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecutions against the economic offenders are not allowed to continue, the entire community is aggrieved."
21. Considering the allegations against the petitioners on the anvil of the principles laid down by the Supreme Court in the judgments cited above, it is evident that the petitioners had obtained loan from the Bank prima facie by fraud inasmuch as they submitted forged cheques/bills. The offence committed by the accused have greater impact on the society as it plays with the fiscal system of the country and, therefore, charge-sheet and the proceedings drawn on the basis of it cannot be quashed on the ground that since the petitioners have arrived at one time settlement with the Bank and the Bank has issued no dues certificate, the proceedings are to be quashed.
22. In view thereof the present petition is dismissed.
23. The trial Court is directed to proceed with the matter expeditiously.
Order Date :- 25.11.2019 prateek