Supreme Court - Daily Orders
M/S Kothari Polymers Ltd vs Siu(X)/Spe/Cbi on 16 February, 2022
Bench: Sanjay Kishan Kaul, M.M. Sundresh
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IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No. 239/2015
M/S KOTHARI POLYMERS LTD & ORS. Appellant(s)
VERSUS
SIU(X)/SPE/CBI Respondent(s)
O R D E R
The appellants availed of a loan facility secured by an equitable mortgage created on 21.10.1995 by the SBI, Industrial Estate Branch, Gwalior in respect of the property stated to be covered under tenancy rights of 5 Bighas, 2 Kathas and 14 lachchas of land in District Kamrup, Village Moidam, Sub-Division Gauhati Mauza Beltola, Assam (Sale deed No. 5555/77). The loan availed of was fund based limit of Rs.9.32 crores and non-fund based limit of Rs.9.55 crores. The sale of the rights of tenancy had been executed in favour of appellants Nos. 2 to 4 by the occupancy tenants. Another title deed bearing the same number and containing ownership rights over the same property was deposited in the State Bank of India, Gauhati Branch on 03.05.1990, once again creating an equitable mortgage.
Signature Not Verified
In a nutshell, the property was mortgaged twice at Digitally signed by Charanjeet kaur Date: 2022.02.19 13:20:03 IST Reason: different places to take advantage of the two sets of sale deeds. The appellants may have gotten away with it if they had met their financial liability, but when they 2 defaulted their nemesis caught up with them. An FIR was registered on 29.11.2001 under Section 120-B read with Section 420 IPC and Section 13(2) read with 13(1)
(d) of the Prevention of Corruption Act, 1988, claiming wrongful loss of Rs.5.50 crores to the SBI and the corresponding gain to the accused. It is not necessary now for us to go into the nature of financial transactions taken up by the appellants but suffice it to say that the civil proceedings were also launched before the Debt Recovery Tribunal by the SBI, Gwalior Branch and an FIR was also filed. In pursuance to the FIR, an investigation took place and charge sheet was filed. The endeavour of the respondent to get permission to prosecute the Bank Manager did not succeed and thus, offences for which the appellants were tried were under Section 420 read with Section 120-B IPC.
We are informed that the trial proceeded with the prosecution evidence being completed and it was at the stage of recording of the statements of the accused under Section 313 Cr.P.C.
The appellants, possibly seeing the adverse consequences which must flow, ultimately settled the dues of the Banks and obtained the No Dues Certificates from both the Banks.
Learned counsel for the appellants states as against a wrongful loss of amount of Rs.5.5 crores for which the charge sheet had been filed, Rs.5.75 crores were paid on which settlement with the Bank was arrived at. This 3 happened on 25.02.2008 and 07.05.2008. The appellants also withdrew other proceedings against the Banks.
It is in July 2014, the appellants having cleared all the liabilities, endeavoured to bring an end to the criminal proceedings by filing Misc. Criminal Petition No.5611/2014 under Section 482 Cr.P.C. However, after the initial stage, the petition was dismissed on 28.10.2014 against which an SLP was filed. Notice was issued in the present proceedings and ultimately leave was granted on 29.01.2015 while staying the proceedings before the Special Magistrate, Indore. We are now seven years hence! Learned ASG seeks to point out that the appellants had prayed for quashment of the FIR itself and thus, the impugned order has been rightly passed. It took into consideration that the same property was mortgaged twice at two different places taking advantage of two sets of sale deeds, with the criminal intent to defraud the Bank in respect of the outstanding account of M/s Sampat Industrial and Construction Company Ltd., which was not liquidated. The credit in the financial transactions of sale was not given to the Bank.
The judgment of the High Court is predicated on a reasoning that the offence charged being an economic one, it has serious impact on the society.
On the other hand, learned counsel for the appellants seeks to contend that the appellants had come clean by making the payment, albeit a little belatedly. He submits 4 that he is not seeking quashing of the FIR now but would like the criminal proceedings to be brought to an end. It is his submission that there can be no element of conspiracy under Section 120-B of the IPC as the same was really predicated on the role played by the Bank Manager, as the others are only family members. The prosecution of the Bank Manager did not take place as the CBI was not able to obtain permission from the competent authority.
We have given our thoughts to the matter. We cannot doubt the proposition that economic offences have a larger impact on the society. Be that as it may, it is also appropriate to note in the given facts of the case that the conspiracy element can hardly stand in view of the fact that the competent authority did not give permission to the CBI to prosecute the Bank officers. That leaves only the family members accused in whose names the tenancy rights were granted along with the ownership rights. There can however, be little doubt of the role of the appellants keeping in mind the contours of the offence under Section 420 IPC.
The issue is that in view of the subsequent developments, is it a fit case to compound the offence under Section 420 IPC and if so on what terms and conditions. One of the roles which is played in all these criminal proceedings is that of the time period itself. Without blaming any of the parties, the fact remains that since the FIR was filed, 18 years have elapsed. No doubt the prosecution evidence has been led but this Court itself has 5 stayed the proceedings which have continued for seven years. It is in 2008 itself that the appellants had settled their financial liabilities and we are thus, 14 years hence.
In view of the aforesaid facts, we are inclined to compound the offence, but subject to appropriate financial terms to be imposed on the appellants. We consider that apart from whatever monies the appellants may have spent for settlement of the dues, the appellants must pay cost for the wastage of time and money of the prosecuting agency as also the judicial system. We thus consider appropriate to impose costs of Rs. 25 lakhs on the appellants. It is in a way the cost of redeeming themselves. Out of this cost, a sum of Rs. 10 lakhs should be paid to the CBI as the prosecuting agency for having prosecuted the case from registration of the FIR till the stage it has reached as on date and a sum of Rs. 15 lakhs will be deposited with the Supreme Court Mediation and Conciliation Project Committee (MCPC).
The aforesaid legal proposition is fortified by the observations of this Court in State of M.P. vs. Laxmi Narayan1 and Central Bureau of Investigation, ACB, Mumbai vs.Narendra Lal Jain &Ors.2 This Court has observed that in criminal cases having a predominantly civil character, especially where a settlement is arrived at after the alleged commission of the offence, the courts may be 1(2019) 5 SCC 688 2(2014) 5 SCC 364.
6liberal in accepting the settlement and quashing the criminal proceedings.
Consequently, the proceedings in FIR dated 29.11.2001 in connection with Crime No. RC SIA 2001 E 0005, registered at police Station STU(X)/SPE/CBI, New Delhi and consequent S.T. No. 1/2004 pending before the learned Special Judicial Magistrate, CBI, Indore are closed.
In fact we believe that whatever indulgence is sought by the accused in similar scenarios, they must pay both the prosecuting agency for the time and money spent and the system for having wasted judicial time and not meeting their financial liability at the threshold by availing of the principles of ‘plea bargaining’ which have been incorporated in the Cr.P.C. under Chapter XXI-A (Sections 265A to 265L). If we may say so, at this stage really, we are seeking to accept the plea of bargaining rather than anything else.
Learned counsel for the appellants states that Rs. 25 lakhs will be deposited in this Court within three months’ period of time. We deem it appropriate to direct that the amount be bifurcated into Rs. 15 lakhs and 10 lakhs and remitted to the Supreme Court Mediation and Conciliation Project Committee (MCPC) and the CBI respectively. We hope that our order may give a thought process to bring the long duration of trials in economic offences to an end, in suitable cases by making the accused pay for what they have done other than meeting their financial obligations. 7
The appeal stands allowed in the aforesaid terms leaving the parties to bear their own costs.
………………..………………………..J. [SANJAY KISHAN KAUL] ……………………………..…………..J. [M.M. SUNDRESH] NEW DELHI;
FEBRUARY 16, 2022.
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ITEM NO.103 COURT NO.6 SECTION II-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Criminal Appeal No(s). 239/2015
M/S KOTHARI POLYMERS LTD & ORS. Appellant(s)
VERSUS
SIU(X)/SPE/CBI Respondent(s)
(IA No. 19443/2016 - PERMISSION TO FILE ANNEXURES) Date : 16-02-2022 This matter was called on for hearing today. CORAM :
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL HON'BLE MR. JUSTICE M.M. SUNDRESH For Appellant(s) Mr. Huzefa Ahmadi, Sr. Adv.
Mr. Benney Joseph, Adv.
Ms. Alka Sinha, Adv.
Mr. Anuvrat Sharma, AOR
M/S. Bj Law Offices, AOR
For Respondent(s) Ms. Aishwarya Bhati, Ld. ASG
Mr. Celeste Agarwal, Adv.
Mr. Manvendar Singh, Adv.
Ms. Manisha Chava, Adv.
Ms. Shreya Jain, Adv.
Mr. Aman Sharma, Adv.
Ms. Pooknima Singh, Adv.
Mr. Arvind Kumar Sharma, AOR
UPON hearing the counsel the Court made the following O R D E R The appeal stands allowed in the aforesaid terms leaving the parties to bear their own costs.
Pending application stands disposed of.
[CHARANJEET KAUR] [POONAM VAID]
ASTT. REGISTRAR-cum-PS COURT MASTER (NSH)
[ Signed order is placed on the file ]