Telangana High Court
Sri B.Nageswara Rao, Hyderabad., vs The State Of Ap., Rep Spl.Pp For Cbi ... on 21 August, 2018
THE HON'BLE Dr. JUSTICE SHAMEEM AKTHER
Criminal Petition No.13282 of 2016
ORDER:
This Criminal Petition, under Section 482 of the Code of Criminal Procedure, 1973, is filed by the petitioner/A.4, seeking to quash the proceedings against him in C.C.No.13 of 2006 on the file of the II Additional Special Judge for CBI Cases, Visakhapatnam.
2. Heard the learned counsel for the petitioner/A.4, the learned Special Public Prosecutor for CBI Cases representing the respondent-State and perused the record.
3. The learned counsel for the petitioner/A.4 would submit that the CBI filed charge-sheet against the petitioner/A.4 and the other accused in this case for the offences punishable under Sections 120-B read with 420, 468, 471 of I.P.C. and Sections 13(1)(d) read with 13(2) of the Prevention of Corruption Act, 1988, alleging that the petitioner/A.4 and the other four accused entered into a criminal conspiracy and that A.1 in this case, by abusing his official position as public servant, committed criminal misconduct and caused wrongful gain to A.5 and that A.5 had boosted up the value of the property offered by him as collateral security for sanction and disbursement of loan of Rs.7,50,000/- by the State Bank of Hyderabad, Kothapeta Branch, Guntur, to be utilised for developing his business. The allegations levelled against the petitioner/A.4 are false. The complaint lodged by the complainant/manager does not disclose any accusations against 2 the petitioner/A.4 constituting the alleged offences. The petitioner/A.4 is only a Field Officer of the bank and not the valuator or final authority to sanction and disburse the subject loan. The responsibility of the petitioner/A.4 is only to inspect the properties, measure the same and submit his report as per the fair market value thereof and hence, he cannot be held responsible for any defect in the title deeds of the said properties. None of the witnesses examined in this case stated anything against the petitioner/A.4 before the Investigating Officer. There is no material on record to show that the petitioner/A.4 had conspired with the other accused in this case and caused wrongful loss to the bank. A.5 had re-paid the entire amount due to the bank by way of 'One Time Settlement'. The bank authorities accepted the same and issued letter No.F/Comp/275, dated 29.08.2006, to that effect. Since the entire loan amount has been re-paid by A.5, the question of the petitioner/A.4 cheating the bank does not arise. Since A.5 compromised the matter with the bank authorities and when the bank authorities accepted the same, continuation of proceedings against the petitioner/A.4 amounts to abuse of process of law and ultimately prayed to quash the proceedings against the petitioner/A.4. It is also contended that the value of the property offered as security is more than the book value and the same was adequate to obtain the subject loan. In support of his contentions, the learned counsel relied on two decisions of the Apex Court in Central Bureau of Investigation Vs. Sadhu Ram Singla1 and Nikhil 1 AIR 2017 Supreme Court 1312 3 Merchant Vs. Central Bureau of Investigation and another2 and a decision of this Court in V.Rajagopala Rao and others Vs. The State of Telangana3.
4. On the other hand, the learned Special Public Prosecutor for CBI cases representing the respondent-State would contend that A.5 obtained loan of Rs.7,50,000/- from State Bank of Hyderabad, Kothapeta Branch, Guntur Disrtrict, for business purposes. He offered Ac.0.60 cents of agricultural land and a house belonging to him as collateral security for the said loan. The value of said Ac.0.60 cents of agricultural land is Rs.52,000/- and the value of the house offered as collateral security is Rs.2.02 lakhs only. But A.5 had shown the value of the agricultural land as Rs.14.07 lakhs for obtaining loan from the bank. The petitioner/A.4, who was Field Officer of the Bank, had facilitated A.5 in obtaining the subject loan by signing the opinion report, dated 24.01.1999, without verifying the valuation reports. There is a registered document in respect of the agricultural land showing the value of the said land as Rs.52,000/-. In the letter No.F/Comp/275, dated 29.08.2006, issued by the bank to A.5 accepting the compromise entered between A.5 and the bank, there is no specific mention that the banker had no objection to quash the impugned proceedings against the petitioner/A.4. There is dishonest and fraudulent intention on the part of the petitioner/A.4 to cheat the bank. A prima facie case for the offences alleged against the petitioner/A.4 is clearly made out by the prosecution and ultimately prayed to dismiss the petition. In support of his 2 2009 (1) ALT (Crl.) 77 (SC) 3 Decided by this Court, vide order, dated 16.03.2016 passed in Crl.P.No.11049 of 2015. 4 contentions, the learned Special Public Prosecutor for CBI cases had relied on two decisions of the Apex Court in Gopakumar B.Nair Vs. Central Bureau of Investigation4 and Parbatbhai Aahir Alias Parbatbhai Bhimsinhbai Karmur and others vs. State of Gujarat and another5.
5. In view of the above rival contentions, the point that arises for consideration in this criminal petition is whether the proceedings against the petitioner/A.4 in C.C.No.13 of 2006 on the file of the II Additional Special Judge for CBI Cases, Visakhapatnam, are liable to be quashed.
6. The case of the prosecution, in brief, is that A.5 obtained loan of Rs.7.5 lakhs from the State Bank of Hyderabad, Kothapeta Branch, Guntur District, for development of his cotton business, by offering a house property worth Rs.2.02 lakhs and Ac.0.60 cents of agricultural land as collateral security. Though the Ac.0.60 cents of agricultural land offered as collateral security is worth Rs.52,000/-, A.3-R.Vasudeva Reddy, approved valuer of State Bank of India, valued the said agricultural land at Rs.14.07 lakhs, vide Valuation Report, dated 05.01.2000. The value of the said agricultural land in the Valuation Report, dated 05.01.2000, is contrary to the value mentioned in sale deed, dated 05.01.2000, which was obtained by A.5, just prior to the submission of loan application to the Bank. Thus, A.3-R.Vasudeva Reddy, dishonestly, fraudulently and in furtherance of the criminal conspiracy, gave the Valuation Report, dated 05.01.2000, valuing 4 (2014) 5 Supreme Court Cases 800 5 (2017) 9 Supreme Court Cases 641 5 the said agricultural land at Rs.14.07 lakhs. Moreover, in the Encumbrance Certificate No.43/2000, dated 06.01.2000, the value of the said agricultural land was mentioned as Rs.3,906/- only. A.5 obtained the Valuation Report and Legal Opinion in connection with the said loan and got prepared the loan documents with the help of A.2-Ch.Ramakrishna, a Chartered Accountant. Sri K.V.R.H.Prasad, an Advocate, has given the legal opinion in respect of the collateral security on 11.01.2000, which was prior to the submission of loan application, dated 18.01.2000. A.1-Ch.Lakshmikantha Rao, Branch Manager, State Bank of Hyderabad, Kothapet Branch, Guntur District and the petitioner/A.4-Sri B.Nageswara Rao, Field Officer of the said bank, signed the opinion reports, without actually verifying the details of valuation report. Investigation revealed that the Ac.0.60 cents of agricultural land offered as collateral security is not worth Rs.14.07 lakhs and it is not located as per the details mentioned in the Valuation Report, dated 05.01.2000. The said agricultural land was physically verified and found to be of no use. In furtherance of the criminal conspiracy, the petitioner/A.4- B.Nageswara Rao made a false entry in the branch inspection register regarding his visit to the said property and A.1 has authenticated the said entry. Had A.4 really made a physical verification of the said agricultural land, he would not have accepted the barren land as collateral security offered by A.5 to obtain loan. Thus, A.3 facilitated the sanction of loan to A.5 with the help of A.2; and A.1 and the petitioner/A.4, who are bank 6 officials, sanctioned and disbursed the loan to A.5, in furtherance of the criminal conspiracy, to cause wrongful loss to the bank.
7. Be that as it may, A.5 had compromised the matter with the bank by repaying the loan obtained by him under 'One Time Settlement Scheme' and the bank had accepted the same and issued a letter to that effect, vide letter No.F/Comp/275, dated 29.08.2006. The said letter reads as under:
"Dear Sir, Compromise Settlement-M/s.Sri Manikantha Enterprises With reference to your letter, dated 26.07.2006, requesting for waiver of interest for the delayed period of compromise settled earlier, the Bank has accepted to your request subject to crediting the entire amount of amount kept in term deposits along with interest in the above account.
Hence, we wish to inform you that the term deposit along with interest Rs.6,01,530/- has been adjusted on date in your above account under compromise as per the letter submitted by the depositor Sri P.Sunilkumar Reddy.
The title deeds pertain to you and the guarantor Smt.Kathula Samrajyam are handed over to CBI, Vizag, for investigation. The CBI, Vizag , filed charge-sheet against you in this account. The case is under trial at CBI Court, Vizag.
As you have closed the account with us under compromise and even though there are no dues from you to our branch, we submit that we will deliver the title deeds pertains to you and the Guarantor after completion of the CBI investigation only.
Yours faithfully, Branch Manager."
A perusal of the above letter makes it clear that A.5 had compromised the matter with the bank by repaying the entire loan amount and the bank had accepted the same by crediting the entire amount kept in term deposits along with interest to the loan account.
8. The learned counsel for the petitioner/A.4 had relied on Sadhu Ram Singla's case (1 supra). The accused therein were charged with the offences punishable under Sections 120-B read with Sections 420, 467, 468 & 471 of I.P.C. for having entered 7 into criminal conspiracy and causing loss to the Bank to an extent of Rs.28.49 crores through false stock statements, forged bank guarantee and dishonest misuse of funds generated. Pending proceedings before the CBI Court, a compromise was arrived between the bank and the accused under 'One Time Settlement Scheme'. In the circumstances, the Apex Court, referring to the earlier decisions, held that continuance of the criminal proceedings, after a compromise has been arrived at between the complainant and the accused, would amount to abuse of process of Court and an exercise in futility, since the trial would be prolonged and ultimately, it may end in a decision which may be of no consequence to any of the parties.
9. In Nikhil Merchant's case (2 supra), the Apex Court held that continuation of criminal proceedings after the compromise arrived between the parties would be a futile exercise.
10. In a similar situation, this Court, in an unreported judgment in V.Rajagopala Rao and others's case (3 supra), relying on Nikhil Merchant's case (2 supra), quashed the proceedings against the accused therein.
11. In Parbatbhai Aahir Alias Parbatbhai Bhimsinhbhai Karmur and others's case (5 supra), which was relied by the learned Special Public Prosecutor for CBI Cases, the Apex Court, while framing the guidelines for use of inherent powers of the High Court under Section 482 of Cr.P.C., held that criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially 8 civil flavour, may, in appropriate situations, fall for quashing, where parties have settled the dispute. 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.
12. The facts in the decision in Gopakumar B.Nair's case (4 supra) relied on by the learned Special Public Prosecutor for CBI Cases are that the accused therein furnished forged agreement for purchase of a second hand Lancer car bearing registration No.KL 5L 7447 showing the value thereof as Rs.6.65 lakhs though the accused had purchased the car for Rs.5.15 lakhs only. The other accused therein, who are bank employees, alleged to have abused their position and dishonestly sanctioned a loan of Rs.5.00 lakhs towards car purchase without the requisite sanction and inspection. Though the amounts were paid by the accused therein in pursuance of a private settlement, there was no acknowledgement on the part of the Bank of exoneration of criminal liability of the accused therein. In the circumstances, the Apex Court held that no interference with the impugned judgment refusing to quash the criminal proceedings in exercise of power under Section 482 Cr.P.C. was called for.
13. In the instant case, A.5 obtained the subject loan to develop his cotton business. It is not the case that he did not invest the said money in the cotton business. It is not the case that he filed forged documents. The only allegation against the petitioner/A.4- 9 Sri B.Nageswara Rao is that he had signed the opinion reports, without actually verifying the details of valuation report and had he really made a physical verification of the said agricultural land, he would not have accepted the barren land as collateral security offered by A.5 to obtain loan. There was no proper assessment of the worth of the said land by the investigating officer. The document obtained at the relevant point of time may be undervalued registered sale deed. Mere undervaluing the value of the property and getting it registered, is not an offence. The deficit stamp duty is required to be collected by the authority concerned in accordance with the procedure contemplated under law. Moreover, A.5 has paid the money having compromised the matter with the Bank. As held in Parbatbhai Aahir alias Parbatbhai Bhimsinhbhai's case (5 supra), originally the dispute between the parties is a commercial civil dispute. The amount involved is not high. Therefore, the facts in above decision in Gopakumar B.Nair's case (4 supra) are different from that of the present case.
14. In Gian Singh Vs. State of Punjab6, a Full Bench of the Apex Court, considering the facts and circumstances of the said case which are similar to the facts and circumstances of the case on hand, held as follows:-
"The power of the High Court in quashing a criminal proceeding or FIR or complaint in exercise of its inherent jurisdiction is distinct and different from the power given to a criminal court for compounding the offences under Section 320 of the Code. Inherent power is of wide plenitude with no statutory limitation but it has to be exercised in accord with the guideline engrafted in such power viz; (i) to secure the ends of justice or (ii) to prevent abuse of the process of any Court. In what cases power to quash the criminal proceeding or complaint or F.I.R. may be exercised where the offender 6 (2012) 10 Supreme Court Cases 303 10 and victim have settled their dispute would depend on the facts and circumstances of each case and no category can be prescribed. However, before exercise of such power, the High Court must have due regard to the nature and gravity of the crime. Heinous and serious offences of mental depravity or offences like murder, rape, decoity, etc. cannot be fittingly quashed even though the victim or victim's family and the offender have settled the dispute. Such offences are not private in nature and have serious impact on society.
Similarly, any compromise between the victim and offender in relation to the offences under special statutes like Prevention of Corruption Act or the offences committed by public servants while working in that capacity etc; cannot provide for any basis for quashing criminal proceedings involving such offences. But the criminal cases having overwhelmingly and pre-dominatingly civil flavour stand on different footing for the purposes of quashing, particularly the offences arising from commercial, financial, mercantile, civil, partnership or such like transactions or the offences arising out of matrimony relating to dowry, etc., or the family disputes where the wrong is basically private or personal in nature and the parties have resolved their entire disputes. In this category of cases, High Court may quash criminal proceedings if in its view, because of the compromise between the offender and victim, the possibility of conviction is remote and bleak and continuation of criminal case would put accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal case despite full and complete settlement and compromise with the victim. In other words, the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and wrongdoer and whether to secure the ends of justice, it is appropriate that criminal case is put to an end and if the answer to the above question(s) is in affirmative, the High Court shall be well within its jurisdiction to quash the criminal proceeding."
15. In view of the above, this Court is of the view that the decision of the Apex Court relied upon by the petitioner/A.4 in Sadhu Ram Singla's case (1 supra) and Nikhil Merchant's case (2 supra) are squarely applicable to the facts and circumstances of the present case. So, the same benefit can be extended to the petitioner/A.4 also. A.5 had paid the entire loan amount having compromised the matter with the Bank. The dispute is only with regard to recovery of loan amount which is civil in nature. There is no record to establish that the property offered as security was insufficient to grant the loan. Sometimes, there is difference between the market value of the property and the book value on which the document was registered. The dispute is settled and 11 compromised between the wrong doer and the bank. The whole exercise in criminal trial would be only to ascertain the value of the property offered as collateral security, which would be of no use. In these circumstances, continuation of the impugned proceedings against the petitioner/A.4 tantamounts to abuse of process of law.
16. In the result, the Criminal Petition is allowed quashing the proceedings against the petitioner/A.4 in C.C.No.13 of 2006 on the file of the II Additional Special Judge for CBI Cases, Visakhapatnam.
Miscellaneous petitions, if any, pending in this Criminal Petition shall stand closed.
__________________ Dr. SHAMEEM AKTHER, J 21st August, 2018 Bvv