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Judgment
R. Regupathi, J.—The petitioners, who are the partners of M/s. JAK Communications Pvt., Ltd., are the accused A2 & A3 in a case in RC
MA 1 2008 A 0034 on the file of the respondent police, for an offence punishable under Sections 120-B r/w 420, 468, 468 r/w 471 IPC and u/s
13(2) r/w 13(1)(d) of the Prevention of Corruption Act.
The case of the prosecution is that the petitioners borrowed Rs. 11.90 crores from the Indian Overseas Bank, Mogappair Branch, in which A1
is the branch manager. For obtaining the loan original title deeds of several properties were deposited with the Bank as security. On the basis of
source information, a case has been registered against the accused on the allegation that the two of the documents deposited by the petitioners are
forged documents and the petitioners are not owners of those properties. Pending investigation of the case, the accused were granted anticipatory
bail. The investigation of the case is still pending. Under such circumstance, the present petition to quash the proceedings has been filed by the
petitioners before this Court.
The learned senior counsel for the petitioners submits that the amount borrowed on 08.12.2006 from the Indian Overseas Bank Bank,
Mogappair, Chennai, is Rs. 11.90 crores and EMI was regularly paid at the rate of Rs. 34 lakhs per month to the Bank and the remaining amount
to be paid is Rs. 8 crores. Several original documents were submitted by the petitioners before the Bank for getting the loan amount. It is alleged
that only two of those documents were forged documents. It is further submitted that even if those two documents alleged to have been forged are
eschewed for consideration as security, the value of the properties under the remaining documents, which are in the custody of the Bank, comes to
Rs. 20 crores. All along from the date of receipt of the loan there is harmonious relationship between the petitioners and the Bank. Even in the
present allegation the Bankers are not the aggrieved parties. Even after the registration of the case, the first accused (Bank Manager) is continuing
in service and the Bank never even initiated any departmental proceedings against A1. The learned senior counsel asserted that there is no fault on
the part of the petitioners since they were regularly paying the EMI. Even at the time of granting of anticipatory bail, the petitioners voluntarily
offered to deposit of Rs. 3 crores as a precondition for granting of an order of anticipatory bail and accordingly, it was deposited. The petitioners
are sincerely co-operating with the investigation. Further, to avoid unnecessary complications and to prove their bonafide the petitioners cleared
the entire loan amount and to that effect, the Indian Overseas Bank has given a letter dated 21.4.2009 wherein it has been stated as follows:
This is to state that M/s JAK Communications Pvt., Ltd., who have availed Term Loans from us have closed the loans. There are no dues from
them.
It is further submitted that right from the beginning there was no wrongful loss to the Bank nor wrongful gain to the accused. Pending investigation
of the case, since the petitioners have cleared the entire loan amount borrowed from the Bank, the allegation putforth by the prosecution cannot be
substantiated and therefore, the petitioners seek to quash the FIR and Investigation.
To substantiate his contention the learned senior counsel for the petitioner relied on a decision of the Honourable Supreme Court dated
20.08.2008 in Crl. A. No. 1302 of 2008 : SLP. (Crl) No. 6355 of 2005 (Nikhil Merchant v. Cwentral Bureau of Investigation and Anr.). The
learned senior counsel also relied on an unreported judgment of this Court in Crl.O.P. No. 24756 & 26871 of 2008 dated 23.12.2008 and
contended that in a similar facts and circumstances, relying on the above said decision of the Honourable Supreme Court, quashed the
proceedings.
Per contra, the learned Special Public Prosecutor for CBI submits that though the entire loan amount borrowed from the Bank has been paid
and a certificate has been issued to that effect, the affence committed by the petitioners are against the society and it is serious in nature. The title
deeds of a temple properties were forged for the purpose of obtaining huge loan amount. Pending investigation of the case, 20 witnesses were
examined and 48 documents were recovered and the investigation of the case is almost over. By relying on a resent judgment of the Honourable
Supreme Court in Crl.A. No. 661 of 2009 dated 8.4.2009 (Smt. Rumi Dhar v. State of West Bengal and Anr.) , the learned Special Public
Prosecutor submitted that in view of the facts and circumstances of the case, it is not a fit case to quash the proceedings.
I have heard the learned Counsel on both sides and meticulously perused the records.
The case has been taken on file on source information by the respondent police. The case has not been taken on file on the complaint given by
any aggrieved person or by the Bank. The loan has been borrowed from Indian Overseas Bank, Mogappair Branch, for Rs. 11.90 crores during
1996. Since the monthly installment at the rate of Rs. 34 lakhs was paid regularly the Bankers were happy in receiving the principal and interest.
On the date of registration of the case, the balance loan amount to be paid was Rs. 8 crores. Soonafter the registration of the case, at the time
when the petitioners approached this Court for grant of order of Anticipatory Bail, the petitioners offered to clear the entire loan amount and
promised to deposit Rs. 3 crores as a precondition for grant of order of anticipatory bail. Even subsequently as promised the entire amount has
been cleared by the petitioners within a short span of time. To constitute an offence as aforementioned dishonest intention must be made out. There
is no wrongful loss to the Bank nor wrongful gain to the accused. Even if the two documents claimed as forged documents are eschewed from
consideration for security purpose, it is claimed that the value of the other documents deposited with the bank comes to Rs. 20 crores, which is
double the balance amount to be paid on the date of registration of the FIR. To prove their bonefide, the petitioners have repaid the entire loan
amount and received a certificate to that effect from Indian Overseas Bank, Mogappair Branch. The case is only at the investigation stage. Though
the case was registered on 28.06.2008 and the investigation of the case is pending for nearly one year, the respondent has not come the a
conclusion in one way or the other and final report has not been filed. Even before the filing of the final report, the entire amount has been cleared.
Though it is claimed by the respondent-police that the case itself has been taken on file on source information, the exact source of such information
could not be found out. The learned senior counsel for the petitioner submitted that due to business rivalry the case has been taken on file on the
instigation of his rivals.
This Court in Crl.O.P. No. 24756 & 26871 of 2008 on 23.12.2008 held as follows:
As laid down in B.S. Joshi''s case, the exercise of powers u/s 482 Cr.P.C., would depend upon the facts and circumstances of each case, but with
the sole purpose to prevent abuse of process of any Court or to secure ends of justice.
The Honourable Supreme Court in Crl.A. No. 1302 of 2008 (SLP.(Crl) No. 6355 of 2005) (Nikhil Merchant v. Cwentral Bureau of Investigation
and Anr.) has held as follows:
In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them
whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What,
however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities
beyond the limit to which the Company was entitled. The dispute involved herein has overtones a civil dispute with certain criminal facets. The
question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal
proceedings pursuant to the compromise arrived at, should at all be exercised?
On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi''s case (supra) and the
compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are
satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our
view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise.
We, therefore, set aside the order passed by the High Court dismissing the petitioner''s revision application No. 49 of 2003 in Special Case
No. 80 of 1998 and quash the proceedings against the appellant. The appeal is accordingly allowed.
The learned Special Public Prosecutor for CBI submitted that the facts and circumstances of the cases are totally different and relied an a
subsequent case held by the Honourable Supreme Court in Crl.A. No. 661 of 2009 (Smt. Rumi Dhar v. State of West Bengal and Anr.) on
8.4.2009 as follows:
The jurisdiction of the Court under Article 142 of the Constitution of India is not in dispute. Exercise of such power would, however, depend on
the facts and circumstances of each case. The High Court, in exercise of its jurisdiction u/s 482 of the Code of Criminal Procedure, and this Court,
in terms of Article 142 of the Constitution of India, would not direct quashing of a case involving crime against the society particularly when both
the learned Special Judge as also the High Court have found that a prima facie case has been made out against the appellant herein for framing
charge.
Considering the facts and circumstances of the present case, I am of the considered view that the case decided by the Honourable Apex Court
in Nikhil Merchant v. Central Bureau of Investigation and Anr. is squarly applicable to the present facts of the case. In the case on hand, pending
investigation of the case entire money has been settled by the Petitioners and the Banker is not the aggrieved party. The Court has not yet taken
cognizance of the case on the reason that a primafacie case is made out. The main accused i.e, first accused - Manager of the Bank was not
initiated with any departmental action by the Bank and he is continuing in service. Admittedly the petitioners never defaulted in paying the monthly
installments and pending investigation of the case to prove their bonafide have cleared the entire loan amount. The major offence against the
petitioners is u/s 420 IPC and it is a compoundable offence. Moreover, I do not find any dishonest intention at the inception on the part of the
petitioners and since the liability to the Bank has been cleared, there was no wrongful loss to the Bank. On overall survey of the facts and
circumstances of the case, it appears that the case itself has been taken on file on the instigation of some business rivals of the petitioners.
Therefore, I am of the considered opinion that the continuation of the investigation will be a futile exercise and abuse of process of law. I find
that it is a fit case to quash the proceedings and accordingly, FIR and Investigation are quashed. This criminal Original Petition is allowed
accordingly. Connected Miscellaneous Petition is closed.