Dr. C.R. Bhansali and Another vs State of Bihar and Another

Rakesh Kumar, J.—Two petitioners, while invoking inherent jurisdiction of this Court u/s 482 of the Code of Criminal Procedure, 1973, have prayed for quashing of the entire criminal proceeding including the order dated November 17, 1997, passed by the learned Chief Judicial Magistrate, Sasaram (Rohtas) in Complaint Case No. 919 of 1997. By the order dated November 17, 1997, the learned Chief Judicial Magistrate has taken cognisance of the offences under Sections 120B, 406 and 420 of the Indian Penal Code, 1860, against the accused persons including the two petitioners.

Short fact of the case is that opposite party No. 2 filed a complaint vide Complaint Case No. 919 of 1997 before the learned Chief Judicial Magistrate, Sasaram (Rohtas) disclosing therein that he was an employee of the civil court and did savings from his salary. He had made a fixed deposit in Swarna Deposit Scheme of M/s. CRB Capital Markets Ltd., Mumbai. It was disclosed in the complaint petition that on September 25, 1996, he had made two deposits of Rs. 10,000 each in the said scheme for one year at 10 per cent. per annum. As per the claim of the complainant, the fixed deposits were to mature on September 23, 1997. However, even after maturity, no amount was paid to the complainant. It was alleged that the petitioners, who were directors of M/s. CRB Capital Markets Ltd., Mumbai and other accused persons, had cheated the complainant and the accused persons has committed offences under Sections 406 and 420 of the Indian Penal Code, 1860. On the aforesaid allegation, opposite party No. 2, namely, Bindeshwari Prasad filed the aforesaid complaint petition.

The complaint petition was filed on November 15, 1997 and thereafter the case was fixed for hearing on November 17, 1997. On November 17, 1997, the learned Chief Judicial Magistrate, Sasaram (Rohtas) examined the complainant on S. A., and thereafter the learned court below on the basis of the statement of the complainant and after examining the complaint petition, by its order dated November 17,1997, took cognisance of offences under Sections 120B, 406 and 420 and of the Indian Penal Code, 1860 and transferred the case to the court of Sri P. K. Tripathi, Judicial Magistrate, Sasaram for its disposal.

Aggrieved with the order of cognisance dated November 17, 1997, the two petitioners approached this Court by filing the present petition. In this case on February 17, 2000, notice was issued to opposite party No. 2 and this Court had directed that pending notice, warrant of arrest, if issued, shall remain stayed. Subsequently, on December 12, 2000, this petition was admitted and it was directed that till disposal of this application further proceeding in Complaint Case No. 919 of 1997 pending in the court of Chief Judicial Magistrate, Sasaram (Rohtas) shall remain stayed and since then, the order of stay is continuing. In this case despite valid service of notice, none had appeared at the time of hearing of this petition on behalf of opposite party No. 2 and, accordingly, after hearing learned Counsel for the petitioners and the State by order dated April 28, 2010, judgment was reserved.

Learned counsel for the petitioners, while making a prayer for quashing of the entire criminal proceeding in Complaint Case No. 919 of 1997 including the order dated November 17, 1997, passed by the learned Chief Judicial Magistrate, Sasaram (Rohtas) submitted that opposite party No. 2, while filing the complaint petition, had not disclosed correct fact before the court below and, as such, the learned Magistrate in the absence of correct fact has passed the impugned order of cognisance. It was argued that the deposits made by the complainant/opposite party No. 2 were to mature on September 23, 1997 and prior to the date of maturity of the fixed deposits, of the complainant a liquidation proceeding was already initiated by the Delhi High Court vide Company Petition No. 191 of 1997. It was submitted that petitioner No. 1 was a director of M/s. CRB Capital Markets Ltd., Mumbai and petitioner No. 2 who was also a director, had already resigned on February 25, 1997. It was argued that M/s. CRB Capital Markets Ltd., Mumbai was a non-banking financial company regulated by the Reserve Bank of India under the Reserve Bank of India Act, 1934 and the same was duly incorporated under the Companies Act, 1956, with its registered office at New Delhi. It was further argued that the Reserve Bank of India under the Reserve Bank of India Act, 1934, initiated a winding up proceeding bearing Company Petition No. 191 of 1997 before the hon''ble Company Judge, Delhi High Court in May, 1997 and thereafter the Delhi High Court vide its ex parte order dated May 22, 1997, appointed an official liquidator attached to the Delhi High Court as provisional liquidator to take over all the assets of M/s. CRB Capital Markets Ltd., on June 13, 1997. It has further been clarified that simultaneously after institution of the winding up proceeding the Central Bureau of Investigation started investigating the complaint lodged by the State Bank of India against M/s. CRB Capital Markets Ltd., and petitioner No. 1 was initially arrested by the C. B. I. However, he was released on bail on September 17, 1997. It was submitted that since much prior to the date of maturity of the complainant''s deposits, a provisional liquidator was already appointed by the Delhi High Court on May 22, 1997, it was not within the domain of the petitioners to make payment in respect of the deposits made by the complainant. It was further argued that since the liquidation proceeding had already been initiated and a provisional liquidator was appointed much prior to the filing of the present complaint petition, the petitioners cannot be held responsible for non-payment and in that view of the matter, it is clear that there was no intention on the part of the petitioners either to cheat the complainant or to commit any offence. Whatever had happened had happened due to the reasons, which were beyond the control of the petitioners and, as such, no offence was committed by the petitioners. Accordingly, it has been argued that in the absence of any material available on record to show that the petitioners had committed any offence the learned Magistrate has incorrectly and in haste proceeded with the proceeding against the petitioners on a complaint, which was filed on November 15, 1997 and only on November 17, 1997, the learned Magistrate has passed the order of cognisance. Accordingly, it has been prayed to quash the entire criminal proceedings in Complaint Case No. 919 of 1997 including the order of cognisance dated November 17, 1997.

In this case, as indicated above, none had come forward to support the case of opposite party No. 2. However, Smt. Indu Bala Pandey, learned Additional Public Prosecutor has appeared on behalf of the State, who has opposed the prayer of the petitioners.

Besides hearing learned Counsel appearing on behalf of the petitioners and the State. I have also perused the materials available on record. The petitioners have brought on record an order of the Delhi High Court passed in Company Petition No. 191 of 1997, which was initiated by the Reserve Bank of India against M/s. CRB Capital Markets Ltd. From the order dated May 22, 1997, which is at pages 17-19, it is evident that in the said case the Delhi High Court after having satisfied with the averments made in the company petition had appointed the provisional liquidator, who was attached to the Delhi High Court and he was directed to take over all the assets and properties of the company along with the books of account and other documents of the company. In view of the order of the Delhi High Court dated May 22, 1997, it is evident that on the date of maturity of the complainant''s deposits, i.e., September 23, 1997, the petitioners were already divested with the power and control over the company in question and its records and, as such, it was not possible for them to refund the complainant''s amount and, as such, it cannot be said that the petitioners were responsible in respect of non-refund of amount to the complainant. At the same time, in view of the facts and circumstances, it cannot be said that the petitioners had committed any offence, as alleged by the complainant and, accordingly, it was required on the part of the complainant to inform the learned Chief Judicial Magistrate at the time of filing of the complaint petition regarding the present status of the company in question. Had it been disclosed in the complaint petition, there was every possibility of rejection of the complaint petition. In sum and substance, in absence of availability of the correct fact, it appears that the learned Magistrate had proceeded with the complaint petition and passed the order of cognisance.

Accordingly, in view of the facts and circumstances, as indicated hereinabove, the court is satisfied that allowing the present complaint petition to proceed further will amount to allowing abuse of the process of the court. It would also not be appropriate to direct the petitioners to participate in the proceeding, which was stayed in the year 2000, i.e., after a lapse of such a long time. Accordingly, the order of cognisance dated November 17, 1997, as well as the entire proceedings in Complaint Case No. 919 of 1997 is set aside so far as it relates to the two petitioners of this case.

Accordingly, the petition stands allowed.