Gopal Jha vs Central Bureau Of Investigation

Ajoy Kumar Mukherjee, J

The present revisional application under Section 482 of the Code of Criminal Procedure has been preferred against the judgment and order dated 17.7.2018 passed by the learned Additional District & Sessions Judge, Fast Track Court No. II, Bichar Bhawan Calcutta in Criminal Revision No.176 of 2016 thereby dismissed the same and affirmed the order dated 17.5.2016 passed by the learned Metropolitan Magistrate, 21st Court, Calcutta, in GR Case No.2252 of 2009.

It has been contended by the petitioner that the CBI/EOW/Kolkata registered the instant case No.8/E/2008/Kolkata on the basis of a letter of complaint of the Senior Manager, Bank of India alleging, inter alia, commission of offence under Section 120B read with 419/420/467/468/471 of the Indian Penal Code against the present petitioner who is proprietor of M/s. Avinash Hosiery.

In the FIR it has been alleged that a fraud has been practised at Bank of India by the present petitioner and others by way of cash credit facilities amounting to Rs.150 lakhs from Bank of India on the basis of mortgage of immovable properties including third party collateral securities and other fake security/guarantee documents purportedly executed by the real owner of the properties.

It was further alleged that the present petitioner by violating the terms of the loan disposed of the hypothecated stocks and machinery and ultimately, the loan account was turned into NPA (Non Performing Assets) exposing the bank to a loss of Rs.155.96 lakhs.

After completion of investigation, charge-sheet has been submitted before the Court against the present petitioner and three others under Sections 419/420/467/120B of the Indian Penal Code.

The Bank of India moved before the Debt Recovery Tribunal in connection with the outstanding loan amount vide OA No.365 of 2008. Meanwhile, ASREC (India) Ltd., a securitization and asset reconstruction company acquired from Bank of India (original lender) the outstanding in the account of the firm M/s. Avinash Hosiery along with all the right, title, claim and interest with all the securities furnished to the Bank by the borrowers. The collateral securities (immovable property) was also assigned before them vide an agreement the outstanding in the account of the firm M/s. Avinash Hosiery along with all the right, title, claim and interest with all the securities furnished to the bank by the borrower dated 23.12.2008 duly registered before the Sub-Registrar, Andheri 3, Mumbai. Accordingly, ASREC (India) Ltd. stepped into the shoes of Bank of India in respect of the credit facilities as lenders in OA No.365 of 2008.

Thereafter, the claim of ASREC (India) Ltd. was settled by a mutual understanding between the lender and borrower and a compromise settlement was reached by which a sum of Rs.50 lakhs is to be paid in full and final clearance of the debt to the lender. As per terms of settlement, Rs.20 lakhs was paid and then the petitioner filed an application under Section 239 of the Code of Criminal Procedure on 27.12.2013 seeking discharge from the case before the learned 21st Metropolitan Magistrate, Kolkata.

During the course of hearing, the entire amount of settlement of Rs.50 lakhs was paid to ASREC and accordingly, ASREC issued a “No Due” Certificate on 15.10.2014 and the same was filed before the Debt Recovery Tribunal and accordingly, vide order dated 24.12.2014 the same case being OA No.365 of 2008 was disposed of as withdrawn.

However, learned Metropolitan Magistrate, 21st Court by an order dated 17.5.2016 was pleased to reject the petition filed by the petitioner under Section 239 of the Code and he proceeded to frame charges against the petitioner along with two other accused persons as by that time another accused Karunapati Pandey died.

Being  aggrieved  by  and  dissatisfied  with  the  aforesaid  order  dated 17.5.2016  passed  by  the  learned  Metropolitan  Magistrate,  the  present petitioner  preferred  an  application  before  the  learned  Chief  Judge,  City Sessions Court at Calcutta being Criminal Revision No.176 of 2016 and the  same was transferred to learned Additional Sessions Judge, Fast Track Court No. II, Calcutta for disposal.

By the impugned judgment and order dated 17.7.2018, learned Additional Sessions Judge, Fast Track Court No. II, Calcutta was pleased to dismiss the Criminal Revision No.176 of 2016 and thereby affirmed the order dated 17.5.2016 passed in aforesaid GR Case No.2252 of 2008.

Mr. Sudipto Maitra, learned Counsel appearing on behalf of the petitioner, submits that the borrower that is the M/s. Avinash Hosiery was sanctioned a cash credit loan facility of Rs.1.50 crores as per norms of Bank of India against adequate movable (hypothecation of plant and machinery) and immovable securities (creation of equitable mortgage on the immovable property in the name of the guarantor) provided by the guarantor and the borrower had been operating the said cash credit loan account for a year but thereafter due to certain unforeseen market changes and non-realization of dues from the sundry debtors, there was stagnation in the account and for which the borrower bank declared the loan account as NPA in October 2007 and proceeded for recovery of the dues and lodged complain with CBI, which resulted aforesaid GR Case 2252/2009 as stated above. But subsequently, the matter was compromised and as per the terms of compromise, the entire amount of Rs.50 lakhs has been paid to the lender/ASREC and “No Due” Certificate has been issued by ASREC and the debt recovery case which was pending before the Debt Recovery Tribunal has also been disposed of as withdrawn on 24.12.2014.

Accordingly, Mr. Maitra argued that the matter in issue is purely civil in nature and for which no criminal case can be proceeded against him and Hon’ble Apex Court in catena of judgments has observed that when there is compromise settlement with the bank, the private party is entitled to discharge from the criminal case. Unfortunately, learned Judge has failed to grasp the fulcrum of the case and for which the petitioner has got seriously prejudiced and as such the proceeding pending before the Magistrate is liable to be quashed.

He further submits that there is no sufficient grounds for proceeding against the accused/petitioner and the learned Court is erred in holding that the repayment of dues is a subsequent act on the part of the petitioner which merely establishes the default on his part and thereby disallowed the prayer for discharge.

Mr. Maitra further submits that learned Judge held on a misconceived notion that at the time of framing of charge, it is not necessary to delve into the facts of the case but that does not mean that even vital facts are not to be paid heed and the petitioner shall be pushed into a protracted trial, causing serious prejudice to the petitioner.

Learned Judge was erred in holding that the offences are not compoundable and at the same time, he failed to take into consideration that if the charge of cheating fails then subsidiary allegations under Section 419/467/468/471 of the Code automatically fail.

Mr. Maitra further submits that throughout the length and breadth of the allegations under Sections 420/467/468/471 of the Indian Penal Code, there is nothing to bring out any complicity of the petitioner with regard to the commission of the offences alleged and it is trite law that in respect of cases involve   fabrication   of   documents,   prosecution   has   to   bring-forth unimpeachable materials in order to establish the complicity of the availability to prove its case and no useful purpose would be served by continuing the proceeding any further from the stage it has already reached.

Mr. Maitra in this context relied upon three Apex Court judgments in Central Bureau of Investigation vs. Sadhu Ram Singla & Ors. reported in (2017) 4 C.Cr.LR (SC) 561, Central Bureau of Investigation, ACB, Mumbai vs. Narendra Lal Jain & Ors. reported in (2014) 2 C.Cr.LR (SC) 328 and C.B.I. New Delhi vs. B.B. Agarwal & Ors. reported in 2019 (2) Supreme 689.

Mr. Amajit De, learned counsel appearing on behalf of the CBI, submits that there are sufficient materials in the case diary which constitutes offence against the present petitioner under Sections 419/420/467/468/471 of the Indian Penal Code and there is sufficient materials to show that there was initial deception and false representation, coupled with fraudulent and dishonest intention on the part of the petitioner to induce the Bank to disburse the said loan amount in his favour which he was not entitled to get.

He further submits that the compromise which has been effected between the parties, that relates to payment of outstanding loan amount but with the amicable settlement the allegation of commission of forgery of documents for the purpose of cheating cannot be compounded as said offence is non-compoundable under section 320(9) of Cr.P.C.. In this context, he refers the extract copy of case diary and submitted that fraud has been perpetrated at the bank by the petitioner by way of availing loan on the basis of mortgage of immovable properties and other fake security/guarantee documents purportedly executed by the real owner of the properties.

Mr. De further submits that it transpires during investigation that in support of his application he had submitted inflated/false audit report and to secure the advance, the petitioner had fraudulently projected one Pramod Kumar Singh, Binod Kumar Singh, Manoj Kumar Singh and Karunapati Pandey as guarantor to the proposed advance and he had also offered the factory premises of Avinash Hosiery located at patuli, Madhyamgram, landed property of said Pramod Kumar singh, Manoj Kumar Singh and Vinod Kumar Singh and a landed property of Rammuni Pandey, father of guarantor Karunapati Pandey, as collateral securities.

Mr. De further submits that investigation reveals that in furtherance to the conspiracy, the petitioner on the pretext of purchasing properties had obtained title deeds of landed property jointly owned by purported guarantors, namely, Pramod Kumar Singh, Vinod Kumar Singh and Manoj Kumar Singh from their elder brother namely Arun Kumar Singh who was the custodian of the title deeds. Thereafter, the petitioner in connivance with Kamal Deo Singh and Karunapati Pandey with full knowledge and mala fide intention clandestinely lodged the said properties of Pramod Kumar Singh, Vinod Kumar Singh and Manoj Kumar Singh as collateral securities with the bank for fraudulently availing the cash credit limit. The report given by the examiner of questioned documents has confirmed that Pramod Kumar Singh, Vinod Kumar Singh and Manoj Kumar Singh had not executed any of the advance documents as guarantor. In fact, borrower’s/guarantor’s profile of Binod Kumar Singh, Pramod Kumar Singh and Manoj Kumar Singh had been filled up by the petitioner himself as appearing from the report of the handwriting expert.  Further petitioner has also impersonated and signed as Manoj Kumar  Singh in various documents including power of attorney whereas Kamal Deo Singh had impersonated the guarantor Pramod Kumar Singh in various loan and valuable security documents. The petitioner had also submitted two letters to Bank of India forging the signature of Binod Kumar Singh, Pramod Kumar Singh and Manoj Kumar Singh and all these are established from the report given by the examiner of questioned documents.

Mr. De further submits that the application of petitioner was processed by the branch officials and during process of verification, bank had also collected the borrower’s/guarantor’s profile in order to ascertain their ‘Net Worth’. Now it transpires during investigation that the balance sheet of M/s. Avinash Hosiery for the financial year 2002-2003 and 2003-2004 which were certified/signed by Santu Lahiri as Chartered Accountant and proprietor of R.S. Associate, is highly inflated and false documents. Investigation reveals that Santu Lahiri is not a member of Institute of Chartered Accountants of India and therefore, he had no authority to certify/audit the financial statement of any firm/company by claiming himself as a chartered accountant. Petitioner knowing fully well that he was not eligible for the said cash credit facility had submitted the aforesaid forged and highly inflated balance sheet of M/s. Avinash Hosiery with full knowledge and mala fide intention to fraudulently make his firm eligible for the advance of Rs.150 lakhs and thereby dishonestly induced the bank to sanction the said loan.

Mr. De further submits that the petitioner after availing the limit had utilized the fund for the purpose of other than for which the said advance was sanctioned and clandestinely removed the plant and machinery from the factory premises which was hypothecated with the Bank of India.

Accordingly, Mr. De submits that from the facts and circumstances which are based on evidences in the form of oral, documentary as well as opinion of the handwriting experts, a prima facie case has been well-established beyond all reasonable doubt against the present petitioner as well as against the other accused persons and accordingly, he submits that both the courts below have not committed any error in dismissing the petitioner’s prayer for discharge under Section 239 of the Code of Criminal Procedure.

I have gone through the order passed by the learned Metropolitan Magistrate dated 17.5.2016 and also the impugned judgment passed in Criminal Revision No.176 of 2016 on 17.7.2018.

Both the orders are reasoned and the learned Metropolitan Magistrate on the basis of perusal of the case diary and statement of the witness and other materials on record came to the conclusion that there is strong prima facie case against the accused persons and the materials shows their involvement into the crime and accordingly refused to discharge the accused persons merely on the ground that outstanding amount has been settled by and between the parties.

Learned revisional court affirmed the rejection order passed by Magistrate and she further observed that the payment of dues is a subsequent act on the part of the petitioner which merely establish the default made on his part but coming to the factum of the offence of fraud and cheating as well as forgery it remains the same and it cannot be concluded that no fraud was practiced.

Before going to further details, Section 239 of the Code of Criminal Procedure is reproduced hereinbelow:-

“Section 239: When accused shall be discharged. If, upon considering the police report and the documents sent with it under section 173 and making such examination, if any, of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, the Magistrate considers the charge against the accused to be groundless, he shall discharge the accused, and record his reasons for so doing.”

The obligation under Section 239 arises when the Magistrate considers the charge against the accused groundless.

The word “groundless” in section 239 of Cr.P.C. means that the materials placed before the court do not make out or are not sufficient to make out a prima facie case against the accused persons. Where materials collected by the investigating agency are not even remotely sufficient to raise strong suspicion against the accused, materials render the charge groundless and accused should be discharged. In other words the word “groundless” implies that no reasonable or prudent man can come to the conclusion that there was any ground whatsoever to sustain the charge against the accused and at this stage court cannot disbelieve the evidence and shall have to take the evidence on it’s face value. Truth, veracity and effect of the evidence, which the prosecution proposes to adduce are not to be meticulously judged at this juncture but the real test for determining whether the charge should be groundless is that whether the materials are such that even if unrebutted, makes out no case whatsoever.

In the present case specific allegation against petitioner has been alleged inter alia under section 467 of the Indian Penal Code, which deals with forging a document which purports to be a valuable security and as such section 467 is to be read with section 463 and section 30 of the Indian Penal Code. Prosecution alleged that investigation revealed that to secure the advance petitioner fraudulently projected certain fictitious persons as guarantors and also impersonated and signed as Manoj Kumar Singh in various loan and valuable security documents and also forged signature of Binod Kumar Singh, Pramod Kumar Singh and Manoj Kumar Singh in two letters along with other offences and such offences were committed by petitioner as he was aware that he was not eligible for the said cash credit facility and prosecution specifically alleged that with the help of forged documents, he induced bank dishonestly to sanction case credit limit of Rs. 150 lakhs. In support of said allegation, they have also collected reports from hand writing experts (G.E.Q.D) and the matter is pending for trial.

In prosecution for such serious offence relating to forgery of valuable security, it would not be proper to discharge the accused/petitioner merely on the ground of withdrawal of debt recovery case or on the grand that private complainant/bank is no longer interested to proceed with the criminal case in view of payment of settled amount. This issue involves public policy and such discharge is not permissible under the provisions of the code. Section 467 is also not compoundable and is an offence against the state and such settlement of outstanding amount with private complaint/Bank is no way connected to deal with such serious offence to discharge an accused without trial.

In the present case, from the materials appearing in the extract copies of the case diary, specially the reports submitted by the handwriting expert, clearly goes to show, the petitioner’s prima facie mala fide and fraudulent intention from the very beginning in order to cheat the bank, which discloses offence that needs to be tried and considering the documents and statement of other witnesses it cannot be said that the chance of conviction of the petitioner is bleak, even if the private complainant/bank may have became reluctant to proceed with the case in view of amicable settlement.

The case law cited by the petitioner in (2017) 4 C.Cr.LR (SC) 561 is not applicable in the present context as it was not a case where forgery of documents i.e. offence under section 467 of IPC was involved, rather the issue involved in the said case relates to forged stock statements and accordingly with the payment of outstanding amount borrower became reluctant about the issue relating to forged stock statement for the purpose of obtaining higher credit limit and the issue became insignificant to the borrower and in view of compromise, the prolonged trial might be an abuse of the process of the court, since ultimately trial may end in a decision, which may be of no consequence to any of the parties, but when such issue coupled with allegations of fabrication and forgery of documents involved as appearing from the materials in the case diary, in the present case, it cannot be said that the chance of conviction in the present case in bleak.

The case law reported in 2019 (2) Supreme 689 is also not applicable in the present case as also in that case allegation of forgery or impersonation under section 467 or 419 was not involved. High Court in that case was of the view that on the basis of settlement of accounts the parties obtained consent decree from DRT and paid entire sum and there is no live issue which now survives. But in the present case even if on settlement of accounts, bank has withdrawn the suit from the DRT but live issues regarding practicing fraud upon the bank impersonation and other material allegations including cheating the bank on the basis of forged documents are subject matter for decision during trial.

Similarly the case law reported in (2014) 2 C.Cr.LR (SC) 328 is also not applicable because in that case the civil liability of the respondents to pay the amount to the bank has already been settled amicably and bank has no subsisting grievance in this regard and though accused booked in that case under Section 420 and 120B of the Indian Penal Code is non-compoundable but even then following the ratio laid down in B.S. Joshi and Nikhil Merchant Hon’ble Apex Court came to the finding that continuance of the criminal proceeding which is likely to become oppressive or may partake the character of a prosecution would be good ground to invoke the extraordinary power under Section 482 of the Code of Criminal Procedure. Here in the present case not only the offence cheating involves but also allegations of cheating by personation, forgery for the purpose of cheating, forgery of documents and some other offences alleged, which involves public policy and it is not confined to the grievance of civil liability of non-payment of outstanding amount.

In view of the aforesaid discussion and also in view of the materials collected during investigation and also in view of the fact that in the present case subsisting issues are still live for adjudication during trial even after amicable settlement by petitioner with defacto complainant and that there are still grounds for proceeding against petitioner/accused, I am of the view this is not a fit case where invoking power under Section 482 of the Code of Criminal Procedure, the proceeding can be quashed.

CRR 2908 of 2018 is accordingly dismissed.

However, there will be no order as to costs.

Urgent photostat certified copies of this order may be delivered to the learned Advocates for the parties, if applied for, upon compliance of all formalities.