Union of India vs V.P.Anand and anr.

Harmohinder Kaur Sandhu, J.

The present Revision Petition has been filed by Union of India against the order dated January 11, 1990, passed by Chief Judicial Magistrate, Chandigarh whereby the accusedrespondents were discharged of the offences under Section 120B read with Sections 420/467 and 471 Indian Penal Code.

The prosecution case in brief is that the respondents hatched a Conspiracy at Chandigarh to cheat Punjab National Bank, in pursuance of which three fictitious companies were floated by V.P. Anand, respondent. He made his employee Baldev Raj Sharma, respondent No. 3 proprietor, of M/s Moonlight Industries, Village and Post Office Nasrala, District Hoshiarpur. This firm was registered on 20.6.1978 as Small Scale Industrial Unit with District Industries Centre, Hoshiarpur for preparing agricultural implements. The firms was deregistered on 20th March, 1981 by General Manager, District Industries Centre, Hoshiarpur and it stopped production. This firm was not entitled to import material under Open General Licence. Respondent No. 3 opened current account No. 3730 on 9.9.1980 at the instance of V.P. Anand in Sector 22D Branch of Punjab National Bank, Chandigarh in respect of his firm M/s Moonlight Industries. The credit limit of this firm was Rs. 9,25,000/ which was later on extended to Rs. 25 lacs and V.P. Anand stood guarantor for it.

V.P. Anand started another firm M/s Guru Nank Industries in the name of Harbans Singh in village Mandiala and got it registered as Small Scale Industrial Unit on 4.9.1978. On 21.2.1979 it was transferred in the name of Bansi Lal respondent, who was also an employee of V.P. Anand. This unit was registered on 30th January, 1980 on the recommendation of Block Level Extension Officer, Hoshiarpur and it stopped production. This firm too was not entitled to import the material under Open General Licence. Bansi Lal opened current account No. 3726 with the same bank at Chandigarh on 22.8.1980 in respect of his firm and credit was granted to this firm to the extent of Rs. 25 lacs.

V.P. Anand himself was the proprietor of M/s New Link Enterprises, SCF No. 13, Sector 22D Chandigarh. He too opened current account No. 3661 in the came branch of Punjab National Bank, Chandigarh and he was granted Foreign Letter of Credit Limit of Rs. 15 Lacs although he was not entitled to import any material as per rules.

Ajay Aggarwal, respondent No. 2, a non resident Indian had current account in the name of M/s Sales International, in Emirates National Bank, Dubai. V.P. Anand submitted application alongwith proforma Invoice dated 29.6.1981 duly signed by Ajay Aggarwal to the Punjab National Bank for opening Foreign Letter of Credit.

Ranjit Kumar Marwaha, respondent No. 5 manager of Punjab National Bank in contravention of ITC Policy 19811982 opened Foreign Letter of Credit No. 4069P on 2.7.1981 in the account of M/s New Link Enterprises for U.S. Dollars 169440 in favour of M/s Sales International, Dubai. Bansi Lal respondent submitted an application alongwith proforma invoice dated 30.6.1981 duly signed by Ajay Aggarwal and respondent No. 5 opened Foreign Letter of Credit No. 40 0P on 2.7.1981 in the account of M/s Gurunank Industries for Rs. 4,90,000/ in favour of M/s Sales International, Dubai for importing carbon steel billets under Open General Licence. In the same way respondent No. 5 opened Letter of Credit No. 4084P on 19.8.1981 in the account of M/s Moonlight Industries for U.S. Dollars 2.50 lacs in favour of M/s Sales International, Dubai. Copy of each letter of credit was sent to Irving Trust Company, New Yark, USA where Punjab National Bank had a current account authorising them to honour drawings by the British Bank of Middle East, Dubai. Respondent No.5 further made amendments in all the three letters of credit and made the credits unrestricted for negotiations and accepted the documents negotiated by Emirates National Bank, Dubai which was not an approved bank.

Ajay Aggarwal submitted bills of lading and bills of exchange relating to letters of credit. On receipt of these documents, the Emirates National Bank, Dubai vide letter dated 2.9.1981 sent the same to Punjab National Bank for payment of the amount. The shipping documents were examined and it was pointed out that the name of the shipping company was not mentioned in the bills of lading. Information to that effect was sent to the Emirates National Bank on 12.9.1981 and on the same day Irving Trust Company, New York was asked not to reimburse the amount of letter of credit to the bank at Dubai.

On 16.9.1981 at the instance of V.P. Anand who was in Dubai, the Emirates National Bank, Dubai informed the Punjab National Bank, Chandigarh that the discrepancy in the document was acceptable to V.P. Anand and V.P. Anand had inspected the goods on board vessel, M.V. Atefeh. On receipt of this information M/s Sales International, Dubai, credited full amount of U.S. Dollars 439200 against all the three Foreign Letter of Credit Nos. 4069P, 4070P and 4084P on 26.9.1981 on discount basis. During investigation it was found that vessel M.V. Atefeh was not in existence and three Foreign Letters of Credit were prepared on the basis of false and forged shipping documents submitted by respondent No. 2 to the Emirates National Bank, Dubai and in this way Punjab National Bank was cheated of an amount of Rs. 40,30,309/.

After hearing the learned counsel for the parties, the trial Court came to the conclusion that though a conspiracy to cheat may have been hatched at Chandigarh yet the main offences regarding forgery and cheatting were committed outside India and previous sanction of the Central Government was required under Section 188 of the Code of Criminal Procedure before the respondents could be prosecuted at Chandigarh. For want of sanction no chargesheet was framed against the respondents and they were discharged which led Union of India to file the present Criminal Revision.

I have heard the learned counsel for the parties and have perused the record.

The present case was registered on the complaint of Manager, Punjab National Bank, Sector 22D, Chandigarh. Earlier V.P. Anand, respondent filed a suit for declaration and injunction against Punjab National Bank, Chandigarh and others restraining them from recovering an amount of Rs. 18,28,379.50. In the written statement filed in that case a plea was taken by the Punjab National Bank that suit was not maintainable at Chandigarh and the courts at Chandigarh had no jurisdiction to try the suit. It was further pleaded that in clause (iii) of bills of lading the disputes were to be resolved in the court where the carrier had its principal place of business and the law of that country was to apply. On the basis of these specific pleas taken by Punjab National Bank, Chandigarh court had no jurisdiction to try the suit. The contention of the respondents now was that the judgment of the civil court was binding on the court taking cognizance of the offences and as some of the offences were committed outside India, provisions of Section 188 of the Code Criminal Procedure were applicable and the respondents could not be tried for the offences without prior sanction of the Central Government.

The learned counsel for the petitioner contended that the judgment of the Civil Court was not binding on the court holding trial of criminal offences nor any sanction was required under Section 188 of the Code Criminal Procedure and the finding of the trial Court to that effect were not sustainable. She submitted that prima facie, the conspiracy to cheat was hatched in Chandigarh and in pursuance of that conspiracy even if some acts were committed outside the territorial jurisdiction of Chandigarh the offences were triable at Chandigarh without any sanction under Section 188 of the Code of Criminal Procedure.

The learned counsel for the respondents submitted that even if it is presumed that conspiracy was hatched at Chandigarh, the offences were committed outside India, the Invoices and bills of lading were prepared at Dubai. Payment was also made through Emirates National Bank, Dubai and the instigation to commit the offence if there was any which compelled the parties to forge the documents also took place at Dubai. So even if part of the offence was committed outside India sanction was required. In support of his argument he placed reliance on the case of T. Fakhrulla Khan and others v. Emperor, AIR 1985 Madras 326 and also on the case of Kailash Sharma v. State, 1973 Criminal Law Journal 1021. In the case of Fakhrulla Khan (supra) it was observed :

"Under the terms of Section 188 as it stands since the amendment of 1923 a Court in British India cannot try an offence by virtue of the terms of Section 129, merely because part of the consequences hand ensued within its jurisdiction. If some part of the offence has been committed in a Native State, the section renders the certificate of the Political Agent necessary even in such cases."

The facts of the case of Kailash Sharma (supra) were that some pamphlets misrepresenting that valuable gifts would be given to winners of lucky tickets were printed and issued in India but the same were sent to the complainant who was residing in Malaya. The offence of cheating was said to have been committed when the pamphlets reached the complainant in the foreign country where the misrepresentation or the receipt had taken place. It was observed that the provisions of Section 188 would be attracted even if one of the ingredients of the offence of cheating took place outside India.

In both the cases referred above the accused were charged of the offence under Section 420, Indian Penal Code and no conspiracy was hatched to cheat anyone.

In the instant case during investigation it is found that V.P. Anand, Baldev Raj and Bansi lal opened their accounts in Punjab National Bank in the name of M/s New Link Enterprises, M/s Moonlight Industries and M/s Guru Nank Industries to get the credit facilities by way of getting issued Foreign Letters of Credit No. 4069P, No. 4070P and No. 4084P. Ranjit Marwaha respondent issued these letters of credit in violation of import policy. the proforma Invoice of M/s Sales International was addressed to Punjab National Bank through M/s Guru Nanak Industries and New Link Enterprises. The bills of lading were addressed to the bank at Chandigarh. The cable confirmation of Punjab National Bank was sent to M/s Sales International by Punjab National Bank, Sector 17B, Chandigarh. Authority letter was issued by Chandigarh Branch and subsequently cables were sent to remit the amount to Emirates National Bank Limited through Irving Trust Company. Thus there remains no doubt that conspiracy to cheat the bank took place at Chandigarh as a result of which the bank lost a huge sum of money. It is well settled that the court having jurisdiction to try the offence of conspiracy is competent to try all the other offences which were committed in pursuance of that conspiracy. It is not disputed that offence of criminal conspiracy under Section 120B of the Indian Penal Code is triable at Chandigarh. It is also not disputed that the alleged overt acts such as forging of documents and making representations were committed in the course of same transaction which embraced the conspiracy and the acts done under it. In these circumstances no sanction was required.

Section 188 of the Code of Criminal Procedure deals with offences, committed outside India by a citizen of India whether on the high seas or elsewhere or by a person not being such citizen on any ship or aircraft registered in India. It is only in these eventualities that the offence can be tried in India only with the previous sanction of the Central Government. This section is not applicable to the facts of the present case. In the case of Purushottamadas Dalmia v. State of West Bengal, AIR 1961 Supreme Court 1589 it was observed that Criminal conspiracy and offence in pursuance of conspiracy committed in different local limits could be tried by the court having jurisdiction to try the offence of conspiracy even though the offences committed, in pursuance of conspiracy were outside its jurisdiction. It was further observed in this case :

"The desirability of the trial, together of on offence of Criminal conspiracy and of all the overt acts committed in pursuance of it, is obvious. To establish the offence of criminal conspiracy, evidence of the overt acts must be given by the prosecution. Such evidence will be necessarily tested by cross examination on behalf of the accused. The court will have to come to a decision about the credibility of such evidence and, on the basis of such evidence, would determine whether the offence of criminal conspiracy has been established or not. Having done all this, the court could also very conveniently record a finding of `guilty'' or `not guilty'' with respect to the accused said to have actually committed the various overt acts. If some of the overt acts were committed outside the jurisdiction of the court trying the offence of criminal conspiracy and if the law be that such over acts could not be tried by that court, it woudl mean that either the prosecution is forced to give up its right of prosecuting those accused for the commission of these overt acts or that both the prosecution and the accused are put to unnecessary trouble inasmuch as the prosecution will have to produce the same evidence a second time and the caused will have to test the credibility of that evidence a second time. There would also be the risk of the second court coming to a different conclusion, from that of the first court."

The findings in this case were relied upon in the case of Banwarilal Jhunjhunwala and others v. Union of India and another, AIR 1963 SC 1620 wherein it was held :

"A court trying an accused for an offence of conspiracy is competent to try him for all offences committed in pursuance of that conspiracy irrespective of the fact that any or all the other offences were not committed within its territorial jurisdiction."

In view of the above mentioned authorities, I find that as a prima facie case for the trial of the respondents for the offence of criminal conspiracy at Chandigarh, is made out, so the avert acts committed in pursuance of that conspiracy at Dubai which constituted offences under Sections 420, 467 and 471 of the Indian Penal Code are also triable at this place without any previous sanction of the Central Government.

As regards the findings of the civil court the civil court at Chandigarh had no jurisdiction to try the suit for declaration filed by M/s New Link Enterprises through V.P. Anand, I am of the view that judgment has no relevancy so far as the question of determining the territorial judication of a court to try the offences is concerned. It is correct that decisions of civil court are binding on criminal courts but no decision has been given by the civil court in this case on merits. Jurisdiction of a civil court to adjudicate a civil dispute is to be determined by the provisions of Civil Procedure Code. The right decided by the civil court of the parties are different from the criminal proceedings. The offences particularly that of cheating and forgery are to be decided by criminal courts by following the established procedure contained in the Code of Criminal Procedure. So the findings of the civil court which are not given on merits of the case have not relevancy for the determination of the jurisdiction of the court to hold trial for the offence alleged to have been committed by the respondents.

In view of the above discussion I find that the impugned order cannot be sustained. I therefore, accept the Revision Petition set aside the impugned order dated January 11, 1990 whereby the accused respondents were discharged in the case. The file of the trial Court be sent back for taking further proceedings against the respondents in accordance with law. Parties through their counsel are directed to appear before the Trial Court on 17.7.1992.