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1983 DIGILAW 253 (PAT)

M. L. Biswas And Co. And Anr. v. State Of Bihar

1983-09-21

ABHIRAM SINGH

body1983
Judgment Abhiram Singh, J. 1. This is an application under Sec. 482 of the Code of Criminal Procedure (hereinafter to be referred to as the Code) for quashing the entire criminal prosecution against the petitioners in Special Case No. 3/80 pending in the court of the Special Judge (C.B.I.) South Bihar, Patna. 2. The petitioners Nos. 2 and 3 are the partners of petitioner No. 1 which is a firm having business transaction with the State Bank of India, Daltonganj Branch from the very beginning of the opening of the branch in the year 1957. It is said that the petitioners bill transaction and D.D. purchase transaction with the said bank varied from Rs. 1 crore to Rs. 8 crores per year. The petitioners had Cheque facilities with the State Bank of India, Daltonganj with certain limits which is known as Demand Draft Purchase System. The petitioners used to issue self-cheques and also in favour of other persons at Calcutta Banks presented at Daltonganj and used to collect the money on the basis of the assumption of deposits of sale-proceeds at Calcutta banks. On 25.1.1980, a first information report was filed under Sections 120B, 409, 418, 468, 471 and 477A of the Indian Penal Code and under Sections 5(2) r/w and 5(1)(c)(d) of the Prevention of Corruption Act against the petitioners and also against other officers of the State Bank of India at Daltonganj. The allegations against the petitioners are that they drew sufficient amount in excess of the Demand Draft Purchase limits allowed by the Bank. It is said that Sri T.K. Bagchi and Sri Arjun Prasad while functioning as Branch Manager and Manager respectively of State Bank of India, Daltonganj-branch, during the period of October, 1978 to March, 1979, entered into a criminal conspiracy with M/s M.L. Biswas and Company and other partners Ranjit Kumar Biswas and B.N. Biswas to cheat the State Bank of India Daltonganj branch and to commit criminal misconduct abusing their official position and to obtain undue pecuniary benefits for themselves and others. It is further said that in furtherance of the said Criminal conspiracy, 109 cheques for Rs. It is further said that in furtherance of the said Criminal conspiracy, 109 cheques for Rs. 57,24,000, (Fifty-seven lakhs and twenty four thousand) issued by M/s. M.L. Biswas and company and Sri Ranjit Kumar Biswas on their accounts standing at Mercantile Bank and United Bank of India at Calcutta were allowed to be discounted at State Bank of India, Daltonganj by Sri T.K. Bagchi and Sri Arjun Prasad when there was insignificant balance to their credits with the drawee banks. With the result that the cheques were dishonoured and returned unpaid and the amounts could not be recovered from the discounters. M/s. M.L. Biswas and Company had been allowed Demand Draft limit up to Rs. 2,50,000. (Two lakhs and fifty thousand). Sri R.K. Biswas up to Rs. 2,00,000 and Sri B.N. Biswas up to Rs. 1,00,000. (One lakh). The Bank employees are said to have accommodated the petitioners by allowing them to draw more amount than the limits imposed. It is said that the forged bank-payment advices purported to have been issued by State Bank of India, Calcutta Main Branch were introduced into the Bank Records of State Bank of India, Daltonganj branch and the liabilities of the discounters were marked off dishonestly and with intent to facilitates further accommodation to the petitioners. 3. On 19.3.1982, the police submitted charge-sheet under Sections 120B, 420, 468, 471 and 477A of the Indian Penal Code read with Sections 5(2) and 5(1)(c)(d) of the Prevention of Corruption Act against the petitioners as well as against the employees of the State Bank of India, Daltonganj branch. The learned court of special Judge (C.B.I.) South Bihar took cognizance against the petitioners and other employees of the State Bank of India on 20.3.1982 under Sections 120B, 420, 468, 471 and 477A of the Indian Penal Code and Sec. 5(2) r/w and 5(1)(d) of the Prevention of corruption Act. 4. The learned Counsel appearing on behalf of the petitioners has submitted that basically the dispute is for the breach of contract which is of civil nature and the criminal prosecution of the petitioners is nothing but an abuse of the process of the court. The bank has already filed Money Suit for the breach of the contract which is of civil nature and for the same wrong, both the civil and criminal action cannot be taken. The bank has already filed Money Suit for the breach of the contract which is of civil nature and for the same wrong, both the civil and criminal action cannot be taken. He has further submitted that mere issuance of cheque even when funds were not immediately available does not constitute an offence under Sec. 420 of the Penal Code unless deception is played by fraudulent and dishonest inducement. According to him the facts stated in the first information report do not constitute any offence against the petitioners. The materials on the basis of which cognizance has been taken against the petitioners do not constitute any offence and it is apparent that the learned Special Judge, who has taken cognizance against the petitioners has passed the order without applying his mind to the facts and to circumstances of the case, mechanically and in routine manner. 5. Reliance has been placed on behalf of the petitioners on a decision in -- R.P. Kapur V/s. State of Punjab. It has been held in this decision that: The inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code and the High Court would be reluctant to interfere with said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent jurisdiction. Some of the categories of cases where the inherent jurisdiction to quash proceedings can and should be exercised are: (i) Where it manifestly appears that there is a legal bar against the institution or continuance of the criminal proceeding in respect of the offence alleged. Absence of the requisite sanction may, for instance, furnish cases under this category. (ii) Where the allegations in the First Information Report or the Complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. (iii) Where the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly false to prove the charge. 6. The instant case does not come under the first category as it has not been pointed out to me that there is any legal bar against institution or continuance of the criminal proceeding against the petitioners in respect of the alleged offence. There is also no question of absence of the requisite sanction. The instant case is covered by the second category as it has been urged on behalf of the petitioners that the facts of the case as alleged in the first information report and the charge-sheet do not constitute any offence. Hence, it is to be considered whether the facts of the instant case constitute any offence. The learned Counsel appearing on behalf of the State has contended that if the allegations speak only about the civil liability then of course there does not arise any question of criminal prosecution. But there may be cases where there can be both civil and criminal action for the same wrong. Therefore, it is to be considered in this case whether there are such allegations in the instant case which speak about a criminal wrong and for which there can be any criminal action against the petitioners. The petitioners are not the only accused in the case in question, some employees of the bank are also accused. These employees of the bank are said to have committed offence for cheating the bank inclusion with the petitioners. Hence the conduct of the petitioners in respect of the fraud alleged to have been perpetrated by the bank employees will have to be judged as beneficiaries are the petitioners and it is to secure under monitary gain for the petitioners that the bank employees are said to have conspired. It is, therefore, necessary to look to some of the allegations against the petitioners and the bank employees in respect of defrauding the bank. 7. It is, therefore, necessary to look to some of the allegations against the petitioners and the bank employees in respect of defrauding the bank. 7. The learned Counsel appearing on behalf of the petitioners has contended that the first information report does not indicate the exact date of occurrence, He submitted that in the column of the date of occurrence in the first information report it was only written that 1978 October to December, and no period is indicated and as such the prosecution is not sure about the period of occurrence. But the alleged offence does not appear to be an offence which can be committed on single day. The offence as alleged in the instant case appears to be continuing one and it can be committed for a lung period. It appears that the year 1979 is missing in the first information report but the charge-sheet give a clear idea about the period of the occurrence i.e., October, 1978 to March, 1979 and there is no vagueness in the charge-sheet. The petitioners too have mentioned in paragraph Nos. 9 and 10 of their application that the period involved in this case is in relation to cheques negotiated between the period 24.2.1979 to 17.3.1979 during which 109 cheques were issued and purchased by the banks. Money Suit No. 37 of 1979 has been filed before the lodging of the first information report on 25.1.1980 against the petitioners and others and the period involved is 24.2.1979 to 17.3.1979 which is the period involved in the criminal case. 8. Charge-sheet of the case disclosed that T.K. Bagchi and Arjun Prasad while functioning as Branch Manager and Manager of the State Bank of India, Daltonganj Branch during the period October, 1978 to March, 1979 entered into criminal conspiracy with M/s M.L. Biswas and Company and their partner Sri Kanjit Kumar Biswas and B.N. Biswas of Daltonganj and others to cheat the State Bank of India, Daltonganj Branch and to commit criminal misconduct abusing their official position in order to obtain pecuniary benefits for themselves and others. It is further said that in furtherance of the said criminal conspiracy 109 cheques for Rs. 57,24,000. It is further said that in furtherance of the said criminal conspiracy 109 cheques for Rs. 57,24,000. Rupees Fifty seven lakhs and twenty four thousand), issued by M/s M. L. Biswas and Company and Shri Ranjit Kumar Biswas on their accounts standing at Mercantile Bank and United Bank of India, Calcutta, were allowed to be discounted at State Bank of India, Daltonganj during the period 24.2.1979 to 17.3.1979 by Sri T.K. Bagchi and Arjun Prasad when there was insignificant balance to their credits at the draw bank with the result that the cheques were dishonoured and returned unpaid and the amounts could not be recovered from the discounters. It is also said that out of Rupees fifty seven lakhs and odd only Rupees fourteen lakhs and odd could be realised and Rupees Forty two lakhs and odd could not be realised for which the aforesaid money suit has been filed. It is also said that the said huge amount of Rupees fifty seven lakhs and odd could be drawn by the petitioners according to the arrangement under which the petitioners received immediate payment on presentation of the cheques which is commonly known as Demand Draft Purchase System. According to this Demand Draft Purchase System, the petitioners used to draw money in advance at Daltonganj and the said amount used to be realised from their account in Calcutta banks on the presentation of the cheques but in most cases the cheques could not be honoured by the Calcutta Banks for a considerable long time and the bank was compelled to file the aforesaid money suit No. 37 of 1979. It is also said that the demand draft limit was only upto Rupees eleven lakhs and odd, but the petitioners entered into conspiracy with the bank employees to draw Rupees fifty seven lakhs and odd within a short period of 22 days. 9. It is further said that forged payment advices by the forged signature of one Sri B.N. Mitra, Officer Grade I, Calcutta Branch, who was transferred from that place and was relieved on 30.10.1978, were found in respect of the dues against the petitioners. The entries in the demand liabilities register continued to be marked off on the strength of the payment advices purported to have been signed by Sri B.N. Mitra. The entries in the demand liabilities register continued to be marked off on the strength of the payment advices purported to have been signed by Sri B.N. Mitra. Records of the State Bank of India, Daltonganj Branch, showed that in the large number of cases telegrames advising non-payment of cheques were received from the State Bank of India. Calcutta Main Branch, in respect of the cheques of which payment advices had been shown received earlier. These telegrames were not acted upon either by T.K. Bagchi or by Arjun Prasad. It further transpired from the records of the back that the State Bank of India, Calcutta Main Branch, had advised Daltonganj Branch more than once since August, 1978, that cheques negotiated from the branch from the concerned discounters were seldom being paid on first presentation and they should exercise cautions in purchasing cheques from the parties, but T.K. Bagchi and Arjun Prasad continued indulging in the purchase of cheques from the petitioners and others despite such cautions received by them. It is further said that during the course of investigation, the residential premises of R.K. Biswas at Daltonganj were searched on 4.1.1981 and incriminating documents such as 20 blank forms of payment advices of the State Bank of India, Calcutta Main Branch, were recovered from the iron safe of the accused, R.K. Biswas in presence of the independent witnesses. On such blank payment advices forged communications were shown to have been received at the State Bank of India, Daltonganj, on the basis of which the liabilities of the accused petitioners were marked off by accused T.K. Bagchi and Arjun Prasad. Such blank payment advices were to be used by the Bank and they were not supposed to be retained by any private parties. Some blank printed letter heads of the State Bank of India, Daltonganj branch were also recovered during such search. A copy of confidential letter of show cause issued by the Bank to Shri T.K. Bagchi calling for the explanation against misconduct was also recovered, there from. During investigation it also transpired that B.N. Mitra was not a party to the crime and conspiracy as he had already been transferred from Calcutta Branch on 30.10.1978. It is said that his signatures were forged on the fake payment advices. 10. From the above allegations, it appears that the transaction between the petitioners and the Bank had not been normal. It is said that his signatures were forged on the fake payment advices. 10. From the above allegations, it appears that the transaction between the petitioners and the Bank had not been normal. The allegations of forging some documents by the accused of the case i.e., some of the bank employees and the petitioners, in respect of the payments made to the petitioners do not indicate the intention which can be said to be civil wrong. The recovery of certain incriminating documents from the possession of the petitioners also does not speak of the civil nature of the alleged wrong. The ways in which the limit of the Demand Draft Purchase has been transgrassed also do not speak about civil intention on the part of the petitioners. There are clear allegations regarding the collusion between some of the bank employees and the petitioners. All the aforementioned alleged facts show that there is prima facie case against the petitioners under the sections under which cognizance has been taken against them. The learned Special Judge, Daltonganj, does not appear to have passed the order for taking cognizance against the petitioners without applying his mind to the facts and circumstances of the case. He has already written in his order of taking cognizance that he has perused the charge-sheet, the sanction order, the first information report and other relevant papers. 11. The learned Counsel appearing on behalf of the petitioners has also placed reliance on the decision in A. Sirkar V/s. The State of Bihar, 1982 ELR 42 and M.P. Jain V/s. The State of Bihar, 1981 0 BCR 311, Kishan Mengharaj Oehi and Anr. V/s. Mengharaj Gordhandas Gehi and Anr. -- , Trilok Singh and Ors. V/s. Satyadeo Tripathi 1981 0 BBCJ 351, Hare Krishna Sahay V/s. The State of Bihar 1982 0 BBCJ 447 and Hare Krishna Sahay V/s. The State of Bihar and Anr. 12. In 1982 ELR 42 (supra) it has been held that the entire materials on the record should be considered before issuing processes under Sec.204 of the Code of Criminal Procedure. In the instant case it has not been pointed out that the learned Special Judge has not considered all the materials on the record. 12. In 1982 ELR 42 (supra) it has been held that the entire materials on the record should be considered before issuing processes under Sec.204 of the Code of Criminal Procedure. In the instant case it has not been pointed out that the learned Special Judge has not considered all the materials on the record. In 1981 Bombay Case Reporter, 311, it was a case between the father and his son regarding the partnership deed for which the father had filed a suit for dissolution and accounts. Their Lordships in that case came to the conclusion that the dispute between the parties was purely of civil nature and the facts of that case did not constitute an offence under Sec. 420 of the I.P.C. The facts of the instant case are quite dissimilar. In -- (supra) the dispute was between the parties related to the purchase of truck by hire purchase agreement and their Lordships of the Supreme Court took the view that there was a bona fide civil dispute between the parties which led to the seizure of the truck. I have already discussed above that the present case is not of purely of civil nature. In 1981 BBCJ 352 and 1982 BBCJ 447 , the facts are quite different from the facts of this case. 13. In view of the above discussion, I do not find any merit in this case and it is dismissed accordingly.