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2000 DIGILAW 737 (PAT)

Sagar Suman v. State Of Bihar

2000-05-19

S.K.CHATTOPADHYAYA

body2000
Judgment S.K.Chattopadhyaya, J. 1. The petitioner has impugned the order taking cognizance and issuing process dated 14.7.99 by invoking jurisdiction of this court under Section 482 of the Code of Criminal Procedure. 2. It is to be noted that initially the complainant Branch Manager of the Punjab National Bank was not made a party in this application but on the submission that there was a chance of compromise between the parties by order dated 30.9.99 the petitioner was permitted to implead the complainant as opposite party no. 2. 3. Sri Yashwardhan Sinha, senior Manager of Punjab National Bank, Patna lodged a written report before the police alleging, inter alia, that M/s Sagar Suman Vision through its proprietor Sagar Suman applied for a term loan of Rs. 11,40,000/- and cash credit limit of Rs. 3,50,000/- for advancement of his business. One Smt. Bibha Sinha was made guarantor. The bank sanctioned loans on 24.1.1996 and prior to that the petitioner, Sagar Suman, executed certain agreement of loan. The goods were hypothecated in favour of the bank. As per conditions the petitioner was required to pay monthly instalment of loan alongwith interest and to produce the stock statements regularly. The petitioner not only defaulted in payments of the loans after some time but also failed to produce the stock statements of the firm. A legal notice was sent to him on 20.10.1997 but without any result. The petitioner was requested to deposit the over dues, which was flatly refused by him. It was found on physical verification that the petitioner removed the stock of the business and as the petitioner till then owed debt of Rs. 5,38329/- on the C.C. Account and Rs. 16,41,200/- in the term loan account the written report was submitted to the police. On receipt of the written report the police registered Budha Colony RS. Case No. 174 of 1998 under sections 420, 406 and 120 (B) of the Penal Code. This written report is Annexure-1 to this application. The petitioner was granted bail by this Court on 7.7.99. The police after investigation filed chargesheet and the learned Magistrate took cognizance of the offence as aforesaid. 4. From the records it appears that several opportunities were given to the parties to settle the matter amicably but the same has failed. On 24.4.2000 opposite party no. The petitioner was granted bail by this Court on 7.7.99. The police after investigation filed chargesheet and the learned Magistrate took cognizance of the offence as aforesaid. 4. From the records it appears that several opportunities were given to the parties to settle the matter amicably but the same has failed. On 24.4.2000 opposite party no. 2 filed a counter affidavit indicating the total amount of loan alongwith interest as Rs. 30,32,754/-. The value of land mortgaged in favour of the bank and the camera with accessories was also given. Opposite party no. 2 however, was given time to file counter affidavit indicating its terms and conditions for liquidating the loan taken by the petitioner. Parties were directed to exchange their terms and conditions and to file affidavits. Pursuant thereto affidavits have been filed by the parties, which indicate that the petitioner is not agreeable to the terms and conditions set forth by opposite party no. 2. Thus, with consent of the parties the matter was heard on merit. 5. Learned counsel for the petitioner submits that the allegation made in the written report is out and out a civil dispute and, as such, no criminal case could have been instituted by the police. According to him when the petitioner being an un-employed graduate wanted to settle in his life by advancing his business but for some unforeseen circumstances he could not pay the loan, the matter could not have been brought before the criminal court for pressurisig the petitioner for payment of loan amount. His argument is that when the petitioner expressed his willingness to pay off all the dues with interest by some easy instalment, opposite party no. 2 ought to have accepted the request of the petitioner. Lastly, with reference to the decision in the case of Ranjit Prasad Singh V/s. The State of Bihar & ors. reported in (1998) 2 PLJR 401 and in the case of Central Bureau of Investigation V/s. Duncans Agro Industries Ltd. Calcutta ( AIR 1996 S.C 2452 ) he submits that the allegations do not make out any offence under Section 406 of the Indian Penal Code. Secondly, he contends that there was no criminal intention of the petitioner from inception and, as such, no case is made out for an offence under section 420 of the Penal Code. 6. Secondly, he contends that there was no criminal intention of the petitioner from inception and, as such, no case is made out for an offence under section 420 of the Penal Code. 6. Countering the argument learned counsel appearing on behalf of the Branch Manager of the Bank (Opposite Party no. 2) submits that initially the bank authority was not made a party and only to get an interim protection it was submitted before the Court on 30.9.99 that there was a chance of compromise. According to him the conduct of the petitioner compelled the authority to file the complaint because the loan money may be realised, which the petitioner failed to pay inspite of several requests. Lastly, he urged that the allegations made in the complaint petition clearly make out a case both under Sections 420 and 406 of the Penal Code and at this stage the High Court will not intenere with the impugned order. 7. I have already noticed earlier that the loan was sanctioned in favour of the petitioner with certain conditions. He was required to pay the monthly instalment of loan in the term loan account alongwith interest, route the daily sale proceeds of his business through the C.C. Account and produce the stock statements regularly before the bank for verification. However, after disbursement of the loan the petitioner started defaulting in depositing the instalments of the term loan and also failed to route the daily sale proceeds of his business through C.C. Account and producing the stock statements of his firm before the bank for verification. Several letters of request were sent to him and ultimately on 20.10.97 a legal notice was also sent to the petitioner asking him to discharge his liabilities but all these efforts went in vain. Even he authority met the petitioner and requested him to deposit the over dues but the flaty refused to deposit the same. On physical verification the authority found that the petitioner almost removed the stock of his business which he pledged to the bank as primary security. As observed by their Lordships in the case of G.V. Rao V/s. L.H.V. Prasad & ors. reported in JT 2000 (2) SC 627 Section 415 of the I.P.C. is in two parts. On physical verification the authority found that the petitioner almost removed the stock of his business which he pledged to the bank as primary security. As observed by their Lordships in the case of G.V. Rao V/s. L.H.V. Prasad & ors. reported in JT 2000 (2) SC 627 Section 415 of the I.P.C. is in two parts. Second part of this section is as follows : ".........Intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". Their Lordships have further observed that "this part speaks of intentional deception which must be intended not only to induce the person deceived to do or omit to do something but also to cause damage or harm to that person in body, mind, reputation or property. The intentional deception presupposes the existence of a dominant motive of the person making the inducement. Such inducement have led the person deceived or induced to do or omit to do anything which he would not have done or omitted to do if he were not deceived. The further requirement is that such act or omission should have caused damage or harm to body, mind, reputation or property." 8. in the present case the bank was induced by the petitioner for sanctioning the loan on the assurance that he would reimburse the loan with interest according to the terms of agreement entered into between the parties. The bank sanctioned the loan with a hope that its principal amount with interest would be paid by the petitioner. That having not done, in my view, a clear case of cheating has been established. It is true that for prosecuting the party for the offence under the Penal Code the traditional rules of mens rea has to be followed. Often it is argued that the guilty intention from very inception has to be proved before constituting offence of cheating. This argument has been replied by their Lordships in the case of Radhey Shyam Khemka and anr. V/s. State of Bihar, (1993) 3 SCC 54 . Often it is argued that the guilty intention from very inception has to be proved before constituting offence of cheating. This argument has been replied by their Lordships in the case of Radhey Shyam Khemka and anr. V/s. State of Bihar, (1993) 3 SCC 54 . According to their Lordships "the ingredients of the different offences under the Penal Code need not be proved only by direct evidence : they can be shown from the circumstances of a particular case that the intention of the promotors or directors was dishonest since very inception or that they developed such intention at some stage, for their wrongful gain and causing wrongful loss to the investors. All the circumstances and the materials to prove such a charge have to be collected during the investigation and inquiry and ultimately have to be produced before the court at the stage of trial for a verdict as to whether the ingredients of offence in question have been established on behalf of the prosecution." In the instant case also the complainant has to prove that the petitioner as loanee had dishonest intention since the very beginning while applying for loan and these facts can be proved at the trial stage from various circumstances. The complainant has alleged that since the very beginning the petitioner was not regular in payment of loan with interest. Ultimately, when he has personally approached by the bank authority he flatly refused to pay off the loan. In such circumstances, it cannot be said that the learned Magistrate has wrongly taken cognizance of the offence under Section 420 of the Penal Code. 9. In the case of Ranjit Prasad Singh (supra) it has been held that for disposing of hypothecated goods covering the security against the credit facility and in absence of any allegation of inducment no case is made out under section 420 of the Penal Code nor the allegation constitutes criminal breach of trust. According to this decision non-payment of loan amount constitutes only civil wrong. 10. However, distinguishing the above decision in the case Mahesh Prasad Manjhi & anr. V/s. The State of Bihar and anr. reported in 1999 (3) PLJR 90 another Single Judge has held that when the allegation is that the petitioner stealthily removed some items when the Corporation took steps to recover its dues by selling the assets, a case under Section 406 is made out. V/s. The State of Bihar and anr. reported in 1999 (3) PLJR 90 another Single Judge has held that when the allegation is that the petitioner stealthily removed some items when the Corporation took steps to recover its dues by selling the assets, a case under Section 406 is made out. 11. Without going into this aspect of the matter it is sufficient to say that merely because an act has a civil profile is not suffice to denude it of its criminal outfit. In the case of Nagpur Steel & Alloys Pvt. Ltd. V/s. P. Radha Krishna alias Ranjan and ors. reported in 1997 SCC (Cri) 1073 their Lordships have observed that merely because the offence was committed during the course of a commercial transaction would not be sufficient to hold that the complaint did not warrant a trial. In the present case admittedly some stock of his business was pledged to the bank as primary security but on verification to stock it was found that the petitioner almost removed the entire stock which was by way of security. 12. In the case of Rajesh Bajaj V/s. State NCT of Delhi and ors. reported in (1999) 3 SCC 259 : 2000(1) PLJR (SC) 79 their Lordships has observed as follows : "It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction. But that is hardly a reason for holding that the offence of cheating would elude from such a transaction, in fact, many a cheatings were committed in the course of commercial and also money transaction." 13. The decision in the case of Central Bureau of Investigation V/s. Duncans Agro Industries Ltd. Calcutta (supra) relied by the learned counsel for the petitioner, in my opinion, can easily distinguish from the facts and circumstances of the present case. In the reported case the bank had already filed suit for recovery of the dues of the bank and the said suit had been compromised on receiving payment from the concerned company. Under these circumstances it was held that the compromise decree passed in the suits instituted by the Companies for all intents and purposes amounted to compounding of the offence of cheating and consequently complaint for both the offences was quashed. This is not the fact here. 14. Under these circumstances it was held that the compromise decree passed in the suits instituted by the Companies for all intents and purposes amounted to compounding of the offence of cheating and consequently complaint for both the offences was quashed. This is not the fact here. 14. Under these circumstances at this stage it cannot be said that the allegation made in the complaint petition is merely a dispute of civil nature and criminal proceeding cannot continue. The High Court at this stage has no authority or jurisdiction to go into the matter or examine the correctness of the allegations made in the complaint petition. Whatever appears on the face of the record shall be taken into consideration without any critical examination and in my view perusal of the allegation made in the complaint petition prima facie makes out a case against the petitioner. In such circumstances, the order taking cognizance cannot be quashed. 15. In the result, I find no merit in this application, which is, accordingly, dismissed.