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2005 DIGILAW 490 (AP)

R. Prasad v. State Of A. P.

2005-06-10

body2005
( 1 ) THE petitioner herein is accused No. 18 in C. C. No. 9 of 2004 on the file of the Metropolitan Sessions Judge cum special Court, Hyderabad. In this petition filed under Section 482 of the Criminal procedure Code, 1973 (hereinafter called cr. P. C ) he seeks quashing of the said calendar case. ( 2 ) AS per the charge-sheet filed by p. S. Central Crime Station (White Collar offences. T. I), petitioner is nephew of accused No. 1. He colluded and collaborated with accused No. l in misappropriation of the funds of M/s. Manikanta Co-operative bank Ltd. , (hereinafter called the bank ). The charge-sheet further discloses the following. The bank is registered under the A. P. Co-operative Societies Act 1964 ( co-operative Act for brevity) and started its business from 1-4-1998 at Santoshima complex, RTC X Roads, Hyderabad. An enquiry under Section 51 of the Co-operative act revealed gross misappropriation of funds by directors and Chief Executive Officer of the bank by mismanagement of funds and reckless sanction of loans and callous recovery of loans. A complaint was made by the second respondent herein; LW. 1l. The p. S. CCS (WCO. T. I) therefore registered crime No. 201 of 2003 under Sections 420, 406 and 477a of the Indian Penal Code, (for short the IPC ) and Sections 3 and 5 of A. P. Protection of Depositors of Financial establishments Act, 1999 (hereinafter called protection Act ). The police conducted investigation and recorded the statements of L. W. 1 and L. W. 31 and filed a report before the Court of Metropolitan Sessions judge cum Special Court for trial of offences under the Protection Act, Hyderabad. The police opined that the facts collected in the course of investigation established that the accused are liable to be punished under sections 420, 406 and 477a of the IPC besides Section 5 of Protection Act. Learned metropolitan Sessions Judge took cognizance of case on 17-4-2004 and issued summons to the accused. Aggrieved by (he same, the petitioner is before this Court. Be it also noted that in the charge-sheet, it is alleged that petitioner herein was appointed to work for the bank and he assisted and colluded with accused No. l in misappropriation activities. The charge-sheet further reveals that accused No. l acquired as many as five items of immovable property. Aggrieved by (he same, the petitioner is before this Court. Be it also noted that in the charge-sheet, it is alleged that petitioner herein was appointed to work for the bank and he assisted and colluded with accused No. l in misappropriation activities. The charge-sheet further reveals that accused No. l acquired as many as five items of immovable property. It is also stated that accused No. 1 acquired as many as three items of immovable property either in his name or in the name of his wife after coming into existence of the Co-operative bank. ( 3 ) THE learned Counsel for the petitioners, Sri Sreenivasa Mukherjee, submits that Protection Act cannot be invoked in relation to any contravention by an establishment, which is not a financial establishment as defined in the Protection act. Secondly, it is his submission that no overtacts are specifically attributed to accused No. 18 and therefore the offences under Sections 420 and 406 of IPC as well as offences under Sections 3 and 5 of protection Act are not made out against the petitioner. He would also urge that the offence under Section 477a of IPC is alleged against the directors of the bank and the petitioner being a peon/attender, cannot be prosecuted for the offence punishable under Section 477a of IPC. These contentions are refuted by the learned additional Public Prosecutor. ( 4 ) THE submission that Protection Act cannot be invoked in relation to Manikanta co-operative bank is misconceived. There is no material laid before this Court to countenance the submission that the said bank has obtained any bank licence from the Reserve Bank of India as required under the Banking Regulation Act, 1949 or reserve Bank of India Act, 1934. It is admitted case that Manikanta Bank is registered under the Co-operative Act vide t. B. No. 1441/98 and started its business with effect from 1-4-1998 in the State of Andhra pradesh. Though it is engaged in banking business to a limited extent including the grant of loans, in the considered opinion of this Court, Manikanta Bank cannot be treated as falling in the excluded category under the Protection Act. This Court however hastens to add that it is always open to the petitioner to produce necessary evidence in support of his contentions before the Trial Court and seek an order of discharge. In a petition under Section 482 cr. This Court however hastens to add that it is always open to the petitioner to produce necessary evidence in support of his contentions before the Trial Court and seek an order of discharge. In a petition under Section 482 cr. P. C. , the power of the Court is limited to appreciate the allegations in the FIR/ charge-sheet to see whether crime investigation/prosecution if allowed against the petitioner would tantamount to abuse of process of law. Therefore, this Court is not able to - for the purpose of this petition; countenance the submission of the learned counsel for the petitioner. ( 5 ) THE fact that the petitioner is a nephew of accused No. 1 who was the chairman of the bank and the fact that he was working in the bank are not denied. The allegation against the petitioner herein is that he colluded with and assisted accused No. 1 in misappropriation activities. The police have done elaborate investigation and filed a charge-sheet under Sections 420, 406 and 477a of IPC besides Section 5 of the Protection Act. It is a white-collar offence where the Chairman (accused No. 1) of the Co-operative bank allegedly swindled huge sum of public money. In such a case, it would be improper for the Court to quash the case at the very threshold. It is now well settled that when the investigation is done by the police, spending considerable time, and a charge-sheet is filed, unless and until there are exceptional circumstances, the case cannot be quashed. A reference may made to State of H. P. v. Pirthi Chand, 1996 (1) ALD (Crl.) 772 (SC) = 1996 SCC (Crl.) 210 = (1996) 2 SCC 37 , wherein it was observed: it is thus settled law that the exercise of inherent power of the High Court is an exceptional one. Great care should be taken by the High Court before embarking to scrutinize the HR/charge-sheet/complaint In deciding whether the case is rarest of rare cases to scuttle the prosecution in its inception, it first has to get into the grip of the matter whether the allegations constitute the offence. It must be remembered that FIR is only an initiation to move the machinery and to investigate into cognizable offence. It must be remembered that FIR is only an initiation to move the machinery and to investigate into cognizable offence. After the investigation is conducted (sic concluded) and the charge-sheet is laid, the prosecution produces the statements of the witnesses recorded under Section 161 of the Code in support of the charge-sheet. At that stage it is not the function of the Court to weigh the pros and cons of the prosecution case or to consider necessity of strict compliance of the provisions which are considered mandatory and its effect of non-compliance. It would be done after the trial is concluded. The court has to prima facie consider from the averments in the charge-sheet and the statements of witnesses on the record in support thereof whether Court could take cognizance of the offence on that evidence and proceed further with the trial. If it reaches a conclusion that no cognizable offence is made out, no further act could be done except to quash the charge-sheet. But only in exceptional cases, i. e. , in rarest of rare cases of mala fide initiation of the proceedings to wreak private vengeance process of criminal is availed of in laying a complaint or FIR itself does not disclose at all any cognizable offence - the Court may embark upon the consideration thereof and exercise the power. It was further held: when the Court exercises its inherent power under Section 482, the prime consideration should only be whether the exercise of the power would advance the cause of justice or it would be an abuse of the process of the Court. When investigation officer spends considerable time to collect the evidence and places the charge-sheet before the Court, further action should not be short-circuited by resorting to exercise inherent power to quash the charge-sheet. The social stability and order requires to be regulated by proceeding against the offender as it is an offence against the society as a whole. This cardinal principle should always be kept in mind before embarking upon exercising inherent power. The accused involved in an economic offence destabilizes the economy and causes grave incursion on the economic planning of the State. This cardinal principle should always be kept in mind before embarking upon exercising inherent power. The accused involved in an economic offence destabilizes the economy and causes grave incursion on the economic planning of the State. When the legislature entrusts the power to the police officer to prevent organized commission of the offence or offences involving moral turpitude or crimes of grave nature and are entrusted with power to investigate into the crime in intractable terrains and secretive manner in concert, greater circumspection and care and caution should be borne in mind by the High Court when it exercises it inherent power. Otherwise, the social order and security would be put in jeopardy and to grave risk. The accused will have filed day in destabilising the economy of the State regulated under the relevant provisions, (emphasis supplied) ( 6 ) IN the present case, serious allegations are made against the Chairman, vice-Chairman and other directors of the co-operative bank as well as employees who allegedly connived with them in commission of serious economic offences. Therefore, it is not a fit case where the Court should exercise its inherent power and quash the criminal case. It shall be open to the petitioner to raise all his objections and make out a case of discharge by filing appropriate application before the Trial Court. ( 7 ) THE criminal petition, with above observations, is therefore dismissed.