JUDGMENT (Prayer: Criminal Original Petition has been filed under Section 482 of the Code of Criminal Procedure to call for records and quash the case against the petitioner in Crime No.29 of 2018 on the file of the 1st respondent. Criminal Original Petition has been filed under Section 482 of the Code of Criminal Procedure to call for records and quash the case against the petitioners in Crime No.29 of 2018 on the file of the 1st respondent.) Common Order: 1. The petitioner in Crl.O.P.No.29447/2018 is the Managing Director & Chief Executive Officer of Tamilnadu Mercantile Bank Ltd. The petitioners 1 and 2 in Crl.O.P.No.2501/2019 are the Regional Managers of the said Bank at Coimbatore between 2013 to 2016 and 2016 to 2018. The third petitioner was the Manager of the Bank at Tiruppur Branch. 2. These two petitions are filed to quash the FIR in Crime No.29/2018 on the file of the first respondent under his investigation. The FIR came to be registered pursuant to the order dated 02/11/2018 passed by the Judicial Magistrate II, Tiruppur in Crl.M.P.No.4390/2018, to register the complaint given by K.Manoharan and investigate. 3. As per the complaint, Mr.Manoharan the complainant is a businessman. He and his family members maintain Savings Bank Account and Recurring Deposit Account in TamilNadu Mercantile Bank, Arcot Branch and Tiruppur Branch. During the years 2011-2014, the first accused Saravanan was the Branch Manager of Tamilnadu Mercantile Bank Ltd, Arcot Branch. The first accused took advantage of the complainant's gullible nature, hatched a plan to cause wrongful loss to him and his family members, make a unlawful gain to himself, began to create false, bogus, forged and unauthorised cash/transfer transactions without the cheques signed by him or his wife. The first accused continues to do his act of fraud and cheating even after his transfer from Arcot Branch to Tirupur Branch. The complainant and his 5 family members have joint and single Savings Bank Account and OD accounts with Tiruppur Branch. The first accused, without any cheque signed by the complainant or his family members, had debited from his account and his family members account. During demonetization, he and his family members deposited demonetised money Rs.58,25,000/- in their accounts maintain at Tiruppur Branch. However, the first accused has falsely transacted to a tune of Rs.1,65,00,000/- into the complainants account without his knowledge and consent. 4. During demonetization, he and his family members deposited demonetised money Rs.58,25,000/- in their accounts maintain at Tiruppur Branch. However, the first accused has falsely transacted to a tune of Rs.1,65,00,000/- into the complainants account without his knowledge and consent. 4. He came to know about the surreptitious entries in the accounts of his and his family members only on receipt of notice from Income Tax Department pointing to the abnormal and astronomical amounts been transacted by the complainant and his family members. Soon after receipt of the notice from Income Tax Department, he went to the bank personally and checked the entries and found several of the transactions reflected in his accounts were done without his knowledge and consent. The first accused Saravanan in connivance with the other accused 2 to 4, to cheat and to misappropriate the lawful amounts, due to the complainant and his family members had created the false entries and suppressed the actual state of affairs. 5. When the complainant met the 5th accused, who is the Managing Director and Chief Executive Officer of the Bank and reported about the misdeeds, he instead of taking action trying to shield, protect and manipulate. Instead of unearthing the fraud, the bank Senior Officials are not taking any genuine efforts to fix the wrong doers. As an eyewash, the bank higher officials have given complaint against the first accused only in respect of the complaint given by one Manimaran, owner of Shree Mother and Mother Exports regarding manipulation of his accounts. Alleging that a total sum of Rs.37,03,863/- been misappropriated from his account and his family members account by the erring officials. In the complaint, the statement of accounts of his and his relatives furnished to demonstrate, how he and his family members were made poorer by around Rs.37 lakhs. 6. The case of the petitioners, who are the 2nd to 5th accused holding the post as MD-cum-CMD, Regional Managers and Branch Manager of Tamil Nadu Mercantile Bank, is that, the complaint does not disclose any offence against them, except the allegation as Senior Officers, they are responsible for the misdeed done by A-1- Saravanan as Branch Manager during relevant point of time and refused to take action on his complaint amounts to shielding the accused persons. 7. 7. In fact, on knowing about the irregularities committed by Saravanan as Branch Manager in the branches at Arcot and Tiruppur, the Head Officer placed him under suspension vide order dated 01/07/2017. A criminal complaint against Saravanan was lodged by N.Narendran (2nd petitioner in Crl.O.P.No.2501/2019). After investigation, the CCB, Tirupur has filed final report against Saravanan for offence under Section 409 IPC and trial is pending. While so, by accusing the senior officers through this complaint, the defacto complainant in fact indirectly helping his friend Saravanan A-1 to whom he admittedly allowed to operate his account and accounts of his family members. In fact, the monetory loss which is referred in the complaint is regarding the tax, he paid for the money he depositied in his account during the demonetization. Therefore, pleaded that the registeration of the complaint based on the direction of the Judicial Magistrate under Section 156(3) of Cr.P.C., without application of mind and reasoning, is liable to be quashed. 8. On the point of inherent power of the High Court to quash FIR exercising its power under Section 482 Cr.P.C and under Article 227 of the Constitution of India, the following judgements cited:- Mrs. Priyanka Srivatsava and Another –vs- State of UP reported in [2015(4) SCC ( cri ) 153]: “22. In Anil Kumar v. M.K. Aiyappa [ (2013) 10 SCC 705 : (2014) 1 SCC (Cri) 35] , the two-Judge Bench had to say this: “11. The scope of Section 156(3) CrPC came up for consideration before this Court in several cases. This Court in Maksud Saiyed [Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668 : (2008) 2 SCC (Cri) 692] examined the requirement of the application of mind by the Magistrate before exercising jurisdiction under Section 156(3) and held that where jurisdiction is exercised on a complaint filed in terms of Section 156(3) or Section 200 Cr.P.C, the Magistrate is required to apply his mind, in such a case, the Special Judge/Magistrate cannot refer the matter under Section 156(3) against a public servant without a valid sanction order. The application of mind by the Magistrate should be reflected in the order. The mere statement that he has gone through the complaint, documents and heard the complainant, as such, as reflected in the order, will not be sufficient. The application of mind by the Magistrate should be reflected in the order. The mere statement that he has gone through the complaint, documents and heard the complainant, as such, as reflected in the order, will not be sufficient. After going through the complaint, documents and hearing the complainant, what weighed with the Magistrate to order investigation under Section 156(3) CrPC, should be reflected in the order, though a detailed expression of his views is neither required nor warranted. We have already extracted the order passed by the learned Special Judge which, in our view, has stated no reasons for ordering investigation.” 23. In Dilawar Singh v. State of Delhi [ (2007) 12 SCC 641 : (2008) 3 SCC (Cri) 330] , this Court ruled thus: “18.… ‘11. The clear position therefore is that any Judicial Magistrate, before taking cognizance of the offence, can order investigation under Section 156(3) of the Code. If he does so, he is not to examine the complainant on oath because he was not taking cognizance of any offence therein. For the purpose of enabling the police to start investigation it is open to the Magistrate to direct the police to register an FIR. There is nothing illegal in doing so. After all registration of an FIR involves only the process of entering the substance of the information relating to the commission of the cognizable offence in a book kept by the officer in charge of the police station as indicated in Section 154 of the Code. Even if a Magistrate does not say in so many words while directing investigation under Section 156(3) of the Code that an FIR should be registered, it is the duty of the officer in charge of the police station to register the FIR regarding the cognizable offence disclosed by the complainant because that police officer could take further steps contemplated in Chapter XII of the Code only thereafter.’ 24. In CREF Finance Ltd. v. Shree Shanthi Homes (P) Ltd. [ (2005) 7 SCC 467 : 2005 SCC (Cri) 1697], the Court while dealing with the power of the Magistrate taking cognizance of the offences, has opined that having considered the complaint, the Magistrate may consider it appropriate to send the complaint to the police for investigation under Section 156(3) of the Code of Criminal Procedure. And again : When a Magistrate receives a complaint he is not bound to take cognizance if the facts alleged in the complaint disclose the commission of an offence. The Magistrate has discretion in the matter. If on a reading of the complaint, he finds that the allegations therein disclose a cognizable offence and the forwarding of the complaint to the police for investigation under Section 156(3) will be conducive to justice and save the valuable time of the Magistrate from being wasted in enquiring into a matter which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence itself. As said earlier, in the case of a complaint regarding the commission of a cognizable offence, the power under Section 156(3) can be invoked by the Magistrate before he takes cognizance of the offence under Section 190(1)(a). However, if he once takes such cognizance and embarks upon the procedure embodied in Chapter XV, he is not competent to revert back to the pre-cognizance stage and avail of Section 156(3).” 25. Recently, in Ramdev Food Products (P) Ltd. v. State of Gujarat [ (2015) 6 SCC 439 ] , while dealing with the exercise of power under Section 156(3) Cr.P.C by the learned Magistrate, a three- Judge Bench has held that : “22.1...the direction under Section 156(3) is to be issued, only after application of mind by the Magistrate. When the Magistrate does not take cognizance and does not find it necessary to postpone instance of process and finds a case made out to proceed forthwith, direction under the said provision is issued. In other words, where on account of credibility of information available, or weighing the interest of justice it is considered appropriate to straight away direct investigation, such a direction is issued. 22.2 The cases where Magistrate takes cognizance and postpones issuance of process are cases where the Magistrate has yet to determine ‘existence of sufficient ground to proceed’.” 28. Issuing a direction stating “as per the application” to lodge an FIR creates a very unhealthy situation in society and also reflects the erroneous approach of the learned Magistrate. It also encourages unscrupulous and unprincipled litigants, like Respondent 3, namely, Prakash Kumar Bajaj, to take adventurous steps with courts to bring the financial institutions on their knees. Issuing a direction stating “as per the application” to lodge an FIR creates a very unhealthy situation in society and also reflects the erroneous approach of the learned Magistrate. It also encourages unscrupulous and unprincipled litigants, like Respondent 3, namely, Prakash Kumar Bajaj, to take adventurous steps with courts to bring the financial institutions on their knees. As the factual exposition would reveal, Respondent 3 had prosecuted the earlier authorities and after the matter is dealt with by the High Court in a writ petition recording a settlement, he does not withdraw the criminal case and waits for some kind of situation where he can take vengeance as if he is the emperor of all he surveys. It is interesting to note that during the tenure of Appellant 1, who is presently occupying the position of Vice-President, neither was the loan taken, nor was the default made, nor was any action under the SARFAESI Act taken. However, the action under the SARFAESI Act was taken on the second time at the instance of the present Appellant 1. We are only stating about the devilish design of Respondent 3 to harass the appellants with the sole intent to avoid the payment of loan. When a citizen avails a loan from a financial institution, it is his obligation to pay back and not play truant or for that matter play possum. As we have noticed, he has been able to do such adventurous acts as he has the embedded conviction that he will not be taken to task because an application under Section 156(3) CrPC is a simple application to the court for issue of a direction to the investigating agency. We have been apprised that a carbon copy of a document is filed to show the compliance with Section 154(3), indicating it has been sent to the Superintendent of Police concerned. 29.At this stage it is seemly to state that power under Section 156(3) warrants application of judicial mind. A court of law is involved. It is not the police taking steps at the stage of Section 154 of the Code. A litigant at his own whim cannot invoke the authority of the Magistrate. A principled and really grieved citizen with clean hands must have free access to invoke the said power. A court of law is involved. It is not the police taking steps at the stage of Section 154 of the Code. A litigant at his own whim cannot invoke the authority of the Magistrate. A principled and really grieved citizen with clean hands must have free access to invoke the said power. It protects the citizens but when pervert litigations takes this route to harass their fellow citizens, efforts are to be made to scuttle and curb the same. 33.... In the present case, we are obligated to say that the learned Magistrate should have kept himself alive to the aforesaid provision before venturing into directing registration of the FIR under Section 156(3) CrPC. It is because Parliament in its wisdom has made such a provision to protect the secured creditors or any of its officers, and needless to emphasise, the legislative mandate has to be kept in mind. 34. In view of the aforesaid analysis, we allow the appeal, set aside the order passed [Priyanka Srivastava v. State of U.P., Criminal Misc. WP No. 24561 of 2011, decided on 23-12-2011 (All)] by the High Court and quash the registration of the FIR in case Crime No. 298 of 2011, registered with Police Station Bhelupur, District Varanasi, 9. In HDFC Securities Limited and Others –vs- State of Maharashtra and another reported in [ 2017(1) SCC 640 ], after referring the following judgment, the Hon'ble Supreme Court held that: 15.......in Lalitha Kumari v. State of U.P., wherein this Court held:(SCC p.60, para 119) “119. Therefore, in view of various counterclaims regarding registration or nonregistration, what is necessary is only that the information given to the police must disclose the commission of a cognizable offence. In such a situation, registration of an FIR is mandatory. However, if no cognizable offence is made out in the information given then the FIR need not be registered immediately and perhaps the police can conduct a sort of preliminary verification or inquiry for the limited purpose of ascertaining as to whether a cognizable offence has been committed. But, if the information given clearly mentions the commission of a cognizable offence, there is no other option but to register an FIR forthwith. Other considerations are not relevant at the stage of registration of FIR, such as, whether the information is falsely given, whether the information is genuine, whether the information is credible, etc. But, if the information given clearly mentions the commission of a cognizable offence, there is no other option but to register an FIR forthwith. Other considerations are not relevant at the stage of registration of FIR, such as, whether the information is falsely given, whether the information is genuine, whether the information is credible, etc. These are the issues that have to be verified during the investigation of the FIR. At the stage of registration of FIR, what is to be seen is merely whether the information given ex facie discloses the commission of a cognizable offence. If, after investigation, the information given is found to be false, there is always an option to prosecute the complainant for filing a false FIR”. 16. We are of the considered opinion that in the present case a fact-finding investigation was directed by the impugned order. Consequently, FIR was registered against appellants 2 to 4 and against RM (Vinod Kopar). The accused under Indian Criminal legal System, unless proved guilty shall always be given a reasonable space and liberty to defend himself in accordance with the law. Further, it is always expected from a person accused of an offence pleading not guilty that he shall cooperate and participate in criminal proceedings or proceedings of that nature before a court of law, or other tribunal before whom he may be accused of an “offence” as defined in Section 3(38) of the General Clauses Act, i.e., an act punishable under the Penal Code or any special or local law. At the same time, Courts, taking cognizable of the offence or conducting a trial while issuing any order, are expected to apply their mind and the order must be a well-reasoned one. 10. In All Cargo Movers (India) (P) Ltd., v. Dhanesh Badarmal Jain reported in [ (2007) 14 SCC 766 ], relied upon in para 16 thereof, it was held by the Hon'ble Supreme Court:- “16. We are of the opinion that the allegations made in the complaint petition, even if given face value and taken to be correct in its entirety, do not disclose an offence. For the said purpose, this Court may not only take into consideration the admitted facts but it is also permissible to look into the pleadings of Respondent 1-plaintiff in the suit. No allegation whatsoever was made against the appellants herein in the notice. For the said purpose, this Court may not only take into consideration the admitted facts but it is also permissible to look into the pleadings of Respondent 1-plaintiff in the suit. No allegation whatsoever was made against the appellants herein in the notice. What was contended was negligence and/or breach of contract on the part of the carriers and their agent. Breach of contract simpliciter does not constitute an offence. For the said purpose, allegations in the complaint petition must disclose the necessary ingredients there for. Where a civil suit is pending and the complaint petition has been filed one year after filing of the civil suit, we may for the purpose of finding out as to whether the said allegations are prima facie correct, take into consideration the correspondences exchanged by the parties and other admitted documents. It is one thing to say that the Court at this juncture would not consider the defence of the accused but it is another thing to say that for exercising the inherent jurisdiction of this Court, it is impermissible also to look to the admitted documents. Criminal proceedings should not be encouraged, when it is found to be mala fide or otherwise an abuse of the process of the court. Superior courts while exercising this power should also strive to serve the ends of justice. “ 20. Further, in Maksud Saiyed v. State of Gujarat reported in (2008) 5 SCC 668 at para 13, this Court observed that:- “13. Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the company when the accused is the company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein were personally liable for any offence. The bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liability. The bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liability. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability.” 21. In Thermax Ltd. v. K.M. Johny and in Sunil Barti Mittal v. CBI at para 39, this Court held: (Thermax Ltd. Case, SCC p.429) “39. Apart from the fact that the complaint lacks necessary ingredients of Sections 405, 406, 420 read with Section 34 IPC, it is to be noted that the concept of “vicarious liability” is unknown to criminal law. As observed earlier, there is no specific allegation made against any person but the members of the Board and senior executives are joined as the persons looking after the management and business of the appellant Company.” 11. The Hon'ble Supreme Court, considering the facts involved in the HDFC case, concluded as below: “27. It appears to us that the appellants approached the High Court even before the stage of issuance of process. In particular, the appellants challenged the order dated 4-1-2011 passed by the learned Magistrate under Section 156(3) Cr.P.C. The learned counsel appearing on behalf of the appellants after summarising their arguments in the matter have emphasised also in the context of the fundamental rights of the appellants under the Constitution, that the order impugned has caused grave inequities to the appellants. In the circumstances, it was submitted that the order is illegal and is an abuse of the process of law. However, it appears to us that this order under Section 156(3) Cr.P.C requiring investigation by the police, cannot be said to have caused an injury of irreparable nature which, at this stage, requires quashing of the investigation. We must keep in our mind that the stage of cognizance would arise only after the investigation report is filed before the Magistrate. Therefore, in our opinion, at this stage the High Court has correctly assessed the facts and the law in this situation and held that filing of the petitions under Article 227 of the Constitution of India or under Section 482 Cr.P.C, at this stage are nothing but premature. Therefore, in our opinion, at this stage the High Court has correctly assessed the facts and the law in this situation and held that filing of the petitions under Article 227 of the Constitution of India or under Section 482 Cr.P.C, at this stage are nothing but premature. Further, in our opinion, the High Court correctly came to the conclusion that the inherent powers of the Court under Section 482 Cr.P.C should be sparingly used.” 12. The fact of the present case is almost similar to the facts in HDFC case cited supra. In the case in hand also, the complaint filed before the Judicial Magistrate has been forwarded to the Police for investigation and report. However, the complaint alleging conspiracy between the first accused Saravanan and the other officials of TamilNadu Mercantile Bank who are petitioners before the Court does not satisfy the parameters laid by the Hon’ble Supreme Court in Bajanlal case. The complainant specific case is that he believed the first accused Saravanan and allowed him to deal with his accounts as well as the accounts of his family members. He and his family members used to give signed withdrawal slips to the first accused. The complainant used to inform in advance to the accused Saravanan about his need for money and the first accused used to arrange and transfer money from his accounts in Arcot Branch to any one of the accounts maintained by his family members at Salem Branch. Though the complainant is a residence of Salem and carrying on business at Salem, he and his wife were maintaining the accounts at Tamil Nadu Merkantile Bank, Arcot Branch because their friend Saravanan was working as its Branch Manager. There is no allegation that the money he deposited was misappropriated. His allegation is that Saravanan had meddled with his account and his family members account without their knowledge. The money in his account was stealthily withdrawn by Saravanan and later recouped with the money deposited by Manimaran. This grievence of the complainant has been addressed by the Senior Officers of the Bank by placing Saravanan under suspension and lodging complaint. 13. The complainant admits that he has withdrawn Rs.38 lakhs in 4 installments of Rs.9.5 lakhs each from his account and his money not misappropriated but he was paid by misappropriating the money laying in Manimaran account. This grievence of the complainant has been addressed by the Senior Officers of the Bank by placing Saravanan under suspension and lodging complaint. 13. The complainant admits that he has withdrawn Rs.38 lakhs in 4 installments of Rs.9.5 lakhs each from his account and his money not misappropriated but he was paid by misappropriating the money laying in Manimaran account. This is already the subject matter of prosecution against Saravanan, for that purpose he need not file a compliant under Section 156(3) Cr.P.C. 14. The next allegation made in the complaint is the deposit of Rs.1,65,00,000/- in his account without knowledge and as a consequence the Income Tax Department has issued notice for suppression of income and non-payment of tax. Therefore, the senior officers of the Bank are implicated by applying the principle of vicarious liability. 15. When the alleged act of manipulating the account is not in the course of discharge of duty and to an extent done with the connivance of the complainant himself, it appears that this complaint alleging petitioners as parties to the illegal act of Saravanan is apparently a dubious design to get ride of being suspected as accomplice of Saravanan and to avoid paying tax as demanded by the Income Tax Department. 16. Manimaran is the actual person, who lost money in the alleged manipulation of account by the Branch Manager-Saravanan, who has wrongfully transferred the money of Manimaran into the account of Manoharan (defacto complainant). The defacto complainant as per bank document is one of the beneficiary of the wrong entries. For the misdeed of Saravanan, Mr.Narendran, the Regional Manager of the Bank has given the complaint and the same has been registered against Saravanan and final report also filed. While so, this complaint under Section 156(3) Cr.P.C by Manoharan without following the procedure under Section 154 (1) and (3) of Cr.P.C, is clearly an attempt to harass the officers, who found the misappropriation of Saravanan and placed him under suspension and also lodged the complaint against Saravanan. These petitioners, who are at top level of the Bank administration, cannot be held vicariously liable for the act of the Branch Manager, who has fabricated documents and registers and admittedly, close to the defacto complainant to an extent of allowing to operate his accounts, which has facilitated the crime. 17. These petitioners, who are at top level of the Bank administration, cannot be held vicariously liable for the act of the Branch Manager, who has fabricated documents and registers and admittedly, close to the defacto complainant to an extent of allowing to operate his accounts, which has facilitated the crime. 17. The allegations in the FIR, is to say the least not only inherently improbable but the converse is more probable. The strong reason to observe so is the complaint is given belatedly about the transactions alleged took place several months ago. The complaint has not whispered about any breach of trust against his friend Saravanan till departmental action taken against Saravanan for his misappropriation at Arcot and Tiruppur Branch. Thus, malafide in lodging the complaint against the top rank officers of the Bank by including his friend Saravanan will ulterior design to delay the penal and departmental action against Saravanan, is seen manifestly. 18. For the reasons stated above, these Criminal Revision cases to quash the FIR as against the petitioners (A-2 to A-5) alone are allowed. Investigation against the first accused Saravanan may go on and final report, if any cognizable offence is made out, may be filed before the Court which has ordered the investigation. Consequently, connected Miscellaneous Petitions are closed.