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Gujarat High Court · body

2023 DIGILAW 719 (GUJ)

Rajendrakumar Dhanraj Banthia v. State of Gujarat

2023-05-02

GITA GOPI

body2023
JUDGMENT : 1. Rule. Learned advocates for the respective respondents waive service. 2. The revisionist is challenging the order dated 18.01.2018 passed below Exh. 66 in Criminal Case No. 3047 of 2009 where the learned Court was pleased to reject the discharge application. 3. The case of the prosecution on 05.01.2002 by filing of FIR being I-C.R. No. 6 of 2002, registered with Anand Town Police Station, on a complaint filed by Mr. Suresh Dalwadi, General Manager of Charotar Nagrik Sahakari Bank Ltd. (CNSB) for the offence punishable under Sections 409, 465, 467, 468, 466, 470, 471, 406, 420 and 120B of the Indian Penal Code, 1860 (IPC) alleges that one Chiman Sathi, Managing Director of CNSB, without any authority, opened the letter of credit in November 2000 on behalf of CNSB and that beneficiaries were companies controlled by Chiman Sathi and Himanshu Desai. It is also alleged that the loans were sanctioned by CNSB in the companies controlled by Chiman Sathi and Himanshu Desai without security and no steps were taken to recover the same. On 22.01.2003, after the investigation by the Police, a Chargesheet was filed which was registered as Criminal Case No. 2423 of 2003 before the learned Chief Judicial Magistrate, Anand. Thereafter, on 01.02.2003, first supplementary Charge-sheet was filed against the present revisionist which was numbered as Criminal Case No. 201 of 2003 and later on renumbered as Criminal Case No. 3047 of 2009. Again on 18.09.2006, second supplementary Charge-sheet came to be filed against one Jayesh Jagdishchandra Dave for the offence punishable under Section 406, 420 and 120B IPC and the case was numbered as Special (ACB) Case No. 55 of 2006. The, case thereafter, came to be transferred from Anand Town Police Station to State CID Crime and after the investigation in the supplementary Charge-sheet a specific role of the revisionist was specified under Section 411 of the IPC. 3.1 It is stated by learned senior advocate Mr. Syed for the revisionist that on 31.03.2003, the revisionist preferred a regular bail application before the Sessions Court at Anand, which was rejected and the bail was also not granted by this Court in Criminal Misc. Application No. 2513 of 2003 and the revisionist, thus, preferred Special Leave Petition (Criminal) No. 1718 of 2003 before the Hon’ble Supreme Court and where bail was granted to the revisionist. 3.2 It is submitted by learned senior advocate Mr. Application No. 2513 of 2003 and the revisionist, thus, preferred Special Leave Petition (Criminal) No. 1718 of 2003 before the Hon’ble Supreme Court and where bail was granted to the revisionist. 3.2 It is submitted by learned senior advocate Mr. Syed that on 16.11.2005, the Apex Court in Criminal Appeal No. 1523 of 2005, in the matter, which was preferred by the co-accused namely Himanshu Desai, has made a categorical observation about the role of the present revisionist i.e. Rajendrakumar Dhanraj Banthia to specify that his role is different and he apparently was not directly involved in defrauding the bank. Learned senior advocate Mr. Syed states that the said matter was reported in (2005) 13 SCC 234 . 3.3 Referring to the facts of the case, learned senior advocate Mr. Syed submits that the only allegation against the revisionist is under Section 411, IPC in the Charge-sheet where actually, Police had no evidence to invoke the said section, when the investigation was before the Police, Anand. The application was moved by Police Inspector, LCB, Anand before the Judicial Magistrate First Class, Anand, where the prayer was made after the Charge-sheet to add Sections 467, 468, 465, 466, 470, 471, 406, and 420 of the IPC, with a further prayer before the Court to consider the Charge-sheet being filed under the said sections. The learned senior advocate for the revisionist states that Charge-sheet was filed under Section 411, IPC against the present revisionist. The learned Chief Judicial Magistrate, Nadiad under the said jurisdiction, rejected the application of the LCB, Anand considering that the said application was not tenable under Section 173 of the Criminal Procedure Code, 1973 (CrPC). 3.4 The learned senior advocate for the revisionist submitted that the office bearers of CNSB misusing the official position, took out money from the bank in the form of loans and letter of credits and diverted the said money. The office bearers / co-accused decided to buy the majority stock holding of one Nedungadi Bank and the revisionist being a well-known Share Broker was holding majority stake in Nedungadi Bank. The office bearers / co-accused approached the revisionist and entered into an agreement to purchase the majority stake holding from the revisionist of the Nedungadi Bank. The office bearers / co-accused decided to buy the majority stock holding of one Nedungadi Bank and the revisionist being a well-known Share Broker was holding majority stake in Nedungadi Bank. The office bearers / co-accused approached the revisionist and entered into an agreement to purchase the majority stake holding from the revisionist of the Nedungadi Bank. 3.5 It is submitted by the learned senior advocate for the revisionist that as per the prosecution Charge-sheet, the office bearers / co-accused paid an amount of Rs.19 crore to the revisionist for the purchase of majority stake holding in Nedungadi Bank at the rate of Rs.191 per Share. It was alleged that, out of Rs.19 crore, the revisionist had transferred Shares worth Rs.10 crore to the office bearers / co-accused, while at the relevant time, could not transfer the remaining Shares worth Rs.9 crore. 3.6 The learned senior advocate for the revisionist, referring to the letter dated 07.11.2002, addressed to the Police Inspector, Anand Town Police Station, stated that the revisionist voluntarily surrendered Shares worth Rs.9 crore on the condition that the Investigating Officer (IO) may not Charge-sheet the revisionist. The learned senior advocate for the revisionist submitted that, however, the said Shares worth Rs.9 crore were frozen with the Stock Holding Corporation of India (SHCI) in spite of that, the revisionist was charge-sheeted under Section 411, IPC, where, actually, as observed by the Apex Court in Himanshu Chandravadan Desai and others (supra), the transaction of present revisionist as a Share Broker is different and he cannot be termed as directly involved in defrauding the bank. 3.7 The learned senior advocate for the revisionist submitted that the Hon’ble High Court had directed the IO to put the status of the said Shares with SHCI and the revisionist, in pursuance to the order, by way an affidavit placed the certified copies of the statement of holdings of the SHCI which clearly reveals that the Share worth Rs.9 crore are still lying frozen with the SHCI. 3.8 Referring to the facts of the case, the learned senior advocate for the revisionist submitted that the last payment which was received by the revisionist against the sale of Shares from the co-accused was on 08.01.2001. 3.8 Referring to the facts of the case, the learned senior advocate for the revisionist submitted that the last payment which was received by the revisionist against the sale of Shares from the co-accused was on 08.01.2001. Rs.10 crore from the Letter of Credit opened by Bhavika Creation in favour of Matreyi, was encashed by Matreyi on 20.07.2000, while Rs.5 crore each from loan sanctioned to Sathiprakashan and Chaman Farms, was disbursed on 21.03.2001 and 17.02.2001 respectively. The revisionist has not received any part of Rs.10 crore sanctioned to Sathiprakashan and Chaman Farms, while the allegation is that the revisionist has not given the Shares worth Rs.9 crore which actually, learned senior advocate Mr. Syed states that, are voluntarily given to Police and were frozen by the Police and thus, there should not be any case of Section 411, IPC which alleges receiving stolen properties. 3.9 The learned senior advocate for the revisionist submitted that the revisionist was not aware of the transactions undertaken by the co-accused nor was aware of the source of money and the transaction undertaken by the co-accused with the present revisionist was purely commercial as there was sale and purchase of Shares and hence, there should not be any report by the Police for adding other offences under Sections 120B, 463, 464, 465, 409, 467, 468, 470, 471, 406 and 420 of the IPC. Thus, it is stated that the learned Chief Judicial Magistrate, Nadiad has rightly rejected the said report. 3.10 The learned senior advocate for the revisionist submitted that there would not be any case under Section 411, IPC since being commercial transaction and the revisionist was only a Share Broker and had not been been any beneficiary to any of the transactions of the co-accused, as has been appropriately observed in the case of Himanshu Chandravadan Desai and others (supra) that the present revisionist is not directly involved in defrauding the bank. 4. Learned Additional Public Prosecutor Ms. Maithili Mehta for the respondent – State states that conspiracy factor would be required to be proved, which can be done only if the trial is allowed against the revisionist, thus, urged that no discretion be exercised to discharge the revisionist. 5. 4. Learned Additional Public Prosecutor Ms. Maithili Mehta for the respondent – State states that conspiracy factor would be required to be proved, which can be done only if the trial is allowed against the revisionist, thus, urged that no discretion be exercised to discharge the revisionist. 5. The facts of the case suggest that the investigation was thereafter transferred to the State CID Crime, Economic Offence Wing, Gandhinagar (CID Crime), and the CID Crime made further investigation and also investigated the role of each accused and filed a supplementary Charge-sheet, wherein, the role of the accused was specifically mentioned. The second supplementary Charge-sheet was filed against one Jayesh Jagdishchandra Dave for the offences punishable under Section 406, 420 and 120B of the IPC,wherein, for the very first time the name of the revisionist was included to be chargesheeted under Section 411, IPC. It has been alleged that the revisionist has received Rs.19 crore against the sale of Shares of Nedungadi Bank. Out of said Rs.19 crore, Rs.10 crore was paid from Bhavika Creation and Rs.5 crore Sathiprakashan and further Rs.5 crore from Chaman Farms. 5.1 This Court, vide order dated 27.04.2023, had ordered the Police as well as the Liquidator of CNSB to file affidavit. The said order was passed in the presence of learned advocate Mr. Dharmesh Shah, who represents the Bank. Today, on behalf of the respondent No. 1, Mr. A. A. Pandya serving as Deputy Superintendent of Police, Economic Office Wing, CID Crime, Gandhinagar filed an affidavit, who submits about the present status of the stock holdings, and, according to the affidavit, 5 lac Shares of the revisionist amounting to Rs.9 crore are frozen and the said act of freezing of Shares was at the behest of the respondent No.1 i.e. Police Inspector, Local Crime Branch, processed on 08.11.2002. The affidavit states that the physical Shares are not with the Police Inspector, Anand but is with the SHCI. Thus, according to the affidavit the physical custody of the Shares are not with the Police but with the SHCI. 5.2 Unfortunately, no affidavit has been filed on behalf of the CNSB, however, it is stated that on 10.04.2023, an affidavit was filed by the Liquidator and learned advocate Ms. Drashti Shah for learned advocate Mr. Thus, according to the affidavit the physical custody of the Shares are not with the Police but with the SHCI. 5.2 Unfortunately, no affidavit has been filed on behalf of the CNSB, however, it is stated that on 10.04.2023, an affidavit was filed by the Liquidator and learned advocate Ms. Drashti Shah for learned advocate Mr. Dharmesh Shah stated that the same be considered as their affidavit to be in compliance of the order of this Court dated 27.04.2023. Ms. Avni Vora, Liquidator of the CNSB, in the affidavit dated 10.04.2023, has placed reliance on the reply before the trial Court and the paper-book supplied by the complainant bank, as per the order of this Court on 24.02.2019. The bank has noted in the affidavit that the bank has to recover Rs.9 crore from the present revisionist and unless and until the accrued interest on Rs.9 crore is not paid, he cannot be discharged. 5.3 The bank relies on the letter of the present revisionist dated 07.11.2002 addressed to the Inspector of Police, Anand in connection with I-C.R. No.6 of 2002, where, he had shown his willingness to effect the sale by transfer of about 5 lakh Nedungadi Bank Shares in favour of such persons / institutions / banks, as the Police / Court may specify at the rate of Rs.191/- per Share equivalent to value of Rs.9 crore. The said voluntary action was subject to the conditions. 5.4 The statement of holding of SHCI as on 17.04.2023 shows the first holder name as Rajendrakumar Dhanraj Banthia, the present revisionist with ISIN as INE586A01010, ISIN Description as NEDUNGADI BANKEQ, Account Description, Beneficiary, Quantity, 312500, which is non-house beneficiary. The said statement of holding also reflects portfolio valuation. 5.5 The allegation against the present revisionist is of the Rs.19 crore paid to the revisionist for the purchase of majority stock holding in Nedungadi Bank at the rate of Rs.191/- per Share. It is alleged that out of Rs.19 crore, the revisionist had transferred Shares worth Rs.10 crore to the office bearers / co-accused, while he failed to transfer the remaining Shares worth Rs.9 crore. The revisionist by his letter dated 07.11.2002, had voluntarily surrendered the Shares worth Rs.9 crore, and as per the affidavit of the respondent No. 1, the Police of CID Crime, the said Shares worth Rs.9 crore are frozen and are with the SHCI. The revisionist by his letter dated 07.11.2002, had voluntarily surrendered the Shares worth Rs.9 crore, and as per the affidavit of the respondent No. 1, the Police of CID Crime, the said Shares worth Rs.9 crore are frozen and are with the SHCI. Thus, the alleged Shares have been recovered and is frozen by the IO. The Apex Court in Himanshu Chandravadan Desai and others (supra), while referring to the case, had made observation that present revisionist i.e. Rajendrakumar Dhanraj Banthia, who is a Share Broker, his role is different and he was not directly involved in defrauding the bank. The facts of the case suggest that the co-accused wanted to have major stock holding in Nedungadi Bank and the present revisionist, being a Share Broker, had agreed upon to transfer the Share worth Rs.19 crore. Initially, Shares worth Rs.10 crore were transferred and he willingly on 07.11.2002 had surrendered the Shares worth Rs.9 crore. Considering the transaction to be absolutely commercial and the present revisionist being a Share Broker, would be entitled to deal with the sale and purchase of Shares, cannot be alleged as of holding in stolen property. The learned senior advocate for the revisionist has referred to the decision of the Apex Court in Krishna Lal Chawla and Others v. State of Uttar Pradesh and Another, (2021) 5 SCC 435 to submit that the trial Courts and the Magistrates have an important role in curbing injustice. They are the first lines of defence for both the integrity of the criminal justice system and the harassed and distraught litigant. The trial Courts have the power to nip frivolous litigation in the bud, even before they reach the stage of trial, by discharging the accused in fit cases, which would not only save the judicial time but also the cost of public money and would protect the right to liberty that every person is entitled to under Article 21 of the Constitution. 6. In this matter, the transaction regarding the sale of Shares of Nedungadi Bank was undertaken by the revisionist at the time when Charge-sheet was filed which was against the co-accused. The Shares worth Rs.9 crore were yet to be transferred, however, prior to that, Shares worth Rs.10 crore were already transferred. 6. In this matter, the transaction regarding the sale of Shares of Nedungadi Bank was undertaken by the revisionist at the time when Charge-sheet was filed which was against the co-accused. The Shares worth Rs.9 crore were yet to be transferred, however, prior to that, Shares worth Rs.10 crore were already transferred. The revisionist by an application before the Police on 07.11.2002 had volunteered to surrender the Shares of Rs.9 crore, which according to the Police, are at present with SHCI. The Transaction being commercial in nature, there is no case under Section 411, IPC nor there can be any case of any criminal conspiracy with other co-accused, where, the co-accused are being charged for defrauding the bank. 7. For the aforesaid observations and discussion, present revision application succeeds and is allowed accordingly. The order below Exh. 66 dated 18.01.2018 in Criminal Case No. 3047 of 2009 is quashed and set aside. The revisionist is discharged from all the alleged offence against him in pursuance to the FIR being I-C.R. No. 6 of 2002, registered with Anand Town Police Station and Criminal Case No. 3047 of 2009. Rule is made absolute accordingly. R&P, if lying, be returned forthwith to the trial Court concerned.