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2025 DIGILAW 1093 (TS)

Md. Zulfekar Altaf v. State of Tenagana

2025-09-24

JUVVADI SRIDEVI

body2025
ORDER : JUVVADI SRIDEVI, J. This Criminal Revision Case is filed by the petitioner-accused No.13 seeking to set aside the impugned Order dated 15.11.2018 passed in CRL.M.P.No.955 of 2018 in C.C.No.4 of 2007 by learned III Additional Special Judge for Central Bureau of Investigation (CBI) Cases, Hyderabad, wherein an application filed under Section 239 of the Code of Criminal Procedure (for short ‘Cr.P.C.’) seeking discharge of the petitioner from C.C.No.4 of 2007, was dismissed. The offences alleged against the petitioner-accused No.13 are under Sections 120-B, 420, 471 of the INDIAN PENAL CODE (for short ‘IPC’) read with Sections 13 (2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 (for short ‘PC Act’). 02. Heard Sri T.Bala Mohan Reddy, learned counsel for the petitioner-accused and Sri T. Srujan Kumar Reddy, learned Special Public Prosecutor for Central Bureau of Investigation. Perused the record. 03. The case of the prosecution is that the petitioner–accused No.13 applied for a housing loan from Syndicate Bank, Borabanda Branch, Hyderabad, for the purpose of purchasing a Flat bearing No.202 in Sree Towers, Anjaneya Nagar, Kukatpally, Hyderabad. At the time of submitting the application, he furnished copies of income tax returns for the assessment years 2002 to 2005 in support of his income credentials, and also offered one surety for collateral security, who likewise submitted copies of income tax returns. The loan was sanctioned by the accused No.1 the Branch Manager of Syndicate Bank, Borabanda Branch, on the basis of the documents submitted by the petitioner–accused No.13. Out of the sanctioned amount, a sum of Rs.4.5 lakhs was released towards interior works, and thereafter the sale deed was executed. Subsequently, it was revealed that the petitioner- accused No.13 had submitted false income tax returns and that the surety had also furnished fabricated income tax returns. It is further alleged that the accused No.1, in collusion with other accused, sanctioned the loan in favour of the petitioner– accused No.13 and others despite the falsity of the documents, thereby cheated Syndicate Bank, Borabanda Branch. 04. Learned counsel for the petitioner submits that the petitioner-accused No.13 is nothing to do with the alleged offences. The learned trial Judge erred in dismissing the discharge petition filed by the petitioner. Basing on the statement of LW8 that the petitioner had submitted false income tax returns, the petitioner has been implicated in the present. 04. Learned counsel for the petitioner submits that the petitioner-accused No.13 is nothing to do with the alleged offences. The learned trial Judge erred in dismissing the discharge petition filed by the petitioner. Basing on the statement of LW8 that the petitioner had submitted false income tax returns, the petitioner has been implicated in the present. But the statement of LW8 does not disclose the name of the petitioner-accused No.13. It is contended that no dishonest or fraudulent intention can be attributed to the petitioner-accused No.13. The petitioner-accused No.13 has repaid his loan amount and the bank issued no due certificate in favour of the petitioner-accused No.13. Learned counsel also submits that the proceedings against accused No.10 in C.C. No.4 of 2007 were quashed by this Court vide order dated 06.03.2025 in Criminal Petition No.12489 of 2011, on the ground of mistaken identity. With the above submissions, while praying for the quashment of criminal proceedings, he relied upon a decision of the Honourable Supreme Court in K.Bharthi Devi and others v. State of Telangana and others , [MANU/SC/1083/2024] wherein it was held at Paragraph Nos.31, 34 & 35 that: “ 31 . It could thus be seen that this Court reiterates the position that the criminal cases having overwhelmingly and predominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties have resolved their entire disputes among themselves. 34 . The facts in the present case are similar to the facts in the case of Sadhu Ram Singla and others (supra) wherein a dispute between the borrower and the Bank was settled. In the present case also, undisputedly, the FIR and the chargesheet are pertaining to the dispute concerning the loan transaction availed by the accused persons on one hand and the Bank on the other hand. Admittedly, the Bank and the accused persons have settled the matter. Apart from the earlier payment received by the Bank either through Equated Monthly Instalments (EMIs) or sale of the mortgaged properties, the borrowers have paid an amount of Rs.3,80,00,000/- under OTS. After receipt of the amount under OTS, the Bank had also decided to close the loan account. The dispute involved predominantly had overtures of a civil dispute. 35 . Apart from the earlier payment received by the Bank either through Equated Monthly Instalments (EMIs) or sale of the mortgaged properties, the borrowers have paid an amount of Rs.3,80,00,000/- under OTS. After receipt of the amount under OTS, the Bank had also decided to close the loan account. The dispute involved predominantly had overtures of a civil dispute. 35 . Apart from that, it is further to be noted that in view of the settlement between the parties in the proceedings before the DRT, the possibility of conviction is remote and bleak. In our view, continuation of the criminal proceedings would put the accused to great oppression and prejudice.” 05. Further, he relied upon a decision in Amit Kapoor v. Ramesh Chander and others , [MANU/SC/0746/2012] wherein the Hon’ble Supreme Court held at Paragraph No.19 that: “ 19 . Having discussed the scope of jurisdiction under these two provisions, i.e., Section 397 and Section 482 of the Code and the fine line of jurisdictional distinction, now it will be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but is inherently impossible to state with precision such principles. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be: 1) Though there are no limits of the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal proceedings, particularly, the charge framed in terms of Section 228 of the Code should be exercised very sparingly and with circumspection and that too in the rarest of rare cases. 2) The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. 2) The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere. 3) The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. 4) Where the exercise of such power is absolutely essential to prevent patent miscarriage of justice and for correcting some grave error that might be committed by the subordinate courts even in such cases, the High Court should be loathe to interfere, at the threshold, to throttle the prosecution in exercise of its inherent powers. 5) Where there is an express legal bar enacted in any of the provisions of the Code or any specific law in force to the very initiation or institution and continuance of such criminal proceedings, such a bar is intended to provide specific protection to an accused. 6) The Court has a duty to balance the freedom of a person and the right of the complainant or prosecution to investigate and prosecute the offender. 7) The process of the Court cannot be permitted to be used for an oblique or ultimate/ulterior purpose. 8) Where the allegations made and as they appeared from the record and documents annexed therewith to predominantly give rise and constitute a ‘civil wrong’ with no ‘element of criminality’ and does not satisfy the basic ingredients of a criminal offence, the Court may be justified in quashing the charge. Even in such cases, the Court would not embark upon the critical analysis of the evidence. 9) Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction, the Court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice. 10) It is neither necessary nor is the court called upon to hold a full-fledged enquiry or to appreciate evidence collected by the investigating agencies to find out whether it is a case of acquittal or conviction. 11) Where allegations give rise to a civil claim and also amount to an offence, merely because a civil claim is maintainable, does not mean that a criminal complaint cannot be maintained. 12) In exercise of its jurisdiction under Section 228 and/or under Section 482, the Court cannot take into consideration external materials given by an accused for reaching the conclusion that no offence was disclosed or that there was possibility of his acquittal. The Court has to consider the record and documents annexed with by the prosecution. 13) Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records but is an opinion formed prima facie. 14) Where the charge-sheet, report under Section 173(2) of the Code, suffers from fundamental legal defects, the Court may be well within its jurisdiction to frame a charge. 15) Coupled with any or all of the above, where the Court finds that it would amount to abuse of process of the Code or that interest of justice favours, otherwise it may quash the charge. The power is to be exercised ex debito justitiae, i.e. to do real and substantial justice for administration of which alone, the courts exist.” 06. On the other hand, learned Special Public Prosecutor appearing for the respondent contended that there are triable issues and factual aspects to be examined by the learned trial Court and it is not a fit case to discharge the petitioner at this juncture and the matter is to be decided after conducting trial by the learned trial Court and prayed to dismiss this Criminal Petition. 07. On a careful perusal of the record, it is evident that the petitioner was initially summoned as a witness under Section 160 of Cr.P.C. and was subsequently arrayed as an accused solely on the basis of the statement of LW8. 07. On a careful perusal of the record, it is evident that the petitioner was initially summoned as a witness under Section 160 of Cr.P.C. and was subsequently arrayed as an accused solely on the basis of the statement of LW8. The principal link relied upon by the prosecution, as noticed in the petition, is the statement of LW.8 to the effect that the income tax returns submitted were false. The offences alleged against the petitioner-accused No.13 are under Sections 120-B, 420 and 471 of IPC. As seen from the statement of LW8 the name of the petitioner-accused No.13 was not found. However, the statement of LW8 does not specifically attribute to the petitioner-accused No.13 either the authorship or the fabrication of the alleged income tax returns. Moreover, if any false income tax returns were in fact filed, the matter would appropriately fall within the jurisdiction of the competent authorities under the Income Tax Act to take necessary action. The mere fact that a document in the loan file was subsequently found to be false, in the absence of any direct material establishing that the petitioner-accused No.13 had knowledge of such falsity at the time of its submission, does not satisfy the essential ingredients of the aforesaid offences. A bald allegation that false documents were submitted along with the loan application, without clear, cogent, and credible evidence to demonstrate that the petitioner individually participated in such fabrication with the requisite mens rea, is insufficient to fasten criminal liability upon the petitioner-accused No.13. 08. It is important to note that the petitioner repaid the loan amount and obtained a "No-Due Certificate" from the Bank. Further, having considered the record, the dispute in its essence pertains to a loan transaction which is a commercial matter between a borrower and the Bank. The claims raised, documents produced and the reliefs sought are primarily of commercial character. The Hon’ble Supreme Court in K. Bharthi Devi’s case cited supra, has reiterated that where the dispute is predominantly civil or commercial character and the parties have settled or a prima facie case of criminality is not made out, continuation of criminal proceedings would be an abuse of process. 09. The Hon’ble Supreme Court in K. Bharthi Devi’s case cited supra, has reiterated that where the dispute is predominantly civil or commercial character and the parties have settled or a prima facie case of criminality is not made out, continuation of criminal proceedings would be an abuse of process. 09. In view of the aforesaid facts and circumstances, and having regard to the well-settled principles of law enunciated by the Hon’ble Supreme Court in the decisions referred to supra, and further taking into account the fact that the entire loan amount has already been repaid by the petitioner-accused No.13 and that a ‘No Due Certificate’ has been issued by the concerned Bank, this Court is of the considered opinion that, in the absence of any prima facie incriminating material identifying the petitioner-accused No.13 as the fabricator or conscious user of the forged income tax returns, the continuation of criminal prosecution against him would amount to an abuse of the process of law. It is also evident that the learned trial Court has failed to examine whether the allegations contained in the charge sheet, even if taken at their face value, disclose the essential ingredients of the offences alleged against the petitioner. In that view of the matter, the impugned order passed by the learned trial Court is liable to be set aside and the consequential proceedings against the petitioner-accused No.13 are hereby quashed. 10. Accordingly, this Criminal Revision Case is allowed. The impugned order dated 15.11.2018 passed in Crl.M.P.No.955 of 2018 in C.C.No.4 of 2007 by the learned III Additional Special Judge for Central Bureau of Investigation (CBI) Cases, Hyderabad, is hereby set aside. Consequently, the petitioner-accused No.13 is discharged from the alleged offences, and the consequential proceedings against him are hereby quashed. As a sequel, pending miscellaneous applications, if any, shall stand closed.