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2025 DIGILAW 251 (GUJ)

Virendrabhai Manibhai Patel v. State of Gujarat

2025-03-10

J.C.DOSHI

body2025
ORDER : 1. RULE. Learned Additional Public Prosecutor waives service of notice of Rule on behalf of the respondent-State and learned advocate Mr. Dharmesh V. Shah waives service of notice of Rule on behalf of respondent No.2. 2. The Managing Director to whom the Board of Directors have given authority has passed away, and therefore, the proceedings is abated qua him and the present petitioner who as Director of the Bank has signed the resolution passed in the Board meeting. 3. The present petition is filed seeking the following reliefs :- “A) That your Lordships be pleased to quash the FIR bearing C.R. No. I-6 of 2002 registered with the Anand Town Police Station, Anand for the offences punishable under Sections 409, 469, 468 of the Indian Penal Code and the charge-sheet (Annexure-A) and subsequent proceedings thereto; (B) That pending the admission hearing and final disposal of the petition, Your Lordship may be pleased to stay further proceedings in Criminal Case No.3044/2009 pending in the Court of learned 4 th Additional Senior Civil Judge and learned Chief Judicial Magistrate, Anand. (C) pass such other and further order as though just, fit and expedient in the facts and circumstances of the case.” 4. Learned advocate for the petitioner Mr. Vishal K. Anandjiwala stated that, there is a Board of Directors who managed the affairs of the Bank but because of some political rivalry license of the Bank came to be cancelled and official liquidator was appointed who realized the money from the borrowers who were arraigned as accused in the FIR and the money of the depositors have been paid including the insurance corporation and the registrar as well as the Government revived them which learned advocate for the petitioner submits that it establishes that the Board of Directors had taken not only a valid but a wise decision and because of that the liquidator is in a position to repay all the depositors and at present he is in excess of the funds. 5. 5. Learned advocate for the petitioner stated that the petitioner was elected as a Director of Charotar Nagarik Sahakari Bank and because of certain lapses and result of the scam by Madhupura Nagarik Cooperative Banks and other scheduled banks and as well as Cooperative Bank, this bank has also committed some default at the initial stage and an administrator was appointed at the instance of the Reserve Bank of India, the license of the Bank under the Banking Regulations Act, 1929, was cancelled and at present the whole of the administration is in the hands of the liquidator. He further submits that it is because of the circular of the Registrar of Cooperative Society to all urban Cooperative Society the Criminal Case came to be registered as the circular states about registration of the Criminal Case against the lonee whose dues are more than Rs.10,00,000/-. 6. Learned advocate for the petitioner, referring to a resolution No.3 dated 04.08.1997 of the Board of Directors of the Charotar Nagarik Sahkari Bank Ltd. submitted that the verification of the documents and other allied things were to be carried out by the bank staffs and the loans were to be released in accordance and after the compliance of the procedures by the bank manager along with the consensus of the loan manager and on behalf of the board, responsibility of the verification of the loan papers was given to the managing director and all the papers were required to be examined and by way of the resolution it was decided that before the board only the appraisal note would be placed. Thus, in view of this fact, learned advocate for the petitioner stated that the present applicant was Board of Director and thus he was not required to verify the documents and sufficiency of the securities and other collateral were required to be considered and valued by the banks manager, loan officer and bank staffs. Though the power to sanction the loan is with the Board of Directors but the disbursement of the loan amount is in the hands of the executives and any default or lapse on their part would not attribute any criminality on the present petitioner. Though the power to sanction the loan is with the Board of Directors but the disbursement of the loan amount is in the hands of the executives and any default or lapse on their part would not attribute any criminality on the present petitioner. He further stated that Vinodchandra Maganlal Patel, authorized officer of the bank by way of the affidavit in reply on behalf of the respondent bank has affirmed the fact that the petitioner accused was Director of the bank at the relevant point of time, he has also stated that vide order dated 09.12.2010, the Chief Judicial Magistrate, Anand, had framed charges against all the accused persons below Exhibit-1789 and subsequently by Exhibit 1888, the accused person had preferred an application for alteration of the charge under Section 216 of the Code of Criminal Procedure which came to be granted vide order dated 13.12.2017 and thereafter subsequently by Exhibit 2067 again, few of the accused had prayed for alteration in charges which was granted on 12.04.2018. Mr. Vinodchandra Maganlal Patel, in his affidavit has stated that the procedure adopted by the bank since 1997 is for the approval of the loan by the Board of Directors and the duty of the Managing Director is to verify the loan papers, sufficiency of the security is to be checked by the loan manager of the bank who accordance to it has to receive the securities towards the loan. It has also been noted in the affidavit that the present petitioner had produced Resolution No.3, passed by the bank on 04.08.1997, which the deponent Mr. Vinodchandra Maganlal Patel affirms and acknowledges that the present petitioner has no role in the disbursement and the transaction except approving the loan in the board meeting. The FIR came to be registered on 05.01.2002. He further contended that he resigned as Director in the year 2000 and after his resignation, the Board of the Bank appointed a new Director replacing the petitioner herein. On 08.10.2000 before registration of FIR, the petitioner left for USA as his entire family was residing there. Even the Police Clearing Certificate (PCC) was issued to the petitioner herein. He further contended that he resigned as Director in the year 2000 and after his resignation, the Board of the Bank appointed a new Director replacing the petitioner herein. On 08.10.2000 before registration of FIR, the petitioner left for USA as his entire family was residing there. Even the Police Clearing Certificate (PCC) was issued to the petitioner herein. He has contended that the bank has verified all the available records and found that the present petitioner and his family members have not taken any loan advances from the bank and is not involved in any fraud, cheating, misappropriation of the public money of the bank. 7. Learned advocate for the petitioner(s) has also referred to the orders in Special Criminal Application No.5690 of 2014 dated 28.01.2015, Criminal Miscellaneous Application No.6857 of 2015 dated 28.10.2015, Criminal Miscellaneous Application No.6862 of 2015 dated 28.03.2017, Special Criminal Application No.1025 of 2015 dated 07.09.2015, Criminal Miscellaneous Application No.8286 of 2015 dated 23.12.2016, Criminal Miscellaneous Application No.20569 of 2014 dated 19.01.2015, Special Criminal Application No.1270 of 2013 dated 05.12.2014, Criminal Miscellaneous Application No.7847 of 2018 dated 04.05.2018, Criminal Miscellaneous Application No.6856 of 2015 dated 28.03.2017, Criminal Miscellaneous Application No.5030 of 2017 dated 11.05.2018 to apprise the Court that the borrowers after the repayment of the dues were issued no due certificates by the bank and therefore, on examining the said fact, the impugned FIR being CR.No.I-06 of 2002 against all those came to be quashed by aforesaid orders. 8. In case of State of Haryana Vs. Bhajan Lal and Others, AIR 1992 SC 604 , the Apex Court formulated as many as seven categories of cases, wherein the extraordinary power under Section 482 could be exercised by the High Court to prevent abuse of process of the court. It was clarified that it was not possible to lay down precise and inflexible guidelines or any rigid formula or to give an exhaustive list of circumstances in which such power could be exercised. In this case, the Apex Court made the following observations :- “8.1. It was clarified that it was not possible to lay down precise and inflexible guidelines or any rigid formula or to give an exhaustive list of circumstances in which such power could be exercised. In this case, the Apex Court made the following observations :- “8.1. In the exercise of the extra-ordinary power under Article 226 or the inherent powers under Section 482 of the Code of Criminal Procedure, the following categories of cases are given by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guide in myriad kinds of cases wherein such power should be exercised :- (a) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused; (b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code; (c) where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused; (d) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code; (e) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused; (f) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and / or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party; (g) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.” 9. Here, the role of the petitioner is much less than that of the other Directors where the proceedings have been quashed by this Court. It has been categorically stated that the present petitioner has not availed of any loan advances from the bank, he was not liable to verify the loan papers. Resolution of the bank dated 04.08.1997, reflects that the petitioner(s) has no role in disbursement of the loan amount and the only function was the approval of the loan that too was through the board meeting and are not the chairperson who was chairing the meeting. Thus, prima facie, no criminality can be attracted, there is no allegation of any loan taken by the present petitioner for his own use. The liquidators as accordingly has already recovered most of the money from other borrowers and has stated the bank has now surplus amount towards funds of bank. 10. It is fruitful to refer the judgments of Co-ordinate Bench of this Court in the cases of (i) Ghanshyambhai Naranbhai Patel vs. State of Gujarat rendered in Criminal Misc. Application No. 13675 of 2019 dated 23.9.2021, (ii) Charotar Gas Sahakari Mandali Ltd. vs. State of Gujarat rendered in Criminal Misc. Application No. 6862 of 2015 dated 28.3.2017, (iii) Janakbhai Shankarlal Patel vs. State of Gujarat rendered in Criminal Misc. Application No. 6857 of 2015 dated 28.10.2015, (iv) Dhananjay Vallabhbhai Patel vs. State of Gujarat rendered in Criminal Misc. Application No. 6856 of 2015 dated 28.3.2017, (v) Jayesh Jagdishchandra Dave vs. State of Gujarat rendered in Special Criminal Application No. 5690 of 2014 dated 28.1.2015, (vi) Jayesh Jagdishchandra Dave vs. State of Gujarat rendered in Special Criminal Application No. 5690 of 2014 dated 5.2.2015, (vii) Ashokbhai Ratnabhai Bharwad & Others vs. State of Gujarat rendered in Special Criminal Application No. 1025 of 2015 dated 7.9.2015, (vii) Shaily Construction Pvt. Ltd. and Others vs. State of Gujarat and Another rendered in Criminal Misc. Application No. 8286 of 2015 dated 23.12.2016, (viii) Pran S.Fultariya vs. State of Gujarat rendered in Criminal Misc. Application No. 20569 of 2014 with Criminal Misc. Application No. 20638 of 2014 dated 19.1.2015, (ix) Sangitaben Hiteshbhai Patel vs. State of Gujarat rendered in Special Criminal Application No. 1270 of 2013 dated 5.12.2014, (x) Bharatbhai Chimanbhai Patel vs. State of Gujarat rendered in Criminal Misc. Application No. 20569 of 2014 with Criminal Misc. Application No. 20638 of 2014 dated 19.1.2015, (ix) Sangitaben Hiteshbhai Patel vs. State of Gujarat rendered in Special Criminal Application No. 1270 of 2013 dated 5.12.2014, (x) Bharatbhai Chimanbhai Patel vs. State of Gujarat rendered in Criminal Misc. Application No. 5030 of 2017 dated 11.5.2018, (xi) Daxesh Mahendrabhai Shah vs. State of Gujarat rendered in Criminal Misc. Application No. 7847 of 2018 dated 4.5.2018, (xii) Amrut Shivabhai Fultariya vs. State of Gujarat rendered in Criminal Misc. Application No. 20946 of 2014 dated 28.1.2015 and (xiii) Hanubha Manubha Jadeja vs. State of Gujarat rendered in Special Criminal Application No. 5582 of 2014 dated 28.1.2015. 11. Taking all the facts into consideration, the continuation of the trial against the present petitioner would be rather harsh and continuation of the trial would create unnecessary hardship and burden to the petitioner. 12. In view of the aforesaid fact, the First Information Report being CR.No.I-06 of 2002 registered with Anand Town Police Station, Anand, charge-sheet and subsequent proceedings qua the present petitioner is quashed in the captioned application. Rule is made absolute. Direct service is permitted.