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2025 DIGILAW 57 (TS)

VHT Rama Rao v. State of Telangana

2025-02-19

E.V.VENUGOPAL

body2025
ORDER : E.V.VENUGOPAL, J. CRIMINAL REVISION CASE No.94 OF 2023 1 This criminal revision case is filed under Sections 397 and 401 of Cr.P.C. aggrieved by the order dated 05.7.2019 passed by the learned III Additional Special Judge for CBI cases, Hyderabad in Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007, whereunder the learned Judge dismissed the said petition filed by the petitioner/ A.9 under Section 239 Cr.P.C. seeking discharge from the proceedings. 2 Heard Sri Deepak Misra, learned counsel for the revision petitioner and Sri T.Srujan Kumar Reddy, the learned standing counsel for CBI, and perused the record. 3 The facts unfold that the petitioner who is claiming to be proprietor of M/ s. Mareechi Computers, availed housing loan from Syndicate Bank, Boraganda branch, to a tune of Rs.10.00 lakhs and as on the date of filing of the charge sheet, it was alleged that the outstanding loan amount was Rs.11,21,471/ - and that the petitioner failed to pay the outstanding dues. The further allegation is that the bank valuer had colluded with various borrowers including the petitioner and inflated the area of flat and its market value so as to get more loan and the value of the plot owned by the petitioner is Rs.6.00 lakhs only, however, by inflating the rate by Rs.4.00 lakhs, the petitioner secured loan of Rs.10.00 lakhs and subsequently the petitioner committed default. 4 It is further alleged that the petitioner applied for demand loan of Rs.2.00 lakhs on 12.12.2003 from Syndicate Bank for domestic purpose to which loan A.6 stood as guarantor. The petitioner claimed himself to be the Director of M/ s. Rupa Informatics Ltd, and proprietor of M/ s. Mareechi Computer Services and he has enclosed copies of IT returns for the years 2001-02 to 2003-04 showing income tax of Rs.75,578/ -, Rs.93,682/ - and Rs.1,91,063/ - paid for the above three years respectively along with the photocopies of IT returns of the A.6 (guarantor). The said loan amount was disbursed to the joint account of A.6, A.8 and A.9 (petitioner herein) and that the name of the petitioner was included as joint operator of this SB account just before sanctioning of the loan. The said loan amount was disbursed to the joint account of A.6, A.8 and A.9 (petitioner herein) and that the name of the petitioner was included as joint operator of this SB account just before sanctioning of the loan. 5 The further allegation levelled against the petitioner was that the petitioner was not an income tax assessee, similarly, A.6 also did not pay any income tax for the years 2001-02 and did not file returns for the next two years and that either M/ s. Rupa Informatics Limited or M/ s. Mareechi Computer Services did not file any returns nor paid any tax for the years 2001-02 to 2004-05 respectively. During investigation it was further revealed that no firm by name M/ s. Mareechi Computer Services existed at the given address. 6 It was the further case of the prosecution that the petitioner applied for Housing Loan of Rs.10.00 lakhs, to which loan, A.14 stood as guarantor. In this transaction also, the petitioner claimed himself to be the Director of M/ s. Rupa Informatics Ltd, and proprietor of M/ s. Mareechi Computer Services and he has enclosed copies of IT returns for the years 2001-02 to 2003-04 showing income tax. A.14 also furnished photocopies of income tax for the said period showing payment of income tax for two years. 7 The CBI further submitted that as per the investigation copies of IT returns of accused Nos.9 and 14 were fake and they were not assessees and as per the statement of Assistant Commercial Tax Officer, Sanathnagar, Hyderabad and M/ s. Rupa Informatics Ltd., did not file any returns or paid any tax for the years 2001-02 to 2004-05 and M/ s. Mareechi Computer Services also did not file any returns nor paid any tax during the years 2001-02 to 2004-05 and as per the investigation no firm by name M/ s.Mareechi Computer Services is existed at the place mentioned. Hence the prosecution alleged that the petitioner along with the other accused entered into criminal conspiracy and cheated the bank by using forged documents as genuine. 8 While the matter was pending before the learned trial Court, the petitioner filed Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007 seeking discharge from the prosecution. However, the learned trial Court, by the impugned order, dismissed the petition. Hence the present criminal revision case. 8 While the matter was pending before the learned trial Court, the petitioner filed Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007 seeking discharge from the prosecution. However, the learned trial Court, by the impugned order, dismissed the petition. Hence the present criminal revision case. 9 The contention of the learned counsel for the petitioner is that the trial Court failed to see that the entire grievance of the bank was only with regard to non-payment of outstanding dues which the petitioner has ultimately satisfied and the same was affirmed by the bank also. It is further submitted that the petitioner genuinely owned the plot which was mortgaged to the bank at the time of availing the loan and that for recovery of the dues, the bank initiated proceedings under SARFAESI Act and hence the allegation that the bank was cheated is absolutely false, so also, it is not the case of the prosecution that the mortgaged asset was not genuine property and the bank has lost the opportunity of realising its dues by selling the mortgaged asset. He further submitted that it is not even the case of the prosecution that the title deeds of the property are fake and false documents and that the bank has sustained loss due to furnishing fake property in mortgage. It is his further contention that the learned trial Court failed to see that the intention of the petitioner at the time of entering into the loan transaction with the bank was never to cheat the bank by not repaying the loan amount since at the time of availing the loan amount the petitioner had parted with his valuable property by conferring all rights in favour of the bank to deal with the said property and as such the question of bank sustaining any loss would not arise. 10 He further submitted that the learned trial Court failed to see that the valuation of the mortgaged property was done by the approved valuer of the bank who works at the instructions of the bank and for the benefit of the bank and as such question of the petitioner entering into conspiracy with the valuer for inflating the value of the mortgaged asset would not arise and in any event the market value of the mortgaged asset is much more than the loan liability. 11 It is the predominant contention of the learned counsel for the petitioner that though the repayment of the loan amount will not exonerate the petitioner from criminal liability, in this case as per the liability of the petitioner as per the charge sheet is non-payment of outstanding dues and further the loan was fully secured by way of mortgage of genuine property and further during the pendency of trial the bank has not only accepted the repayment but also issued no due certificate and as such the learned trial Court ought to have discharged the petitioner from criminal prosecution instead of dismissing the discharge petition. 12 In support of his above contentions, the learned counsel for the petitioner relied on the following judgments: 1) Nikhil Merchant v. Central Bureau of Investigation , [2008 (2) ALD (Crl.) 591 (SC)] , 2) Order dated 07.11.2012 passed in Crl.P.No.7900 of 2009 by the erstwhile High Court of A.P, 3) Order dated 05.5.2020 passed in Crl.P.No.613 of 2013 by this High Court, 4) Order dated 22.9.2022 passed in Crl.R.C.No.489 of 2019 by this High Court. 13 On the other hand, Sri T.Srujan Kumar Reddy, the learned standing counsel for CBI submitted that the petitioner herein claiming himself to be the Director of M/ s. Rupa Informatics Limited and proprietor of M/ s. Mareechi Computer Services availed loan from the Syndicate Bank to a tune of Rs.2.00 lakhs on 12.12.2003 from Syndicate Bank for domestic purpose A.6 stood as guarantor and that the petitioner also availed loan of Rs.10.00 lakhs to which loan, A.14 stood as guarantor. In both the cases the petitioner filed fake income tax returns of both A.6 and A.14. The petitioner was not an income tax assessee, so also the other guarantors. Neither the petitioner nor the firms to which he is claiming to be Director have ever filed income tax returns and that the firms have never existed. The petitioner availed housing loan by submitting false documents such as inflated valuation report, false IT returns of himself and his guarantors and ultimately failed to repay the loan and thereby committed the offences punishable under Sections 120-B, 420 and 471 of IPC. He, accordingly, prayed to dismiss this criminal revision case. The petitioner availed housing loan by submitting false documents such as inflated valuation report, false IT returns of himself and his guarantors and ultimately failed to repay the loan and thereby committed the offences punishable under Sections 120-B, 420 and 471 of IPC. He, accordingly, prayed to dismiss this criminal revision case. The learned standing counsel relied upon the following judgments in support of his contentions: 1) Central Bureau of Investigation vs. Maninder Singh , [ (2016) 1 SCC 389 ] , 2) Central Bureau of Investigation vs. Hari Singh Ranka , [ (2019) 16 SCC 687 ] , 3) Ishoo Narang vs. State of Telangana rep. by its Inspector of Police, CBI/ACB, Hyderabad  2020 SCC OnLine TS 3456 and 4) Order passed by this Court in Crl.R.C.No.958 of 2019 dated 10.4.2024. 14 In Nikhil Merchant vs. Central Bureau of Investigation (1 supra) the Hon’ble Supreme Court held at para Nos.21 to 24 held as follows: 21. The basic intention of the accused in this case appears to have been to misrepresent the financial status of the company, M/s Neemuch Emballage Limited, Mumbai, in order to avail of credit facilities to an extent to which the company was not entitled. In other words, the main intention of the company and its officers was to cheat the Bank and induce it to part with additional amounts of credit to which the company was not otherwise entitled. 22. Despite the ingredients and the factual content of an offence of cheating punishable under Section 420 IPC, the same has been made compoundable under Sub-section (2) of Section 320 Cr.P.C. with the leave of the Court. Of course, forgery has not been included as one of the compoundable offences, but it is in such cases that the principle enunciated in B.S. Joshi's case (supra) becomes relevant. 23. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised? 24. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi's case (supra) and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise. 15 This Court in the Order dated 05.5.2020 passed in Crl.P.No.613 of 2013 held that “Recently in Central Bureau of Investigation, New Delhi v. B.B.Agarwal and others ( (2019) 15 SCC 522 ) the Apex Court held as under: “12. The High Court was of the view that on resettlement of accounts, the parties obtained the consent decree from DRT and paid the entire sum, therefore, there is no live issue, which now survives. The High Court then examined the question as to whether the issue of criminality is involved so as to allow the trial Court to continue on its merits. After examining this issue with reference to charges and documents, the High Court held that no criminality issue is found involved notwithstanding the settlement of the case between the parties.” In the present case also during pendency of the investigation, the matter has been settled in terms of compromise and the entire amount has been paid. It is also not in dispute that the de facto complainant-bank has also issued certificates stating that there are no outstanding dues payable by Shakti Steels and Arien Steels Limited. It is also not in dispute that the de facto complainant-bank has also issued certificates stating that there are no outstanding dues payable by Shakti Steels and Arien Steels Limited. Considering the above settled law and also taking into consideration the fact that entire case involved default in repayment of debt to the bank and even before filing of the charge sheet, the liability to make good the monetary loss suffered by the de facto complainant-bank had been mutually settled between the parties and even though trial is commenced, but the material witnesses did not support the prosecution case and more time will be consumed to conclude the trial which is of no use that results in waste of time of the Court and public money, this Court finds that continuation of proceedings against the petitioners/A-1 to A-3 and A-9 would be an abuse of process of law. Accordingly, the Criminal Petition is allowed and the proceedings initiated against the petitioners/A-1 to A-3 and A-9 in C.C.No.7 of 2007 on the file of the Special Judge for C.B.I. Cases, Hyderabad, are hereby quashed. 16 In the light of the aforesaid findings of this Court as well as the Hon’ble Supreme Court in the cases cited supra, I am of the considered view that the petitioner herein also stands on the same footing and entitled to the relief sought for. 17 In the Order dated 22.9.2022 passed in Crl.R.C.No.489 of 2019 also this High Court observed that when the substantive offences under IPC are not made out in the FIR and the complaint, there is absolutely no ground to proceed against the private individuals for the offences under the P.C Act. 18 In that view of the matter, the order dated 05.7.2019 passed by the learned III Additional Special Judge for CBI cases, Hyderabad in Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007, is hereby set aside and the petitioner is discharged form the offences alleged against him in the above case. 19 The Criminal Revision Case is accordingly allowed. Miscellaneous petitions if any pending shall stand closed.