Jammu & Kashmir High Court – Srinagar Bench
Raj Singh Gehlot vs The Anti-Corruption Bureau on 20 December, 2024
Author: Javed Iqbal Wani
Bench: Javed Iqbal Wani
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
Reserved on: 28.11.2024
Pronounced on: 20.12.2024
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022
Raj Singh Gehlot .....Appellant(s)/Petitioner(s)
S/o Late Sh. Nihal Singh R/o A-5,
May Fair Garden, New Delhi-110016
Through: Mr. Tanveer A. Mir, Advocate with
Mr. Vaibhav Suri, Advocate &
Mr. Arfat Rashid Lone, Advocate.
vs
The Anti-Corruption Bureau, (Central ..... Respondent(s)
Kashmir) Home Department
At Anti Corruption bureau Headquarters
Peer Bagh, Srinagar, Kashmir (J&K)
Also at Anti Corruption Bureau
Headquarters Behind New Secretariat,
Jammu Tawi (J&K)
Through: Mr. Mohsin Qadri, Sr. AAG with
Ms. Nadia Abdullah, Advocate.
Coram: HON'BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE
JUDGMENT
1. The petitioner in the instant petition has invoked the inherent power of
this Court saved under Section 482 Cr. P.C. for quashing FIR No.
16/2019 dated 29.07.2019 registered with Police Station, Anti
Corruption Bureau, Central Kashmir (for short ABC) for offences
under Section 5(1) (d), 5 (2) of the J&K Prevention of Corruption Act
read with Section 120-B RPC.
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CrlM No. 1283/2022, 1284/2022 2
2. Factual matrix:-
i. The petitioner herein states to be a qualified chartered
accountant and also a law graduate besides promoter and
director of the company, namely, M/s Ambiance Towers Private
Limited (for short „ATPL‟) established in the year 1986 by the
petitioner and involved in developing premium residential
apartments and commercial properties in South Delhi, having
successfully executed more than 150 projects in and around
Delhi and Gurgaon.
ii. The ATPL is stated to have purchased a commercial freehold
plot of land measuring 4106.91 sq. mtrs. located at 2B2 Twin
District Center, Sector-10, Rohini, Delhi in an open auction held
on 07.12.2006 by Delhi Development Authority (for short
DDA) by submitting the highest bid of Rs. 120.52 crore
whereupon the DDA executed a conveyance deed on
23.09.2008.
iii. It is stated that the ATPL decided to develop a Shopping Cum
Office Complex (for short “the Project”) on the said plot of land
and as such, obtained building plan from the DDA vide sanction
No. F-13 (281) 08/Bldg. Dated 10.05.32010 after obtaining
various requisite permissions and clearances from the concerned
authorities, whereupon the construction and development of a
Shopping Mall (for short “the Mall”) comprising of three level
basements for service and parking and 361738 sq ft. of leasable
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area on ten floors (with ground floor to nine floors) got
commenced and completed in the year 2010 uptill 2015 and
Occupancy Certificate/Completion Certificate was consequently
applied for by the ATPL and issued by the DDA vide No.
C.13(281)2008/Bldg./16 dated 17.03.2016.
iv. An amount of Rs. 315 crore is stated to have been incurred on
the cost of acquisition, construction and development of the
project, which came to be financed by way of promoter
contribution of Rs. 165 crore and term loan of Rs. 150 crore
sanctioned by UCO Bank, Central Bank of India and Small
Industries Development Bank of India (for short “SIDBI”).
v. It is stated that during the course of construction of the project,
one Future Group agreed to take on lease the entire area of
3,61,738 sq. ft. from ground floor to ninth floor in the Mall on a
monthly rent of Rs. 103 per sq. ft. per month, however, before
operationalization of the leased area by the said Future Group,
HDFC Bank Ltd. expressed an interest and desired to take on
lease an area of 1,35,615 sq. ft. from fifth floor to eighth floor of
the Mall as a consequence whereof the ATPL took a considered
decision to lease out the space to HDFC Bank Ltd., which
decision was driven by commercial reasons, such as, longer
tenure proposed by the HDFC Bank of being 25 years,
consistency of monthly rental, long term association and most
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CrlM No. 1283/2022, 1284/2022 4
importantly rental security, in that, bank being a more secured
tenant than a retail outlet.
The said decision is stated to have been taken by the ATPL
regardless of the fact that the offer of HDFC Bank Ltd. qua fifth
to eighth floors in the Mall was Rs. 45.59 per sq. ft. per month
which was considerably less than the already agreed rent of Rs.
103 per sq. ft. per month offered by the Future Group.
vi. It is being stated that the HDFC Bank issued a letter of intent
dated 01.08.2014 for taking on lease 135615 sq. ft. of area qua
fifth to eighth floor in the Mall at the rate of 45.59 per sq. ft. per
month, whereas the Future Group agreed to take on lease
174950 sq. ft of area in the Mall qua the ground floor to fourth
floor in terms of an unregistered lease agreement dated
22.11.2013.
vii. It is stated that an area measuring 51173 sq. ft. left out on the
ninth floor came to be leased out by the ATPL to one M/s
Sindhu Trade Links Pvt. Ltd. on rent basis at the rate of Rs.
92 per sq. ft. per month in terms of an unregistered lease
agreement dated 17.11.2014.
viii. It is being next stated that the ATPL approached various banks
for sanctioning of Lease Rental Discounting Loan (for short
„LRD Loan‟) by way of discounting of term loan and
discounting of future lease rental as also other receivables of the
Mall in terms of policy framed by the banks as per guidelines of
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CrlM No. 1283/2022, 1284/2022 5
the Reserve Bank of India in respect of said type of loans and
the Punjab Housing Finance Ltd. (for short PNB HFL) as also
State Bank of India (SBI) after inspection and verification of
documents sanctioned LRD loan of Rs. 50 crore vide sanction
letter dated 23.01.2025 and Rs. 100 crore vide sanction letter
dated 03.03.2015 respectively in favour of ATPL and the ATPL
after execution of the loan documents of the SBI and PNB HFL,
obtained disbursement of Rs. 150 crores of LRD loan for the
Mall which was utilized to pay for the outstanding balance in
the project term loan account of Rs. 150 crore sanctioned and
disbursed by UCO Bank, Central Bank of India and SIDBI for
construction and development of the Mall.
ix. It is being stated that the EMI‟s in the project loan of the above
said banks being UCO Bank, Central Bank of India and SIDBI
came to be regularly paid by the ATPL and the loan accounts of
all said banks were standard and performing.
x. It is being next stated that the SBI had evaluated the eligibility
of ATPL for LRD loan at Rs. 250 crores on the basis of future
lease rent of the Mall for a period of nine years, but later on the
State Bank of Hyderabad (SBH) assessed the eligibility of the
ATPL for such LRD loan at Rs. 300 crores on the basis of future
lease rent of the Mall for a period of 12 years and sanctioned
part of LRD loan of Rs. 50 crores vide sanction letter dated
13.06.2015. Besides, Punjab and Sind Bank is stated to have
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CrlM No. 1283/2022, 1284/2022 6
also assessed the eligibility of ATPL for Rs. 300 crores for LRD
loan and consequently sanctioned Rs. 100 crores vide sanction
letter dated 13.08.2014.
Following is the breakup given by the petitioner herein qua the
requested LRD loan of Rs. 300 crores and sanctioned by the
various banks:
State Bank of India (SBI) Rs. 100 Cr.
PNB Housing Finance Ltd. (PNB HFL) Rs. 50 Cr.
State Bank of Hyderabad (SBH) Rs. 50 Cr.
Punjab and Sind Bank (P&SB) Rs. 100 Cr.
xi. It is being next stated that in the process of finding a suitable
banking partner for the LRD loan of Rs. 300 crores, ATPL had
also approached the J&K Bank Ltd. for sanctioning part of LRD
loan of Rs. 300 crores and the said bank had expressed its
willingness to sanction entire LRD loan of Rs. 300 crores and
ATPL with a view to deal with one bank instead of multiple
banks for the purpose of availing LRD loan, filed an application
before the J&K Bank Ltd. on 28.11.2015 for sanction of entire
LRD loan of Rs. 300 crores by way of discounting the 12 years
lease rental and other receivables from the leased space in the
Mall, in response to which the J&K Bank sanctioned LRD loan
of Rs. 258 crores as against the demand loan of Rs. 300 crores,
which the ATPL did not avail and instead again sought the LRD
loan of Rs. 300 crores and requested the J&K Bank to review its
decision and to sanction demanded loan of Rs. 300 crores,
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 7
whereupon the J&K Bank Ltd. after conducting fresh evaluation
of the loan proposal of the ATPL sanctioned the LRD loan of
Rs. 300 crores vide sanction letter dated 02.02.2016, which loan
is stated to have been sanctioned subject to multiple conditions
including that the ATPL will provide copies of registered lease
deeds to the bank before disbursement, in response to which the
ATPL stated that in terms of above proposal dated 28.11.2015,
the loan has to be disbursed on the basis of unregistered lease
deeds only as was earlier agreed by SBI and PNB HFL, in
response to which the J&K Bank Ltd. vide sanction letter dated
19.03.2016 agreed to the said request of ATPL and permitted it
to submit registered sale deeds within a period of 120 days of
the disbursement of LRD loan of 300 crores. In respect of
another condition incorporated by the J&K Bank in the sanction
letter dated 02.02.2016, the J&K Bank is stated to have also
provided that the ATPL had to keep the total peak exposure of
J&K Bank in Ambience Group to Rs. 650 crores and to bring it
down to Rs. 625 crores initially and subsequently to Rs. 600
crores and the ATPL in compliance to the said condition paid
back project loan of Rs. 150 crores granted by the J&K Bank for
its Panipat Project from its own sources in order to comply with
the said condition incorporated in letter dated 02.02.2016.
xii. It is being further stated that the ATPL duly complied with all
the conditions of sanction letter dated 02.02.2016 including the
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CrlM No. 1283/2022, 1284/2022 8
execution of all other requisite loan documents, whereafter the
J&K Bank disbursed the first tranche of Rs. 142.38 crores on
30.03.2016 which was utilized by ATPL to pay for the
outstanding balance of LRD loan of SBI and PNB HFL
amounting to Rs. 96.21 crores and Rs. 46.14 crores respectively,
besides the mortgage of the Shopping Cum Office Complex at
2B2, Sector 10, Twin District Centre, Rohini, Delhi was
completed by the ATPL out of the remaining amount of first
tranche, whereafter the J&K Bank Ltd. disbursed the second
tranche of Rs. 157.62 crores to the ATPL on 31.03.2016 for
payment of unsecured loan of other banks taken by ATPL for
construction and development of the Mall and for other
purposes.
xiii. It is being next stated that the ATPL has paid and is regularly
paying the EMI‟s in the LRD loan of J&K Bank and the said
account is Performing Asset in terms of norms and guidelines of
J&K Bank and Reserve Bank of India since the date of its
sanction and disbursement and has neither caused nor is causing
pecuniary or notional loss to the bank in any manner.
xiv. It is being further stated that the HDFC bank in order to meet its
requirements of additional space approached the ATPL to lease
out 51173 sq. ft. of space lying vacant on the 9 th floor,
whereupon the ATPL requested M/s Sindhu Trade Links, who
had by that time not operationalised the area obtained by it on
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CrlM No. 1283/2022, 1284/2022 9
the ninth floor, to shift its lease from ninth floor to terrace floor
and in atrium of the Mall for setting up of its food court and
accordingly M/s Sindhu Trade Links Ltd. agreed to the
proposal, however, later on because of non-operationalization
of the said alternate space provided to M/s Sindhu Trade Links
Ltd., the lease deed signed and executed by the ATPL with M/s
Sindhu Trade Links Ltd. got terminated on 01.03.2018,
whereupon in terms of registered lease agreement dated
28.06.2016, 4th floors to 9th floor of the Mall came to be leased
out to the HDFC Bank at the rate of 45.59 per sq. ft. per month
with a condition to renew the same after another five years.
xv. It is being next stated that the Future Group in order to ease out
the burden of rent of initial period of its opening of the retail
outlets, namely, „Big Bazaar‟ and „Central‟ requested the ATPL
to bifurcate the agreed lease rent of its spaces into a fixed lease
rent of Rs. 57.20 per sq. ft. per month as Minimum Guaranteed
Rent and a percentage of Net Sales Value whichever was higher
as per practice followed in other Malls and consequently the
ATPL agreed to link the rentals of M/s Future Group with net
turnover as business prudence and consequently executed two
separate lease deeds in favour of M/s Future Retail Ltd. for “Big
Bazaar” and in favour of M/s Future Lifestyle Fashion Ltd. for
Central Brand with minimum guaranteed return of Rs. 57.20 per
sq. ft. linked with percentage of sale/turnover. The said exercise
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 10
is stated to have been a normal market practice to lease out
rental spaces in commercial complexes to fix the rate of rent
payable for the space on per sq. ft. on monthly basis at the time
of signing the preliminary agreement and then to work out and
agree on the percentage of turnover with Minimum Monthly
Guarantee (MMG) whichever is higher in such manner that over
the period of lease the overall agreed rent is realized.
xvi. It is being also stated that the EMI‟s of interest and instalment
of the sanctioned LRD loan of Rs. 300 crores availed by the
ATPL from J&K Bank were and are being paid in terms of
sanction letter of the Bank and the said loan account is
Standard and Performing Asset in terms of norms and
guidelines issued by the RBI.
xvii. It is being next stated that the ATPL received a notice from Anti
Corruption Bureau (ACB), Jammu to attend its office on
01.07.2019, whereupon the petitioner herein attended the said
office on 01.07.2019, on which date his statement came to be
recorded over three days, whereupon for the reasons best known
to ACB, the impugned FIR came to be got registered against the
ATPL and its promoters and directors.
xviii. It is being next stated that on account of registration of the
impugned FIR, ATPL vide its letters dated 03.08.2019,
17.09.2019, 23.09.2019 and 27.09.2019 requested the J&K
Bank to allow pre-payment of outstanding balance in the LRD
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 11
loan account of Rs. 300 crores without levying the prepayment
penalty/penal interest, which request, however, came to be
rejected by the Bank although, allowed the prepayment vide its
letter dated 07.11.2019.
xix. It is being next stated that the J&K Bank on the instructions of
ACB, Jammu got conducted a forensic audit through an
independent chartered accountant firm in respect of LRD loan
availed by the ATPL, whereupon conducting of said forensic
audit, no fraud and/or diversion of funds out of the LRD loan
amount of Rs. 300 crores or from ATPL came to be reported by
the forensic auditor in its report dated 22.08.2019.
xx. It is being next stated that in the month of January, 2021, the
ATPL executed lease agreements with Reliance Projects and
Property Management Services Ltd. for the premises leased out
to Future Retail Limited and Future Fashion Lifestyle Limited,
which new agreements had better rentals of Rs. 64.35 per sq. ft.
instead of Rs. 57.20 per sq. ft. per month executed with Future
Group and in respect of the said new agreement/arrangement,
the J&K Bank also issued no objection certificate dated
26.03.2021 to ATPL recognizing the execution of new lease
agreements with Reliance Projects and Property Services
Limited.
3. The petitioner herein has challenged the impugned FIR in the instant
petition on the following grounds:
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CrlM No. 1283/2022, 1284/2022 12
I. BECAUSE the allegations in the Impugned FIR, even if
taken at face value and assumed to be correct in their
entirety, do not disclose the commission of the offences
under Section 5(1)(d) r/w 5(2) of J&K PC Act r/w
Section 120-B of RPC, against the Petitioner. The entire
case of the prosecution in the impugned FIR either
revolves around the innocuous anomalies in the
sanctioning of the Loan by J&K Bank to the Company
ATPL or seeks to question the business model adopted
by the Company ATPL to run a mall. The FIR nowhere
even remotely suggests that if any undue loss was caused
to the J&K Bank or for that manner any undue gain was
received by the Company ATPL. Rather, the loan
account of the Company ATPL since inception has been
a healthy and a performing asset for the Bank. The
successful servicing of the loan account by the Company
ATPL after commencement of business operations in the
mall most evidently shows that no undue favour or
benefit was handed out to the Company ATPL and
instead the sanction of loan was based on cogent and
reasonable financials proposed and shown by the
Company ATPL at the time of sanction. The contents of
the impugned FIR except for making vague allegations
against the Company ATPL and its promoters and
directors, does not disclose or attract any criminal
offence.
II. BECAUSE the very registration of the Impugned FIR is
actuated with mala fide and contrary to the findings of a
forensic audit by an independent chartered accountant
appointed by J&K Bank, at the instance of the ACB CK,
which exonerated the Petitioner and found that there
was no fraud and/or diversion of funds in respect of the
LRD Loan.
Allegations qua increase in the sanctioned loan
amount i.e. from Rs. 258 crores to Rs. 300 crores.
III. BECAUSE the allegation in the FIR qua the alleged
increase in the sanctioned loan amount is concerned, the
same is totally unsubstantiated and lacks merit. It is
submitted that the it is an admitted case that J&K Bank
had initially sanctioned a loan amount of Rs. 258 Crores
against the proposal of Rs. 300 Crores vide sanction
letter dated 28.12.2015. It is pertinent to mention that
J&K Bank had unilaterally without giving any just cause
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 13or reason sanctioned only an amount of Rs. 258 Crores
against the proposal of Rs. 300 Crores. The Company
Ambience Towers Private Limited (ATPL) immediately
thereupon vide letter dated 30.12.2015 had sought for
modification of the sanctioned loan terms and prayed for
sanction of Rs. 300 Crores as originally proposed. It is
submitted that in the letter dated 30.12.2015 the
Company had not only provided calculations and cogent
reasons for showcasing their eligibility to avail a loan of
Rs. 310 Corers but had also pointed out in clear terms
that the amount of Rs. 258 Crores computed by the Bank
suffers from an error as the Bank had failed to consider
the quantum of security deposit being offered by the
Company. It is submitted that the Company along-with
its letter had even annexed a calculation sheet showing
the correct financials and justification for the ask of Rs.
310 Crores. It is submitted that the Bank after the
receipt of the letter dated 30.12.2015 had again carried
out an exercise to scrutinise the loan proposal of the
Company and upon fresh evaluation, the Bank was
convinced about the eligibility of the Company to obtain
a loan of Rs. 300 Crores. Accordingly, fresh sanction
letter dated 02.02.2016 was issued by the Bank with
modified terms of sanction. It is submitted that the
allegations in the FIR that increase in the sanctioned
loan amount was allegedly on account of a well-knit
conspiracy between the Petitioner along-with other
directors of the Company ATPL and unknown officials of
the Bank is absolutely false and bereft of merit and the
same is established from the fact that despite carrying
out preliminary enquiry as mentioned in the FIR itself,
the agency was unable to point out to any delinquent
officer or for that matter any exchange of money
between the Petitioner and the alleged officials of the
Bank. On the other hand, the material placed on record
in nature of communication exchanged between the
Company and the Bank prior to the issuance of final
sanction letter dated 02.02.2016 clearly brings out the
reason and the cause for increase in the sanctioned loan
amount from Rs. 258 Crores to Rs. 300 Crores. The FIR
in question fails to disclose any cognizable offence and
moreover seeks to portray simple commercial
transactions as criminal wrongdoings.
IV. BECAUSE the Respondent despite conducting a
preliminary enquiry before the registration of impugned
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CrlM No. 1283/2022, 1284/2022 14
FIR has failed to appreciate that the entitlement to LRD
is derivative of various variables e.g. number of years of
rent which is considered for discounting as in the
present case entitlement of LRD Loan of Rs. 258 crore
was worked out on the basis of rent and other
receivables for 9 years and LRD loan of Rs. 300 crore
was worked out on the basis of rent and other
receivables for 12 years, rate of interest, amount of
security deposit and likelihood of increase in rent
receivable in future etc. Moreover, to grant or not to
grant loan facility or evaluation and determination of
the extent of loan to be sanctioned is a matter of policy
and commercial wisdom and experience of professional
and experts working with the lender bank and as such
within the exclusive domain of the Bank. The Respondent
by virtue of impugned FIR instead of investigating any
offence is rather engaging in replacing the commercial
wisdom of J&K Bank with that of itself, without even
realising that the decisions taken by J&K Bank were
based on commercial viability and expertise. The
Respondent in the impugned FIR only seeks to question
the decisions taken by the Bank qua the loan proposal of
Company ATPL and thus Commercial decisions are
being projected as criminal wrongs.
V. BECAUSE the increase in the sanctioned loan amount
to the Company ATPL was not a result of any criminal
wrongdoing or conspiracy, rather it was a direct
outcome of correct evaluation of the financials projected
by the Company to the Bank. It is submitted that State
Bank of India and PNB Housing Finance Ltd. evaluated
the entitlement of LRD loan of Rs. 250 crore on the basis
of rent and other receivables of 9 years and State Bank
of Hyderabad and Punjab and Sind Bank had assessed
the entitlement of Rs. 300 crore of LRD loan on the basis
of rent and other receivables of 12 years and
accordingly sanctioned their respective loans.
VI. BECAUSE even otherwise, the facts subsequent to the
disbursement of loan such as maintaining the loan
account as a regular account, no default in payment and
most importantly the proposal by the Company in August
and September, 2019 regarding pre-payment of the
entire outstanding goes on to prove that the projected
financials/revenues turned out to be absolutely correct
and thus the same by no stretch of imagination were
marred with any ulterior motives to secure an undue
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CrlM No. 1283/2022, 1284/2022 15
advantage. It is submitted that no loss whatsoever has
been caused to the Bank for sanctioning LRD loan to the
tune of Rs. 300 Crores to the Company ATPL as the
same was based on robust calculations and correct
financials.
VII. BECAUSE despite carrying out preliminary enquiry as
mentioned in the FIR itself, the agency was unable to
point out to any delinquent officer or for that matter any
exchange of alleged consideration or money or availing
of any peculiar gain/benefit from the Petitioner to any of
the officials of the Bank. On the other hand, the material
placed on record in nature of communication exchanged
between the Company and the Bank prior to the issuance
of final sanction letter dated 02.02.2016 clearly brings
out the reason and the cause for increase in the
sanctioned loan amount from Rs. 258 Crores to Rs. 300
Crores. The FIR in question fails to disclose any
cognizable offence and moreover seeks to portray simple
commercial transactions as criminal wrongdoings.
VIII. BECAUSE the LRD loan of Rs. 300 crore was got
sanctioned from J&K Bank only to consolidate the total
loan with one bank instead of four banks. Further
although J&K Bank had sanctioned LRD loan of Rs. 300
crore but in any case, the total loan exposure of J&K
Bank was only Rs. 150 crore in view of stipulation in the
sanction of J&K Bank that outstanding loan of another
company of Ambience Group of which ATPL is part of
had to repay a loan of Rs. 150 crore in order to keep the
total exposure of J&K Bank in Ambience Group within
the stipulated amount of Rs. 650 crore.
IX. BECAUSE the loan was fully secured against the
mortgage of immovable Shopping Cum Office Complex
Property at 2B2, Twin District Centre, Rohini, Delhi
which is valued more than Rs. 400 crore and having
perfect marketable title. Further no fault has been
alleged in title, mortgage and/or value of the property
mortgaged to the Bank.
Allegations qua lease deeds
X. BECAUSE the condition to disburse the sanctioned loan
amount after submission of registered lease deed was
waived off/withdrawn by the competent authority of J&K
Bank vide sanction dated 19.03.2016. It is submitted that
the loan of Rs. 300 crore was disbursed in two tranches
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of Rs. 142.38 crore on 30.03.2016 and Rs. 157.62 crore
on 31.03.2016 after signing and execution of proper
loan documents in terms of sanction dated 02.02.2016 of
J&K Bank and further there is no violation in
disbursement of sanctioned loan of Rs. 300 crore.
Therefore, the allegations in the Impugned FIR as to
disbursement of loan without obtaining registered lease
deeds by the officers/officials of J&K Bank BU, Ansal
Plaza, New Delhi are completely baseless and
unfounded.
XI. BECAUSE the allegations in the FIR with respect to
non- submission of registered lease deeds and change in
terms of lease in the registered lease deeds are solely
based on presumptions and conveniently turns a blind
eye to the business realities and the covenants of the
registered lease deeds. It is submitted that terms of the
registered lease deed executed with the Future Group
reveals that though the amount of fixed lease rental was
reduced from Rs. 103 Sq. ft. to Rs. 57.20 Sq. Ft.,
however the rights of the Company ATPL as well as the
Bank continued to remain secured as the lease deed with
Future Retail Limited (Big Bazaar) and Future Lifestyle
Fashion Limited (Central) provided for lease rent at the
rate of 4.5% & 9% of the Net Sales Value (NSV)
respectively in case the same is more than the fixed rent
@ Rs. 57.20 per sq. ft. It is submitted that the Company
by providing the mechanism of revenue model for
securing the best possible lease rental from the lessee
i.e. the Future Group, ensured that the interest of the
Bank is not jeopardised. It is submitted that even
otherwise, Company ATPL annually remitted the
shortfall to the Bank and thus at all times the Bank had
received lease rent at the rate of Rs. 103 Sq. ft. i.e. the
amount mentioned in the unregistered lease deed dated
22.11.2013. It is submitted that the Company ATPL
since inception has been paying the Bank in terms of the
rate mentioned in the 2013 unregistered lease agreement
with Future Group and thus by no stretch of imagination
it can be alleged that the Company ATPL or its
promoters or directors had any intention far from
culpable to cheat or cause any financial loss to the
Bank. It is pertinent to mention that the payment of lease
rental by the Company ATPL towards the shortfall was
done on an annual basis. Thus, the Bank at no stage
suffered any financial loss on account of change in the
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lease rentals in the final registered lease deeds
submitted to the Bank. It is further submitted that the
changes in the lease rental in the registered lease deed
were on account of many business-related reasons. The
said bona fide reasons were duly explained and
communicated to the Bank by the Company vide letter
dated 25.07.2018. It is submitted that the same reasons
were reiterated by Future Group in their communication
dated 16.11.2019 to J&K bank upon a query being
raised by the auditors. Moreover, with shifting of lease
of M/s Sindhu Trade Links Ltd. to Terrace Floor and
Atrium Area resulted into increase in leasable area of
the Mall and overall lease revenue of the Mall would
have increased in case Terrace Floor and Atrium area
would have been operationalized by M/s Sindhu Trade
Links Ltd. Copy of the communication dated 25.07.2018
issued by the Company ATPL to the Bank qua change in
the final terms of lease deed is annexed herein as
Annexure P-XVIII Copy of the communication dated
16.11.2019 issued by Future Group is annexed herein as
Annexure P-XIX
XII. BECAUSE the revocation of understanding with M/s
Sindhu Trade Links, which entity was supposed to run a
food court on the 9th floor of the mall is being given a
criminal colour even though the same was purely a
commercial decision of the Company ATPL which was
taken keeping in view the long-term interest of the
Company ATPL. The Company was constrained to
revoke the understanding with M/s Sindhu Trade Links
Ltd. as they did not come forward to execute the lease
deed. The same space was thereafter allotted to HDFC
Bank who was already occupying 5″ Floor to 8th Floor
and thus when the deal was executed for gth floor, it was
natural for the lessee HDFC to negotiate for the same
rate. Even otherwise it is basic knowledge that the
commercials of running a food court cannot be at par
with running a Bank and thus a higher rental was
initially decided for M/s Sindhu Trade Links Ltd. It is
submitted that the allegations as which finds mentioned
in the FIR are absolutely frivolous on the face it as the
same seeks to give a complete go-by to the business
realities and commercials of running a mall.
XIII. BECAUSE the allegations relating to the manner of
disbursement and terms of the loan agreement which
amounts to second- guessing the commercial wisdom of
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 18
J&K Bank are without any basis, and purely speculative
on the part of the Respondent as there is no allegation in
FIR that J&K Bank disbursed loans on terms which
were more favourable to ATPL than the other borrowers
of J&K Bank and/or lenders of ATPL. No violation of
policy or guidelines of J&K Bank and/or Reserve Bank
of India is alleged in the FIR. The same is not even
alleged to be of any consequence, as no loss is caused
and/or likely to cause to J&K Bank. Without prejudice, a
mere irregularity in loan conditions or manner of
disbursement does not amount to commission of criminal
offences.
No financial loss whatsoever to J&K bank
XIV. BECAUSE the allegations in the FIR are premature or
suffers from reason and logic as the crux of the
allegation is that the officials of the Bank conspired with
the promoter and director of the Company ATPL to
facilitate a loan of much higher amount than what the
Company was eligible for and consequently accorded
the company undue benefit of higher loan amount of Rs.
300 crores which the company was not entitled to and
would not have the intention and/or capacity to repay
the EMIs of interest and instalment of higher amount of
loan. In complete contradistinction to the case set-up by
the investigating agency, the truth of the matter is that
the Company till the date of registration of FIR and even
post that has been compliant of all the terms of the
sanction and most importantly did not default on the
repayment of the loan. It is submitted that the Company
ATPL at all times had maintained a regular account and
the same was only possible if the Company had rightly
projected the potential and financials to the Bank on the
basis of which the loan was sanctioned. It is submitted
that the Company after registration of the present FIR
and on account of bad publicity had even offered the
Bank complete pre-payment of the entire outstanding
loan vide letter and communications dated 03.08.2019,
17.09.2019, 23.09.2019 and 27.09.2019, however the
same was not accepted by the Bank. The sequence of
events since inception most evidently demonstrates that
J&K Bank at no point of time suffered any loss or set
back on account of the loan transaction in question and
further the Company ATPL maintained the loan account
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 19
without any default. It is submitted that in view of the
facts and supporting documents as placed on record
manifestly reveals that continuation of proceedings
arising out of the present FIR will only be an exercise in
futility or an academic exercise undertaken at the
expense and cost of precious judicial time and money.
XV. BECAUSE the very registration of the Impugned FIR
on the basis of alleged source report/probe appears to
be mala fide, as there is no allegation of any loss to the
bank or any person, nor any complaint by any
person/whistle-blower, hence there appears to be no
reasonable basis to have even initiated a preliminary
inquiry, let alone register the Impugned FIR. The
allegations in the Impugned FIR, even if taken at face
value and assumed to be correct in their entirety (though
vehemently denied), do not disclose the commission of
the offences under Section 5(1)(d) r/w 5(2) of J&K PC
Act r/w Section 120-B of RPC, do not justify a police
investigation, and are so absurd and inherently
improbable that no prudent person could have reached
the conclusion that there is sufficient ground for
proceeding against the Petitioner. The Impugned FIR is
bad in fact and law as it is based on a mere inference of
corruption, that too without any allegation of loss, let
alone wrongful loss, to any person.
XVI. BECAUSE in the absence of ingredients of substantive
offences of section 5(1)(d) r/w section 5(2) of the J&K
PC Act being made out, the charge of conspiracy cannot
be sustained on a standalone basis, and as such, the
Impugned FIR deserves to be quashed.
XVII. BECAUSE even the possibility of loss in the future is
negligible/nil because the value of property mortgaged
and security of the loan is more than adequate to pay for
the originally sanctioned and/or outstanding balance in
the LRD loan account of ATPL.
No criminal connivance or conspiracy between the
management, officers/officials of J&K Bank and ATPL
and its promoters/ directors, including the petitioner
herein
XVIII. BECAUSE not a single bank official has been identified
in the Impugned FIR (which only mentions “concerned
officers/officials), and only private accused persons have
been named. It is submitted that the impugned FIR has
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 20
been registered after carrying out a preliminary enquiry
and thus if the source information received by the
Respondent had any credibility, then the role of the
officials of the Bank would have come to light. Further,
it is submitted that no criminal conspiracy whatsoever
was hatched among the Directors/ promoters of ATPL
and the officials of J&K Bank because even as per the
case of prosecution no guideline or regulation was
flouted by the J&K Bank in granting loan to the
Company ATPL and furthermore the conduct of the
Company ATPL post grant of loan i.e. timely servicing
of the loan account shows that the loan was sanctioned
on correct commercials and financials and the rules
were neither bent nor tweaked in favour of the Company
ATPL and no special treatment was accorded to the
Company ATPL by the Bank.
XIX. BECAUSE in the absence of ingredients of substantive
offence of PC Act being made out, the charge of
conspiracy cannot be sustained on a standalone basis,
and as such, the Impugned FIR deserves to be quashed.
XX. BECAUSE the petitioner has repeatedly offered to
repay the entire LRD loan to M/s J&K Bank vide its
letters dated 03.08.2019, 17,09.2019, 23.09.2019 and
27.09.2019 subject to the waiver of pre-payment
charges. Since the LRD loan is sufficiently secured and
is regular and the EMIs are being regularly paid, J&K
Bank refused to accept the refund of the entire LRD loan
amount together with interest due. It is thus evident that
there is no malafides in getting the LRD loan sanctioned
and disbursed.
XXI. That mere allegation of sanctioning of the loans on the
basis of unregistered lease agreements and non-
submission of the registered lease deeds till 2018 is at
best merely an irregularity No culpability could be
attached or inferred by any of these alleged acts of the
petitioner and/or bank officials.
XXII. BECAUSE allegations in respect of the loan from J&K
Bank being obtained by corruption are ex-facie absurd
and cannot form the basis of prosecuting the Petitioner.
The Impugned FIR alleges that the J&K Bank loan was
obtained pursuant to criminal conspiracy and
connivance of officials of J&K Bank and promoter
directors of ATPL. However, the loan was approved by
the entire Board of J&K Bank after due consideration of
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 21
all relevant factors. Hence, the allegations of
conspiracy, corruption, etc. are ex-facie baseless.
No direct allegation against the petitioner
XXIII. BECAUSE the FIR at no point makes any substantial or
direct allegation against the Petitioner and rather ropes
him into the controversy by simply giving a vague
allegation that he along- with other directors conspired
with the officials of the J&K Bank to secure undue
benefits for the company ATPL. It is submitted that the
said allegation is not only vague but also lacks
substance as no benefit whatsoever was derived by
ATPL and further the FIR is completely silent as to how
the Petitioner played a role in securing any undue
advantage for the Company ATPL. Rather, the entire
communication with respect to the Loan transactions is
duly documented and each and every allegation as
alleged in the FIR can be easily rebutted from those
documents and thus the question of securing any gain
does not arise. Further, it is submitted that in the case at
hand the investigating agency had carried out a
preliminary enquiry and it can be safely concluded that
even during the said Preliminary Enquiry /purported
verification of the alleged source report, the agency did
not come across any official of the Bank who was
allegedly conspiring with the Petitioner to give undue
benefit to ATPL.
XXIV. BECAUSE the Impugned FIR is bad for failure to
disclose any mens rea dishonest intent on the part of the
Petitioner, as J&K Bank has not suffered any loss on
account of the loan disbursed, and ATPL is duly
paying/servicing the outstanding loan amount.
XXV. BECAUSE the Impugned FIR is bad in fact and law as
it is based on a mere inference of corruption, that too
without any allegation of loss, let alone wrongful loss, to
any person.
Suppression of exculpatory material and mala fide
investigation.
XXVI. BECAUSE the registration of the FIR is bad in fact and
law, as the purported verification of an alleged source
report clearly suppresses material facts and documents.
It is submitted that the investigating agency carried out
a preliminary enquiry/verification of its own volition and
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 22
despite that, if material documents have been concealed
or not even mentioned in the FIR then the same shows
the mala fide and ulterior motives behind the
registration of the present FIR.
XXVII. BECAUSE the Impugned FIR mala fidely suppresses
the exculpatory forensic audit report, despite the same
being carried out at the instance of the Respondent. The
conclusions of the forensic audit report clearly state
that:
i. There was no diversion of funds or fraud, and
all disbursements were utilized as per the
sanction terms.
ii. All proceeds received from the lessees were
routed through the escrow account maintained
with J&K Bank.
iii. There was no dilution of security mortgage.
XXVIII. BECAUSE the Impugned FIR and the alleged source
report/probe on which it is based fail to account for the
realities of running a mall, and mala fidely cherry-pick
facts to suit a false narrative. This can be seen from the
fact that even the most cursory probe/preliminary
inquiry would have revealed that:
i. The allegation that HDFC Bank paid less lease
rental than M/s Sindhu Trade Links Ltd. was to
pay is absurd on the face of it, as even the most
cursory probe/preliminary inquiry would reveal
that M/s Sindhu Trade Links Ltd. was to operate
a Food Court, the commercials for which would
obviously differ from opening a bank office.
ii. HDFC Bank, which had initially given a letter of
intent for lease of space from 5th floor to 9th
floor later also required the 9th floor (initially
allotted to M/s Sindhu Trade Links Ltd. and
naturally paid the same rate it was paying for
the 5th Floor.
iii. The increase in the loan amount from Rs. 258
Crores to Rs. 300 Crores was a legitimate act as
the earlier computation by the bank was flawed
as the Bank did not take into account the
quantum of security deposit being offered by the
Company ATPL;
iv. It is pertinent to note that none of the above
changes are material post disbursal, as ATPL
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 23was and has been servicing the loan without any
default.
Thus, the business realities of running a mall have been
completely ignored by the Respondent. Subsequent
decisions which were not taken unilaterally by the
Petitioner/ATPL cannot in any manner lead to an
inference of conspiracy and corruption on their part.
XXIX. BECAUSE the Impugned FIR as also the alleged
probe/source report on which it is based, fails to account
for the fact that LRD loans had been assessed by various
lender banks including State Bank of Hyderabad, which
had found ATPL to be eligible for a loan of Rs. 300
crores.
XXX. BECAUSE the Impugned FIR suppresses the fact that
the State Bank of India had disbursed Rs. 100 crores,
and PNB HFL had disbursed Rs. 50 crores to ATPL on
the same documentation which was submitted to J&K
Bank (which fact would have been obvious from even the
most cursory/preliminary inquiry), and there is no probe
into nor allegation of corruption/connivance with
officials of SBI or PNB HFL.
XXXI. BECAUSE the allegation in the Impugned FIR that
Registered Lease Deeds were not executed before
disbursement of the J&K Bank LRD Loan is baseless
and false because the terms of sanction were amended
by the competent authority vide letter dated 19.03.2016.
Further in the Impugned FIR it has been stated that
registered lease deed was executed on 30.09.2015 but
not furnished by the Petitioner but fails to note that the
same was submitted in 2018 because of reasons duly
explained to and accepted by J&K Bank.
XXXII. BECAUSE the Impugned FIR fails to disclose any
cognizable offence let alone the offences alleged in the
FIR. It is submitted that allegations as alleged are a
product of conjectures and surmises and the contents of
the FIR clearly reflects that the Preliminary Enquiry was
either cursory at best and or mala fide at worst, as
documents material to the allegations have either not
been perused during the enquiry or have been
suppressed in order to make out a false case against the
Petitioner. The continuation of proceedings in the
impugned FIR will result in gross injustice and would be
an exercise in futility as the indisputable and sterling
quality documents placed on record evidently
demonstrates that even if FIR continues and
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 24consequently trial is conducted, there is no likelihood of
it resulting in a conviction.
4. Status report stands filed by the respondent herein on 28.10.2024 in
compliance to order passed by this Court on 11.10.2024, wherein it
has been, inter alia, stated that upon registration of FIR under
challenge and during investigation, it came to fore that the J&K Bank
had illegally sanctioned and disbursed loan worth crores of rupees in
favour of ATPL while bypassing all norms and procedures in order to
confer undue benefit upon the ATPL and the J&K Bank
Officers/Officials in connivance with the ATPL modified the first term
loan of Rs. 258.00 crores and increased the amount of loan to Rs. 300
crores against the discounting value of rentals, inasmuch as on the
basis of unregistered lease deeds executed by M/s Future Group and
M/s Sindhu Trade Links Ltd. with mala fide intentions despite the fact
that the said M/s Sindhu Trade Links never occupied the space in the
Mall or paid any rent, but, in fact, terminated the lease deed executed
with ATPL and the space previously allotted to the said M/s Sindhu
Trade Links came to be allotted to HDFC Bank at the rate of Rs. 45.59
per sq. ft. per month instead of Rs. 92.00 per sq. ft. per month and that
the Officers/Officials of the bank abused their authority for pecuniary
consideration under a well knit conspiracy hatched with the promoters
of ATPL and sanctioned and disbursed the loan of Rs. 300 crores as
against its entitlement of Rs. 195.89 crores as a consequence whereof,
prima facie offences covered in the FIR were found established against
the petitioner and the bank authorities.
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 25
It has been lastly stated therein the status report (Supra) that the
investigation regarding ascertaining the individual role and
responsibility of the bank officers/officials , who had remained
associated with the sanction and disbursement of the LRD loan in
favour of ATPL is in progress and will be concluded at the earliest.
Heard learned counsel for the parties and perused the record.
5. It is significant to mention here that upon coming up of this petition
for consideration on 21.10.2022, this Court directed issuance of notice
to the respondent and as an interim measure also provided that the
Investigating Agency can proceed with the investigation of the case,
however, charge-sheet shall be filed only after permission of the
Court.
6. Before proceeding to advert to the case set up by the parties in their
respective pleadings, it would be pertinent and significant to refer to
the contents of the impugned FIR hereunder being relevant and
germane to the controversy:
1. On the basis of source report, a verification was conducted by
the Anti-Corruption Bureau to look into the allegations that
the officers/ officials of J&K Bank have illegally sanctioned
and disbursed loan worth crores of rupees to a private
beneficiary firm namely M/s Ambience Towers Pvt. Ltd. By
passing all norms and procedures for sanctioning and
disbursement of loans.
2. During probe, it came to fore that a Term Loan of Rs. 258.00
Cr was sanctioned by J&K Bank BU Ansal Plaza Delhi, on
28.12.2015 in favour of M/s Ambience Towers Pvt., Ltd.
against future leasing /rental receipts at shopping cum office
complex at plot no. 2B2, twin District Sector-10, Rohini
Delhi. In order to confer more undue benefit upon the
company, the concerned officers / officials of J&K Bank in
connivance with the beneficiary firm subsequently modified
the first term loan of Rs. 258 Cr sanction and increased the
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 26
loan amount to Rs. 300.00 Cr vide letter No. JKB/ CHQ/
A&AP/ 16-2862 dated 02.02.2016 against discounted value of
rentals calculated by J&K Bank as RS. 300 Cr. Verification
conducted has revealed that lease agreement related to
rentals of the firm was to be executed with three parties viz.,
M/s future Group (Big Bazar), M/s HDFC Bank and M/s
Sindhu Trade links. Apart from other formalities, the Business
Unit JK bank branch Ansal Plaza had to obtain and rely on
registered lease deeds executed between the borrower
company and the three parties mentioned above.
3. On scrutiny of bank documents, it has come to fore that the
beneficiary company’s proposal for loan was recommended
against i) unregistered lease deeds dated 22-11-2013 M/s
Future group (BIG Bazar) reflecting lease rent (Future
income) @ Rs. 103.00 per sq ft per month. (ii) a letter of
intent of HDFC Bank dated 01-08-2014 with lease rent
(future income) @ Rs. 45.59 per sq ft per month and (iii)
unregistered lease deed dated 17-11-2014 with M/s Sindhu
Trade Links with lease rent (future income) @ Rs. 92.00 per
sq ft per month to M/s Ambience Towers. Out of the total loan
amount of Rs. 300 Cr., Rs. 142.38 Cr. was disbursed on
30.03.2016 and Rs. 157.62 Cr. was disbursed on 31.03.2016.
As per sanction letter dated 02.02.2016, there was a
prerequisite condition from the bank that before disbursement
of loan amount to the company, the Business Unit JK Bank
Ansal Plaza New Delhi had to obtain registered lease deeds
but the Bank at the time of disbursement of loan amount did
not obtain either of the registered lease deed deliberately and
with malafide intentions and resultantly on 29-06-2016 when
company furnished registered lease deed in respect of HDFC
Bank with rent @ Rs. 45.59 per sq. ft. per month, whereas no
registered lease deeds in respect of Future Group and Sindhu
Trade Links were furnished by the company to the bank till
2018 and the beneficiary company in connivance with the
officers/officials of J&K Bank furnished registered lease deed
in respect of only Future Group dated 30.09.2015 in 2018
with the rent rate @ Rs. 57.20 per sq. ft. per month which is
about half of the rent @ Rs. 103.00 per sq. ft. per month
mentioned in the unregistered lease deed on the basis of
which Rs. 300.00 Cr. Loan had been sanctioned, however,
M/s Sindhu Trade Links never occupied the space nor did not
pay any rent. The lease deed with M/s Sindhu Trade Links
was terminated later on and the space was allotted to HDFC
Bank on the rates already mentioned in their lease deed which
was Rs. 45.59 instead of the rent @ Rs. 92.00 per sq. ft. per
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 27
month mentioned in the unregistered lease deed of M/s Sindhu
Trade Links. This clearly proves nexus between the
beneficiary company and the officers/officials of J&K Bank
who have conferred undue benefit upon the beneficiary
company. 4.
4. Verification has further revealed that on the basis of
registered lease deeds of Future Group and HDFC Bank, the
company was entitled to obtain maximum of Rs. 195.89 Cr.
instead of Rs. 300.00 Cr sanctioned by the officers/officials of
J&K Bank in connivance with Raj Singh Gehlot, Shekhar
Singh & Sumit Choudhary Promoter Directors of Ambience
Towers Pvt. Ltd. In this way it is established that the
management of J&K Bank at Corporate HQ Srinagar as well
as officers/officials of J&K Bank office New Delhi and
Business Unit Ansal Plaza New Delhi by abuse of their
authority for pecuniary considerations under a well knit
conspiracy hatched with Raj Singh Gehlot, Shekhar Singh &
Sumit Choudhary Promoter Directors of Ambience Towers
Pvt. Ltd., sanctioned and disbursed loan on higher side to the
tune of Rs. 300.00 Cr in excess to its entitlement of Rs. 195.89
Cr in favour of M/s Ambience Towers Pvt. Ltd. The officers /
officials J&K Bank in connivance with Promoter Directors of
M/s Ambience Towers Pvt. Ltd. deliberately and dishonestly
delayed to obtain registered lease deeds in respect of other
two firms i.e. M/s Future Group and M/s Sindhu Trade Links
as per quoted rates of rent which resulted in conferment of
pecuniary advantage upon the company which was not
deserving to obtain such huge loan amount.
5. Since the facts and the circumstances which have emerged
during verification vis-a-vis scrutiny of records of the bank
disclose commission of criminal misconduct by bank
management at Corporate HQ Srinagar officers/officials then
posed at Zonal Office Delhi / Business Unit Ansal Plaza Delhi
and Raj Singh Gehlot, Shekhar Singh and Sumit Choudhary
Promoter Directors of the beneficiary firm M/s Ambience
Towers Pvt. Ltd. and others which constitute offences U/S
5(1)(d) of the J&K. P.C. Act Svt 2006 and r/w section 120-B
RPC punishable u/s 5(2) of the Act. Consequently, a formal
case FIR No. /2019 is registered in P/S ACB and investigation
is entrusted to ——–
7. Before proceeding further in the matter, a reference to the offences
covered in the impugned FIR (Section 5(1) (d), Section 5 (2) of the
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 28
J&K Prevention of Corruption Act, Svt. 2006 and Section 120-B
RPC) would be appropriate hereunder:
“5. Criminal misconduct.-
(1) A public servant is said to commit the offence of
criminal misconduct.
…………. (d) if he, by corrupt or illegal means or by
otherwise abusing his position as public servant, obtains
for himself or for any other person any valuable thing or
pecuniary advantage; or
Section 5 (2): Any public servant who commits any
offence of criminal misconduct as referred to in clauses
(a), (b) and (e) of sub-section (1), shall be punishable,
shall be punishable with imprisonment for a term which
shall not be less than 2 years but which may extend to
seven years and shall also be liable to fine and if he
commits criminal misconduct as referred to in clauses
(c) and (d) of subsection (1) shall be punishable with
imprisonment for a term which shall not be less than one
year but which may extend to five years and shall also
be liable to fine.”
“Section 120-B
(1) Whoever is a party to a criminal conspiracy to
commit an offence punishable with death, imprisonment
for life or rigorous imprisonment for a term of two years
or upwards, shall, where no express provision is made in
this Code for the punishment of such a conspiracy, be
punished in the same manner as if he had abetted such
offence. (2) Whoever is a party to a criminal conspiracy
other than a criminal conspiracy to commit an offence
punishable as aforesaid shall be punished with
imprisonment of either description for a term not
exceeding six months, or with fine or with both.”
Perusal of Section 5 (1) (d) (Supra) reveals that ingredients of offence
are that the accused should have been a public servant and should have
used corrupt or illegal means or otherwise abused his position as a
public servant and that he should have obtained for himself or for any
other person any valuable thing or pecuniary advantage.
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 29
The words “abuse of his position as public servant’ would connote that
the officer does not act as a prudent man, but discords all the normal
and statutory rules to accommodate third party and obtains benefit for
him.
Further the use of words by “corrupt or illegal means” or by
“otherwise abusing his position as public servant appearing in the
Section (Supra) suggests dishonest element on the part of the public
servant himself or while obtaining a valuable thing or pecuniary
advantage for a third person and the words “otherwise abusing his
position as public servant” has to be read in the same context and in
the same degree or culpability as the words “corrupt or illegal means
convey” i.e. to be read in juxtaposition with the words “corrupt or
illegal means”. The words “otherwise abusing his position as public
servant also suggests that it does not confine merely to misuse of his
position as a public servant, but such misuse has to be with a dishonest
mind. The abuse of position by a public servant, thus, in order to come
within the mischief of Section 5(1) (d) must necessarily be dishonest
for obtaining a valuable thing or pecuniary advantage for himself or
for any other person. In other words, mere misuse without dishonest
intention is not abuse, i.e., misusing the position with dishonest
intention would mean abuse and such dishonest intention can be
inferred from the facts and circumstances of each case.
8. In so far as offence of criminal conspiracy contained in Section 120-B
RPC is concerned, law is settled that there must have been an
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 30
agreement between the persons, who are alleged to have conspired and
that agreement should be either for doing an illegal act or for doing by
illegal means. The only relevant factor is that all means adopted and
illegal acts done must be and purported to be in furtherance of the
object of conspiracy. Levelling of an allegation of conspiracy without
mentioning as to how, where and which of the conspirators hatched
conspiracy and for what purpose or circumstances warranting
inference of existence of conspiracy is not enough to constitute an
offence of conspiracy, but an FIR should make out a prima facie case
of conspiracy against accused persons as one cannot have the
construction of fine superstructure without a foundation.
9. Before proceeding further in the matter, it would be advantageous and
appropriate to refer to the ambit and scope of inherent power vested in
this Court.
A reference in this regard to the judgment of Apex Court passed in
case titled State of Haryana and others vs. Bhajan Lal and others
reported in 1992 Supp (1) SCC 335 would be relevant, wherein the
Apex Court had elaborately considered the ambit and scope of Section
482 Cr. P.C. in the context of quashing the criminal proceedings and
in para 102 laid down the following:
“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of the
principles of law enunciated by this Court in a series of
decisions relating to the exercise of the extraordinary power
under Article 226 or the inherent powers under Section 482 of
the Code which we have extracted and reproduced above, we
give the following categories of cases 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
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 31ends of justice, though it may not be possible to lay down any
precise, clearly defined and sufficiently channelised and
inflexible guidelines or rigid formulae and to give an
exhaustive list of myriad kinds of cases wherein such power
should be exercised.
1) 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.
2) Where the allegations in the first information
report and other materials, if any, accompanying
the FIR do not disclose a cognizable offence,
justifying an investigation by police officers under
156 (1) of the Code except under an order of a
Magistrate within the purview of Section 155 (2) of
the Code.
3) 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.
4) 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.
5) 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.
6) 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.
7) 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.”
The Apex Court in this regard has also in case titled as State of
Karnataka vs. M. Devenderappa and another reported in 2002 (3)
SCC 89, at para 6 held as under:
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 32
“6….All courts, whether civil or criminal possess, in the
absence of any express provision, as inherent in their
constitution, all such powers as are necessary to do the right
and to undo a wrong in course of administration of justice on
the principle quando lex aliquid alicui concedit, concedere
videtur et id sine quo res ipsae esse non potest (when the law
gives a person anything it gives him that without which it
cannot exist). While exercising powers under the section, the
court does not function as a court of appeal or revision.
Inherent jurisdiction under the section though wide has to be
exercised sparingly, carefully and with caution and only when
such exercise is justified by the tests specifically laid down in
the section itself. It is to be exercised ex debito justitiae to do
real and substantial justice for the administration of which
alone courts exist. Authority of the court exists for
advancement of justice and if any attempt is made to abuse
that authority so as to produce injustice, the court has power
to prevent abuse. It would be an abuse of process of the court
to allow any action which would result in injustice and
prevent promotion of justice. In exercise of the powers court
would be justified to quash any proceeding if it finds that
initiation/continuance of it amounts to abuse of the process of
court or quashing of these proceedings would otherwise serve
the ends of justice. When no offence is disclosed by the
complaint, the court may examine the question of fact. When a
complaint is sought to be quashed, it is permissible to look
into the materials to assess what the complainant has alleged
and whether any offence is made out even if the allegations
are accepted in toto.”
The Apex Court in case titled as Mohammad Wajid and another vs State
of UP and others reported in 2023 SCC Online SC 951 has also at para 34
in this regard observed as under:
“34. At this stage, we would like to observe something
important. Whenever an accused comes before the Court
invoking either the inherent powers under Section 482 of the
Code of Criminal Procedure (Cr.P.C.) or extraordinary
jurisdiction under Article 226 of the Constitution to get the
FIR or the criminal proceedings quashed essentially on the
ground that such proceedings are manifestly frivolous or
vexatious or instituted with the ulterior motive for wreaking
vengeance, then in such circumstances the Court owes a duty
to look into the FIR with care and a little more closely. We
say so because once the complainant decides to proceed
against the accused with an ulterior motive for wreaking
personal vengeance, etc., then he would ensure that the
FIR/complaint is very well drafted with all the necessary
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 33pleadings. The complainant would ensure that the averments
made in the FIR/complaint are such that they disclose the
necessary ingredients to constitute the alleged offence.
Therefore, it will not be just enough for the Court to look into
the averments made in the FIR/complaint alone for the
purpose of ascertaining whether the necessary ingredients to
constitute the alleged offence are disclosed or not. In frivolous
or vexatious proceedings, the Court owes a duty to look into
many other attending circumstances emerging from the
record of the case over and above the averments and, if need
be, with due care and circumspection try to read in between
the lines. The Court while exercising its jurisdiction under
Section 482 of the Cr.P.C. or Article 226 of the Constitution
need not restrict itself only to the stage of a case but is
empowered to take into account the overall circumstances
leading to the initiation/registration of the case as well as the
materials collected in the course of investigation.”
10. Thus, what emanates from the above principles of law is that the
inherent power of this court saved under Section 482 Cr. P.C. does not
confer any new power on the High Court, in that, it only saves the
inherent power of this Court, which the court possessed before
enactment of the Code of Criminal Procedure and it envisages three
circumstances under which the inherent jurisdiction may be exercised,
namely-
a) To give effect to an order under the Code,
b) To prevent abuse of process of court, and
c) To otherwise secure the ends of justice.
11. It has been a consistent view of the Constitutional Courts that it is
neither possible not desirable to lay down any inflexible rule which
would govern the exercise of inherent jurisdiction and no legislative
enactment dealing with procedure can provide for all cases that may
possibly arise, thus suggesting that the the courts have inherent powers
apart from provisions of law which are necessary for proper discharge
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 34
of functions and duties imposed upon them by law. That is the
doctrine which finds expression in Section 482 Cr. P.C. which merely
recognises and preserves the inherent power of the High Court to do
the right and to undo the wrong in the course of administration of
justice on the principle “that when the law gives a person anything,
it gives him that without which it cannot exist” and that the inherent
power is exercised ex debito justitiae to do real and substantial justice
for the administration of which alone the courts exist and that the
authority of court exists for advancement of justice and if any attempt
is made to abuse the authority so as to produce injustice, the court has
power to prevent abuse and that it would be an abuse of process of
court to allow any action which would result in injustice and prevent
promotion of justice and that in exercise of powers, the court would be
justified to quash any proceeding if it finds that the
initiation/continuance of it amounts to abuse of process of court or
quashing of these proceedings would otherwise serve the ends of
justice.
12. Reverting back to the case in hand, it is an admitted fact that the
impugned FIR stands registered on 29.07.2019 and alleged offences
covered therein in the said FIR pertain to the loan transactions of the
year 2015 and 2016.
13. A deeper and closer examination of the CD file produced by the
counsel for the respondent, inasmuch as the status report (Supra) filed
by the respondent on 28.10.2024, almost after a period of four years
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 35
from the registration of FIR would reveal that the investigating agency
has till date failed to collect any material worth the name connecting
the alleged prime accused i.e. the bank officers/officials of the J&K
Bank in the commission of alleged offences covered in the impugned
FIR. No headway indisputably has been made by the investigating
agency in order to find out involvement of the bank officers/officials
in the commission of alleged offences in the first instance and in the
second instance by the petitioner herein and the said prolonged and
lethargic investigation in the impugned FIR cannot but said to be
having an element of extreme emotional and mental stress and strain
upon the petitioner herein, more so when there is no plausible
explanation offered by the respondent herein for having carried on
with the lethargic and prolonged investigation in the matter without
there being any element of delay attributable to the petitioner herein.
14. The aforesaid approach of conducting the investigation by the
respondents in the instant matter cannot but said to be as well a ground
for quashing of impugned FIR. More so, in presence of law laid down
by the Apex Court in case titled as State of Andhra Pradesh vs. P. V.
Pavithran, reported in (1990) 2 SCC 340 at para 7 has held as under:
7. There is no denying the fact that a lethargic and
lackadaisical manner of investigation over a prolonged
period makes an accused in a criminal proceeding to
live every moment under extreme emotional and mental
stress and strain and to remain always under a fear
psychosis. Therefore, it is imperative that if investigation
of a criminal proceeding staggers on with tardy pace
due to the indolence or inefficiency of the investigating
agency causing unreasonable and substantial delay
resulting in grave prejudice or disadvantage to the
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 36accused, the court as the protector of the right and
personal liberty of the citizen will step in and resort to
the drastic remedy of quashing further proceedings in
such investigationThe Apex Court further in case titled as Pankaj Kumar vs. State of
Maharashtra and others reported in 2008 (16) SCC 117 at para 22 has
held as under:
“22. It is, therefore, well settled that the right to speedy
trial in all criminal prosecution is an inalienable right
under Article 21 of the Constitution. This right is
applicable not only to the actual proceedings in court
but also includes within its sweep the preceding police
investigations as well.”
Even otherwise also, perusal of the impugned FIR inasmuch as the
incriminating material collected by the investigating agency during the
course of investigation so far manifestly tend to show that the offences
alleged to have been committed by the petitioner herein are not made
out on a plain reading, in that, it is evident that the allegations levelled
in the complaint instead seemingly are constituting at the most a
procedural lapse committed by the bank officers/officials in discharge
of their duties in the process of granting alleged enhanced loan in
favour of the ATPL and significantly no loss whatsoever found till
date to have been caused to the Bank, thus in no case constituting
alleged offences covered in the impugned FIR, against the petitioner
herein.
15. Based on inclusive consideration of facts and circumstances of the
case summed up in the foregoing paras, the instant case cannot, but
said to be warranting exercise of inherent power of this Court for
CRM(M) No. 450/2022
CrlM No. 1283/2022, 1284/2022 37
quashing the impugned FIR for what has been observed, considered
and analysed hereinabove.
16. Resultantly, the instant petition succeeds, as a consequence
whereof, the impugned FIR No. 16/2019 dated 29.07.2019
registered with Police Station, Anti Corruption Bureau, Central
Kashmir for offences under Section 5(1) (d) read with Section 5 (2)
of the J&K Prevention of Corruption Act read with Section 120-B
RPC is quashed insofar as the petitioner is concerned.
17. Disposed of along with connected applications.
(JAVED IQBAL WANI)
JUDGE
Jammu
20.12.2024
Sahil Padha
Whether the order is speaking: Yes/No.
Whether the order is reportable: Yes/No.
Sahil Padha
2024.12.23 13:59
I attest to the accuracy and
integrity of this document
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