Madras High Court
I. Stalin S/O. Iruthayanathan (A3) vs /6 on 7 March, 2018
CRL O.P.(MD) No.9731 of 2024
IN THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 17.04.2025
Pronounced on: 16.07.2025
CORAM
The Hon`ble Mr.Justice P.DHANABAL
CRL OP.(MD) No.9731 of 2024
and Crl. M.P. (MD) No.6646 of 2024
1. I. Stalin S/o. Iruthayanathan (A3)
2. K. Sathyanarayana Bhat S/o. Krishna Bhat (A4)
3. S. Shankar Srinivasan S/o. Srinivasan (A5)
4. M. Ganesamoorthy S/o. Muthukrishnan Pillai (A6)
5. A. Ramalingam S/o. Ananthasubbu (A7)
6. C. Sampath Kumar Chary
S/o. Chellam Chary (A8)
7. A. Venkatasubramaniyam
S/o. A.K. Arumugam (A9)
8. Karthikeyan S/o. Murugan (A10)
9. R. Sreekumar S/o. Raghava Varier (A11)
10. D. Surendran S/o. R. Devendran (A12)
11. B. Jeyaseelan S/o. Balakrishnan (A13)
12. P. Chandrashekhar S/o. Sathiya Narayana Panakanti (A16)
13. B. Chunchu Satya Hari S/o. Bahlahaih (A17).
... Petitioners /A3 to 13, 16 & 17
Vs
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1. The State of Tamil Nadu,
The Inspector of Police,
Economic Offences Wing-II,
Karur Town & District.
(Ref: Crime No.1/2022) ... 1st Respondent / Complainant.
2. Jaikavitha D/o. R. Selvaraj ... 2nd Respondent / Defacto
Complainant.
PRAYER: - The Criminal Original Petition is filed under Section 482 of
Code of Criminal Procedure praying to call for records in C.C. No.255 of
2024 on the file of the Chief Judicial Magistrate Court, Karur as against
the petitioners for the offences under Sections 120-B, 420, 406, 408, 409,
466, 467, 468, 471, 477(A), 464 and 109 of IPC and quash the charge
sheet as against these petitioners.
For Petitioners : Mr. A. Ramesh, Senior Counsel
for Mr. D. Shanmuga Raja Sethupathy
For Respondents : Mr. M. Sakthi Kumar [for R1]
Government Advocate [Criminal]
Mr. Abudu Kumar Rajaratnam
Senior Counsel for
MR. K. Prabhakar [for R2]
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CRL O.P.(MD) No.9731 of 2024
ORDER
This Criminal Original Petition has been filed to call for records
and to quash the C.C. No.255 of 2024 on the file of the Chief Judicial
Magistrate Court, Karur pending against the petitioners for the offences
under Sections 120-B, 420, 406, 408, 409, 466, 467, 468, 471, 477(A),
2. The case of the prosecution is that the defacto complainant,
who is the 2nd respondent herein, has lodged a complaint against her
husband, bank Managers and other Staff of the bank stating that the 1st
accused is her ex-husband, that he along with the bank Managers of
erstwhile Syndicate Bank, now amalgamated with Canara Bank,
conspired together and in order to grab the properties of the defacto
complainant worth about Rs.35 crores, without her knowledge, by
putting her signature in the year 2014 obtained loan to the tune of Rs.4
crores in the name of M/s. Morvi Exports, thereby they manipulated the
bank accounts and forged the documents. The 1st accused obtained loan
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for the partnership firms M/s. Morvi Export and M/s. Ram Textiles,
where the defacto complainant and her daughters were also the partners.
In the year 2007, M/s. Ram Textiles obtained loan for a sum of Rs.6
lakhs and on 11.09.2008, M/s. Morvi Exports availed loan for a sum of
Rs.16 lakhs. Thereafter, on 01.04.2009, the defacto complainant and her
daughters, had retired from the partnership firm. Thereafter, the above
said partnership firms were functioned under sole proprietorship.
Thereafter, in the year 2009, the outstanding loan amount went upto Rs.
23.96 crores and some of the properties were sold and Rs.10.78 crores
was settled towards loan.
(i) While so, on 03.05.2010, the 1st accused
Manickavasagam had executed a Settlement Deed in favour of the 2nd
respondent, thereby the properties became the absolute properties of the
2nd respondent. Since the loan was obtained by the partnership firms
and the 2nd respondent stood as guarantor for the said loan, the above
properties were mortgaged towards security for the loan. While so, on
05.10.2010, the bank issued a notice u/s.13(2) of the SARFAESI Act
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stating that M/s.Morvi Exports was liable to pay Rs.11.8 crores and M/s.
Ram Textiles was liable to pay Rs.2.09 crores and total outstanding
amount payable by the partnership firms was Rs.13.17 crores and hence,
the above said loan amounts were declared as Non-Performing Asset.
(ii) On 16.11.2010, some of the properties were sold and the
defacto complainant settled certain dues to the tune of Rs.8.17 crores for
M/s.Ram Textiles on 15.04.2011. As on 27.08.2011, 28 PCL loans were
due, to the tune of Rs.12.57 crores for M/s.Morvi Exports. Thereafter,
again one of the mortgaged properties was sold on 29.03.2012 and a sum
of Rs.1.85 crores was paid. In the meantime, the 1st accused
Manickavasagam demanded the properties, which were settled in favour
of the 2nd respondent and tortured the defacto complainant / 2nd
respondent, thereby, she left the matrimonial home and settled at Erode
from April 2012 onwards.
(iii) While so, the said Manickavasagam by colluding with the
bank officials acted against the 2nd respondent. Thereafter, the 2nd
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respondent issued a notice to the bank on 07.08.2012, 02.11.2012 and
06.12.2012 stating that the mortgaged properties are the absolute
properties of the 2nd respondent. While so, in the year 2012, the 1st
accused colluded with bank officials and M/s. Power Creating Zone
Private Limited, filed a petition before the Debt Recovery Tribunal in
S.A. No.96 of 2012 alleging that the properties belong to the 1st accused
and he borrowed money from the 2nd accused for the company and
entered into an agreement on 18.04.2012. Thereafter, the 2nd
respondent filed an application before the Debt Recovery Tribunal and
the same was disposed of by holding that the properties belong to the
defacto complainant. On 27.03.2012, the bank issued Statement of
Accounts in respect of M/s.Morvi Exports stating that a sum of Rs.
13,85,53,594.92 is due as on 27.03.2012. As on 31.12.2012, the
principal amount was paid and interest is due for Rs.2,49,38,274.89.
(iv) On 31.03.2013, 24 PCLs were discharged and for remaining 4
PCL debts, the principal amount was paid and interest amount is Rs.
49,38,274.89. In fact, from 01.09.2009 to 31.03.2013, Rs.37.55 crores
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were paid. But in the above said account, only Rs.21.32 crores was
shown credit for the said PCL debts. For the remaining amount of Rs.
16.23 crores, a current account was opened in the name of M/s.Morvi
Exports and they took a sum of Rs.2.45 crores and the same was credited
into the account opened by the 1st accused and Rs.5.14 crores was
credited with another account. Totally Rs.7.54 crores was taken from the
account of M/s. Morvi Exports. But there are no records as to what
about the above said amount taken from the account.
(v) Already a sum of Rs.8.17 crores was paid towards debts in the
name of M/s. Morvi Export and Rs.21.32 was paid for M/s. Ram Textiles
to the bank and there was a deposit of Rs.70 lakhs in the name of
M/s.Ram Textiles. Therefore, totally Rs.30.19 crores was settled on
31.03.2013 towards debts in the name of M/s.Morvi Exports. Therefore,
the interest for 4 PCL loan for a sum of Rs.49,38,274.89 was closed and
on 31.03.2013 itself, the entire loan amount for M/s.Morvi Exports was
closed. Therefore, Non-Performing Assets of both the companies were
closed and M/s.Morvi Exports’ account was declared as ‘standard Asset’
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by the bank to the CRIF.
(vi) Since already the entire amount was settled, the properties
mortgaged for that amount was discharged. Therefore, the notice issued
by the bank under SARFAESI Act on 27.09.2011 is void as on
31.03.2013. Therefore, the bank is liable to hand over the documents to
the 2nd respondent. However, in the cases in S.A. No.96/2012 pending
before the Debt Recovery Tribunal and W.P. No.35198 of 2012 before
this Court, they stated that there is a due of Rs.1.45 crores payable by
M/s.Morvi Exports as on 08.04.2013.
(vii) While the facts are being so, the 1st accused colluded with
the bank officials, in order to grab the properties of the 2nd respondent
worth about Rs.35 crores obtained a new Packing Credit loan to the tune
of Rs.4 crores in favour of sole proprietorship concern M/s.Morvi
Exports and the same was declared as Non-Performing Asset on
15.12.2014 and the same was recorded as ‘continuation of old NPA’ for
the period of 2010 and the new debt was converted as Reversal Entry.
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Thereby, the accused have forged the documents and cheated the 2nd
respondent by showing a new loan obtained on 15.12.2014 as
continuation of old loan borrowed in the year 2010 and had shown dues
as Rs.11.75 crores for NPA declared on 07.04.2010. Since the 2nd
respondent had retired from the partnership firm as early as on
01.04.2009, the subsequent loan borrowed by M/s.Morvi Exports will
not bind the 2nd respondent. Therefore, the SARFAESI proceedings
against the properties belong to the 2nd respondent are against law. The
6th accused, suppressing the loan obtained in the year 2014, stated that
there is a due of Rs.11.75 crores for the old NPA declared on 07.04.2010
through his proceedings dated 07.03.2018. Thereby, attempted to grab
the properties.
(viii) Therefore, the 2nd respondent lodged a complaint before the
Economic Offence Wing and the same was forwarded to the
Superintendent of Police, Karur and the same was forwarded to the 1st
respondent police and registered the present FIR. They conducted
investigation and filed a final report against the accused alleging that A1
to A13, in pursuance of criminal conspiracy, committed fabrication of
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false documents and electronic records, of valuable security, for the
purpose of cheating, forged the documents, used the forged documents as
genuine and falsification of accounts of the bank and committed criminal
breach of trust. A14 and A15 have abetted the commission of offences
of cheating by A1 to A13 by giving false valuation report and A16 and
A17 deleted the evidences. Thus the accused A1 to A17 had committed
offences under Sections 464, 467, 468, 466, 471, 477-A, 409 r/w 120-B
of IPC and the accused A14 to A16 had committed offence punishable
under Section 420 read with 109 of IPC. Now the petitioners have
challenged the said charge sheet on various grounds.
3. The learned Senior counsel appearing for the petitioners would
submit that the 2nd respondent, who is the defacto complainant having
failed in her attempt to get back the documents of mortgaged properties,
without discharging the entire liability to the Canara Bank arising out of
Packing Credit Loan, by initiating proceedings before the various
Forums including Civil Court, Debt Recovery Tribunal and District
Consumer Forum, had instituted the malicious prosecution by lodging a
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complaint with the 1st respondent. In fact the defacto complainant has
submitted a complaint before the Inspector General of Police, Economic
Offence Wing, Chennai and the same was forwarded to the Additional
Director General of Police, Economic Offence Wing, Chennai.
Thereafter, the complaint was forwarded to the Inspector of Police,
Economic Offence Wing, Karur by the Additional Director General of
Police, Economic Offence Wing, Chennai. On the basis of the same, the
1st respondent registered a case in Cr. No.1 of 2022 for the offences
under Sections 120-B, 420, 406, 408, 409, 466, 467, 468, 471, 477(A) of
IPC.
(i) One Venkata Subramaniam who is arrayed as 9th accused has
filed a Crl. O.P. No.7776 of 2022 before this Court to quash the FIR and
the same was dismissed by this Court vide order dated 26.04.2022. As
against the above said order, A9 has preferred a Special Leave Petition
before the Hon’ble Supreme Court of India in Special Leave to Appeal
(Crl) No.6348 of 2022 and the same is pending before the Hon’ble
Supreme Court. The petitioners 2,6,8,9 and 10 have jointly filed a
Criminal Original Petition before this Court to quash the FIR. An
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interim protection was given from taking any coercive action against the
petitioners during the investigation. The 1st respondent has issued more
than 33 summons purportedly under Section 160 and 91 of Cr.P.C. to the
various bank officials. The 1st respondent has been continuously
insisting and threatening the bank officials to produce the original title
deeds. The bank has issued E-Auction Notice dated 17.03.2022 in
pursuance of the recovery proceedings under the provisions of
SARFAESI Act. However, the 1st respondent issued a letter dated
18.04.2022 to the Chief Manager, directing him to postpone all further
proceedings in pursuance of the E-Auction Notice. The said notice is
without any authority. Thereafter, the bank officials filed a Crl O.P. No.
14954 of 2023 seeking direction forbearing the 1st respondent and the
Deputy Superintendent of Police from harassing witnesses / officials of
the Canara Bank under the guise of investigation and this Court highly
deprecated the action of the 1st respondent. When the original case was
reserved for orders, the 1st respondent proceeded with investigation and
filed the charge sheet.
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(ii) In fact, M/s. Morvi Exports has availed Packing Credit
facilities from the erstwhile Syndicate Bank, which was subsequently
amalgamated with Canara Bank. The defacto complainant and her
husband / 1st accused were partners of M/s. Morvi Exports. M/s. Ram
Textiles is the Sister concern of M/s.Morvi Exports. The defacto
complainant stood as guarantor to the said loan. The said credit facilities
were secured by way of mortgage of properties belonging to the 1st
accused, M/s.Morvi Exports and M/s. Ram Textiles. Due to the family
dispute, they were unable to conduct business, thereby, there is a default
in payment of loan. Therefore, the outstanding amount was classified as
Non-Performing Asset on 07.04.2010. The Canara Bank had initiated
proceedings under SARFAESI Act for recovery of outstanding amount
of Rs.11,08,19,798/-. Subsequently, the bank had taken physical
possession of the mortgaged properties in accordance with the
procedures under SARFAESI Act. While so, the 1st accused
Manickavasagam has proposed for One Time Settlement on behalf of the
firm and agreed to pay Rs.12.50 crores towards full and final settlement.
Accordingly, One Time Settlement was sanctioned by the bank. The 1st
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accused has also committed to pay Rs.3 crores on 09.04.2012 and the
balance on or before 30.04.2012. Subsequently, M/s.Morvi Exports
through the partner Manickavasagam had informed the bank that
M/s.Power Creating Zone Private Limited was ready and willing to
purchase the secured asset in pursuance of the sale agreement between
them. However, the 1st accused had not made any payment as stipulated
by the terms and conditions of the One Time Settlement. Therefore, OTS
Scheme was cancelled and the Canara bank proceeded with further action
under SARFAESI Act.
(iii) While so, M/s. Power Creating Zone Private Limited filed an
application in S.A. No.96 of 2012 before the Debt Recovery Tribunal-II,
Chennai and challenged the sale notice issued on the basis of sale
agreement. The Debt Recovery Tribunal-II passed an interim order on
26.10.2012 directing the applicant M/s. Power Creating Zone Private
Limited company to pay Rs.4 crores in two installments on or before
28.12.2012. Thereafter, time was extended by the Tribunal and the last
instalment was made on 22.02.2013 by the applicant M/s.Power Creating
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Zone Private Limited. The said deposited amount was adjusted towards
the liabilities of M/s.Morvi Exports. The said repayment was credited to
the loan account from the current account of M/s.Morvi Exports. The
Canara Bank had received a sum of Rs.1105 lakhs into the loan account
between 20.06.2012 and 25.02.2013 including the amount of Rs.4 crores
remitted by M/s.Power Creating Zone Private Limited as per the order of
the Debt Recovery Tribunal. Based on the above, the said amount was
credited to the NPA Packing credit account and 24 out of 28 PCL
accounts were fully closed and the balance amount was adjusted to the
remaining 4 accounts proportionately. Therefore, 4 PCL accounts were
remaining to be closed. As such, the entire liability arising out of loan
transaction was not paid and the charge created on the secured assets was
not cleared. In the meantime, the defacto complainant has filed an
impleading petition in the pending securitization application before the
Debt Recovery Tribunal and the same was allowed. Thereafter, the Debt
Recovery Tribunal dismissed the main petition and directed the bank to
refund Rs.4 crores to the applicant. In pursuance of the order passed by
the tribunal, the Canara Bank refunded Rs.4 crores to M/s.Power
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Creating Zone Private Limited by four demand drafts dated 26.11.2014.
Therefore, the above said amount of Rs.4 crores had become due to the
bank by the defaulting partnership firm. Since there was no provision in
the software to debit the amount, which was already remitted and
adjusted as against the loan amount, a new account number was assigned
to the loan account of M/s.Morvi Exports on 26.11.2014. Thus, the
outstanding number of PCL account became 5 i.e., earlier 4 outstanding
PCL accounts and one new PCL account would come to 5.
(iv) The above said facts are being falsely projected in the charge
sheet alleging that a new loan account was fraudulently opened by the
bank official after the entire loan amount was repaid by the firm and the
charge created on the secured assets in pursuance of the mortgage was
discharged / cleared, therefore, the bank was liable to handover the
documents of the mortgaged properties. It is further alleged that 1st
accused in connivance with the officials of the bank has extended new
loan by mortgaging the properties. Apart from the above, 5 Packing
Credit Loan accounts, bank has not sanctioned any other loan to
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M/s.Morvi Exports as alleged in the charge sheet. The borrowers have
not made any repayment to the loan accounts subsequent to the refund of
Rs.4 crores on 26.11.2014. However, the account numbers of the above
said 5 packing credit loan accounts have undergone changes
subsequently. The software upgradation from 6.X to 11.X happened on
13.09.2019 which has led to the changes in the account numbers. Both
the account numbers are relating to one and same account transaction.
But both the account numbers were erroneously shown in the erred CRIF
report relied on by the investigating officer referred to in the charge
sheet. The date of conversion is erroneously shown as date of sanction
and the ‘amount overdue’ is not shown for account numbers
017PCLN192560015, 017PCLN192560016, 017PCLN192560014 and
017PCLN192560013 which means that the bank does not raise any claim
under these accounts. However, it is falsely projected in the charge sheet
as if new loan accounts were opened in 2019. The above said 5 PCL
accounts were later transferred to CASA Account No.63611570001063
on 12.03.2020 in accordance with the guidelines of E-Syndicate Bank
since suit for recovery was already filed by the bank before the Debt
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Recovery Tribunal. The transfer of the above said 5 accounts is clearly
reflected in statement of account. The closing balance shown in each
account is exactly the same as the total outstanding amount shown for
each respective account in the concurrent audit report. However, this is
again falsely projected as if new current account was opened in the year
2020 on the basis of the erred CRIF report referred to in the charge sheet.
The amount overdue is not shown for the 017PCLN192560015,
017PCLN192560016, 017PCLN192560014 and 017PCLN192560013
which means the bank does not raise any claim under these accounts
separately as the accounts are already merged in the 157 account wherein
the total claim of the bank is reflected.
(v) It is falsely alleged in the charge sheet that the 3rd accused
opened a fictitious current account No.63611630000032 in the name of
M/s.Morvi Exports and unlawfully diverted the amount of Rs.2.45 crores
from the regular current account No.63611010000800. In fact, it is not a
fictitious account. It was opened for adjusting the OTS amount received
in accordance with the guidelines of the Bank. Therefore, the above said
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current account no.63611630000032 was opened for adjusting the
recovery proceeds received from M/s.Morvi Exports as prescribed by the
Board approved policy of the bank. During the investigation, the errors
in the CRIF report was brought to the knowledge of the bank by
Economic Offence Wing by summons dated 16.08.2022 to which the
bank replied on 22.08.2022 that there were errors and the matter is taken
up with CRIF through HO and the update report would be provided.
Later the rectified report was provided to EOW on 16.09.2022. However
subsequently Economic Offence Wing sent an email to CRIF with
specific direction to reinstate the erred report and not to disclose it to the
bank and as a result of which, the erred report was reinstated. However,
the CRIF has later updated the error-free report on understanding that the
pending litigation is only the quash petition filed by the bank officials.
The facts are being so, the 2nd respondent with malafide intention lodged
a false complaint and the investigation officer has also, in a biased
manner, filed the final report.
(vi) The defacto complainant already filed a Writ Petition in W.P.
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No.35198 of 2012 before this Court to direct the authorized officer of the
bank to conduct public auction in respect of 1/4th of the property,
appropriate the amount with interest and refund the amount to the Canara
Bank and to give back the rest of the property to her. The said Writ
petition was dismissed on 04.06.2013 with cost for the frivolous petition.
Thereafter, in the review application, adverse remarks made against the
Writ petitioner were deleted. Thereafter, the bank initiated further
recovery action by issuing sale notice as per the provisions of the
SARFAESI Act, against which, the defacto complainant filed a petition
in S.A. No.182 of 2015 before the Debt Recovery Tribunal and the same
is pending. Further the defacto complainant has also instituted a Suit in
O.S. No.91 of 2016 before the Principal Sub Court, Karur seeking
declaration that the loan of M/s.Morvi Exports was already discharged
and the defacto complainant is not liable to pay the loan amount and the
same is also pending. Further the defacto complainant also filed a
Consumer Complaint vide C.C. No.6 of 2019 before the District
Consumer Disputes Redressal Forum, Karur and the same was allowed.
Thereafter, the bank filed an appeal before the State Consumer Disputes
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Redressal Commission (Circuit Bench) at Madurai vide F.A. No.26
of 2020 and the same was also allowed through an order dated
23.03.2020. After having failed in all her attempts, to walk away with
the title documents of the secured assets, without discharging full
satisfaction of the loan liability, she has initiated the vexatious and
malafide prosecution by suppressing the material facts. Therefore, the
pending charge sheet is liable to be quashed.
(vii) Further, the bank has not been arrayed as an accused in this
case. As per the law laid down in Irridium India Telecom Ltd., v.
Motorola INC reported in AIR 2005 Supreme Court Cases 514 case,
the corporate body can be included as offender and the corporate body is
a person as per law. Therefore, without prosecuting the bank, the case
against the other accused is not maintainable. Whereas in a civil case
filed before the Principal Sub Court, Karur, the Syndicate Bank is a
party. Therefore, without prosecuting against the bank, the prosecution
against the other bank officials, is not maintainable. As far as the
offences are concerned, as per the charge sheet, criminal conspiracy,
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forgery, cheating and criminal breach of trust have been charged. The
petitioners are alleged to have committed offences under Section 120-B
read with other offences. While describing the overt act of each accused
in the charge sheet, it is alleged as stereo-type version saying that ‘in
pursuance of the criminal conspiracy’ at the same place at Karur in the
year 2014. But none of the witnesses has spoken about the criminal
conspiracy. There are no allegations that an agreement between the
accused. Mere statement that the petitioners conspired among
themselves is not sufficient to attract the offence under Section 120-B of
IPC.
(viii) As far as ‘cheating’ is concerned, as per the charge sheet,
Section 420 of IPC is included. To attract Section 420 of IPC, the
‘dishonest inducement to do any act’ is sine-qua-non. Two essential
ingredients of offence would be (i) to make a false statement so as to
deceive any person and (ii) fraudulently and dishonestly inducing the
person to deliver any property or to do or omit to do something. In this
case, there is no any dishonest intention. The factual details spelt out in
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the charge sheet does not exhibit element of ‘dishonest intention’
coupled with false representation or inducement. As far as ‘criminal
breach of trust’ is concerned, as per the charge sheet, Sections 406, 408
and 409 of IPC were included. To make out the offence of Criminal
Breach of Trust, a person should have been entrusted with property or
entrusted with dominion over the property, the person with whom the
property is entrusted should have dishonestly misappropriated or
converted to his own use of that property, such misappropriation,
conversion or disposal should be in violation of any direction of law in
which such trust is to be discharged. In this case, there is no any
entrustment of property or misappropriation by the petitioners or Bank.
Entrustment of original documents would not amount to entrustment of
property and the 2nd respondent herself admitted that the properties in
question were mortgaged and charge was created as against the Packing
Credit Loan availed by M/s. Morvi Exports.
(ix) As far as the offences under Sections 466, 467 and 468 of IPC
are concerned, forgery is sine-qua-non for attracting all the above said
offences. The term ‘forgery’ used in these sections is defined in Section
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463 of IPC. As per Section 463 of IPC, making any ‘false documents’
with intent to cause damage or injury to any person, or support any claim
or title, or to cause any person to part with property, or to enter into
express or implied contract would amount to forgery. ‘Making false
document’ is defined under Section 464 of IPC. To attract Section 464
of IPC, a person if made or executed a document claiming to be someone
else or authorized by someone else, he altered or tampered a document,
he obtained a document by practicing deception or from a person not in
control of his senses. But to attract those ingredients, no any averments
found either in the FIR or in the charge sheet. As far as offence under
Section 477-A of IPC is concerned, the ingredients that “the employee or
servant should have altered or destroyed or falsifies any books or records
which were in the possession of his employer and intention to defraud
the employer” are necessary. In this case, the employer of the petitioners
of Canara Bank has not made any such allegation of false document
against the petitioners. Even if the 2nd respondent has disputed the
accounts maintained by the Canara Bank in respect of the loan
transactions, it does not mean to be falsification of accounts within the
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meaning of Section 477-A of IPC. Therefore, there are no materials to
make out the case under Sections 120-B, 420, 406, 408, 409, 466, 467,
468, 471 and 477A of IPC r/w 109 of IPC as against these petitioners.
(x) The loan transaction is contractual in nature. Already the bank
has initiated SARFAESI proceedings and the litigations are pending
before the Debt Recovery Tribunal and Sub Court, Karur. While so, if
the impugned prosecution is allowed to be continued based on the false
allegations, it would be abuse of process of law. Moreover, in the year
2016, the defacto complainant had filed a Suit before the Sub Court,
Karur, but the present complaint has been preferred in the year 2021 after
6 years from the date of presentation of Plaint. Therefore, the defacto
complainant has lodged a false complaint and the Trial Court also
without considering that no prima facie materials are available to
constitute the above said offences, had taken cognizance without
applying mind. Therefore, the pending charge sheet against the
petitioners are liable to be quashed.
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(xi) In support of his arguments, the learned Senior Counsel
appearing for the petitioners has relied upon the following judgments:-
1. Delhi Race Club (1940) Ltd., and others vs. State of Uttar Pradesh
reported in (2024) 8 SCR 670.
2.Sushil Sethi and another vs. State of Arunachala Pradesh reported in
(2020) 3 SCC 240.
3.Ramesh Rajagopal vs. Devi Polymers Private Limited reported in (2016) 6
SCC 310.
4.M.N. Ojha & others vs. Alok Kumar Srivastav and another reported in
(2009) 9 SCC 682.
5.Chanchalpati Das v. State of West Bengal and others & Madhupandit Das
vs. State of West Bengal and others reported in (2023) 6 SCR 655.
6.Zandu Pharmaceutical Works Ltd & others vs. Mohd. Sharaful Haque and
another reported in (2005) 1 SCC 122.
7.Dinesh Gupta vs. State of Uttar Pradesh and another reported in (2024) 1
SCR 390.
8.Kishan Singh vs. Gurpal Singh & others reported in (2010) 8 SCC 775.
9.Paramjeet Batra vs. State of Uttarakhand and others reported in (2013) 11
SCC 673.
10.Sheila Sebastian vs. Jawaharaj and another reported in (2018) 7 SCC 581.
11.Mohammed Ibrahim & others vs. State of Bihar (2009) 8 SCC 751.
12.Babubhai vs. State of Gujarat and others reported in (2010) 12 SCC 254.
13.R.P. Kapur vs. State of Punjab reported in AIR 1960 SC 686.
14.Subhash Shirodkar vs. State of Goa in CRMAM No.116 of 2014, High
Court of Bombay at Goa.
15.TGL Groundnut Corporation vs. Agricultural Market Committee
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16.Ratna Khandelwal and another vs. Kotak Mahindra Bank in CM(M) No.
1106/2021, Delhi High Court.
4. The learned Senior Counsel appearing for the 2nd respondent /
defacto complainant would submit that based on the complaint dated
17.02.2022 lodged by the 2nd respondent, the 1st respondent registered a
case in Cr. No.1 of 2022 for the offences under Sections 120-B, 406,
408, 409, 420, 464, 466, 467, 468, 471, 477-A r/w 109 of IPC.
Thereafter, the 1st respondent conducted the investigation elaborately
and filed the final report. As per the final report, all the accused entered
into criminal conspiracy at Karur on 18.04.2012 and created false
documents and also falsely stated that A2 representing M/s.Power
Creating Zone Private Limited agreed to purchase the properties from A1
for Rs.12.50 crores. A1 and A2, knowing fully well that the properties
belong to the defacto complainant, created false documents and based on
the false documents, the 2nd accused filed a petition before the Debt
Recovery Tribunal-II, Chennai.
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(i) A3, worked as a Senior Manager, Syndicate Bank, Karur
Branch during the period from 2007 to 2013, entered into criminal
conspiracy, on 30.07.2012, dishonestly, fraudulently and unauthorizedly
opened fictitious current account bearing A/c. No.63611630000032 in
the name of M/s. Morvi Exports and unlawfully diverted the amount of
Rs.2.45 crores from the regular current account No.63611010000800 to
the said fictitious account opened by him. Without any authorization
from the above account holders, he transferred the amount of Rs.2.45
crores to the fictitious account opened by him on various dates on
29.08.2012, 03.10.2012 and 27.11.2012. The said current account No.
63611630000032 was opened without account opening form and without
customer signature. A3, knew fully well that the current account opened
was illegal act and the amount transferred by him would cause damage to
the defacto complainant.
(ii) The 4th accused was working as Chief Manager / Authorized
Officer of Syndicate Bank, Regional Office, Chennai, during the period
from 2012 to 2013, entered into criminal conspiracy, mislead the Court
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with an intention to grab the defacto complainant’s properties. He
colluded with A1 to A3 and on 13.02.2013 filed a false affidavit before
this Court in W.P. No.35198 of 2012 and falsely stated that the third
party M/s. Power Creating Zone Private Limited had so far paid Rs.10.05
crores to the bank to purchase the properties by Sale Deed dated
18.04.2012. Whereas the said company represented by A2 paid only a
sum of Rs.4.10 crores to the bank. A5 worked as Branch Senior
Manager, Syndicate Bank, Karur Branch during the period from 2014 to
2016, entered into criminal conspiracy, dishonestly and fraudulently
opened a loan account bearing No.017PCLB143300001 for Rs.4 crores
in the name of M/s.Morvi Exports without any documents and authority
and dishonestly and fraudulently disbursed loan to M/s. Morvi Exports
for Rs.4 crores on 26.11.2014. Thereafter, A5 declared the said new loan
as Non-Performing Asset on 15.04.2015 and unlawfully brought the
defacto complainant’s entire properties for sale on 20.03.2015 by
fabricating the accounts to Rs.7,61,73,579/- under e-auction as
outstanding by illegally using the old demand notice issued in the year
2011 for the loan of the year 2014 and has deliberately created false
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accounts and unauthorisedly debited amount to Rs.4 crores and taken
Demand Drafts.
(iii) A6, who was the Branch Manager in the year 2016-2018 as
the successor of A5, had joined in the criminal conspiracy and after
knowing well that M/s.Morvi Exports loans which were classified as
Non-Performing Asset on 07.04.2010 had fully been discharged and
become a standard account in March 2013 itself from his own bank
records. On 28.11.2016, he fabricated the account statements and
calculated the loan amount due from M/s.Morvi Exports as Rs.
9,81,33,252.54 for the earlier Non-Performing Asset as on 07.04.2010
and filed an application in O.A. No.1277 of 2017 before the Debt
Recovery Tribunal. A7, joined as Regional Manager, Salem during the
period 2017-18 and he dishonestly and fraudulently claimed Rs.
11,75,55,826.74 from the defacto complainant under the old loan Non-
Performing Asset on 07.04.2010, which is not in their books of accounts.
A8, General Manager of NPA Management, Syndicate Bank, Bangalore
worked in the year 2018-2020, on 30.06.2018, published one crore and
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above defaulters in their website on 30.06.2018 as per RBI guidelines.
In that list, M/s. Morvi Exports due mentioned Rs.4.53 crores as on
30.06.2018 and date of NPA as 15.12.2014. But before the District
Consumer Forum in C.C. No.6 of 2019, he falsely claimed that due in old
loan which as NPA on 07.04.2010 and he concealed the new loan which
was declared as NPA on 15.12.2014.
(iv) A9, joined as Branch Manager, Karur Branch in the period
2018-19 and entered into criminal conspiracy and dishonestly claimed by
quoting the old loan which was declared as NPA on 07.04.2010 before
the Court of law for wrongful gain from defacto complainant and based
on the false entries made by A5 and A6, A9 filed false affidavits and
statements in the case in O.S. No.91 of 2016 before the Principal Sub
Court, Karur. A10, worked as Branch Manager of Karur Branch during
the period 2019-2020 and A11 worked as Assistant General Manager,
Trichy in the year 2019-2020. Both had actively colluded in the criminal
conspiracy, while pending consumer Court Case, opened fictitious
accounts Nos.1) 017PC2B192560001, 2) 17PC2N192560013,
3) 017PCLN192560014, 4) 17PCLN192560015 and
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5) 17PCLN192560013 on 13.09.2019 and created 5 loan accounts for Rs.
21.60 crores said to have been sanctioned to the already defaulted
accounts of M/s.Morvi Exports.
(v) A12, worked as General Manager of Canara Bank Circle
Office, Madurai and he conspired with A10 and A11, directed A10 to
transfer M/s. Morvi Export account from Karur to ARM Branch, Trichy.
The Madurai circle office was under A12’s direct control. The above
transfer was took place in order to continue such manipulations. A13,
worked as Chief Manager, ARM Branch, Trichy during the period
2020-22 and he also joined criminal conspiracy. But he falsely stated
that Rs.7.05 crores only was recovered from M/s.Morvi Exports in the
period from 07.04.2010 to 31.03.2013, whereas during the said period, a
sum of Rs.14.54 crores was recovered by the bank. He intentionally
suppressed the the above said fact. He also got a false valuation
certificate from A14 and A15 by undervaluing the properties of the
defacto complainant as fair market value of Rs.13.42 crores and Rs.13.33
crores respectively in the year 2021, when actual fair market value of the
said properties is worth about Rs.50 crores. A13 intentionally got
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undervalued the properties, thereby, falsified the books of accounts and
attempted to grab and sell the property of the defacto complainant. A14
and A15 are Civil Engineers and valuer and joined as Panel Valuers of
Canara Bank. Under instigation of A13, A14 undervalued the property
and gave false valuation report. A15, a Civil Engineer, joined as a Panel
Valuer of Canara Bank, under instigation of A13, A15 undervalued the
property.
(vi) In the year 2022, after registration of FIR, during the
investigation, it was found that A16 attempted to delete the evidence in
the CRIF credit report and requested the CRIF credit registering
company Bureau to delete and suppress the loan account numbers of
2019 and 2020 details in the CRIF M/s.Morvi Exports credit report with
an intention to scree and safeguard the offenders. On 01.09.2022, A16
sent mail to CRIF customer service and attempted to delete the evidence
on direction of A12. A17, worked as Chief Manager, ARM Branch,
Trichy during the period 2022-23 and in pursuance of criminal
conspiracy, A17 falsely stated that he only recovered Rs.7.05 crores from
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M/s.Morvi Exports from 07.04.2010 to 31.03.2013. Whereas the actual
amount recovered from M/s.Morvi Exports was Rs.14.54 crores. A17
used to claim A10’s created loan card dated 18.12.2020 and he
intentionally suppressed Rs.7.49 crores from the originally repaid
amount of Rs.14.54 crores.
(vii) Therefore, all the accused have entered into criminal
activities. During the investigation, the 1st respondent collected the
materials and recorded statements from the witnesses and as per their
statements and materials collected during the investigation revealed that
there are prima facie materials as against all the accused and the same
can be tested through trial. Therefore, the present petition is liable to be
dismissed.
5. The learned Government Advocate (Criminal side) appearing
for the 1st respondent would submit that all the accused conspired
together, forged the documents, thereby, the defacto complainant lodged
a complaint. Based on the complaint, the 1st respondent registered a
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case in Cr. No.1 of 2022 for the offences 120-B, 420, 406, 408, 409, 466,
467, 468, 471 and 477(A) of IPC. The 1 st respondent investigated the
case elaborately and filed the final report. As per the final report, there
are prima facie materials available to constitute the offences as against
the accused. Therefore, it is matter of trial and the petitioners have to
face the trial. In other aspects, adopted the arguments of the 2nd
respondent. Therefore, the petition is liable to be dismissed.
6. Heard both sides and perused all the materials available on
record.
7. According to the prosecution, all the accused conspired
together and in order to cheat the defacto complainant, they created false
documents, committed forgery and also falsified the accounts. The 1 st
accused and the defacto complainant are husband and wife. They along
with their daughters started Partnership Firms in the name of M/s.Morvi
Exports and M/s. Ram Textiles and obtained loan for a sum of Rs.6
crores in the name of M/s.Ram Textiles and Rs.16 crores in the name of
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M/s.Morvi Exports and the properties in the name of M/s.Ram Textiles
and the 1st accused were mortgaged for the purpose of security to the
above said loan. Thereafter, during pendency of loan, a Settlement Deed
was executed by the 1st accused in favour of the defacto complainant / 2 nd
respondent. In the meantime, some of the amounts were settled to the
bank. Due to non-payment of the remaining amount, the said loans were
declared as Non-Performing Asset. In the meantime, there was a
misunderstanding between the 1st accused and the 2nd respondent. The
2nd respondent / defacto complainant along with her daughters were
retired from the Partnership firms on 01.04.2009. These are the admitted
facts.
8. After retirement from the partnership firms by the 2nd
respondent and her daughters and after execution of a Settlement Deed in
favour of the 2nd respondent, the bank initiated SARFAESI Proceedings
to recover the debts. In the meantime, the 1 st accused entered into an
agreement with M/s.Power Creating Zone Private Limited, represented
by the 2nd accused, in respect to the properties already settled in favour
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of the 2nd respondent, to settle the outstanding dues to Syndicate Bank,
thereby, the 1st accused approached the Syndicate Bank for One-Time
Settlement. At that time, the amount due to the bank is Rs.11.05 crores.
Thereafter, the bank also agreed for the one time settlement, however, the
1st accused failed to pay the said amount within the stipulated time,
hence, the One-Time Settlement was cancelled. In the meantime, the 1st
accused paid a sum of Rs.3 crores to the bank on 09.04.2012 and the
balance amount has to be paid on or before 30.04.2012. Thereafter, the
2nd accused approached the Debt Recovery Tribunal, Chennai
challenging the SARFAESI notice issued by the bank under the
SARFAESI Act through a S.A. No.96 of 2012 and the Tribunal also
directed M/s.Power Creating Zone Private Limited to pay a sum of Rs.4
crores to the bank and the same was adjusted for the loan amount.
During the pendency of the proceedings before the Debt Recovery
Tribunal and based on the order of the Debt Recovery Tribunal, the loan
account of M/s. Morvi Exports was closed. Thereafter, the defacto
complainant approached the Debt Recovery Tribunal and stated that the
properties were already settled to the defacto complainant by the 1 st
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accused and thereby, the 1st accused has no any right to enter into an
agreement with M/s.Power Creating Zone Private Limited and thereafter,
the Debt Recovery Tribunal dismissed the application filed by M/s.Power
Creating Zone Private Limited and directed the bank to refund Rs.4
crores to the account of M/s.Power Creating Zone Private Limited.
Thereafter, again the bank proceeded for the recovery of the amount
under SARFAESI Act. Thereafter, since the loan account of M/s.Morvi
Exports was already closed, a new account was assigned in the name of
M/s. Morvi Exports and the amount was debited from the loan account of
M/s.Morvi Exports.
9. According to the petitioners, since already the loan amount was
settled and the account was closed and, in the meantime, based on the
order of the Debt Recovery Tribunal, in order to debit the amount paid by
M/s.Power Creating Zone Private Limited, they assigned a new account
in the name of M/s. Morvi Exports and there is no any intention to create
a new account to cheat the 2nd respondent. Since the accounts were
computerised and the same were closed, thereafter there is no possibility
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to reopen the same account. Thereby, they assigned a new number to the
above said account of M/s. Morvi Exports and the amount was shown as
outstanding balance along with interest. The above said facts are to be
tested in the trial.
10. Further, according to the prosecution, the bank opened new
PCL accounts. But according to the petitioners, out of 28 PCL debts,
already 24 PCL loan accounts were closed. 4 PCL debts are only
outstanding. In the meantime, based on the order of the Debt Recovery
Tribunal, the loan already settled was also reopened and thereby, totally
5 PCL debts are pending and for administrative purpose and upgradation
of software version, the changes were made. The above said explanation
of the petitioners cannot be decided through this quash petition and it
needs elaborate trial.
11. According to the prosecution, the 3rd accused opened fictitious
current account bearing No.63611630000032 in the name of M/s.Morvi
Exports and unlawfully diverted the amount of Rs.2.45 crores from the
regular current account No.63611010000800. But the petitioners
explained that it was opened for discharging the One-Time Settlement
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amount received as per the order of the Debt Recovery Tribunal in
accordance with the guidelines of the bank. The petitioners have also
relied some documents to prove the same. The above said documents
have to be tested through trial. Therefore, it is not appropriate to quash
the charge sheet as against all the petitioners and there are prima facie
materials available to proceed with the case as against some petitioners.
Therefore, all the grounds, raised by the petitioners against whom prima
facie materials are available, have to be tested before the trial Court
including the vexatious and malicious prosecution.
12. However, the investigation officer conducted the
investigation in a mechanical manner and without applying his mind, he
simply included all the persons who are all dealt with the bank accounts
of M/s.Morvi Exports.
13. As far as the charges against A3 and A5 are concerned, the 3rd
accused opened the fictitious current account and diverted the amount of
Rs.2.45 crores from the regular account to the said fictitious current
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account and A5 dishonestly and fraudulently opened the loan account for
Rs.4 crores in the name of M/s.Morvi Exports and fraudulently taken 4
demand drafts each for Rs.1 crore from the customers current account
without any application or cheque. But according to the petitioners,
since the loan account was already closed, they assigned new number to
credit the money to M/s. Power Creating Zones Private Limited, as per
the order of the Debts Recovery Tribunal. Therefore, those allegations
are to be tested through trial.
14. As far as the charges levelled against A4 are concerned, A4
filed a false affidavit before the High Court of Madras in W.P. No.35198
of 2012 by falsely stating that the 3rd party M/s.Power Creating Zone
Private Limited had paid Rs.10.05 crores to the bank to purchase the
properties by a Sale Deed dated 18.04.2012, whereas the said company
M/s.Power Creating Zone Private Limited did not pay Rs.10.05 crores to
the bank and paid only Rs.4.10 crores. Therefore, he filed a false
affidavit before the Court. As far as these allegations are concerned, they
are only vague allegations. Even assuming that a false affidavit is filed, a
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complaint has to be lodged as per Section 195 of Cr.P.C., but no such
procedures had been followed in this case as against A4. Merely filing
an affidavit before the Court, would not amount to fabrication of
documents and falsifying accounts. Moreover already the said Writ
petition was disposed of by the High Court and this Court made adverse
remarks against the defacto complainant and thereafter, in the Review
Petition expunged the adverse remarks. Therefore, there are no materials
as against A4 to constitute offences.
15. As far as charges against A6 are concerned, during the year
2016-18, A6 as the successor of A5, had joined in the criminal
conspiracy and knowing fully well that M/s.Morvi Exports loans which
were classified as NPA on 07.04.2010 had fully been discharged and
become a standard account in March 2013 itself. However, he filed an
application before Debts Recovery Tribunal and deliberately concealing
the loan disbursed and NPA as on 2014 details, he fabricated the
accounts statement in the NPA loan as of 2010 and falsely filed the said
O.A. No.1277 of 2016 before the Debts Recovery Tribunal to recover
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money from the defacto complainant. Therefore, he falsified the
accounts. Though the entire amount was settled to the bank and
thereafter due to the order of the Debts Recovery Tribunal, Chennai, the
amount was returned to M/s. Power Creating Zone Private Limited,
thereby there was a due. Therefore, based on the previous documents,
A6 would have acted and merely filing a petition before the Debts
Recovery Tribunal, that too based on the documents available in the
bank, it will not amount to commission of offence. Therefore, there are
no materials as against A6 to constitute any offence.
16. As far as A7 is concerned, charge against him is that he
dishonestly and fraudulently claimed a sum of Rs.11,75,55,826.74 from
the defacto complainant under the old loan NPA of 07.04.2010, which is
not in their Books of Accounts. Therefore, he fabricated the accounts and
falsified the books of accounts and fabricated records using the official
position on his capacity as Regional Manager and the said account was
controlled by him. As far as these allegations are concerned, he was the
incharge from the period 2017-18 and the alleged accounts were opened
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in the year 2014 itself and he is only incharge from 2017-18 and based
on the accounts, he would have acted. There are no records to show that
he only fabricated the accounts and even according to the prosecution
case, the accounts were created in the year 2014 itself. This accused A7
had only joined as Regional Manager in the year 2017-18. Therefore, he
cannot be roped into the criminal case, only because he is the controlling
authority . Therefore, there are no materials as against A7.
17. As far as A8 is concerned, the allegation is that he worked as
General Manager of NPA Management, Syndicate Bank, Bangalore and
he only published the defaulters’ list in the website on 30.06.2019, where
the name of M/s.Morvi Exports due was mentioned as Rs.4.53 crores as
on 30.06.2018 and the date of NPA is 15.12.2014, but A8, before DRT,
filed a false affidavit and therefore, he has been roped into this case. The
investigation officer without applying his mind, has roped the persons,
who are all filed petitions before the competent authority, unnecessarily
by concluding that they falsified the accounts. As far as filing of
affidavit is concerned, already the concerned Courts have disposed all
the matters by accepting the affidavits and as far as filing of affidavit
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before DRT, Madurai is concerned, it is for him to prove the same before
the concerned Court and as far as affidavit before Debts Recovery
Tribunal, Chennai is concerned, already the matter has been disposed of
by the competent authorities and therefore, it cannot be reopened by way
of this Criminal cases, that too without any records. Therefore, there are
no materials against A8 to rope him into the criminal case.
18. As far as charges against A9 are concerned, the allegation is
that he joined duty during the period 2018-19 and he dishonestly claimed
and wrongly quoted the old loan which was declared as NPA of
07.04.2010 and thereby, falsified the accounts and filed affidavit before
the Court in O.S.No.91 of 2016. Since the case is pending before the
Principal Sub Court, Karur, at this stage, it cannot be decided that he
filed a false affidavit and false statements as he joined duty only in the
year 2018-19. As per the prosecution, the above said offences took place
in the year 2012-14. Therefore, merely because of filing affidavit before
the concerned Court, would not amount to commission of offence. Even
if any affidavt filed, it is for the concerned Court to decide as to whether
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the affidavits are false or not. Therefore, there are no any materials
against A9 to rope him into this criminal case.
19. The allegation as against A10 is concerned, he worked as a
Branch Manager at Karur during the year 2019-2020 and A11 worked as
Assistant General Manager at Trichy during the year 2019-2020 and both
colluded and entered into criminal conspiracy, while pending Consumer
Court case No.6/2019, A10 fraudulently opened fictitious accounts in the
name of M/s.Morvi Exports. All the above loans were said to have been
disbursed unauthorizedly without any loan opening forms. Therefore, it
needs elaborate trial and it has to be tested before the competent Court
and hence, A10 has to face the trial.
20. As far as the charges levelled against A11 are concerned, he
fabricated the documents and account statement of M/s.Morvi Exports
and A11 obtained false certificate from the Auditor for the outstanding
amount of Rs.13,55,36,258.55, which is not in their Bank Books of
Accounts for the loan NPA on 07.04.2010. It is also subsequent to the
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period of 2012-2014 during which the offences are said to have been
taken place. Therefore, he cannot rope into the criminal case, merely
because he obtained statement from the Auditor for the outstanding dues.
21. As far as A12 is concerned, the allegation is that he worked as
General Manager of Canara Bank Circle office, Madurai in the year
2020. The charge against him is that he joined together in criminal
conspiracy with A10 and A11. A11 relieved from Trichy Regional
Office on 10.07.2020 and joined as Assistant General Manager in
Madurai Circle Office and he directed A10 to transfer M/s. Morvi
Exports accounts from Karur to ARM Branch, Trichy. The Madurai
Circle Office is under A12’s direct control. Therefore, he has been roped
into this criminal case, only because, the account was transferred from
one branch to another branch. Without any material it cannot be
construed as he had malafide intention to transfer the accounts to grab
the property. Therefore, there are no materials as against A12 to rope
him into this criminal case.
22. As far as A13 is concerned, he was the Chief Manager, ARM
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Branch Trichy during the period 2020-2022. The allegation as against
A13 is that he also joined together with A10 to A12 and falsely stated
that Rs.7.05 crores only was recovered. But actually Rs.14.54 crores was
recovered by the bank from M/s.Morvi Exports, but A13, had
intentionally suppressed Rs.7.49 crores. Since the major offences took
place from 2012-2014, this A13 worked only during the period 2020-22,
he cannot be roped into this criminal case. As far as the calculation of
amounts is concerned, it can be decided by the competenet Court where
the claims are pending. Therefore, there are no records as against A13
and he cannot be roped into the criminal case.
23. As far as A14 and A15 are concerned, no any petition has
been filed by them.
24. As far as A16 is concerned, charge against A16 is that he
attempted to delete the evidence in the CRIF Credit report and he
requested the CRIF Credit registering company bureau to delete and
suppress the loan account numbers of 2019 and 2020 details in the CRIF
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M/s.Morvi Excort credit report with an intention to screen and safeguard
the offenders. On 01.09.2022, A16 sent an email to CRIF customer
service and attempted to delete the evidence under the direction of A12.
Based on the request of A16, CRIF deleted the report and A16 obtained
the modified report from the CRIF and submitted to the police.
Therefore, he abetted the commission of offence of cheating. Even as
per the prosecution case, as per the request made by A12, A16 made
corrections in the CRIF and all the alleged offences were committed from
2012 to 2014. Therefore, mere correcting the errors will not constitute
any offence. Without any materials that the petitioner/A16 had intention
and acted, he cannot be roped into this case.
25. As far as A17 is concerned, the charge is for the occurrence in
the year 2014. But A17 worked as Chief Manager, ARM Branch, Trichy
during the period 2022 to 2023. According to the prosecution, he
entered into criminal conspiracy with A10 to A13 and A16. The amount
of Rs.14.54 crores was actually recovered by the bank from M/s.Morvi
Exports between the period from 07.04.2010 to 31.03.2013. But A17
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falsely stated that only Rs.7.05 crores was recovered from M/s.Morvi
Exports. Therefore, he committed the offence. As already discussed by
this Court in the previous paragraphs, the offences took place between
the period of 2012 and 2014 and A17 worked from 2022-23 and based
on the records, he had shown the accounts and it cannot be considered
that he committed offences. Therefore, he cannot be roped into a
criminal case.
26. The Investigation Officer without any materials included all
the bank officials, who were all dealing with the accounts of M/s.Morvi
Exports, without applying his mind in a mechanical manner and the
entire investigation reveals his non-application of mind. Therefore, the
petitioners 4, 6 to 9, 11,12,13, 16 and 17 need not face the ordeal of trial
without any prima facie materials against them.
27. The learned counsel appearing for the petitioners would
submit that Sections 420 and 406 of IPC cannot co-exist simultaneously
on same set of facts, but the prosecution charged for the offences under
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Sections 420 and 406 of IPC and relied the judgment of Hon’ble Supreme
Court in Delhi Race Club (1940) Ltd., and others vs. State of Uttar Pradesh
reported in (2024) 8 SCR 670, wherein the Hon’ble Supreme Court held that
in a case of Criminal Breach of Trust, the offender is lawfully entrusted
with the property and he dishonestly misappropriated the same. Whereas
in a case of cheating, the offender fraudulently or dishonestly induced a
person by deceiving him to deliver any property, in such a situation, both
the offences cannot co-exist simulataneously. In the case on hand, there
are so many accused and as against whom, the particular offence is made
out has to be decided at the time of framing charges as against the
petitioners against whom prima facie materials available and there are
series of continuing offences, therefore, the said case law will not be
applicable to the present facts of the case.
28. Further, the learned Senior counsel appearing for the
petitioners would submit that the Bank has not been included as accused
and without impleading the Bank as one of the accused, the prosecution
against the Bank officials is not maintainable and he relied the judgment
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of Hon’ble Supreme Court in Sushil Sethi and another vs. State of
Arunachala Pradesh reported in (2020) 3 SCC 240.
On a careful perusal of the said judgment, it is clear that in the
absence of specific allegations against the Managing Director of
vicarious liability, in the absence of company being arrayed as a party, no
proceedings can be initiated against such Managing Director or any
officer of a company. In the case on hand, there are specific allegations
as against the Bank officials and all the offences are on their individual
capacity, therefore, the said case law will not be applicable to the present
facts of the case.
29. Further the learned Senior counsel for the petitioner would
submit that the allegations are as a part of ongoing disputes between the
1st accused and the defacto complainant and the offences are inherently
improbable and there is no sufficient ground to proceed against the
accused. To support his contention relied the judgments in Ramesh
Rajagopal vs. Devi Polymers Private Limited reported in (2016) 6
SCC 310 and M.N. Ojha & others vs. Alok Kumar Srivastav and
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another reported in (2009) 9 SCC 682.
On a careful perusal of the said judgments, it is clear that whether
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., the High Court can quash the proceedings. In the case on hand,
there are allegations to constitute the offences as against some accused.
30. The learned Senior counsel appearing for the petitioners
would further submit that in this case, there are allegations in respect of
falsification of accounts and creation of documents, but there was no
expert opinion obtained or scientific evidence collected on the
documents allegedly forged to show as to by whom, when and how the
documents were forged. To support his contention, he relied the
judgment in Chanchalpati Das v. State of West Bengal and others &
Madhupandit Das vs. State of West Bengal and others reported in
(2023) 6 SCR 655.
On a careful perusal of the said judgment, it is clear that if there
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was no expert opinion obtained or scientific evidence collected on the
documents allegedly forged to show as to by whom, when and how the
theft of vehicle and forgery of documents were committed. Under the
circumstances, allowing such prosecution to continue would not only be
an empty formality but would be gross wastage of Court’s precious time.
In the case on hand, there are so many offences charged and there are
prima facie materials available as against some accused, therefore, the
said case law will not be applicable to the present facts of the case.
31. The learned Senior counsel would further submit that the
defacto complainat earlier filed Writ petition and filed a Suit before the
Principal Sub Court, Karur and also filed a petition before the Debt
Recovery Tribunal and filed a complaint before the Consumer Redressal
Forum and after failing in all the above attempts, she filed this complaint
with malafide intention and she has not come to the Court with clean
hands, therefore, the charge sheet is to be quashed. In support of his
contention, he relied upon judgments in (i) Zandu Pharmaceutical
Works Ltd & others vs. Mohd. Sharaful Haque and another
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reported in (2005) 1 SCC 122, (ii) Dinesh Gupta vs. State of Uttar
Pradesh and another reported in (2024) 1 SCR 390, (iii) Kishan
Singh vs. Gurpal Singh & others reported in (2010) 8 SCC 775, and
(iv) Paramjeet Batra vs. State of Uttarakhand and others reported in
(2013) 11 SCC 673.
On a careful perusal of the above said judgments, it is clear that the
parties approaching the Court should come with clean hands, in case of
malicious prosecution and the complainant deliberately and
unnecessarily had caused substantial delay and had been waiting for
opportune moment for initiating false and frivolous litigation, it amounts
to abuse of process of law and those prosecution can be quashed by the
High Court.
32. The learned Senior counsel also relied upon the judgments in
(i) Sheila Sebastian vs. Jawaharaj and another reported in (2018) 7
SCC 581, (ii) Mohammed Ibrahim & others vs. State of Bihar (2009)
8 SCC 751, (iii) Babubhai vs. State of Gujarat and others reported in
(2010) 12 SCC 254, (iv) R.P. Kapur vs. State of Punjab reported in
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AIR 1960 SC 686, (v) Subhash Shirodkar vs. State of Goa in
CRMAM No.116 of 2014, High Court of Bombay at Goa, (vi) TGL
Groundnut Corporation vs. Agricultural Market Committee
reported in 1985 (1) APLJ 368 (AP) / 1984 SCC OnLine AP 183 and
(vii) Ratna Khandelwal and another vs. Kotak Mahindra Bank in
CM(M) No.1106/2021, Delhi High Court.
On a careful perusal of the above said judgments, it is clear that to
make out a case for forgery, mere execution of a document by claiming
the property being sold was executant’s property did not amount to
commission of offence under Sections 467 and 471 of IPC, even if title
of property did not vest in the executant. Further, from the above
judgments, it is clear that the investigation into a criminal offence must
be free from objectionable features or infirmities which may legitimately
lead to a grievance on the part of the accused that investigation was
unfair and carried out with an ulterior motive and fair investigation is
also part of constitutional rights guaranteed under Articles 20 and 21 of
the Constitution of India and when a mortgage was created in favour of a
Bank, without consenet of the Bank, if any document is executed by the
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Mortgagor, the same can be defeat the rights of the Bank as Mortgagee in
respect of the said property. In the case on hand, there is no ‘forgery’
charge in respect of the mortgage deed. Since there are some materials
available as against some accused, it is for the trial Court to decide as to
what offences are made out against the particular accused. It is true that
the investigation officer has not conducted fair investigation, but it is the
matter of trial for the accused against whom prima facie materials are
available and the matter is pending before Civil Court in respect of the
mortgage.
33. Therefore, as discussed supra, there are materials to proceed
with the case further as against A3, A5 and A10 and it is the matter of
trial and therefore, they have to face the trial.
34. As against A4, A6 to A9, A11, A12, A13, A16 and A17, there
are no materials to constitute offences as against them.
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35. In view of the above discussions, this Court is of the opinion
that this petition has to be allowed in part and charge sheet has to be
quashed as against A4, A6 to A9, 11, 12, 13, 16 and 17.
36. Accordingly, the Criminal Original Petition is partly allowed
and
(i) the charge sheet pending in C.C. No.255 of 2024 on the file of
the Chief Judicial Magistrate Court, Karur is quashed against the
petitioners 2, 4 to 7 and 9 to 13 / the accused 4, 6 to 9, 11, 12, 13, 16 and
17.
(ii) With respect to the accused 3, 5 and 10, this Criminal Original
Petition is dismissed. Consequently, the connected miscellaneous
petitions are closed.
16.07.2025
[2/2]
index: Yes/No
Internet: Yes/No
Speaking/Non Speaking order
mjs
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To
The State of Tamil Nadu,
The Inspector of Police,
Economic Offences Wing-II,
Karur Town & District.
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P.DHANABAL,J
mjs
Pre-delivery Judgment in
CRL O.P.(MD) No.9731 of 2024
16.07.2025
[2/2]
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