Andhra Pradesh High Court – Amravati
Appasani Pattabhi Ramarao, vs Syndicate Bank, on 3 December, 2024
APHC010139102022
IN THE HIGH COURT OF ANDHRA
PRADESH
AT AMARAVATI
(Special Original Jurisdiction)
[3396]
TUESDAY, THE THIRD DAY OF DECEMBER
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HONOURABLE SMT.JUSTICE VENKATA JYOTHIRMAI PRATAPA
CRIMINAL PETITION NO: 2312/2022
Between:
1. APPASANI PATTABHI RAMARAO,,MANAGING DIRECTOR M/S.
BABY FOOD PRODUCTS PVT. LTD., D.NO.43-15-5, 1ST FLOOR,
SUBBALAKSHMINAGAR, VISAKHAPATNAM.
2. TALASILA CHOLA BHUPATI,, S/O.RAMA RAO, HINDU, AGED ABOUT
YEARS, R/O. 43-15-5, IST FLOOR, SUBALAKSHMINAGAR,
VISAKHAPATNAM.
...PETITIONER/ACCUSED(S)
AND
1. SYNDICATE BANK, RAWAN COMMERCIAL COMPLEX, MAIN ROAD,
DABA GARDENS, VISAKHAPATNAM, REP. BY INCHARGE, BRANCH
HEAD/MANAGER.
2. THE STATE OF ANDHRA PRADESH, REP. BY ITS PUBLIC
PROSECUTOR, HIGH COURT BUILDINGS, AMARAVATHI.
...RESPONDENT/COMPLAINANT(S):
Counsel for the Petitioner/accused(S):
1. RAJA REDDY KONETI
Counsel for the Respondent/complainant(S):
1. PUBLIC PROSECUTOR (AP)
The Court made the following:
ORDER:
The instant petition under Section 482 of Code of Criminal Procedure,
19731 has been filed by the Petitioners/Accused Nos.1 and 3, seeking
quashment of the proceedings against them in C.C.No.620 of 2019 on the file
of the Court of II Additional Chief Metropolitan Magistrate, Visakhapatnam City
for short „Cr.P.C‟
1
2
for the offence under Sections 420, 471 and 120B read with 34 of the Indian
Penal Code, 18602.
2. The case of the Prosecution, in brief, is as follows:
a) Accused Nos.1 being the Managing Director and Director of
M/s.Baby Food Products Private Limited, Visakhapatnam obtained loan of
Rs.3.85 Crores from the Respondent No.1- Bank, for the construction of cold
storage for agricultural purpose, by mortgaging the land of an extent of
Ac.1.28 cents in Sy.No.20-18 of Mushidipalli Village, S.Kota Mandal,
Vizianagaram District and 2500 square yards of vacant land situated in
Sy.No.111/1 of Madhurawda Village, GVMC Limits and Accused No.3 stood
as guarantor for the said loan. The Bank has released an amount of
Rs.2,59,84,162/- and the same has to be paid in 84 EMIs @ Rs.3,95,000/- per
month.
b) Subsequently, the Firm has constructed the cold storage in the
land which is not mortgaged to the Bank and actually semi completed cold
storage is erected in Sy.Nos.78/17, 18, 19, 20, 21, 22 and 23 instead of the
land mortgaged to the Bank. Further, the vacant site in Sy.No.111/1
admeasuring 2500 sq. yards was under strong legal claim from M/s.Suryaveni
Constructions Private Limited. As the borrower deliberately mortgaged the
disputed property and also constructed cold storage in a different survey
number, Respondent No.1- Bank lodged a complaint against all the Accused,
which was registered as a case in Crime No.366 of 2012 on the file of II Town
for short „IPC‟
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3Police Station, Visakhapatnam City and after completion of investigation filed
charge sheet for the offence under Sections 420, 471 and 120 B read with 34
IPC, which was numbered as C.C.No.620 of 2019.
c) Aggrieved thereby, Petitioners/Accused Nos.1 and 3 filed the
present petition seeking quashment of the proceedings against them.
Arguments Advanced at the Bar
3. Heard Sri Raja Reddy Koneti, learned counsel for the Petitioners,
Ms.K.Priyanka Lakshmi, learned Assistant Public Prosecutor for the
Respondent No.2/State. Despite service of notice, none appeared for
Respondent No.1.
4. Learned counsel for the Petitioners, while admitting the availment of
loan by the Petitioners, would submit that the allegations mentioned in the
complaint do not make out a case against the Petitioners for the alleged
offence. Learned counsel would submit that, even according to the
Prosecution, more than 35 installments out of 84 installments were paid by the
Petitioners and subsequently, the loan was cleared as One Time Settlement
by selling away the vacant site of 2500 square yards and the said loan
account was also closed. Learned counsel would further submit that the
Petitioners never committed any offence, as alleged by Respondent No.1-
Bank and hence, prayed for quashment of proceedings against the
Petitioners/Accused Nos.1 and 3.
5. Learned Assistant Public Prosecutor would submit that there are
specific allegations against the Petitioners which would attract the offence
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alleged against them. At this stage, the proceedings against the Petitioners
cannot be quashed. Hence, prayed for dismissal of the petition.
Point for determination:
6. Having heard the submissions of the learned counsel representing both
the parties, now the point that would emerge for determination is:
Whether there are any justifiable grounds for quashment of
the proceedings against the Petitioners in C.C.No.620 of
2019 on the file of the Court of II Additional Chief Metropolitan
Magistrate, Visakhapatnam CityDetermination by the Court:
7. A bare perusal of Section 482 makes it clear that the Code envisages
that inherent powers of the High Court are not limited or affected so as to
make orders as may be necessary; (i) to give effect to any order under the
Code or, (ii) to prevent abuse of the process of any Court or, otherwise (iii) to
secure ends of justice. A court while sitting in Section 482 jurisdiction is not
functioning as a trial court, court of appeal or a court of revision. It must
exercise its powers to do real and substantial justice, depending on the facts
and circumstances of the case. These powers must be invoked for compelling
reasons of abuse of process of law or glaring injustice, which are against
sound principles of criminal jurisprudence.
8. Specific circumstances warranting the invocation of the provision must
be present. The decision rendered by the Hon‟ble Apex Court in State of
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Haryana and others v. Bhajanlal and others3 is considered as the guiding
torch in the application of Section 482 Cr.P.C. At paras 102 and 103, the
circumstances are spelt out as follows:
“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 ends 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 Section 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.
3
AIR 1992 SC 604
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(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.
103. We also give a note of caution to the effect that the power
of quashing a criminal proceeding should be exercised very
sparingly and with circumspection and that too in the rarest of
rare cases; that the court will not be justified in embarking upon
an enquiry as to the reliability or genuineness or otherwise of
the allegations made in the FIR or the complaint and that the
extraordinary or inherent powers do not confer an arbitrary
jurisdiction on the court to act according to its whim or caprice.”
(emphasis supplied)
9. In the case on hand, it is alleged that, Petitioner/Accused No.1, who is
the Managing Director and Accused No.2, who is the Director of M/s.Baby
Food Products Private Limited, Visakhapatnam obtained loan of
Rs.2,59,84,162/- from the Respondent No.1- Bank, for the construction of cold
storage, by mortgaging the land of an extent of Ac.1.28 cents in Sy.No.20-18
of Mushidipalli Village, S.Kota Mandal, Vizianagaram District and 2500 square
yards of vacant land situated in Sy.No.111/1 of Madhurawda Village, GVMC
Limits and Accused No.3 stood as guarantor for the said loan. The said loan
has to be repaid in 84 EMIs @ Rs.3,95,000/- per month. Stating that the
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borrower deliberately mortgaged the disputed property and also constructed
cold storage in the land which was under strong legal claim from
M/s.Suryaveni Constructions Private Limited, the crime was registered.
10. It is the contention of the Petitioners that, they had no intention to cheat
the Bank at any point of time. The allegation that the collateral security
appears to be a fake one, is not tenable since there is a Sale Deed in favour
of the Company and no legal proceedings or any other dispute was raised by
anybody with regard to the said property. There are no ingredients to attract
the alleged offence against the Petitioners.
11. Admittedly, it is not the case of Respondent No.1- Bank that the
borrower obtained the loan by depositing forged and fabricated documents, as
a security and thereafter committed default in payment of the loan and thereby
cheated the Bank. It is the contention of the Petitioners that, subsequent to
the lodging of the present complaint, the entire loan amount was cleared
under “One Time Settlement” scheme. A bare perusal of the letter addressed
by Petitioner/Accused Nos.3 to Respondent No.1-Bank, dated 29.06.2019
would clearly show that they have cleared the loan amount under the said
scheme and the same was acknowledged by the Bank, vide letter dated
16.08.2019 addressed to Accused Nos.1 to 3 and the Bank also issued No
Due Certificate to them.
12. At this juncture it is relevant to refer to Sections 415 and 420 IPC which
read as follows:
“415. Cheating.–Whoever, by deceiving any person,
fraudulently or dishonestly induces the person so deceived to
8deliver any property to any person, or to consent that any
person shall retain any property, or intentionally induces the
person so deceived to do or omit to do anything which he
would not do or omit if he were not so deceived, and which act
or omission causes or is likely to cause damage or harm to that
person in body, mind, reputation or property, is said to “cheat”.
420. Cheating and dishonestly inducing delivery of
property.–Whoever cheats and thereby dishonestly induces
the person deceived to deliver any property to any person, or to
make, alter or destroy the whole or any part of a valuable
security, or anything which is signed or sealed, and which is
capable of being converted into a valuable security, shall be
punished with imprisonment of either description for a term
which may extend to seven years, and shall also be liable to
fine.”
13. Perusal of the above Sections would reveal that, to hold a person guilty
of the offence of cheating, it has to be shown that his intention was dishonest
at the time of making the promise. In the present case, the material available
on record would show that there was no intention of the Petitioners from the
inception to cheat Respondent-Bank. Since the Petitioners/Accused Nos.1
and 3 have discharged the entire loan amount and nothing is due to
Respondent-Bank, criminal liability cannot be attributed to them. Even if the
allegations made in the complaint are taken at their face value and accepted
in their entirety, they do not prima facie constitute any offence or make out a
case against the Petitioners/Accused Nos.1 and 3. In such circumstances,
this Court is of the view that there are no tenable grounds to continue the
proceedings against the Petitioners/Accused Nos.1 and 3 and as such, the
same are liable to be quashed.
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14. Accordingly, the Criminal Petition is allowed, quashing the proceedings
against the Petitioners/Accused Nos.1 and 3 in C.C.No.620 of 2019 on the
file of the Court of II Additional Chief Metropolitan Magistrate, Visakhapatnam
City for the offence under Sections 420, 471 and 120B read with 34 IPC.
Pending miscellaneous petitions, if any, shall stand closed.
_____________________________________
JUSTICE VENKATA JYOTHIRMAI PRATAPA
Date:03.12.2024
Dinesh
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HON’BLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA
CRIMINAL PETITION No.2312 of 2022
Dt.03.12.2024
Dinesh