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2024 (10) TMI 1212 - SC - Income TaxInadvertent error on the part of the bank officials ignoring restraint orders - FIR registered for the offences punishable under the different provisions of the IPC on certain officials of the appellant-bank - continuation of the criminal proceedings against the appellant-bank - mens rea of the officials of the appellant-bank or failure to disclose the commission of any offence - restraint order was imposed in respect of Bank Lockers, Bank Accounts and Fixed Deposits - As submitted that access of the bank locker given is in violation of Section 132(2) of the IT Act would attract the offence under Section 409 read with Section 405 of the IPC HELD THAT - In the present case, the FIR does not show that the appellant-bank had induced anyone since inception. For bringing out the offence under the ambit of Section 420 IPC, the FIR must disclose the following ingredients (a) That the appellant-bank had induced anyone since inception; (b) That the said inducement was fraudulent or dishonest; and (c) That mens rea existed at the time of such inducement. The appellant-bank is a juristic person and as such, a question of mens rea does not arise. However, even reading the FIR and the complaint at their face value, there is nothing to show that the appellant-bank or its staff members had dishonestly induced someone deceived to deliver any property to any person, and that the mens rea existed at the time of such inducement. As such, the ingredients to attract the offence under Section 420 IPC would not be available. For bringing out the case under criminal breach of trust, it will have to be pointed out that a person, with whom entrustment of a property is made, has dishonestly misappropriated it, or converted it to his own use, or dishonestly used it, or disposed of that property. In the present case, there is not even an allegation of entrustment of the property which the appellant-bank has misappropriated or converted for its own use to the detriment of the respondent No.5. As such, the provisions of Section 406 and 409 IPC would also not be applicable. Since there was no entrustment of any property with the appellant-bank, the ingredients of Section 462 IPC are also not applicable. Likewise, since the offences under Section 206, 217 and 201 of the IPC requires mens rea, the ingredients of the said Sections also would not be available against the appellant-bank. FIR/complaint also does not show that the appellant-bank and its officers acted with any common intention or intentionally cooperated in the commission of any alleged offences. As such, the provisions of section 34, 37 and 120B of the IPC would also not be applicable. We find that the present case would squarely fall within categories (2) and (3) of the law laid down by this Court in the case of Bhajan Lal and others 1990 (11) TMI 386 - SUPREME COURT The continuation of the criminal proceedings against the appellant-bank would cause undue hardship to the appellant-bank. The impugned judgment and order passed by the learned Single Bench of the High Court of Judicature at Patna is quashed and set aside.
Issues Involved:
1. Whether the FIR against the appellant-bank and its officials disclosed any mens rea or commission of any offence under the IPC. 2. Whether the High Court erred in dismissing the writ petition for quashing the FIR. 3. Applicability of Sections 34, 37, 120B, 201, 206, 217, 406, 409, 420, and 462 of the IPC to the appellant-bank and its officials. 4. Examination of the High Court's role under Section 482 of the Cr.P.C. in quashing the FIR. 5. Relevance of the judgments cited by both parties in the context of the current case. 6. Whether the continuation of criminal proceedings against the appellant-bank would cause undue hardship. Detailed Analysis: 1. Mens Rea and Commission of Offence: The appellant-bank contended that the FIR, even when taken at face value, did not disclose any mens rea or commission of any offence by the bank officials. The FIR lacked specific allegations of collusion between the bank staff and the customer, Ms. Sunita Khemka. The bank officials had misinterpreted the revocation order, assuming it extended to the bank locker, which was a bona fide error without any fraudulent intent. 2. High Court's Dismissal of Writ Petition: The High Court dismissed the writ petition under Section 482 Cr.P.C., finding no merit in the appellant-bank's plea to quash the FIR. The Supreme Court, however, emphasized that the High Court should have examined whether the FIR prima facie disclosed the ingredients of the alleged offences. The failure of the High Court to perform this duty led to the erroneous continuation of the proceedings against the appellant-bank. 3. Applicability of IPC Sections: - Section 420 IPC: The FIR did not show inducement by the appellant-bank or its officials since inception, nor was there any fraudulent or dishonest intent. As such, the ingredients for Section 420 IPC were not met. - Sections 406 and 409 IPC: There was no allegation of entrustment of property that the bank misappropriated or converted for its own use. Thus, these sections were inapplicable. - Section 462 IPC: The absence of entrustment negated the applicability of this section. - Sections 206, 217, and 201 IPC: These sections require mens rea, which was not evident in the appellant-bank's actions. - Sections 34, 37, and 120B IPC: The FIR/complaint did not show any common intention or intentional cooperation in the alleged offences by the bank or its officials. 4. High Court's Role under Section 482 Cr.P.C.: The Supreme Court reiterated that the High Court, while exercising its powers under Section 482 Cr.P.C., must evaluate whether the FIR prima facie makes out the ingredients of the offence. The High Court's failure to do so in this case resulted in an unjust continuation of the criminal proceedings. 5. Judgments Cited: The Supreme Court referred to the principles laid down in the cases of Arnab Manoranjan Goswami and Bhajan Lal, emphasizing the necessity of a prima facie evaluation of the FIR's contents. The Court highlighted that the High Court should have assessed whether the allegations constituted any offence under the IPC. 6. Undue Hardship: The Supreme Court concluded that the continuation of the criminal proceedings against the appellant-bank would cause undue hardship, as the FIR did not disclose any prima facie case against the bank or its officials. The Court found that the case fell within the categories outlined in Bhajan Lal, warranting the quashing of the FIR. Conclusion: The Supreme Court allowed the appeal, quashing the High Court's judgment and the FIR against the appellant-bank. The Court emphasized the importance of a prima facie evaluation of the FIR and reiterated the principles governing the exercise of inherent powers under Section 482 Cr.P.C. to prevent abuse of the process and secure the ends of justice.
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