9911796707
TMI Blog2022 (6) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner in FIR/ Criminal Case No. RCA/BD1/2001(E)/2005/CBI/BS u/s 120B r/w 409/420 of IPC and sections 13(2) and 13(l)(d) of the Prevention of Corruption Act 1988, pending in the Court of Special Judge (CBI)-09, Central District, Delhi, entitled as CBI Vs. V.K. Maheshwari & Ors..." FACTUAL MATRIX 2. The petitioner M/s Ratan Exports and Industries Ltd. (hereinafter "Company") started its business in the year 1979, having its current account with the United Bank of India, Asaf Ali Road Branch, Delhi (hereinafter "UBI"). The petitioner company was engaged in export of tea, coffee, fruit, juice concentrate, canned food products, rice, garments, leather goods, computer peripherals, V belts, electronic items, brushes etc. in the erstwhile USSR and CIS countries. The Company being a proprietorship concern was subsequently converted into a Private Limited Company at the instance of the bank and later to a Public Limited Company with effect from 4th Aril 1984 and enjoyed the status of a government recognized trade house. 3. The petitioner Company was given an overall limit of Rs. 1250 lakhs by the bank which was further enhanced by the Board of Directors to Rs. 1672 lakhs by the board a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on forwarded it to the Assistant General Manager, who after examining the same sent it back to General Manager (Credit) to prepare a draft board note which was sent to the Executive Director. The draft Board Note was submitted to the Chairman cum Managing Director, who approved the Board Note for enhancement of the credit limit of the petitioner Company, and the said approved Board Note was then placed before the Board of Directors. The Board of Directors, consisting of six directors, approved the proposal for sanction of enhanced credit limit to the tune of Rs. 4442 lakhs (44.42 cores). The sanction was conveyed by the Head Office (Credit), to the Zonal Manager with intimation to the Branch Manager and the Regional Manager. 7. There was delay in payment to the bank by the petitioner company in the year 1993. Rajan Bagaria (Accused No. 3), ex-director of the petitioner company, who owned Aarvee International (sister concern) on whom D.A. bills were drawn by the company and discounted by the bank informed the then C.M.D. of the bank, A.K. Bhatacharya, vide fax letter 16th October, 1993 that goods shipped by the petitioner Company have been received by them in Moscow and are lying i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re aside for possible fine/Penalty to the Dept. The account gradually became NPA as on 31st March, 1996. 12. Thereafter, the petitioner company made payment worth over Rs. 11 Crores during 1996. 13. An FIR was lodged with the Central Bureau of Investigation (hereinafter "CBI"), New Delhi against the petitioner Company (Accused No. 4), its directors and few officials of the Bank for causing wrongful loss to the United Bank of India. CBI started investigation and collected the relevant documents. 14. The CBI submitted charge-sheet before the court concerned, against the Company on 26th March, 2004 through its M.D., two directors of the Company, V.K. Maheshwari (Accused No.1), the then Chief Manager of Overseas Branch New Delhi to whom the account of the company was transferred from Janpath Branch in September 1995, when the specialized branch was opened, the then General Manager M.K. Basu (Accused No. 5) and the then Zonal Manager (Accused No. 6). Shantanu Guha, the then Chief Manager (Credit Operations-II), Head Office was shown in column No. 2 in the charge sheet as the bank refused to give sanction for his prosecution. 15. A joint application dated 31st March, 2006 was filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Neither the officials of the Bank nor the Board of Directors of the Bank were involved. 20. Learned counsel for the petitioner submitted that Accused No. 3 and 6 have already been discharged and Accused No. 2 has now ceased to be a director. The petitioner being a corporate body/juristic person cannot itself be punished or jailed but can only be penalized through the directors. Therefore, the company cannot be penalized but the directors can be. The company can be held liable for fine/compensation apropos to the loss established. It is submitted that considering the view that dues have been paid to the bank by the petitioner, there is no justification or gain in continuing proceedings against the petitioner company as one of the accused in the criminal case. It is further submitted that petitioner being an artificial/juristic person does not possess mens rea which is sine qua non for commission of offence Section 420 of the IPC and as per Section 357 of Cr.P.C., the Court can impose fine to compensate the complainant for any loss or injury caused by the offence, when compensation, in the opinion of the Court, is recoverable by such person in a Civil Court. 21. To strengthen he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nction for prosecution has been given as against Shantanu Guha and Ramakrishna has already been discharged while in the chargesheet the allegation was pointed towards these two only. Similarly, as regards the allegations of 'in-house' trading, the Trial Court in the impugned order has held that the same would not survive in view of the fact that Rajan Bagaria has already stands discharged. 24. Learned counsel for the petitioner submitted that in light of the abovementioned the instant petitioner should be allowed and the impugned order is liable to be set aside. On behalf of the Respondent: 25. Per contra, Mr. Rajesh Kumar, learned SPP appearing on behalf of respondent submitted that quashing is sought on the grounds (i) that proceedings against public servants Accused No. 1 and Accused No. 6 have been quashed by the High Court and other public servant has died before framing of the charges, therefore in the absence of any public servant the case cannot proceeded with before the Trial Court, (ii) that petitioner being a Juristic person cannot be prosecuted in the absence of any other accused for the offences as charged, and (iii) that the accused company has compromised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een discharged by the Coordinate Bench of this Court vide order dated 16th April, 2012. The Accused No. 5, Manas Kumar Basu, the then General Manager, UBI passed away before framing of charges and hence, proceedings against him were abated vide order dated 1st October, 2011. The Accused No. 2, Ratan Lal Bagaria was declared as proclaimed offender by the learned Special Judge vide order dated 8th November, 2012. He has been ceased to be Director of the petitioner Company with effect from 31st August, 2006. In this manner, now effectively, the trial is pending to be proceeded against the Company as the sole accused. 30. The petitioner has challenged the order of charge dated 29th November, 2012, seeking quashing of the criminal proceedings on the ground that a company cannot be sentenced to imprisonment. The Court can only impose the punishment of fine against a company. As per the settlement all the disputes between the parties have been amicably settled and one-time payment has been made to the bank. On the basis of the said settlement, the Bank has withdrawn its application for recovery of dues filed before the DRT and the DRT has closed the matter in view of the compromise. More ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ends of justice require that the proceeding ought to be quashed." A similar view has been expressed in Baijnath Jha vs. Sita Ram & Anr. (2008) 8 SCC 77, Zandu Pharmaceutical Works Ltd. and Ors. vs. Mohd. Sharaful Haque and Anr. (2005) 1 SCC 122 and M.Mohan vs. the State, (2011) 3 SCC 626. 35. In view of the above discussions, that, a company cannot be sentenced to imprisonment, that there is categorical finding that no loss has suffered by the Bank, moreover, that the bank has already settled the civil dispute with the petitioner company and pursuant to that an amount of Rs. 8 Crores has been paid to the Bank to its satisfaction and recovery proceedings have already been withdrawn by the Bank, it is clear that no useful purpose would be served by continuing the trial against the petitioner company all alone. Even if the outcome of the trial comes against the petitioner, then also the petitioner company cannot be asked to pay more than the pecuniary loss suffered by the Bank, if any, which has already been satisfied by the petitioner company with the bank. 36. In the impugned order, the learned Special Judge as categorically observed that the loss caused to the bank was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q.B.D. 832; R. v. Manning, 12. Q.B.D. 241; R. v. Plummer [1902] 2 K.B. 339". 8. King v. Plummer ([1902] 2 K.B. 339) which is cited in support of this proposition was a case in which, on a trial of indictment charging three persona jointly with conspiring together, one person had pleaded guilty and a judgment passed against him, and the other two were acquitted. It was held -that the judgment passed against one who had pleaded guilty was bad and could not stand. Lord Justice Wright observed at page 343:- "There is much authority to the effect that, if the appellant had pleaded not guilty to the charge of conspiracy, and the trial of all three defendants together had proceeded on that charge, and had resulted in the conviction of the appellant and the acquittal of the only alleged co-conspirators, no judgment could have been passed on the appellant, because the verdict must have been regarded as repugnant in finding that there was a criminal agreement. between the appellant and the others and none between them and him: see Harrison v. Errington (Popham,202), where upon an indictment of three for riot two were found not guilty and one guilty, and upon error brought it was held a "v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oordinate Bench of this Court has quashed the proceeding against the Accused No. 6, K. Ramakrishna, vide order dated 16th April, 2012. While passing the said order, the Coordinate Bench has categorically noted that no loss was caused to the Bank, and rather the Bank has earned Rs. 20 crores as interest, that the petitioner company was undisputedly a valued client of the bank and had immensely satisfactory transaction with the bank for more than two decades. The Managing Director of the Company used to directly correspond with the CMD of the bank and its file was directly controlled by the Head office. Even the enhancement proposal was initiated and forwarded by Head Office to the Branch Manager to be processed. The problem started from August, 1993 to April, 1994 on account of large-scale crystallization of bills due to political turmoil, disintegration of Soviet Union and in the absence of mutually agreed trade terms between India and CIS countries, the realization of export bills was getting abnormally delayed. For the same reason, the Bank never initiated any criminal case against the petitioner company or its directors, except a recovery suit and the same was withdrawn immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r vested in it under Section 482 CrPC. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially when it is clear that the same would not conclude in the conviction of the accused." 43. In the case of State of Maharashtra vs. Salman Salim Khan, (2004) 1 SCC 525, the Hon'ble Supreme Court has held as under:- "4. The law governing the trial of criminal offences provides for alteration of charges at any stage of the proceedings depending upon the evidence adduced in the case. If the trial is being held before a Court of Magistrate, it is open to that court at any stage of trial if it comes to the conclusion that the material on record indicates the commission of an offence which requires to be tried by a superior court, it can always do so by committing such case for further trial to a superior court as contemplated in the Code of Criminal Procedure (the Code). On the contrary, if the trial is being conducted in a superior court like the Sessions Court and if that court comes to the conclusion that the evidence produced in the said trial m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... views in such certain terms which indicates that the Sessions Court had taken a final decision in regard to the material to establish a charge punishable under Section 304 Part II IPC." 44. In the case of M.Mohan vs. The State, (2011) 3 SCC 626, the Hon'ble Supreme Court held as under:- "53. This Court in State of Karnataka v. L. Muniswamy [(1977) 2 SCC 699 : 1977 SCC (Cri) 404] observed that the wholesome power under Section 482 CrPC entitles the High Court to quash a proceeding when it comes to the conclusion that allowing the proceedings to continue would be an abuse of the process of the court or that the ends of justice require that the proceedings ought to be quashed. The High Courts have been invested with inherent powers, both in civil and criminal matters, to achieve a salutary public purpose. A court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In this case, the Court observed that ends of justice are higher than the ends of mere law though justice must be administered according to laws made by the legislature. This case has been followed in a large number of subsequent cases of this Court and other courts. 55. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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. (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 agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Coordinate Bench of this Court. It is also an admitted fact that the petitioner company was charged for offence punishable under Section 120B/109/409 of the IPC read with Section 13(l)(d) and 13(2) of the PC Act. Therefore, one person all alone cannot commit an offence of conspiracy and be convicted for offence punishable under Section 120B of the IPC. Further, the offence punishable under Section 409 of the IPC could not survive anymore in view of the fact that Accused No. 1, V.K. Maheshwari, has already been discharged by the Coordinate Bench of this Court. 46. After going through the facts and circumstances as well as the aforesaid discussions, this Court is of the considered opinion that if the trial is allowed to go, it will amount to gross miscarriage of the justice, since, the petitioner Company cannot be punished/sentenced after being held guilty of committing an offence being a juristic person. Therefore, there would be no purpose to proceed with the trial against the petitioner. In such an eventuality, jurisdiction of this Court under Section 482 of the Cr.P.C. comes to rescue. 47. Keeping in view the legal position discussed above and the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
