High Court

Legal Reasoning

1criappln No.2358-2023IN THE JUDICATURE OF HIGH COURT AT BOMBAYBENCH AT AURANGABADCRIMINAL APPLICATION NO. 2358 OF 2023Murlidhar S/o. Dattatraya PawarAge : 48 Years, Occu. : Advocate/ArbitratorShriram Transport Finance Company Ltd., Ahmednagar,R/o. Gulmohar Road, Savedi, Ahmednagar, Tq. & Dist. Ahmednagar…. ApplicantVERSUS1.The State of MaharashtraThrough its Investigation Officer, Shrigonda Police Station, Tq. Shrigonda, Dist. Ahmednagar. 2.Sagan S/o. Sahebrao LokhandeAge : 32 Years, Occu. : Agri.,R/o. Shrigonda, Tq. Shrigonda, Dist. Ahmednagar. …. Respondents....Advocate for Applicant : Mr. N.B. NarwadeAPP for Respondent No.1-State : Mr. G.A. KulkarniAdvocate for Respondent No.2 : Mr. Sachin S. Panale.…CORAM : SMT. VIBHA KANKANWADI & SANJAY A. DESHMUKH, JJ.Dated : 07th March 2025ORDER [PER SANJAY A. DESHMUKH, J.] :-1.This is an application for quashing the First InformationReport (for short “the F.I.R.”) vide C.R. No.0535 of 2023, registered 2criappln No.2358-2023at Shrigonda Police Station, Dist. Ahmednagar on 02.06.2023, for theoffences punishable under Sections 420, 465, 467, 468, 471 read with34 of the Indian Penal Code, 1860 (for short “the I.P.C.”).2.Learned Advocate for the applicant pointed out the reportlodged by respondent No.2/informant, in which he averred that he isan agriculturist and residing at Shrigonda, Tq. Shrigonda, Dist.Ahmedngar. In the year 2011, his neighbourer viz. Mr. MacchindraDattatraya Shinde requested him to become his surety for purchasingPoclain (210) Machine and demanded his voter id card, photo, rationcard and specimen signature form of his bank. Accordingly, hehanded over the said documents to Mr. Macchindra Shinde. Thattime, Mr. Macchindra Shinde informed him that he cannot become asurety as he does not possess cheque book of nationalized bank,statement of bank account, pan card and 7/12 extract of theagricultural land. Therefore, he requested Mr. Macchindra Shinde toreturn back all these documents, but he, on this or that count,avoided to return the said documents.3.The informant further averred that, in the year 2018, hesubmitted loan file to HDB Finance Company for purchasing Hyva ofTata Company. HDB Finance Company communicated him that his 3criappln No.2358-2023CIBIL score is low, therefore, loan cannot be sanctioned. He madeinquiry of his low CIBIL score and it was revealed that ShriramTransport Finance Company had shown him as a borrower andsurety. However, he was neither made a surety to anybody nor he hadtaken any loan from Shriram Transport Finance Company.4.The informant further averred that, in the year 2019, hereceived notice from Shriram Transport Finance Company Ltd.,Branch Shrigonda through its Adv. D.D. Gayakwad and informed himthat Rs.42,12,519/- and Rs.10,90,807/- are outstanding against himas a loan amount. He suspected some bogus loan transaction has beenshown in his name. Therefore, he frequently inquired about it withBank Manager Mr. Sachin Pawar, Shriram Transport FinanceCompany Ltd., Branch Shrigonda. Mr. Sachin Pawar told him that, inthe year 2013, he had obtained the said loan amounts from ShriramEquipment Finance Company Ltd., Ahmednagar, for purchasingHyundai Poclain (210) machine and its breaker. He also told him topay the entire loan amount and on failure to pay the loan amount,legal action will be taken against him.5.The informant further averred that, he had never takenany loan amount. However, Bank Manager Mr. Sachin Pawar and 4criappln No.2358-2023other employees of Shriram Transport Finance Company Ltd., BranchShrigonda frequently visited his house and forced him to pay the saidloan amount. Therefore, he suffered mentally and his reputation inthe vicinity has been lowered. That time, due to Covid-19 pandemic,all the money transactions were halted.6.The informant further averred that, in the year 2022,Shriram Transport Finance Company Ltd. through its Arbitrator viz.Adv. Mr. M.D. Pawar i.e. the present applicant, sent him notice to payoutstanding loan amount of Rs.1,73,63,898/-. He was directed toremain present and file say in Arbitration Case No.147 of 2022. Hesent reply notice to the applicant and asked him about the documents,on the basis of which he filed an Award No.147 of 2022. Though thesaid notice was received by RPAD, the applicant had not replied tohim. He, therefore, visited him and asked him about the documentsand Award. The applicant said to him that “he is an Arbitrator, he hasprotection of law and court, he will give an answer to him in theCourt, no one can do anything to him”. Even though no loan wastaken, Award has been illegally passed by the alleged Arbitrator. 7.The informant further averred that, he again inquiredwith Branch Manager Mr. Sachin Pawar, Shriram Transport Finance 5criappln No.2358-2023Company Ltd., Shrigonda and he informed that in the year 2013, thesaid loan was sanctioned and he told him to pay the outstanding loanamount. Thereafter, in the year 2022, he approached to the office ofShriram Equipment Finance Company Ltd., Ahmednagar and inquiredwith one senior officer and Mr. Dinesh Bihani. He said that one SunitaMacchindra Shinde, resident of Shrigonda had executed anagreement for purchasing Hyundai Poclain (210) machine and itsbreaker and he has been made a surety for it. The said financecompany also showed him the file of that loan transaction. He learntthat, surety bond was executed in his name and all his documents viz.photo, voter identity card, specimen signature form, which was takenby Macchindra Shinde, were attached with the said loan file. Theofficers informed him that Sunita Shinde had not paid loan amount.Therefore, in the recovery procedure, he was shown as a bogus suretyof Sunita Shinde. He did not receive any notice from ShriramEquipment Finance Company Ltd., Ahmednagar. He noticed that hisfalse signatures are made as a surety during the sanctioning of theproposal of loan. 8.The informant further averred that, at that time, herequested branch manager Mr. Sachin Pawar to show him the file ofsaid loan transaction. He informed that two loan transactions were 6criappln No.2358-2023taken place in his name in the year 2013 and Sunita Shinde andMacchindra Shinde are surety for said loan i.e. one of Rs.29,35,000/-and another of Rs.8,50,000/- and told him to pay the outstandingloan amount of Rs.1,73,63,898/- immediately. However, he did notshow him any document of the said loan transaction. He lastly statedthat since 2018, he could not borrow any loan from any bank as hewas shown as a bogus borrower and a bogus surety. Therefore, hesuffered huge economic loss. Hence, he lodged the report against theapplicant and others. 9.Learned Advocate for the applicant submitted that theapplicant is falsely implicated in this crime. He is an Advocate andArbitrator. It is not alleged that he had fabricated any document. Hehad only sent legal notice to the informant for Arbitration proceeding.He pointed out Section 42-B of The Arbitration and Conciliation Act,1996, which protects the action taken by the Arbitrator in good faith.He further submitted that the applicant has not fabricated anydocument. He pointed out the documents of arbitration proceedingi.e. copy of appointment letter in the name of the applicant as anArbitrator, copy of daily sheet along with Arbitration Case No.147 of2022, copy of order dated 19.11.2022, passed in MiscellaneousApplication No.01 of 2022. 7criappln No.2358-202310.Learned Advocate for the applicant further submittedthat the applicant has been falsely implicated in this crime onlybecause he sent legal notice to the informat. It is a dispute of civilnature. The applicant’s role is limited and ingredients of any of thesection invoked against him are not stated. He lastly prayed to quashthe report against the applicant.11.Learned APP for the State strongly opposed theapplication and submitted that the applicant is involved in thefabrication of the Arbitration Award. He had not given loandocuments to the informant though he demanded. There is strongevidence against the applicant. The protection under Section 42-B ofthe Arbitration and Conciliation Act, 1996 is available if any action istaken in a good faith. There is no good faith in the action taken by theapplicant. He is not entitled for such protection. He submitted that ifsuch illegal activities on the part of the applicant are allowed tocontinue, there will be havoc in the society. It is lastly prayed to rejectthe application. 12.Learned Advocate for respondent No.2/informantsubmitted that Award was passed by the applicant as an Arbitratorwhen the informant sent notice to him by RPAD. The applicant did 8criappln No.2358-2023not pay heed to the notice sent by the informant. This shows criminalintention of the applicant to commit offence for which he isprosecuted. The applicant is involved in the serious crime. Infurtherance of common intention of other accused, he tried to dupethe informant in false case of loan by passing illegal Award againstthe applicant. His action are not in good faith. Therefore, he is notentitled for the benefit of Section 42-B of the Arbitration andConciliation Act, 1996. It is lastly prayed to reject the application.13.In the context of the case, following case laws arerelevant :-i) CBI vs. Aryan Singh, reported in 2023 SCC Online SC379, in which the Hon’ble Supreme Court held as follows :-“10.As per the cardinal principle of law, at the stageof discharge and/or quashing of the criminalproceedings, while exercising the powers under Section482 of Cr.P.C., the Court is not required to conduct themini trial.”ii) Dharambeer Kumar Singh Vs. The State ofJharkhand and Another, AIR 2024 SC 4499. In para.18, theHon’ble Supreme Could held as follows :- 9criappln No.2358-2023“18.At the cost of repetition, we state that admittedlyrespondents are the beneficiaries and merely because theappellant was an equal mischief player and/or a personhaving criminal antecedents at his credit by itself willnot absolve respondents from the criminal liability asalleged against them. Least to say, “Two wrongs do notmake a right”.”14.We have perused the report and charge-sheet. Thelearned Advocate for the applicant pointed out the documentsshowing that the action of passing of Award by the applicant was ingood faith. He pointed out that Shriram Transport Finance CompanyLtd., Shrigonda has filed Arbitration Petition on 19.11.2022, beforethe applicant for cancellation of Award passed in Arbitration CaseNo.147 of 2022, dated 22.06.2022. Though there are allegations offabrication of documents of loan and surety, it is not averred in thereport that the applicant was one of the conspirator and fabricator ofthose documents of the loan transaction along with the other co-accused. The role of applicant as an Arbitrator comes at a later stage.He cannot have knowledge as to what had happened at the stage ofobtaining of loan and which documents were allegedly createdfraudulently. The F.I.R. does not disclose his role in fabrication offalse and fabricated documents. 10criappln No.2358-202315.There are allegations against the other accused that theytried to dupe the informant by fabricating false documents. Section42-B of the Arbitration and Conciliation Act, 1996 gives protection tothe Arbitrator for the action taken in good faith. Therefore, takinginto consideration the role of applicant as an Arbitrator, his actionsare protected by law. The informant appears to have not challengedthe Arbitration Award passed against him by the applicant on22.06.2022. Now, the informant is attributing allegations ofconspiracy against the applicant which is not sustainable as per law.We are, therefore, of the view that the applicant cannot be prosecutedfor the alleged forgery and fabrication of false documents. There arefabricated and false documents for which the other accused areprosecuted. However, the applicant was an Arbitrator and he was notliable to pay that amount.16.Considering all the facts and circumstances and reasonsstated above, if the applicant is compelled to face the trial, it wouldcertainly be an abuse of process of court. We are, therefore, inclinedto allow the application by exercising our inherent powers underSection 482 of the Cr.P.C., for quashing the said F.I.R. as prayed, inthe interest of justice to prevent the abuse of the process of Court. Theapplication deserves to be allowed. Hence, the following order. 11criappln No.2358-2023ORDERI]The Application stands allowed.II]The First Information Report vide C.R. No.0535 of2023, registered at Shrigonda Police Station, Dist.Ahmednagar on 02.06.2023, for the offencespunishable under Sections 420, 465, 467, 468, 471read with 34 of the Indian Penal Code, 1860 standsquashed as against the applicant. [ SANJAY A. DESHMUKH ] JUDGE[ SMT. VIBHA KANKANWADI ] JUDGEasd