B.Jayaraman & Ors. v. The Inspector of Police SPE/C.B.I / ACBHaddows Road, Shastri Bhavan, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE : 23.04.2009CORAMTHE HONOURABLE MR.JUSTICE R.REGUPATHICRL.O.P.No.6784 of 2009andM.P.No.1 OF 20091.B.Jayaraman2.Hamsaveni.. Petitioners / Accused 2 & 3Vs.The Inspector of Police SPE/C.B.I / ACBHaddows Road, Shastri Bhavan,Chennai. .. Respondent / ComplainantPrayer:- This Criminal Original Petition has been filed under Section482 of Cr.P.C., seeking to quash the FIR in RC MA 1 2008 A 0034 on thefile of the SPE/C.B.I/ACB/Chennai.For Petitioner : Mr.Venkataraman, Senior Counsel for Mr.V.KrishnakumarFor Respondents : Mr.N.Chandrasekaran, Special Public Prosecutor for CBI cases ORDERThe petitioners, who are the partners of M/s.JAK CommunicationsPvt., Ltd., are the accused A2 & A3 in a case in RC MA 1 2008 A 0034on the file of the respondent police, for an offence punishable underSections 120-B r/w 420, 468, 468 r/w 471 IPC and under section 13(2)r/w 13(1)(d) of the Prevention of Corruption Act.2.The case of the prosecution is that the petitioners borrowedRs.11.90 crores from the Indian Overseas Bank, Mogappair Branch, inwhich A1 is the branch manager. For obtaining the loan original titledeeds of several properties were deposited with the Bank as security.On the basis of source information, a case has been registered againstthe accused on the allegation that the two of the documents depositedby the petitioners are forged documents and the petitioners are notowners of those properties. Pending investigation of the case, the https://hcservices.ecourts.gov.in/hcservices/ accused were granted anticipatory bail. The investigation of the caseis still pending. Under such circumstance, the present petition toquash the proceedings has been filed by the petitioners before thisCourt. 3.The learned senior counsel for the petitioners submits that theamount borrowed on 08.12.2006 from the Indian Overseas Bank Bank,Mogappair, Chennai, is Rs.11.90 crores and EMI was regularly paid atthe rate of Rs.34 lakhs per month to the Bank and the remainingamount to be paid is Rs.8 crores. Several original documents weresubmitted by the petitioners before the Bank for getting the loanamount. It is alleged that only two of those documents were forgeddocuments. It is further submitted that even if those two documentsalleged to have been forged are eschewed for consideration assecurity, the value of the properties under the remaining documents,which are in the custody of the Bank, comes to Rs.20 crores. Allalong from the date of receipt of the loan there is harmoniousrelationship between the petitioners and the Bank. Even in thepresent allegation the Bankers are not the aggrieved parties. Evenafter the registration of the case, the first accused (Bank Manager)is continuing in service and the Bank never even initiated anydepartmental proceedings against A1. The learned senior counselasserted that there is no fault on the part of the petitioners sincethey were regularly paying the EMI. Even at the time of granting ofanticipatory bail, the petitioners voluntarily offered to deposit ofRs.3 crores as a precondition for granting of an order of anticipatorybail and accordingly, it was deposited. The petitioners aresincerely co-operating with the investigation. Further, to avoidunnecessary complications and to prove their bonafide the petitionerscleared the entire loan amount and to that effect, the Indian OverseasBank has given a letter dated 21.4.2009 wherein it has been stated asfollows:-"This is to state that M/s JAK Communications Pvt.,Ltd., who have availed Term Loans from us have closed theloans. There are no dues from them."It is further submitted that right from the beginning there was nowrongful loss to the Bank nor wrongful gain to the accused. Pendinginvestigation of the case, since the petitioners have cleared theentire loan amount borrowed from the Bank, the allegation putforth bythe prosecution cannot be substantiated and therefore, the petitionersseek to quash the FIR and Investigation.4.To substantiate his contention the learned senior counsel forthe petitioner relied on a decision of the Honourable Supreme Courtdated 20.08.2008 in Crl.A.No.1302 of 2008 (SLP.(Crl)No.6355 of 2005)(Nikhil Merchant Vs. Cwentral Bureau of Investigation & another). Thelearned senior counsel also relied on an unreported judgment of this https://hcservices.ecourts.gov.in/hcservices/ Court in Crl.O.P.No.24756 & 26871 of 2008 dated 23.12.2008 andcontended that in a similar facts and circumstances, relying on theabove said decision of the Honourable Supreme Court, quashed theproceedings.5.Per contra, the learned Special Public Prosecutor for CBIsubmits that though the entire loan amount borrowed from the Bank hasbeen paid and a certificate has been issued to that effect, theaffence committed by the petitioners are against the society and it isserious in nature. The title deeds of a temple properties were forgedfor the purpose of obtaining huge loan amount. Pending investigationof the case, 20 witnesses were examined and 48 documents wererecovered and the investigation of the case is almost over. Byrelying on a resent judgment of the Honourable Supreme Court inCrl.A.No.661 of 2009 dated 8.4.2009 (Smt.Rumi Dhar Vs. State of WestBengal and anr) , the learned Special Public Prosecutor submitted thatin view of the facts and circumstances of the case, it is not a fitcase to quash the proceedings.6.I have heard the learned counsel on both sides and meticulouslyperused the records.7.The case has been taken on file on source information by therespondent police. The case has not been taken on file on thecomplaint given by any aggrieved person or by the Bank. The loan hasbeen borrowed from Indian Overseas Bank, Mogappair Branch, forRs.11.90 crores during 1996. Since the monthly installment at therate of Rs.34 lakhs was paid regularly the Bankers were happy inreceiving the principal and interest. On the date of registration ofthe case, the balance loan amount to be paid was Rs.8 crores.Soonafter the registration of the case, at the time when thepetitioners approached this Court for grant of order of AnticipatoryBail, the petitioners offered to clear the entire loan amount andpromised to deposit Rs.3 crores as a precondition for grant of orderof anticipatory bail. Even subsequently as promised the entire amounthas been cleared by the petitioners within a short span of time. Toconstitute an offence as aforementioned dishonest intention must bemade out. There is no wrongful loss to the Bank nor wrongful gainto the accused. Even if the two documents claimed as forged documentsare eschewed from consideration for security purpose, it is claimedthat the value of the other documents deposited with the bank comes toRs.20 crores, which is double the balance amount to be paid on thedate of registration of the FIR. To prove their bonefide, thepetitioners have repaid the entire loan amount and received acertificate to that effect from Indian Overseas Bank, MogappairBranch. The case is only at the investigation stage. Though the casewas registered on 28.06.2008 and the investigation of the case ispending for nearly one year, the respondent has not come the a https://hcservices.ecourts.gov.in/hcservices/ conclusion in one way or the other and final report has not beenfiled. Even before the filing of the final report, the entire amounthas been cleared. Though it is claimed by the respondent-police thatthe case itself has been taken on file on source information, theexact source of such information could not be found out. The learnedsenior counsel for the petitioner submitted that due to businessrivalry the case has been taken on file on the instigation of hisrivals. 8. This Court in Crl.O.P.No.24756 & 26871 of 2008 on 23.12.2008held as follows:-"As laid down in B.S.JOSHI'S case, the exercise ofpowers under Section 482 Cr.P.C., would depend upon thefacts and circumstances of each case, but with the solepurpose to prevent abuse of process of any Court or tosecure ends of justice."The Honourable Supreme Court in Crl.A.No.1302 of 2008 (SLP.(Crl)No.6355 of 2005) (Nikhil Merchant Vs. Cwentral Bureau of Investigation& another) has held as follows:-"23.In the instant case, the disputes between theCompany and the Bank have been set at rest on the basis ofthe compromise arrived at by them whereunder the dues of theBank have been cleared and the Bank does not appear to haveany further claim against the Company. What, however,remains is the fact that certain documents were alleged tohave been created by the appellant herein in order to availof credit facilities beyond the limit to which the Companywas entitled. The dispute involved herein has overtones acivil dispute with certain criminal facets. The questionwhich is required to be answered in this case is whether thepower which independently lies with this Court to quash thecriminal proceedings pursuant to the compromise arrived at,should at all be exercised?24.On an overall view of the facts as indicatedhereinabove and keeping in mind the decision of this Courtin B.S.Joshi's case (supra) and the compromise arrived atbetween the Company and the Bank as also clause 11 of theconsent terms filed in the suit filed by the Bank, we aresatisfied that this is a fit case where technicality shouldnot be allowed to stand in the way in the quashing of thecriminal proceedings, since, in our view, the continuance ofthe same after the compromise arrived at between the partieswould be a futile exercise.25.We, therefore, set aside the order passed by theHigh Court dismissing the petitioner's revision applicationNo.49 of 2003 in Special Case No.80 of 1998 and quash the https://hcservices.ecourts.gov.in/hcservices/ proceedings against the appellant. The appeal isaccordingly allowed."The learned Special Public Prosecutor for CBI submitted that thefacts and circumstances of the cases are totally different and reliedan a subsequent case held by the Honourable Supreme Court inCrl.A.No.661 of 2009 (Smt.Rumi Dhar Vs. State of West Bengal andAnother) on 8.4.2009 as follows:-"The jurisdiction of the Court under Article 142 of theConstitution of India is not in dispute. Exercise of suchpower would, however, depend on the facts and circumstancesof each case. The High Court, in exercise of itsjurisdiction under Section 482 of the Code of CriminalProcedure, and this Court, in terms of Article 142 of theConstitution of India, would not direct quashing of a caseinvolving crime against the society particularly when boththe learned Special Judge as also the High Court have foundthat a prima facie case has been made out against theappellant herein for framing charge."9.Considering the facts and circumstances of the present case, Iam of the considered view that the case decided by the Honourable ApexCourt in Nikhil Merchant Vs. Cwentral Bureau of Investigation &another is squarly applicable to the present facts of the case. Inthe case on hand, pending investigation of the case entire money hasbeen settled by the Petitioners and the Banker is not the aggrievedparty. The Court has not yet taken cognizance of the case on thereason that a primafacie case is made out. The main accused i.e,first accused – Manager of the Bank was not initiated with anydepartmental action by the Bank and he is continuing in service.Admittedly the petitioners never defaulted in paying the monthlyinstallments and pending investigation of the case to prove theirbonafide have cleared the entire loan amount. The major offenceagainst the petitioners is under Section 420 IPC and it is acompoundable offence. Moreover, I do not find any dishonest intentionat the inception on the part of the petitioners and since theliability to the Bank has been cleared, there was no wrongful loss tothe Bank. On overall survey of the facts and circumstances of thecase, it appears that the case itself has been taken on file on theinstigation of some business rivals of the petitioners. https://hcservices.ecourts.gov.in/hcservices/

10.Therefore, I am of the considered opinion that thecontinuation of the investigation will be a futile exercise and abuseof process of law. I find that it is a fit case to quash theproceedings and accordingly, FIR and Investigation are quashed. Thiscriminal Original Petition is allowed accordingly. ConnectedMiscellaneous Petition is closed. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarssvTo1.The Inspector of Police SPE/C.B.I / ACBHaddows Road, Shastri Bhavan, Chennai.2.The Spl.Public Prosecutor for CBI Cases,High Court, Madras.+1cc to Mr.V.Krishnakumar, Advocate Sr 17406+1cc to Mr.N.Chandrasekaran, Advocate Sr 17531TM(CO)km/4.5.CRL.O.P.No.6784 of 2009and M.P.No.1 OF 2009