S. No. 3 v. STATE BANK OF INDIA BRANCH NOWGAM BUDGAM

Judgment

1. The respondent no. 1-Bank has filed a complaint under Section 420 RPC, against the petitioner and respondent no. 2, thereby alleging that the respondent no. 1 after relying upon the documents such as Form- 22-A, Sale Certificate, Temporary Certificate of Registration, had granted a loan facility of Rs. 38.78 lacs for two vehicles, Brand EICHER-TERRA16XP E CBC TY BSIII-N ABS, to one Javid Ahmad Sheikh against the two Proforma Invoices bearing Nos. 1779 & 1780, issued by the respondent no. 2.

2. When the respondent no. 1 demanded the Certificate of Registration of RTO from the borrower, the borrower apprised the respondent no. 1through the medium of application on 15.02.2017 that he tried a lot to get those vehicles registered but failed due to the vehicles being Bharat Stage III compliant, and because of non-registration of the CRMC No. 104/2018 Page No. 2 of 7 dumpers, he could not ply the same. It was further alleged by the respondent no. 1, that there was a ban on sale of such vehicles, as per Circular of Ministry of Roadways, and thus, the accused has cheated and committed fraud upon the complainant, resulting pecuniary loss due to non payment of loan along with interest.

3. The Court of learned Munsiff, Judicial Magistrate Budgam, (hereinafter referred to as ‘trial court’) by virtue of order dated

18.12.2017, adjourned the complaint and fixed next date as

22.02.2018 for further proceedings and simultaneously summoned the accused therein i.e., the petitioner and the respondent no. 2.

4. The petitioner has filed this petition for quashing the complaint filed by the respondent no. 1 titled ‘State Bank of India vs Managing Director & Chief Executive Officer, Eicher Motors Ltd. & Anr’ and also the Order dated 18.12.2017 on the following grounds; i) that the petitioner was not privy to the transaction constituting the subject matter of the impugned complaint and nothing has been alleged or ascribed to the petitioner warranting issuance of process under Section 204 Cr.P.C. against the petitioner. ii) iii) that the allegations levelled in the complaint do not make out offence under Section 420 RPC against the petitioner. that as per the judgment of Hon’ble Supreme Court in ‘M.C. Mehta vs Union of India & Ors’ all the vehicles registering authorities under the Motor Vehicles Act were restrained from registering such vehicles on and from 1st April 2017, which did not meet BS-IV emission standards except on CRMC No. 104/2018 Page No. 3 of 7 proof that such a vehicle had already been sold on or before 31st March, 2017. iv) that bare glance at the proforma invoices as well as Form 22-A, Sale Certificate and Temporary Certificate of Registration, filed by the respondent no. 1, would show that there was no misrepresentation whatsoever qua the vehicle, so far as the petitioner herein is concerned.

5. Mr. R. A. Jan, learned Senior counsel for the petitioner has vehemently argued that the complaint filed by the respondent no. 1 does not disclose the commission of offence under section 420 RPC and the petitioner was never privy to the transactions between the borrower and the respondents. He has further argued that the Order impugned dated 18.12.2017, is the classic example of non application of mind as the learned Magistrate has issued the process in a mechanical manner without determining the nature of the offence allegedly committed by the petitioner.

6. Per contra Mr. Q. R. Shamas, learned counsel appearing for the respondent no. 1, has argued that the petitioner has cheated the respondent no. 1, by selling the vehicle to the borrower which was not BS-IV compliant and the Government had specifically barred the

8. sale of such vehicles. Heard and perused the record. The perusal of the compliant would reveal that the vehicles were purchased by the borrower after availing the loan facility from the respondent no. 1. The amount was paid to M/S LAHORI EICHER. The petitioner is right in submitting that the petitioner had never been CRMC No. 104/2018 Page No. 4 of 7 privy to any transaction between the borrower and the respondents. In the Form 22-A, issued by the petitioner, the Brand name of the vehicle has been mentioned as EICHER TERRA 16 XP E CBC RHD TV BSIII-N ABS. It is mentioned in the Form 22-A that vehicle was BS-III compliant. The vehicle was sold on 31.05.2016 by the respondent no.2 to respondent no. 1.

9. In order to prosecute the person for commission of offence under Section 420 RPC, it is incumbent on the part of the complainant to prove that he was deceived by the accused fraudulently or dishonestly and induced to deliver any property to any person, or to consent, any person shall retain any property, or intentionally induced the person so deceived to do or omit to do anything which he would not do or omit if he was not so deceived.

10. In the present case, there has been no transaction between the petitioner and the respondent no. 1. Rather, the transactions took place between the borrower and the respondents. The Form 22-A issued by the petitioner mentions the fact the vehicle was Bharat Stage-III compliant and by no stretch of imagination it can be said that the petitioner deceived the respondent No.1 in any manner when the respondent No. 1 was having the knowledge that the vehicle sought to be sold was BS-III compliant. It is not the case of the respondent No.1 that the BS-III vehicles were sold as BS-IV or in the Form 22-A, the vehicles were mentioned as BS-IV but in fact they were BS-III compliant. In fact, the respondent no. 1 has no cause of action against the petitioner. At the most, dispute, if any, is civil in nature and the petitioner cannot be prosecuted under criminal law, CRMC No. 104/2018 Page No. 5 of 7 for any civil wrong if so committed by the petitioner. In absence of any direct transaction between the petitioner and the respondents and any overt or covert act attributed to the petitioner by the respondent No.1 in its complaint, the petitioner cannot be prosecuted for commission of offence of cheating. In ‘A.M. Mohan v. State’, 2024 SCC On Line SC 339, the Hon’ble Apex Court quashed the proceedings under section 420 IPC on the ground of absence of transaction between the complainant and the accused therein, by observing as under: thus be seen that for attracting

13. It could the provision of Section 420 of IPC, the FIR/complaint must show that the ingredients of Section 415 of IPC are made out and the person cheated must have been dishonestly induced to deliver the property to any person; or to make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. In other words, for attracting the provisions of Section 420 of IPC, it must be shown that the FIR/complaint discloses: (i) the deception of any person; (ii) fraudulently or dishonestly inducing that person to deliver any property to any person; and (iii) dishonest intention of the accused at the time of making the inducement.

19. At the cost of repetition, it has to be noted that no role of inducement at all has been attributed to the present appellant. Rather, from the perusal of the FIR and the charge-sheet, it would reveal that there was no transaction of any nature directly between the appellant and the complainant. The version, if accepted at its face value, would reveal that, at the instance of accused No. 1, the complainant transferred the amount of Rs. 20,00,000/- in the account of the appellant. On receipt of the said amount, the appellant immediately executed the sale deed in favour of accused No. 1, who thereafter executed the GPA in favour of the complainant. After that, no role is attributed to the present appellant and whatever happened thereafter, has happened between accused No. 1, the complainant and the other accused persons. In that view of the matter, we find that the FIR or the charge-sheet, even if taken at its face value, does not disclose the ingredients to attract the provision of Section 420 of IPC qua the appellant. (emphasis added)

11. Further, this Court finds that the learned trial court has issued the process against the petitioner in a mechanical manner and without recording its satisfaction that there is sufficient material to proceed CRMC No. 104/2018 Page No. 6 of 7 against the petitioner. In the order dated 18.12.2017, even the offence has not been mentioned, for which the process has been issued against the petitioner. The order impugned suffers from the vice of non-application of mind.

12. In ‘Sunil Bharti Mittal v. CBI’, (2015) 4 SCC 609, the Hon’ble Supreme Court of India has held as under:

51. On the other hand, Section 204 of the Code deals with the issue of process, if in the opinion of the Magistrate taking cognizance of an offence, there is sufficient ground for proceeding. This section relates to commencement of a criminal proceeding. If the Magistrate taking cognizance of a case (it may be the Magistrate receiving the complaint or to whom it has been transferred under Section 192), upon a consideration of the materials before him (i.e. the complaint, examination of the complainant and his witnesses, if present, or report of inquiry, if any), thinks that there is a prima facie case for proceeding in respect of an offence, he shall issue process against the accused. 52. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction. 53. However, for proceeding” appearing in Section 204 are of immense importance. It is these words which amply suggest that an opinion is to be formed only after due application of mind that there is sufficient basis for proceeding against the said accused and formation of such an opinion is to be stated in the order itself. The order is liable to be set aside if no reason is given therein while coming to the conclusion that there is prima facie case against the accused, though the order need not contain detailed reasons. A fortiori, the order would be bad in law if the reason given turns out to be ex facie incorrect. (emphasis added) the words “sufficient ground

13. Normally, this court would have remanded the matter back to the learned trial court due to technical defect in the order of issuance of process but in the present facts and circumstances of the case, this court is of the considered opinion that the continuance of the criminal proceedings against the petitioner before the learned trial Court shall be nothing but an abuse of process of law, more particularly, when CRMC No. 104/2018 Page No. 7 of 7 no offence is made out against the petitioner. Accordingly, the present petition is allowed and the proceedings of complaint titled ‘State Bank of India versus Managing Director & Chief Executive Officer Eicher Motors Ltd. & Anr’ pending before the learned Munsiff, Judicial Magistrate Budgam, qua the petitioner are quashed.

14. The copy of this Order be sent to the learned trial Court for information.

15. Disposed of. ; SRINAGAR 20.07.2024 Hilal Ahmad (RAJNESH OSWAL) JUDGE Whether the Judgment is reportable: Yes Hilal Ahmad Ganie I attest to the accuracy and authenticity of this document CRMC No. 104/2018