M.N.Ojha
& Ors. Vs. Alok Kumar Srivastav & ANR. [2009] INSC 1469 (21 August
2009)
Judgment
CRIMINAL
APPELLATE JURISDICTION CRIMINAL APPEAL NO. 1582 OF 2009 (Arising out of
SLP(crl.) No. 1875 of 2008) M.N.Ojha & Ors. ...Appellants Versus Alok Kumar
Srivastav & Anr. ...Respondents
B.SUDERSHAN
REDDY,J.
1.
Leave granted.
2.
This appeal by grant of special leave is directed by the
appellant, assailing the judgment and order dated 3.1.2007 passed by the High
Court of Judicature at Patna in Criminal Miscellaneous No. 18838 of 2004 by
which the High Court dismissed the petition for quashing the criminal
proceedings arising out of Complaint Case No. 916 (c) of 2003 pending on the
file of Sub-Divisional Judicial Magistrate, Patna.
3.
The brief factual matrix of the case is as under:
On
21.12.1998; Punjab National Bank, Patna City sanctioned a loan amount of Rs. 5
lakhs to M/s. Nirmala Alankar House, Patna City, a proprietary concern owned by
one Jatinder Mohan. The said Jatinder Mohan furnished security of five
guarantors including the respondent- complainant who in turn deposited Fixed
Deposit Receipts (FDRs) worth Rs. 50,000/-, each duly signed authorizing the
bank to appropriate the proceeds of FDRs along with interest if the timely
payments are not made by the borrower. Each one of them had also executed and
signed Agreement of guarantee jointly and severally guaranteeing to pay the
bank after demand in writing all principal, interest, costs, charges and
expenses due and which may at any time become due to the bank from the
borrower, on accounts opened in respect of the said limits down to the date of
payment and also all loss or damages, costs, charges and expenses occasioned to
the bank by reason of omission, failure or default temporary or otherwise in
such payment by the borrower. The guarantors further agreed that the bank may
enforce the guarantee without enforcing, selling or realizing any of the
securities kept under lien, hypothecated, pledged or mortgaged with it,
notwithstanding that any bills or other instruments given by the borrower in
the said account may be in circulation for collection and outstanding.
4.
The bank in the month of March, 2000 having realized that the loan
account became totally irregular since the borrower was not paying any amount
whatsoever as undertaken in terms of the agreement. On 26.3.2002, the first
appellant - Senior Manager having realized that the recovery of bank loan
became impossible adjusted some amounts from the FDRs furnished by the
guarantors as security towards the dues of the borrower. The bank vide its
notice dated 27.12.2002 informed the borrower as well as the guarantors that
the loan account should be regularized to which there was no response. This was
followed by an FIR lodged by the bank with the concerned police station against
the borrower and guarantors including the respondent for cheating and for
misappropriation of hypothecated goods. The said case is pending trial.
5.
The guarantors addressed a legal notice dated nil to the Deputy
General Manager, Vigilance Cell, PNB, New Delhi, Zonal Manager, PNB, Patna and
Regional Manager PNB, (Haridwar) alleging therein that they were put to serious
inconvenience due to the misconduct on the part of Appellant no. 1. It was also
alleged that no proper steps were taken against the borrower for realization of
loan amounts before proceedings against them and to encash the FDRs offered by
them as sureties for recovery of loan.
6.
In the said legal notice it was further alleged that one Prakash
Mohan while he was working in Patna City Branch as assistant had managed a cash
credit facilities for a sum of Rs. 5 lakhs in the name of his own brother
Jitender Mohan and that both Prakash as well as appellant no. 1 have colluded
with each other with a view to defraud the bank and "put the blame upon
the innocent guarantors".
7.
Thereafter, the complainant Alok Kumar Shrivastava who was one of
the guarantors, being aggrieved by the action of the bank in appropriating the
fixed deposit amount, filed a Complaint Case No. 916 of 2003 in the court of
SDJM, Patna City under Section 409,422,426 and 120B IPC in which the other
three guarantors were shown as witnesses.
The
learned SDJM, Patna City, took cognizance of the case vide order dated
22.3.2004; and directed non-bailable warrant of arrest against all appellants
herein who were named as the accused persons in the complaint.
8.
In the meanwhile, the bank initiated proceedings under the Public
Demand Recovery Act for recovery of balance amounts payable by the borrower
after adjustment of the fixed deposit amounts.
9.
The appellants being aggrieved by the order of SDJM, Patna City,
Patna preferred a petition under Section 482 of the Code of Criminal Procedure
in the High court of Judicature at Patna to quash the criminal proceedings
initiated against them by the respondent-complainant. The High Court disposed
of the said petition summarily without assigning any reasons whatsoever in the
following manner:
"Having
considered the materials on record and facts stated in the complaint petition,
I do not find any merit in this application and so the impugned order does not
require any interference. The facts are to be examined and duly considered at
the appropriate stage of trial."
Hence
this appeal.
SUBMISSIONS:-
10 Shri Dhruv Mehta, learned counsel for the appellants submitted that the High
Court failed to appreciate that the complaint has been lodged with a completely
malicious intent to simply harass the appellants who were only discharging
their duties as public servants which is nothing but an abuse of the process of
law. The averments made in the complaint are totally indefinite in their nature
and none of the ingredients of the offences alleged to have been committed are
made out against the appellants. It was also contended that the summoning order
has been passed by the learned SDJM without application of mind and contrary to
the law laid down by this court in more than one judgment. It was submitted
that the complaint was filed as a counter blast to the FIR already lodged by
the bank on 20.2.2003 for cheating and misappropriation of hypothecated goods
against the borrower and as well as the guarantors.
10.
Though the respondent was served on 16.5.2007, he neither appeared
in person nor through counsel.
11.
The respondent-complainant is one of the guarantors who guaranteed
repayment of the loan obtained by the borrower. There is no dispute that the
loan account became totally irregular and the bank has been left with no option
but to appropriate the FDRs along with interest accrued thereon. The action
initiated was in terms of the documents executed by the complainant along with
other guarantors. It is evident from the record that the bank had lodged FIR
with the police on 20.2.2003, for cheating and misappropriation of hypothecated
goods against the borrower as well as the guarantors. The police initiated
action against the complainant and others based on the said FIR lodged by the
first appellant on behalf of the bank. This fact is specifically admitted in
the legal notice issued for and on behalf of the guarantors including the
complainant. We have no doubt whatsoever in our mind that the complaint dated
3.12.2003;
filed by
the complainant against the appellants almost after 10 months of the FIR lodged
by the first appellant on behalf of the bank is nothing but a clear abuse of
the judicial process to harass the appellants. The complainant himself admitted
in his complaint that the account in question was gradually becoming irregular
and the Manager ought to have taken steps for sale of the hypothecated goods
and appropriated the sale proceeds towards the recovery of loan amounts. It is
the case of the complainant in his complaint that the first appellant should
have appropriated the hypothecated goods first and only thereafter steps could
have been taken for recovery of the balance amount if any from the guarantors.
It was alleged that the Branch Manager in conspiracy with the brother of the
borrower who is none other than an employee of the bank allowed the operation
of the account till the things became "bad to worse". According to
him, the Branch Manager conspired with the borrower and committed criminal
breach of trust.
Repeated
assertions have been made in the complaint that all the accused persons in
conspiracy with each other have diverted huge bank money in a fraudulent manner
for their own benefit. Surprisingly enough neither the borrower nor his brother
with whom the bank officers are alleged to have colluded is arrayed as accused.
The complainant in his complaint freely used choicest expressions such as
"fraud, collusion, conspiracy and cheating etc." but did not make any
concrete allegations against the appellants suggesting commission of any
offence. That a plain reading of the complaint and taking the allegations and
averments made therein to be true on their face value do not reveal the
commission of any offence whatsoever by the appellants who were only taking
steps to realize the amount due to the bank from the borrower and in the
process encashed the FDRs offered by the guarantors as security for the
discharge of the loan. What is the crime they have committed even if they did
not proceed against the hypothecated properties before realizing the FDRs
offered by guarantors? Where is the misappropriation of money? Whom did they
cheat?
12.
In our considered view, criminal law has been set in motion by the
complainant to harass the bank officers needlessly and to wreak personal
vengeance in order to bring them under pressure not to further prosecute the
proceedings already initiated by the appellants against the complainant on
behalf of the bank.
13.
In our considered opinion, the learned SDJM set the criminal law
in motion against the appellants without even examining the allegations and
averments made in the complaint filed by the respondent-complainant. The
learned SDJM took cognizance of the case without considering the allegations on
merits. Had the learned SDJM perused the complaint properly he would have
realized that the complainant himself had made a mention about the lodging of
the FIR for criminal breach of trust and other offences against the
respondent-complainant and others. Had he looked into the complaint properly,
he would have certainly asked the complainant to furnish the copy of the said FIR.
A copy of the legal notice issued on behalf of the respondent- complainant to
the appellants was filed along with the complaint and a mention is made about
it in the order passed by the learned SDJM. Had the learned SDJM perused the
said legal notice, he would have realized that the complainant himself admitted
about his execution of agreement of guarantee and other documents
unconditionally agreeing to discharge the loan amount in case of failure of the
principal borrower to pay the said amount to the bank. Had the learned SDJM
applied his mind to the facts and circumstances and sequence of events and as
well as the documents filed by the complainant himself along with the
complaint, surely he would have dismissed the complaint. He would have realized
that the complaint was only a counter blast to the FIR lodged by the Bank
against the complainant and others with regard to same Special Judicial
Magistrate & Ors. [(1998)5 SCC 749 held:
14.
Summoning of an accused in a criminal case is a serious matter. Criminal
law cannot be set into motion as a matter of course. It is not that the
complainant has to bring only two witnesses to support his allegations in the
complaint to have the criminal law set into motion. The order of the Magistrate
summoning the accused must reflect that he has applied his mind to the facts of
the case and the law applicable thereto. He has to examine the nature of
allegations made in the complaint and the evidence both oral and documentary in
support thereof and would that be sufficient for the complainant to succeed in
bringing charge home to the accused. It is not that the Magistrate is a silent
spectator at the time of recording of preliminary evidence before summoning of
the accused. The Magistrate has to carefully scrutinise the evidence brought on
record and may even himself put questions to the complainant and his witnesses
to elicit answers to find out the truthfulness of the allegations or otherwise
and then examine if any offence is prima facie committed by all or any of the
accused."
The case
on hand is a classic illustration of non-application of mind by the learned
Magistrate. The learned Magistrate did not scrutinize even the contents of the
complaint, leave aside the material documents available on record. The learned
Magistrate truly was a silent spectator at the time of recording of preliminary
evidence before summoning the appellants.
15.
The High Court committed a manifest error in disposing of the
petition filed by the appellants under Section 482 of the Code without even
adverting to the basic facts which were placed before it for its consideration.
It is true that the court in exercise of its jurisdiction under Section 482 of
the Code of Criminal Procedure cannot go into the truth or otherwise of the
allegations and appreciate the evidence if any available on record. Normally,
the High Court would not intervene in the criminal proceedings at the
preliminary stage/when the investigation/enquiry is pending.
Interference
by the High Court in exercise of its jurisdiction under Section 482 of Code of
Criminal Procedure can only be where a clear case for such interference is made
out.
Frequent
and uncalled for interference even at the preliminary stage by the High Court
may result in causing obstruction in progress of the inquiry in a criminal case
which may not be in the public interest. But at the same time the High Court
cannot refuse to exercise its jurisdiction if the interest of justice so required
where the allegations made in the FIR or complaint are so absurd and inherently
improbable on the basis of which no fair-minded and informed observer can ever
reach a just and proper conclusion as to the existence of sufficient grounds
for proceeding. In such cases refusal to exercise the jurisdiction may equally
result in injustice more particularly in cases where the Complainant sets the
criminal law in motion with a view to exert pressure and harass the persons
arrayed as accused in the complaint. It is well settled and needs no
restatement that the saving of inherent power of the High Court in criminal
matters is intended to achieve a salutary public purpose "which is that a
court proceeding ought not to be permitted to degenerate into a weapon of harassment
or persecution. If such power is not conceded, it L. Muniswamy (1977) 2 SCC
699). We are conscious that inherent powers do not confer an arbitrary
jurisdiction on the High Court to "act according to whim or caprice. That
statutory power has to be exercised sparingly, with circumspection and in the
rarest of rare cases". [See: SCC 451].
16.
This is one case where the averments and allegations made in the
complaint do not disclose the commission of any offence by the appellants or
any one of them. They were merely discharging their duties to realize and
recover the amounts due to the bank from the borrower as well as the
guarantors. The complaint obviously has been filed as counter blast to the
proceedings already initiated by the bank including the first information
report lodged by the first appellant against the complainant and the borrower
for the offences of cheating and misappropriation. Sequence of events
undoubtedly suggests that the criminal proceedings have been maliciously
instituted with an ulterior motive of wreaking vengeance on the appellants and
with a view to spite them due to personal grudge. It was clearly intended to
prevent the public servants from discharging their duties.
The
criminal law has been set in motion by the learned SDJM by mere asking to do so
by the complainant. The High Court almost abdicated its duty in refusing to
exercise its jurisdiction under Section 482 of the Code of Criminal Procedure
though the case on hand required its interference in order to prevent abuse of
the process by a court subordinate to it. A clear case is made out requiring
our interference to secure the ends of justice.
17.
For all the aforesaid reasons, the impugned order of the High
Court is set aside and the criminal proceedings arising out of Complaint Case
No. 916 (c) of 2003 are quashed. The appeal is, accordingly, allowed.
..........................................J. ( R.V. Raveendran)
..........................................J. (B. Sudershan Reddy)
New Delhi;
August 21, 2009.
Back
