PAWAN KR RUIA Vs. S P C B I ECONOMIC OFFENCE WING CAL
LAWS(CAL)-1994-11-1
HIGH COURT OF CALCUTTA
Decided on November 12,1994

PAWAN KR.RUIA Appellant
VERSUS
S.P.C.B.I.(ECONOMIC OFFENCE WING) CAL Respondents





Cited Judgements :-

AJIT KUMAR CHAKRABORTY VS. STATE OF WEST BENGAL [LAWS(CAL)-1999-5-24] [REFERRED TO]
S K MURSHIDUL ISLAM VS. STATE OF WEST BENGAL [LAWS(CAL)-1997-2-8] [REFERRED TO]
RAMESH KUMAR VS. STATE OF PUNJAB AND OTHERS [LAWS(P&H)-2015-7-549] [REFERRED]
PAWAN KUMAR RUIA VS. STATE OF WEST BENGAL AND ANOTHER [LAWS(CAL)-1998-7-57] [REFERRED]


JUDGEMENT

G.R.Bhattacharjee, J. - (1.)The Petitioners Shri Pawan Kumar Ruia filed this revisional application for quashing the investigations and proceedings in Case Nos. RC/ 12/EOW/86, RC13/EOW/86, RC/14/EOW/86 and RC/15/EOW/86 all dated 17th December, 1986. All these proceedings were started under sections 120B/420/468/471 I. P. C. and under section 5(1) (d) read with section 5 (2) of Prevention of Corruption Act, 1947 on the basis of four separate F. I. Rs lodged by one Shri D. Kasiappan, Dy. General Manager of Tamil Nadu Marcantile Bank Limited, Calcutta. This revisional application was originally heard by a Division Bench of this court comprising of P. Khastgir and A. M. Sinha, JJ. the petitioner took the objection that the allegations made in the F.I.Rs are not true and at any rate do not, prima facie, make out any cognizable offence and as such the F.I.Rs and the investigations are liable to be quashed. A plea was also taken that the Central Bureau of Investigation (C. B. I.) with whom the F.I.Rs were lodged and who took up the investigations are not competent to investigate the cases. Both the learned Judges of the Division Bench in their separate orders dated 8.5.91 however held that the C.B.I. was competent to investigate the matter. The learned Judges also did not consider it proper to quash the entire investigation. There was however a difference of opinion between the learned Judges on the question whether investigation should be continued against the present petitioner. While A.M. Sinha, J. held that no case was made out for staying the investigation against the petitioner, P. Khastgir, J. was of the view that the investigation proceedings should be stayed so far as present petitioner is concerned. At the same time the learned Judge also made it abundantly clear that the order would not prevent the investigating authorities to further investigate into the matter and if they were able to collect sufficient materials against the petitioner after such investigation they might apply for variation and/or vacation and/or recession of the order. In view of this difference of opinion between the learned Judges of the Division Bench as to whether the investigations should be stayed against the petitioner the matter was referred to a learned Third Judge being M.G. Mukherji, J. Having regard to the nature of the matter the learned Third Judge recommended the matter to be referred to a larger Bench. Accordingly the Hon'ble the Chief Justice has assigned the matter to this Bench which is preside over by M.G. Mukherji, J.
(2.)It has been argued by the learned Advocate for the petitioner that the material allegations in the concerned F.I.Rs are not true and that the allegations do not prima facie disclose commission of any cognidable offence and as such the F.I.Rs and the investigations are liable to be quashed. Here it is necessary to look to the allegations made in the F.I.Rs. The allegations made in all the F.I.Rs are more or less the same. Only the periods, amounts and figures involved are different. As a sample case we look to the allegations made in the F.I.R in proceeding RC/12/EOW/86 dated 17th December, 1986. The F.I.R. was recorded by the C.B.I. on the basis of written complaint lodged by Shri D. Kasiappan, Dy. General Manager, Tamil Nadu Marcantile Bank Limited. It is stated in the F.I.R. that it appears from records that during the period from January 1985 to September 1985 the then Calcutta Branch Manager (of the said bank) Mr. Charles Solomon had misused his official position and power and committed fraud, conspiracy and cheating in a pre-planned manner thereby cheating the bank. It is further stated in the FIR that during the concerned period Mr. Solomon while acting as the Manager and by misusing his power and official position, had cheated, committed fraud and acted to the prejudice of the bank's interest with a view to secure personal gain wrongfully and dishonestly, inter alia, in the following manner :
"(a) Issuance of unauthorise overdraft-Rs. 3,19,41,672.00 (b) Unauthorised Credit extended through clearing cheques outstanding account-Rs. 422.80 lakhs (c) Drawings against clearing-Rs. 62,60,471.00 (d) Illegal book transfer-Rs. 12,35,07,000.00 (e) Other surreptitious and unauthorised-Rs ....... (f) Total loss-Rs.24,18,470.79."
It is also alleged in the F.I.R. that it appears that in the year 1985, 94 public limited companies were floated and the capital was subscribed in questionable manner and that one young Chartered Accountant known as Pawn Kumar Ruia (the petitioner hearin) who was very thick and thin with Mr. Solomon hatched up a plan to utilise the facilities of the bank by flating the said joint stock companies solely with a view to dupe the Government and government agencies into believing that the companies had the genuine base of promoters and in the process had cheated and defrauded government and government agencies at large and the bank as well. Centain facts also have been mentioned for establishing the relationship of P.K. Ruia. Such facts were that Shri Ruia was the common Chartered Accountant of all the floated companies and the registered offices of the companies were shown to be the same in a group and that when demands were made by the bank for payment of the bank dues most of the demand letters came back with the remark 'not known' and that the companies which had received the said demand letters replied word by word in similar manner without any deviation whatsoever and further that if proper scrutiny were made it would appear that most of the Directors were more or less common. It is stated in the F.I.R. that initially the so-called promoters of the joint stock companies utilized many savings bank and current accounts opened by them in Tamil Nadu Marcantile Bank Limited and the cheques were issued from these accounts to the credit of application and allotment accounts of various public issues and only transfer entries were made and in all the cases the basis of allotment was from the date of close of the subscription list and the allotments were made immediately and the so-called companies withdrew the subscription on the very same date, but Mr. Solomon although on document acted as bankers to the issue did not even bother to claim for or realise the bank's commission and expenses and changes thereby causing a loss to the tune of Rs. 24,18,470.79 in the year 1985 for which the bank was being compelled to institute various suits in order to realise the dues and to save limitation and the Bank had to undertake huge expenses for the purpose. It is also the allegation in the F.I.R that there are many book transfers involving the group of companies of Ruia and companies promoted by him and such transactions run into crores of rupees on a single day and in all those accounts the amount standing in the credit is normally in hundreds and in a few cases even less than hundred and the said Mr. Solomon had allowed debit to the various accounts without any credit balances. It is alleged that creating a chain of unauthorised overdrafts which were settled by virtue of cross transfers on the same day the accused persons defrauded the Government and Government agencies and the bank in particular. The entries in this regard, it is alleged, are all fictitious and were caused with direct connivance of Mr. Solomon who allowed those fictitious transactions in the books of the bank and such transactions were innumerable during the period between 1983 and 1985. The further allegation in the F.I.R. is that in all such transactions shares were allotted benami in fictitious names and the promoters withdrew from the bank the amount credit to the share application account even before the application was over. It is stated in the F.I.R. that although the Directors made declarations to the stock exchange stating that brokerages were paid by cheque yet operations of the account do not reveal so and on verification of the DDs, TTs and MTs received at and remittent from Calcutta it is revealed that a sum of Rs. 2.76 crores was received at Calcutta mainly through the accounts of Ruia group of companies and the remitters' names were mentioned as themselves and in some cases there was no such mention at all. The DDs were received, it is alleged towards interest received and towards repayment of the deposits made with some of the companies by Mr. Solomon by forging the signatures which suggests that benami investments were held by him as well and that considerable amount had also gone to a firm at Birudhnangar in which Mr. A. Sankaran, an ex-employee who left the service in April 1985 and his family members were partners and Shri Palani Chard and his wife were also beneficiaries of some of the remittances. It is farther stated in the F.I.R. that Ruia Group of Companies with the help of Mr. Solomon successfully opened many accounts numbering about hundred in Delhi and that the Branch Manager, Delhi however took precautionary measures by issuing certificates in respect of 40 companies registered in Delhi and the Delhi Branch collected commission in all those cases. It is also the allegation in the F.I.R. that unauthorised overdraft facilities were extended to a number of parties by Mr. Solomon and overdrafts were allowed in the current account ledger on many occasions for a certain group of parties where either no interest was charged or interest charged was too inadequate. It is alleged in the F.I.R. that it appears that the Ruia Group of Companies have subscribed for Rs. 12.35 crores unauthorised overdrafts and thus obtained share certificates worth Rs. 12.35 crores without spending a single paisa, not even in terms of interest to the bank and that similar unauthorised overdrafts were allowed to other Ruia Group of Companies to the tune of Rs. 175 lakhs and moreover clearing cheque outstanding account had been utilised by Mr. Solomon to illegally finance the Ruia Group of Companies and the bank did not charges anything towards this and that a good number of cheques belonging mostly to Ruia Groups had bounced subsequently and further that Mr. Solomon appeared to have passed bills purchases account which were used to extend concealed lending to certain parties. It is also revealed from enquiry made by the Head Office of the bank, so goes the allegation in the F.I.R., that for the purpose of defrauding the bank as well as the Government and Government agencies at large no proper documents have been obtained by the said Mr. Solomon thereby securing the so called loan and/or credit facilities and no prior approval and/or sanction was obtained from the Regional Manager and/or the higher authorities of the bank. On these allegations in the written complaint the C.B.I. recorded F.I.R. as already mentioned, under section 120B read with 420/468/471 I.P.C and section 5(1)(d) read with 5(2) of the Prevention of Corruption Act, 1947. As I have already mentioned, the other three F.I.Rs are also more or less of the same nature. The total number of companies floated is stated to be 174. The amounts involved in all the four F.I.Rs also come to a gigantic figure. The F.I.Rs contain clear allegations of cheating, fraud and even forgery. The allegation of conspiracy is also there. Leaving aside the question of truth or falsity, the allegations also prima facie project unholy alliance in the alleged commission of the offences between the Branch Manager Mr. Solomon and the petitioner Mr. Ruia. In the circumstances there is no scope for holding that the F.I.Rs do not disclose any cognizable offence. On the other hand a simple reading of the F.I.Rs discloses daring commission of cognizable offences mentioned therein during a number of years involving huge amounts of money. Since there is no scope for holding that the F.I.Rs do not disclose any cognizable offence and since on the other hand it is apparent that the F.I.Rs contain allegations regarding commission of cognizable offences of very appalling nature it will be not at all proper for the court to throttle the investigation at its birth or infancy.
(3.)Even the learned judges of the Division Bench did not consider to be a fit case for quashing the investigation altogether. What only one of the learned Judges felt was that the investigation against the present petitioner who is one of the accused should be stayed, and that too, with the liberty to the investigating agency to approach the court for variation or vacation of the order if during the investigation proper materials involving the present petitioner becomes available. With great respect, I must say that this is somewhat self-contradictory. If the investigation in respect of a particular accused is stayed by the court, it is difficult to comprehend how it would be possible for the investigating agency to collect materials against the particular accused during the course of the investigation so as to pray subsequently for permission to carry on the investigation against that particular accused. In this connection it is to be noticed that section 156 Cr. P.C. authorises the police to investigate "cognizable case". It is therefore evident that law contemplates and mandates investigation relating to the case, a cognizable case and obviously the investigation can not be predestined by the court to be confined to particular accused only nor can it be shackled by the court within a given frame on the basis of any foregone conclusion so as to exclude any particular person to be named beforehand. The purpose of an investigation is to ascertain whether any cognizable offence has been committed and if so, who are the persons involved in the commission of such offence. The investigation is expected to proceed in a chain process leading to discovery of truth by proceeding from stage to stage on the basis of available materials and detected clues and therefore if in any case an investigation is allowed to continue it will have to be allowed to continue by following its own course in accordance with law so as to reach its logical destination. There is no scope of judicial tailring of police investigation.


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