- (1.) In this application under Article 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure (for short CrPC) the petitioners pray for quashing of the impugned proceeding including the Order No. 63 dated 5th October, 2013 passed by the Ld. 3rd Special Court, CBI in Special Case No. 06 of 2004 arising out of RC Case No. 03/E/2002 dated 28th June, 2002 under Sections 120B read with 406/420/468/471 of the Indian Penal Code (for short IPC) read with Sections 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988 (for short the 1988 Act). By the said impugned Order No. 63 dated 5th October, 2013 the Ld. Special CBI Court was pleased to dismiss the application for discharge filed by the present petitioner under Section 239 CrPC in connection with the said pending proceeding.
(2.) Taking this Court to the contents of the said application under Section 239 CrPC which is annexed to the present CRR, Shri Pratik Kumar Bhattacharya, Ld. Counsel for the petitioners has argued as follows:- i) That on the basis of a complaint dated 27th June, 2002 lodged by one Shri N. Zeevagan, Deputy General Manager, Canara Bank, Circle Office, Kolkata an FIR was started and RC Case No. 3/E/2002 was registered by the CBI against the present petitioner. Thereafter charge sheet was filed in connection with the said case being charge sheet no. 10 dated 19th April, 2004 recording the above noted offences. ii) It has been alleged against the petitioner no. 1, the proprietor of one M/s Machinery and Allied Products that credit facilities were being enjoyed by the firm of the petitioner no. 1 from the UCO Bank Branch, Sadananda Road, Kolkata. Such facilities were being enjoyed during the incumbency of one Shri Manash Basu, the then Branch Manager of UCO Bank. Thereafter the said firm was converted into a Pvt. Ltd. Company on the 8th of October, 1997 with the petitioner no.1 and the petitioner nos. 2 & 3 as the three directors of the said company being M/s. Machinery and Allied Products Pvt. Ltd. The company then applied for credit facilities at Canara Bank Lower Circle Road Branch, Kolkata. Such credit facilities were sanctioned by the Kolkata Circle Office of Canara Bank. iii) One of the accused in the criminal proceedings, being the accused no. 4, Shri K. Unikrishnan, Branch Manager, Canara Bank vide his letter dated 10th February, 1988 while communicating the sanction of loan by the Canara Bank requested the said company to apprise the Canara Bank on the extent of the total liability of the company with UCO Bank. It was also requested that title deeds of the company be handed over to Canara Bank for creating equitable mortgage. The letter dated 10th February, 1988 was replied to by the said Manash Basu of UCO Bank on 13th February, 1988 intimating that the property documents/title deed of the company will be released in favour of Canara Bank subject to the clearance by the company of their liability to UCO Bank under cash credit account to the extent of Rs. 91.91 lacs. Responding to such request the Canara Bank forwarded a demand draft of the said amount and on the basis of such demand draft dated 14th February, 1998 the title deed of the said company were released in favour of Canara Bank and subsequently mortgage was created on 6th May, 1988. Shri Bhattacharya points out that it has been alleged in the criminal proceeding that the said Shri K. Unikrishnan did not take steps to inspect the stock/audit of the company nor created equitable mortgage of the properties within the given period, thereby allowing the company to overdraw cash credit to the extent of Rs. 80 lacs. Neither the said Shri K. Unikrishnan ensure closure of the account of the company maintained with UCO Bank by obtaining 'No dues Certificate' after payment of Rs. 91.91 lacs was received by UCO Bank. Thus it has been alleged that the petitioners were facilitated with dual finance from both the Banks. iv) It has been also alleged that stock inspection of the factory premises of the company by Canara Bank revealed a physical stock of Rs. 4-5 lacs against that declared stock of Rs. 162.52 lacs. Subsequently the petitioners/accused deposited a sum of Rs. 15.92 lacs. to the cash credit of the company and thereby allegedly misappropriated the stock of Rs. 1, 52, 36, 071/- which was hypothecated for availing credit facilities. It is also alleged that due to connivance of both the Brach Managers of Canara and UCO Bank respectively, wrongful loss was caused to Canara Bank to the tune of Rs. 200.47 lacs. v) The Canara Bank thereafter filed recovery proceedings before the Ld. Debts Recovery Tribunal -2 (for short DRT -2) against the present petitioners and the company being OA 26 of 2001. The said case has been settled by the petitioners in terms of one time settlement payment against the dues of the said company with Canara Bank. The Canara Bank has also issued a 'No dues Certificate' in favour of the company. vi) Shri Bhattacharya therefore submits that the matter is purely civil in nature and for this reason the Canara Bank filed recovery proceedings before the ld. DRT -2. The outstandings of the company have been settled in the civil proceedings and the petitioners have paid the entire compromise amount with interest of Rs. 29.95 lacs to the Bank. Shri Bhattacharya asserts that the petitioners at no point of time committed any fraud or mis-representation with either UCO or Canara Bank and did not commit any forgery for the purpose of cheating. On the contrary, according to the Shri Bhattacharya, the company suffered huge losses by parking its deposits with other companies and thereby suffered loss. Placing reliance on the judgment of the Hon'ble Apex Court in Nikhil Merchants Case, 2008 3 SCC(Cri) 858 and in Duncans Agro Industries Case, 1996 5 Supreme 462, Shri Bhattacharya submits that taking note of the compromise arrived at between the petitioners and the Bank and also taking note of the purely civil nature of the proceedings, this Court in exercise of its present jurisdiction is competent to quash the proceedings. vii) Distinguishing the judgment of the Hon'ble Apex Court in the matter of CBI Vs. Jagjit Singh, 2008 3 SCC(Cri) 858 and referring to the judgment in Gian Singh Vs. State of Punjab and anr.,2013 1 CLR 356, Shri Bhattacharya has argued that the Hon'ble Apex Court has made a distinction between offences of a public character and offences which are purely bilateral in nature. In the present case the transaction between the parties was purely bilateral in nature and, once the entire outstandings have been paid, the further continuance of the criminal proceedings would amount to an abuse of the process of law. He submits that this Court in exercise of its inherent and plenary jurisdiction can take note of the purely civil and bilateral nature of the transaction between the parties and, in the absence of any mens rea quash the same. Shri Bhattacharya also draws the attention of this Court to the reasoning applied by the Ld. Special Court and submits that the Ld. Special Court merely recognized the limitation of its own jurisdiction under Section 239 CrPC compared to the jurisdiction of the superior courts and therefore restrained itself from discharging the petitioners.
(3.) He submits that the Ld. Special Court ought to have considered that the loan document or the book debt statement prepared for the purpose of obtaining loan cannot be considered to be on the same footing as a KVP/NSC certificates. In CBI Vs. Jagjit Singh the Hon'ble Apex Court was of the opinion that forgery of KVP/NSC certificates is a serious public offence.;