Rumi Dhar vs State Of West Bengal & Anr

Smt. Rumi Dhar ... Appellant

Versus

State of West Bengal and another ... Respondents

JUDGMENT

S.B. SINHA, J.

1. Leave granted.

2. Application of the provisions of Section 320 of the Code of Criminal

Procedure (hereinafter referred to as `the Code') is in question in this

application. The said question arises in the following factual matrix.

3. Appellant and her husband (A-4) along with various other persons

including the officers of the Oriental Bank of Commerce Khidirpur Branch,

Calcutta (hereinafter called `the Bank') were prosecuted for alleged

1 commission of offences under Sections 120-B/ 420/467/468 and 471 of the

Indian Penal Code. The officers of the Bank had also been prosecuted

under Sections 13(2) read with Section 13(1)(d) of the Prevention and

Corruption Act, 1988.

4. A charge sheet was filed against the appellant and seven others. She

was inter alia charged for taking the benefit of overdrafts between the

period 8th February, 1993 to 5th March, 1993 without furnishing any

security.

5. For the purpose of realisation of the said amount, indisputably the

Bank filed an application for recovery thereof before the Debt Recovery

Tribunal. It is not in dispute that before the said Tribunal, appellant and the

Bank had entered into a settlement pursuant whereto or in furtherance a sum

of Rs.25.51 lacs was paid.

6. It is also not in dispute that for the said purpose, the C.B.I. had

returned the title deeds in respect of the property which were kept as

security for obtaining the loan from the bank.

7. On or about 22.02.2006 the Appellant filed an application under

section 239 of the Code for discharge, inter alia, contending:-

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i) That having regard to the settlement arrived at between her and

the Bank no case for proceeding against her has been out.

ii) That she having already paid Rs. 25.51 Lacs and the CBI

having returned the title deeds which had been kept as security

for the loan from the said bank, the criminal proceeding should

be dropped relying on or on the basis of the said settlement.

iii) That the dispute between the parties were purely civil in nature

and that she had not fabricated any document or cheated the

bank in anyway what so ever, charges could not have been

framed against her.

8. In response to the said application the CBI had contended that mere

payment of loan to the bank could not exonerate the accused from a criminal

proceeding.

9. The learned Judge, Special Court Alipore in Special Case No. 3 of

1993 vide order dated 12.12.2006 dismissed the application of the appellant

noting that mere repayment could not exonerate the accused from the prima

facie charge in a criminal case.

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10. On or about 06.03.2007 the appellant filed a revision application

under section 401 and 402 of the CrPC before the High Court of Calcutta

which was registered as CRR No. 910 of 2007.

Before the High Court, it was argued that further continuation of the

criminal proceeding, despite repayment of the amount of loan by the

appellant, would amount to an abuse of the process of Court and the same

should, therefore, be quashed.

11. In the said revision application the CBI contended that the criminal

case against the appellant was started not only for obtaining loan but also on

the ground of criminal conspiracy with the bank officials. It was accordingly

contended that the court below had rightly rejected the application and the

impugned order does not warrant any interference.

12. On or about 17.07.2007 the learned Single Judge of the High Court

dismissed the revision application. The court after discussing the arguments

of both the parties opined :

"I have taken into consideration the submissions of the ld. Advocates for both the sides. It is the case of the prosecution that the loan in question was sanctioned in favour of the petitioner by way of forming a criminal conspiracy, which was allegedly engineered by the bank officials. It is further been alleged that this accused/petitioner also took part in the said conspiracy. Now it is the

4 admitted position that after investigation charge sheet has also been filed against the petitioner and the matter is now fixed for framing of charge. Ld. Trial Judge in his impugned order discussed the entire matter and thereafter he was of the opinion that merely because of the fact that the amount in question has already been paid in favour of the bank, that cannot exonerate the accused/petitioner, so far as the charge of conspiracy is concerned."

13. The learned judge distinguished the case of CBI, New Delhi v.

Duncans Agro Industries Limited Calcutta, (1996) 5 SCC 591 relied on by

the appellant noting that the said case involved quashing of a criminal case

which was still under investigation. The judge noted that the in the case

before him the application for quashing the criminal proceedings was filed

at a stage when the thorough investigation of the case had already been

completed and a charge sheet had been filed. The court concluded that the

trial judge was justified in rejecting the petition filed under Section 239 of

the Code the appellant.

14. Mr. Nagendra Rai, learned senior counsel appearing on behalf of the

appellant, would submit :

(1) Considering the fact that the Bank had filed a suit to recover money

before the DRT and the dispute between the parties having been

settled and the amount in question having been repayed, continuation

5 of the criminal proceeding would be nothing but an abuse of the

process of law.

(2) Settlement having been arrived at by and between the parties and,

particularly having regard to the nature of allegations made against

the appellant herein, the High Court committed a serious error in

refusing to record the settlement and quashing the criminal

proceedings against her.

15. Mr. Amit Anand, learned counsel appearing on behalf of CBI, on the

other hand, would urge :

(i) No case has been made out for composition of the criminal offence,

as the settlement was arrived at by and between the appellant and the

bank only in respect of the civil dispute between the parties relating

to issuance of a certificate by the Debt Recovery Tribunal and not for

the purpose of withdrawal of the criminal case.

(ii) Having regard to the nature of evidence collected against the

appellant during investigation and consequent filing of a charge

sheet, the High Court has rightly refused to exercise its discretionary

jurisdiction.

6 16. Sub-section (1) of Section 320 of the Code specifies the offences

which are compoundable in nature; Sub-section (2) providing for the

offences which are compoundable with the permission of the court.

17. Appellant is said to have taken part in conspiracy in defrauding the

bank. Serious charges of falsification of accounts and forgery of records

have also been alleged. Although no charge against the appellant under the

Prevention of Corruption Act has been framed, indisputably, the officers of

the bank are facing the said charges.

18. It is now a well settled principle of law that in a given case, a civil

proceeding and a criminal proceeding can proceed simultaneously. Bank is

entitled to recover the amount of loan given to the debtor. If in connection

with obtaining the said loan, criminal offences have been committed by the

persons accused thereof including the officers of the bank, criminal

proceedings would also indisputably be maintainable. When a settlement is

arrived at by and between the creditor and the debtor, the offence committed

as such does not come to an end. The judgment of a tribunal in a civil

proceeding and that too when it is rendered on the basis of settlement

entered into by and between the parties, would not be of much relevance in

a criminal proceeding having regard to the provisions contained in Section

43 of the Indian Evidence Act.

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19. The judgment in the civil proceedings will be admissibile in evidence

only for a limited purpose. It is not a case where the parties have entered

into a compromise in relation to the criminal charges. In fact, the offence

alleged against the accused being an offence against the society and the

allegations contained in the first information report having been

investigated by the Central Bureau of Investigation, the bank could not have

entered into any settlement at all. The CBI has not filed any application for

withdrawal of the case. Not only a charge sheet has been filed, charges

have also been framed. At the stage of framing charge, the appellant filed

an application for discharge. One of the main accused is the husband of the

appellant. The complicity of the accused persons was, thus, required to be

taken into consideration for the purpose of determining the application for

discharge upon taking a realistic view of the matter. While considering an

application for discharge filed in terms of Section 239 of the Code, it was

for the learned Judge to go into the details of the allegations made against

each of the accused persons so as to form an opinion as to whether any case

at all has been made out or not as a strong suspicion in regard thereto shall

subserve the requirements of law.

20. We may also notice that the learned Tribunal, while accepting the

settlement arrived at by and between the appellant and the bank, opined :

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"It is, thus, clear from this evidence that the amount of Rs.25.51 lacs has already been paid by the respondents. The objections of the appellant that the proposal of OTS stands withdrawn because the payment was not made by cheques or in the manner given in their application of OTS has no merit. There is no need of formal joint petition of compromise if the record shows in the applications of the parties and the contents therein their consent to the OTS could be derived from the other documents on record of the case. As is already discussed hereinabove as to the application of the CHB for OTS dated 7.2.2004 the consent was already recorded by the Ld. Recovery Officer in his order dated 7,10.2004. The balance payment of Rs.22.21 lacs by the respondents certificate debtors was payable in 20 monthly instalments which was to expire by December 2005. It is immaterial that how the payment is being made. The parties under the OTS is that the OTS is agreeable and consent was at an amount of Rs.25.51 lacs. It is immaterial that the payment is to be made by equated monthly instalments by post dated cheques or evenotherwise if the payment is made at an early date, then it is not wrong. But if the payments are made beyond the scheduled date, then it is the breach of the OTS and in such a situation the Tribunal may refuse to act upon the OTS. In the present case the amount has already been paid prior to December 2--5. Thus, it cannot be said that the payments as per compromise are not paid."

21. The learned Special Judge in his order dated 16.12.2006 rejected the

contention raised on behalf of the appellant herein, stating :

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"I have gone through the record citation and considered the circumstances. It is true that the accd. has put a good gesture by paying of the dues of the bank but I am at one with the Ld. PP that this payment cannot exonerate the accd. from a prima facie charge. If I allow this, then I may have to swallow in a case of bribery that the accd. has paid back the amount to the sufferer the amount received as bribe. It is a question of trial whether there was any criminal intention on the part of this Lady accd. in this crime. The criminal intention is to be inferred from the evidence to be adduced by the prosecution. Simply because the money has been returned, I cannot shut the mouth of the prosecution from adducing evidence against this accd. Thus, I do not like to pass any order in favour of the accd. The prayer for discharge of accd. No.7, Rumi Dhar stands rejected. Let the case proceed. Fix 7.2.07 for consideration of charge. The sureties must produce all the accd. persons on that date."

22. It has not been argued before us that the learned Judge, in arriving at

the said opinion, committed any error of law or the same otherwise suffers

from any illegality so as to enable the High Court to interfere with the same

matter. A prima facie case has been found out against the appellant. There

is no error apparent on the face of the record warranting interference

therewith.

Strong reliance has been placed by Mr. Rai on a decision of this

Court in Central Bureau of Investigation, SPE, SIU(X), New Delhi v.

10 Duncans Agro Industries Ltd., Calcutta [(1996) 5 SCC 591], wherein this

Court held :

"26. After giving our careful consideration to the facts and circumstances of the case and the submissions made by the respective counsel for the parties, it appears to us that for the purpose of quashing the complaint, it is necessary to consider whether the allegations in the complaint prima facie make out an offence or not. It is not necessary to scrutinise the allegations for the purpose of deciding whether such allegations are likely to be upheld in the trial. Any action by way of quashing the complaint is an action to be taken at the threshold before evidences are led in support of the complaint. For quashing the complaint by way of action at the threshold, it is, therefore, necessary to consider whether on the face of the allegations, a criminal offence is constituted or not. In recent decisions of this Court, in the case of Bhajan Lal (supra), P.P. Sharma (supra) and Janta Dal (supra), since relied on by Mr. Tulsi, the guiding principles in quashing a criminal case have been indicated."

It was furthermore observed :

"27. In the instant case, a serious dispute has been raised by the learned Counsel appearing for the respective party as to whether on the face of the allegations, an offence of criminal breach of trust is constituted or not. In our view, the expression 'entrusted with property' or 'with any dominion over property' has been used in a wide sense in Section 405 I.P.C. Such expression includes all cases in which goods are entrusted, that is, voluntarily handed over for a specific purpose and

11 dishonestly disposed of in violation of law or in violation of contract. The expression 'entrusted appearing in Section 405 I.P.C. is not necessarily a term of law. It has wide and different implications in different contexts. It is, however, necessary that the ownership or beneficial interest in the ownership of the property entrusted in respect of which offence is alleged to have been committed must be in some person other than the accused and the latter must hold it on account of some person or in some way for his benefit. The expression 'trust' in Section 405 I.P.C. is a comprehensive expression and has been used to denote various kinds of relationship like the relationship of trustee and beneficiary, bailor and bailee, master and servant, pledger and pledgee. When some goods arc hypothecated by a person to another person, the ownership of the goods still remains with the person who has hypothecated such goods. The property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in other person and the offender must hold such property in trust for such other person or for his benefit. In a case of pledge, the pledged article belongs to some other person but the same is kept in trust by the pledgee. In the instant case, a floating charge was made on the goods by way of security to cover up credit facility. In our view, in such case for disposing of the goods covering the security against credit facility the offence of criminal breach of trust is not committed. In the facts and circumstances of the case, it, however, appears to us that the Respondents moved the High Court only in 1991 although the first FIR was filed in 1987 and the second was filed in 1989. The CBI, therefore, got sufficient time to complete the investigation for the purpose of framing the charge."

12 This is also not a case where unlike Duncans Agro Industries, no case

of criminal breach of trust had been made out.

Our attention has also been drawn to a recent decision of this Court in

Nikhil Merchant v. Central Bureau of Investigation & Anr. [(2008) 9 SCC

677], wherein this Court refused to refer the matter to a larger Bench,

stating:

"30. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised?

31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi's case (supra) and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not

13 be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise."

23. The jurisdiction of the Court under Article 142 of the Constitution of

India is not in dispute. Exercise of such power would, however, depend on

the facts and circumstance of each case. The High Court, in exercise of its

jurisdiction under Section 482 of the Code of Criminal procedure, and this

Court, in terms of Article 142 of the Constitution of India, would not direct

quashing of a case involving crime against the society particularly when

both the learned Special Judge as also the High Court have found that a

prima facie case has been made out against the appellant herein for framing

charge.

24. For the reasons aforementioned, there is no merit in the appeal. It is

dismissed accordingly.

.....................................J. [S.B. Sinha]

.....................................J.

14 [Dr. Mukundakam Sharma]

New Delhi;

April 8, 2009

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