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Monday, September 14, 2015

The inherent power of the High Court under Section 482 Cr.P.C. should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved.= in Vikram Anantrai Doshi’s case, this Court observed that cheating by bank exposits fiscal impurity and such financial fraud is an offence against society at large in para (23), this Court held as under:- “23. …Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud. The modus operandi as narrated in the chargesheet cannot be put in the compartment of an individual or personal wrong. It is a social wrong and it has immense societal impact. It is an accepted principle of handling of finance that whenever there is manipulation and cleverly conceived contrivance to avail of these kind of benefits it cannot be regarded as a case having overwhelmingly and predominantingly of civil character. The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong. It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a “no due certificate” and enjoy the benefit of quashing of the criminal proceedings on the hypostasis that nothing more remains to be done. The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction under Article 226 of the Constitution or under Section 482 of the Code and quash the proceeding. It is not legally permissible. The Court is expected to be on guard to these kinds of adroit moves. The High Court, we humbly remind, should have dealt with the matter keeping in mind that in these kind of litigations the accused when perceives a tiny gleam of success, readily invokes the inherent jurisdiction for quashing of the criminal proceeding. The court’s principal duty, at that juncture, should be to scan the entire facts to find out the thrust of allegations and the crux of the settlement. It is the experience of the Judge comes to his aid and the said experience should be used with care, caution, circumspection and courageous prudence. As we find in the case at hand the learned Single Judge has not taken pains to scrutinize the entire conspectus of facts in proper perspective and quashed the criminal proceeding. The said quashment neither helps to secure the ends of justice nor does it prevent the abuse of the process of the Court nor can it be also said that as there is a settlement no evidence will come on record and there will be remote chance of conviction. Such a finding in our view would be difficult to record. Be that as it may, the fact remains that the social interest would be on peril and the prosecuting agency, in these circumstances, cannot be treated as an alien to the whole case. Ergo, we have no other option but to hold that the order of the High Court is wholly indefensible”. 13. In this case, the High Court while exercising its inherent power ignored all the facts viz. the impact of the offence, the use of the State machinery to keep the matter pending for so many years coupled with the fraudulent conduct of the respondent. Considering the facts and circumstances of the case at hand in the light of the decision in Vikram Anantrai Doshi’s case, the order of the High Court cannot be sustained. 14. The appeal is allowed and the order passed by the High court was set aside

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION

                      CRIMINAL APPEAL NO. 1496 OF 2009


CENTRAL BUREAU OF INVESTIGATION                     ...Appellant


                                   Versus

MANINDER                                                               SINGH
...Respondent



                               J U D G M E N T


R. BANUMATHI, J.


This appeal is preferred challenging the order of the High  Court  of  Delhi
in Crl. M.C. No.2083 of 2006 dated 10.02.2009, in and  by  which,  the  High
Court exercising its inherent power under Section 482  Cr.P.C.  quashed  the
criminal proceedings in RC No.3 of 1987 under Sections  420,  467,  468  and
471 IPC read with Section 120-B IPC and all proceedings  consequent  thereto
qua the respondent.
2.          Brief facts which led to the filing of this criminal appeal  are
as under:- The complainant-Chief Vigilance Officer of the New Bank of  India
(presently ‘Punjab National Bank’ for  short  ‘PNB’)  lodged  the  complaint
alleging that two persons  namely  Suresh  Kumar  Puri  and  Maninder  Singh
introduced themselves as proprietors of M/s Fashion  India  and  M/s  Ronney
Exports respectively and opened their current accounts with their branch  at
Miller Ganj in Ludhiana on 08.11.1986.  One Manger  namely  A.K.  Satija  of
IBD Cell of the New Bank of India at Ludhiana allowed advance  amount  worth
Rs.5.31 lakhs each to these two firms on production of Bill  of  Lading,  GR
form and other bills and those  foreign  bills  purchased  by  the  Bank  on
27.11.1986 returned unpaid.  During the enquiry made by the  bank,  Bill  of
Lading presented by the proprietors of the abovesaid two  firms  were  found
forged. Manager-A.K. Satija helped Maninder  Singh  to  avail  advance  upto
Rs.10.62 lakhs by opening two different accounts just  to  ensure  that  the
pecuniary limits allowed may fall under  his  power;  however  according  to
prosecution nature of transactions reveal that  parties  were  one  and  the
same.   Respondent  and  other  co-accused  thus  entered  into  a  criminal
conspiracy during the  period  November-December  1986,  with  intention  to
cheat New Bank of India (PNB) to the tune of Rs.10.62 lakhs.  On  the  basis
of the above complaint, case was registered under  Section  120-B  IPC  read
with Section  420  IPC  and  Section  5(2)  read  with  Section  5(1)(d)  of
Prevention of Corruption Act, 1947 and further  substantive  offences  under
Sections 420, 467, 468 and 471 IPC & Section 5 (2) read with Section  5  (1)
of Prevention of Corruption Act,  1947  in  Crime  No.RC.3/87-SIU(X)/CBI/SPE
dated 28.08.1987. After completion of the investigation, a  chargesheet  was
filed on 22.12.1990 in the  Court  of  Chief  Metropolitan  Magistrate,  Tis
Hazari Court,  Delhi  against  the  accused  persons  collectively  for  the
offences under Section 120-B IPC read with Section 420 IPC  and  substantive
offences under Sections 420, 467, 468 and 471 IPC.
3.          Noticeably, on 01.02.1995 i.e. after  four  years  the  accused-
respondent Maninder Singh was arrested by CBI from IGI Airport and  the  CMM
vide order  dated  16.09.1995  framed  charges  against  accused  respondent
Maninder Singh and other accused. In  the  trial,  thirty  nine  prosecution
witnesses were examined. However on 29.01.2005, Maninder Singh arrived at  a
settlement with the New Bank of  India,  Ludhiana  and  on  29.11.2005,  the
respondent-accused filed an application before the CMM for  pleading  guilty
for the offences alleged, but on the date of hearing  i.e.  08.12.2005,  the
accused respondent Maninder Singh did  not  appear  in  the  court  and  his
advocate withdrew the aforesaid application. Respondent herein moved a  Crl.
Misc. Petition bearing No.2083 of  2006  under  Section  482  Cr.  P.C.  for
quashing of the FIR against him on the ground that a settlement  is  arrived
between the parties and amounts are repaid to bank. The High  Court  placing
reliance on Nikhil Merchant vs. CBI & Anr., (2008) 9 SCC 677, vide  impugned
order dated 10.02.2009  allowed  the  petition  and  thereby  directed  that
criminal proceedings in RC No.3 of 1987 and  all  consequential  proceedings
thereto against the  respondent  shall  stand  quashed.   The  appellant-CBI
herein assails the correctness of the order passed by the High Court.
4.          Ms. Pinki Anand, learned Additional Solicitor General  contended
that Nikhi Marchant case is not an authority on the  question  involved  and
in Rumi Dhar (Smt.) vs. State of West Bengal & Anr., (2009) 6 SCC 364,  this
Court raised doubts as to the correctness of the judgment passed  in  Nikhil
Merchant’s case. It was submitted that the facts of  the  present  case  are
totally different and in this case thirty nine  prosecution  witnesses  were
already examined and substantial progress has  been  made  in  the  criminal
case and while so, High  Court  was  not  right  in  quashing  the  criminal
proceedings qua the respondent.  Learned Additional  Solicitor  General  has
drawn our attention to State of Maharashtra through CBI vs. Vikram  Anantrai
Doshi and Ors., 2014 (10) SCALE  690  and  submitted  that  this  Court  has
distinguished Nikhil Merchant’s case and held that availing  loan  from  the
bank by producing forged documents has immense societal impact and the  High
Court ignoring the facts and circumstances  of  the  present  case  was  not
justified in quashing the criminal proceedings qua the respondent.
5.          Learned  Senior  Counsel  for  the  respondent  Mr.  K.K.  Menon
submitted that availing facilities from the bank is purely of civil  dispute
which are personal in nature and therefore High Court was totally  justified
in quashing the proceedings in view  of  the  judgment  rendered  in  Nikhil
Merchant’s case.  It was further submitted that  the  judgment  rendered  in
Nikhil Merchant’s case was upheld in Gian Singh  vs.  State  of  Punjab  And
Anr., (2012) 10 SCC 303; Shiji @ Pappu & Ors. vs. Radhika & Anr., (2011)  10
SCC 705 and other judgments.
6.          We have carefully considered the rival contentions  advanced  by
the parties and perused the material on record.
7.          In the case at  hand,  respondent  and  one  Suresh  Kumar  Puri
introducing themselves as proprietors of M/s Ronney Exports and M/s  Fashion
India opened current accounts Nos.4443 & 4441 on 08.11.1986  with  New  Bank
of India (PNB) and by forged documents they had  availed various  facilities
viz.:- (i) Anticipated case incentive advance Rs.50,000/-  to  each  of  the
firms; (ii) F.B.P. against order documents (the bills of ladings now  turned
out to be forged) Rs.3,05,000/- each; (iii) F.B.P. against  order  documents
(the bills of  ladings  now  turned  out  to  be  forged)  additional  funds
released Rs.22,000/-  each;  (iv)  P.C.L.  against  orders  (Packing  Credit
Loans) Rs.1,50,000/- each and interest Rs.4,000/- to each of the firms.   In
the charges, it is further alleged that A.K. Satija, the then  Manager,  IBD
Cell, New Bank of India, Ludhiana has sanctioned various  credit  facilities
to respondent and  Suresh  Kumar  Puri  viz.:  (i)  Packing  Credit  against
confirmed orders; (ii) Advance against anticipated cash incentive/duty  draw
back; (iii) Advance against cash incentive  and  duty  draw  back  and  (iv)
Advance  against  foreign  bill  purchase.  Chargesheet  refers  to  various
transactions by which bank amounts were credited  to  the  accounts  of  the
said firms based on forged documents.
8.          Accused-respondent  Maninder  Singh  and  his  brother  Arvinder
Singh did not cooperate with the investigating agency  and  were  absconding
and declared proclaimed offenders by  CMM,  Tis  Hazari,  Delhi  vide  order
dated 03.10.1989.  In the trial, thirty nine  witnesses  were  examined  and
thus substantial progress was made.  In  fact,  on  29.11.2005,  respondent-
accused filed an application before the trial  court  for  pleading  guilty;
but the accused did not appear in the court and his  advocate  withdrew  the
aforesaid application.
9.          Placing reliance upon Nikhil Merchant’s  case,  the  High  Court
quashed the criminal proceedings qua the respondent on the ground  that  the
respondent has settled the matter with the bank.  In Nikhil Merchant’s  case
the dispute between the company and the bank which was set at  rest  on  the
basis of compromise arrived at by them  and  dues  of  the  bank  have  been
cleared.  In Nikhil Merchant’s case certain documents were alleged  to  have
been forged by the respondent thereon in order to  avail  credit  facilities
beyond the limit to which the company was entitled.  The  case  at  hand  is
clearly distinguishable on facts. The  chargesheet  referred  to  number  of
transactions based on such forged documents bank money was credited  to  the
accounts of firms of  the  respondent.  For  instance,  respondent  Maninder
Singh and Suresh Kumar Puri are said to have submitted the forged  documents
of shipment for bill purchased on 27.11.1986. These documents included  Bill
of Lading and  invoices  which  were  found  forged  and  according  to  the
prosecution no consignment was sent by the respondent to foreign  companies.
It is further alleged that the Bill of Lading and  G.R.  Form  and  Shipping
Bill also contained forged signatures of customs officers.
10.         The allegation against  the  respondent  is  ‘forgery’  for  the
purpose of cheating and use of forged  documents  as  genuine  in  order  to
embezzle the public money.  After facing such serious  charges  of  forgery,
the respondent wants the proceedings to be quashed on account of  settlement
with the  bank.  The  development  in  means  of  communication,  science  &
technology etc. have led to an enormous increase  in  economic  crimes  viz.
phishing, ATM frauds etc. which  are  being  committed  by  intelligent  but
devious individuals involving huge  sums  of  public  or  government  money.
These are actually public wrongs or crimes  committed  against  society  and
the gravity and magnitude attached to  these  offences  is  concentrated  at
public at large.
11.         The inherent power of the High Court under Section  482  Cr.P.C.
should be sparingly used. Only when the Court comes to the  conclusion  that
there would be manifest injustice or there would be abuse of the process  of
the  Court  if  such  power  is  not  exercised,  Court  would   quash   the
proceedings.  In economic offences Court must not only  keep  in  view  that
money has been paid to the bank  which  has  been  defrauded  but  also  the
society at large.  It is not a case of  simple  assault  or  a  theft  of  a
trivial amount; but the offence with  which  we  are  concerned  is  a  well
planned and was committed with a deliberate design with an eye  of  personal
profit regardless of consequence to the society  at  large.   To  quash  the
proceeding merely on the ground that the  accused  has  settled  the  amount
with the bank would be a misplaced sympathy.   If  the  prosecution  against
the economic offenders are not allowed to continue, the entire community  is
aggrieved.
12.         In recent decision in Vikram Anantrai Doshi (supra), this  Court
distinguished Nikhil Merchant’s case and Narendra Lal Jain’s case where  the
compromise was a part of the decree of the court and by  which  the  parties
withdrew all allegations against each other.   After  referring  to  various
case laws  under  subject  in  Vikram  Anantrai  Doshi’s  case,  this  Court
observed that cheating by bank exposits fiscal impurity and  such  financial
fraud is an offence against society at large in para (23), this  Court  held
as under:-
“23. …Be it stated, that availing of money from a nationalized bank  in  the
manner, as alleged by the  investigating  agency,  vividly  exposits  fiscal
impurity and, in a way, financial fraud.  The modus operandi as narrated  in
the chargesheet cannot be  put  in  the  compartment  of  an  individual  or
personal wrong.  It is a social wrong and it has  immense  societal  impact.
It is an accepted principle of handling of finance that  whenever  there  is
manipulation and cleverly conceived contrivance to avail of  these  kind  of
benefits  it  cannot  be  regarded  as  a  case  having  overwhelmingly  and
predominantingly  of  civil  character.   The   ultimate   victim   is   the
collective. It creates a hazard in the financial interest  of  the  society.
The gravity of the offence creates a dent  in  the  economic  spine  of  the
nation.  The  cleverness  which  has  been   skillfully  contrived,  if  the
allegations are true, has a serious consequence.  A crime  of  this  nature,
in our view, would definitely fall in the category of offences which  travel
far ahead of personal or private wrong.  It has the  potentiality  to  usher
in economic crisis.  Its implications  have  its  own  seriousness,  for  it
creates  a  concavity  in  the  solemnity  that  is  expected  in  financial
transactions. It is not such a case where one can pay the amount and  obtain
a “no due certificate” and enjoy the benefit of  quashing  of  the  criminal
proceedings on the hypostasis that nothing more  remains  to  be  done.  The
collective interest of which the Court is the guardian cannot  be  a  silent
or a mute spectator to allow the proceedings to be withdrawn,  or  for  that
matter yield to the ingenuous dexterity of the  accused  persons  to  invoke
the jurisdiction under Article 226 of the Constitution or under Section  482
of the Code and quash the proceeding. It is not  legally  permissible.   The
Court is expected to be on guard to these kinds of adroit moves.   The  High
Court, we humbly remind, should have dealt with the matter keeping  in  mind
that in these kind of litigations the accused when perceives  a  tiny  gleam
of success, readily invokes the inherent jurisdiction for  quashing  of  the
criminal proceeding.  The court’s principal duty, at that  juncture,  should
be to scan the entire facts to find out the thrust of  allegations  and  the
crux of the settlement.  It is the experience of the Judge comes to his  aid
and the said experience should be used with  care,  caution,  circumspection
and courageous prudence.  As we find in the case at hand the learned  Single
Judge has not taken pains to scrutinize the entire conspectus  of  facts  in
proper perspective and quashed the criminal proceeding.  The said  quashment
neither helps to secure the ends of justice nor does it  prevent  the  abuse
of the process of the Court nor can it be also  said  that  as  there  is  a
settlement no evidence will come on record and there will be  remote  chance
of conviction.  Such a finding in our view would  be  difficult  to  record.
Be that as it may, the fact remains that the social  interest  would  be  on
peril and the prosecuting agency, in these circumstances, cannot be  treated
as an alien to the whole case.  Ergo, we have no other option  but  to  hold
that the order of the High Court is wholly indefensible”.


13.         In this case, the  High  Court  while  exercising  its  inherent
power ignored all the facts viz. the impact of the offence, the use  of  the
State machinery to keep the matter pending for so many  years  coupled  with
the  fraudulent  conduct  of  the  respondent.  Considering  the  facts  and
circumstances of the case at hand in the light of  the  decision  in  Vikram
Anantrai Doshi’s case, the order of the High Court cannot be sustained.
14.         The appeal is allowed and the order passed by the High Court  is
set aside and the trial  court  is  directed  to  proceed  with  the  matter
expeditiously in accordance with law.  We make it clear  that  we  have  not
expressed any opinion on the merits of the matter.

                                                                …………………………J.
                                                   (DIPAK MISRA)


                                                                …………………………J.
                                                   (R. BANUMATHI)
New Delhi;
August 28, 2015
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