THE HONOURABLE SRI JUSTICE K. LAKSHMAN
CRIMINAL PETITION No.1301 OF 2021
ORDER:
This criminal petition is filed under Section 482 Cr.P.C., to quash the proceedings in FIR No.RC0352021A0003 of 2021 pending on the file of CBI, Anti Corruption Branch Police Station, Hyderabad. The petitioners herein are accused Nos.2 and 3 in the said crime. The offences alleged against the petitioners are under Sections 471, 468 and 420 read with Section 120B IPC and Section 13(2) read with 13(i)
(d) of the Prevention of Corruption Act.
2. Heard learned counsel for the petitioners and the learned Public Prosecutor for the State. Perused the record.
3. The allegations against the petitioners, as per the complaint dated 04.01.2021, are as follows:
The State Bank of India, SME Branch, Hyderabad, is the de facto complainant. The 1st petitioner-A2 created twin identities i.e. one as Sri Paruchuri Kumar S/o.P. Raju, as per Aadhar Card and another one as Kanuganti Suresh Kumar S/o.Kanuganti Rajendra Kumar as per ID card issued by Election Commission of India. The 1st petitioner in conspiracy with the 2nd petitioner-A3, his wife, and others with dishonest intention has submitted fake and forged documents to the 2nd respondent-de facto complainant and availed Asset Backed Loan (ABL) of Rs.5.10 Crores and cheated the bank to an extent of Rs.482.93 lakhs. The 1st petitioner mis-represented that 2 KL,J Crl.P. No.1301 of 2021 the loan is being availed for construction of Vasantha Happy Homes Nest at Sainikpuri belonging to him and whereas the building and project thereof is owned by M/s.Vasantha Engineers, represented by one A. Srinivas Reddy. The said loan was guaranteed by the 2nd petitioner, wife of 1st petitioner, and as a collateral security, she has deposited the title deeds, which are specifically mentioned in the complaint, to create equitable mortgage knowing very well that the said title deeds does not confer a valid title and it was already mortgaged to other banks as collateral security.
The 2nd petitioner with dishonest intention to cheat the Bank also executed false declaration cum affidavit on 17.11.2017 stating that there is no subsisting mortgage, charge, lease or other encumbrance or attachment over the property (whereas the property was already mortgaged to Agrasen Cooperative Urban Bank Limited). The 2nd petitioner-borrower in the said declaration cum affidavit dated 17.11.2017 further declared that she has not executed any agreement of sale, transfer or alienation, whereas at the material time, the said property was already subjected to other transfers, one of which was executed by the borrower to the guarantor and others by the father of the borrower K.Rajendra Kumar to his wife Smt. Bharathi Devi. The numbers and the dates of the gift deeds were also specifically mentioned in the complaint. The petitioners herein, borrower and guarantor, along with the parents of the 1st petitioner, with dishonest intention to cheat and defraud the Banks, created two sets of 3 KL,J Crl.P. No.1301 of 2021 documents and submitted to the Bank to create mortgage. Two chains of said documents were specifically mentioned in the complaint including the document numbers, plinth area, number of floors, name of the banks etc., are specifically mentioned in the complaint.
Originals of the two documents were already mortgaged to Agrasen Cooperative Urban Bank Limited and were seized by CBI from Agrasen Bank on 21.02.2013 as part of investigation in CC No.16 of 2014. It is also specifically alleged that Agrasen Bank as part of its recovery measures sold the said property to Mr. P. Uday Bhasker by executing sale deed bearing document No.1164/2017 dated 31.03.2017 and sale deed bearing document No.1165 of 2017 dated 31.03.2.017 by obtaining consent from 2nd petitioner and Smt. K. Bharathi Devi. The said purchaser thereafter has also executed a gift deed bearing No.1166 of 2017 and 1167 of 2017 both dated 31.03.2017 by falsely misrepresenting that the 1st petitioner is his real brother. Thus, the 1st petitioner with an intention to cheat the bank and the SRO authorities has created twin identities as stated supra. He has changed the vendors' name in both the documents. The very execution of the above said gift deeds by P. Uday Bhasker in favour of the 1st petitioner constitutes an act of forgery and they have used those forged documents as genuine ones. He admitted the said facts in one of the letters addressed to the SBI, Bible house Branch for release of documents. The said fraud came to the light when the 2nd petitioner and the said Uday Bhasker approached the SBI, Bible House branch, 4 KL,J Crl.P. No.1301 of 2021 claiming that they are the Directors of M/s.JBC Broadcasting Corporation Pvt. Ltd., by using the second identity. They have also applied for loan of Rs.6.00 crores with the said bank and the said bank has sanctioned the said loan of Rs.6.00 crores, but the same was not disbursed as the 1st petitioner could not produce originals of prior deeds despite repeated requests and based on clarification obtained from Agrasen Bank vide letter dated 31.10.2018.
Thus, the modus operandi adopted by the petitioners along with the other accused in commission of offence is also specifically explained in the complaint. The petitioners, in collusion with the official valuers and panel advocates inflated the value of the property and also by obtaining false investigation report from the panel advocates, obtained the said loan. The details of documents, loan obtained etc., are specifically mentioned in the complaint. It is also specifically mentioned that as the fraud amount is less than Rs.50.00 crores forensic audit was not conducted. Thus, the officials have colluded with the petitioners, borrower and guarantor, in getting the loan sanctioned to ineligible borrowers on the basis of the forged documents. With the said allegations, the 2nd respondent has lodged a complaint with the 1st respondent, who inturn, registered the above said crime for the aforesaid offences against the petitioners and other accused.
4. Sri P. Vishnu Vardhan Reddy, learned counsel representing Sri K. S. Suneel, learned counsel for the petitioners would submit that 5 KL,J Crl.P. No.1301 of 2021 on the complaint lodged by the very same P. Bhanu Prakash, the Police, CCS, Hyderabad, have registered a case in Crime No.218 of 2019 for the offences under Sections 406, 420 read with 34 IPC against the 2nd petitioner. Therefore, on the very same allegations, registration of multiple crimes against the 2nd petitioner is not permissible under law. He has relied upon the principle laid down by the Hon'ble Apex Court in T.T. Antony v. State of Kerala and Ors.1, on the said principle. He would further submit that this Court vide Order dated 21.10.2019 in I.A No.1 of 2019 in Crl.P. No.6617 of 2019 stayed the proceedings in Crime No.218 of 2019.
5. Referring the No Dues Certificates dated 31.03.2017 issued by the Agrasen Cooperative Urban Bank, learned counsel for the petitioners would submit that the loan in respect of the said Agrasen Bank, availed by M/s.Hanuman Traders represented by the 1st petitioner and M/s.P.S.Corporation, represented by K. Rajendra Kumar (father of the 1st petitioner) was cleared and therefore, on receipt of the same, the said Bank issued No Dues Certificates. By referring the No Dues Certificate, dated 21.11.2015 issued by the Indian Bank (Asset Recovery Management Branch), learned counsel for the petitioners would submit that the petitioners have also cleared loan with the said Indian Bank. Learned counsel for the petitioners thus, would submit that there is no mens rea or intention to the petitioners herein to cheat the Banks including the 2nd respondent 1 2001 SCC (Crl.) 1048 6 KL,J Crl.P. No.1301 of 2021 bank. The contents of the complaint lack the ingredients of the offences alleged against the petitioners. The property which was furnished as security towards the loan is a costly property and its value is ten times more than loan sanctioned by the bank. The amount given to the petitioners as loan is fully secured by the immovable property. Even the SBI, Bible House branch, has sanctioned the loan and retained the same. The petitioners have requested the 2nd respondent to adjust the said amount towards loan. The 2nd respondent has already initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SERFAESI Act') by way of issuing possession notice under Section 13 (2) of the SERFAESI Act and therefore, proceedings under SERFAESI Act and also the Criminal proceedings cannot go simultaneously. The 2nd respondent in the complaint dated 04.01.2021 suppressed the fact of giving earlier complaint, on which a case in Crime No.218 of 2019 was registered by the Police,Central Crime Station, Hyderabad. Thus, there is suppression of fact by the 2nd respondent. This Court vide order dated 25.10.2019 in Crl.P. No.6747 of 2019 directed the Investigating Officer in Crime NO.218 of 2019 to strictly follow the procedure laid down under Section 41 A Cr.P.C. and also the guidelines formulated by the Apex Court in Arnesh Kumar v. State of Bihar and another2. He would further submit that the Hon'ble Supreme Court granted stay of all further proceedings in CC No.16 of 2014. With the 2 (2014) 8 SCC 273 7 KL,J Crl.P. No.1301 of 2021 said submissions, learned counsel for the petitioners sought to quash the proceedings in the above said crime against the petitioners.
6. On service of notice, the 2nd respondent entered appearance through their Advocate. But there is no representation on behalf of the 2nd respondent both on 06.01.2021 and 08.04.2021.
7. Sri K. Surender, learned Special Public Prosecutor, CBI, referring to the contents of the complaint filed by the 1st respondent would submit that the petitioners have conspired criminally and the 1st petitioner has obtained twin identities and submitted fake and forged documents with the 2nd respondent and availed loan of Rs.5.1 crores and cheated the Bank to an extent of Rs.482.93 lakhs. Since the allegations made in the complaint submitted by the 2nd respondent, reveals commission of cognizable offence by the accused persons including the petitioners, the 1st respondent has registered the above said case against the petitioners and others. He would further submit that the modus operandi adopted by the petitioners in commission of offence and also their misrepresentation to the bank are specifically mentioned in the complaint. There are several factual aspects to be investigated into by the Investigating Officer during the course of investigation. The petitioners cannot claim that the property mortgaged is costly property and its value is ten times more than the due amount. The said issue cannot be decided by this Court in the present criminal petition under Section 482 Cr.P.C. Mere initiation of proceedings under SERFAESI Act will not absolve the criminal 8 KL,J Crl.P. No.1301 of 2021 liability of the petitioners and the said principle was also laid by the Hon'ble Supreme court in a catena of decisions. The different identities used by the 1st petitioner are also specifically mentioned in the complaint. Crime No.218 of 2019 filed with the CCS, Hyderabad, against the petitioners is for a different crime. The facts are totally different and whereas the loan availed by the 2nd petitioner-A3 for an amount of Rs.2.10 lakhs and the collateral security offered is also different. Therefore, there is no suppression of fact and the present crime is different from Crime No.218 of 2019. There are specific allegations of cheating and criminal conspiracy, forgery etc., and therefore, the dispute is not civil in nature as contended by the petitioners.
8. Referring the principle laid down by the Hon'ble Apex Court in S.M. Datta v. State of Gujarat3, the Special Public Prosecutor would submit that the investigation of an offence is within the exclusive domain of the police department and not the law courts. By relying upon another judgment reported in Parbatbhai Aahir @ Parbatbhai Bhimsinhabhai Karmur and ors. v.State of Gujarat and Anr.4, learned Special Public Prosecutor would submit that economic offences involving the financial and economic well-being of the State have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin 3 2001 (7) SCC 659 4 2017 AIR (SC) 4843 9 KL,J Crl.P. No.1301 of 2021 to a financial or economic fraud or misdemeanor. The consequences of the act complained of upon the financial or economic system will weigh in the balance. With the said contentions, the learned Special Public Prosecutor for CBI sought to dismiss the present petition.
9. The above stated facts would reveal that the 1st petitioner is a loanee, the 2nd petitioner, his wife, is the guarantor to the loan availed by them with the 2nd respondent. There are specific allegations against the 1st petitioner that he has obtained twin identities i.e. one as Sri Paruchuri Kumar S/o.P. Raju, as per Aadhar Card and another one as Kanuganti Suresh Kumar S/o.Kanuganti Rajendra Kumar as per ID card issued by Election Commission of India. There are specific allegaitns with regard to obtaining loan by way of creating two sets of documents. The two chains which were submitted to different banks were specifically mentioned in the complaint. The description of property and title deeds are also specifically mentioned. There is a specific allegation against the petitioner that he has approached the 2nd respondent bank by mis-representing that the loan is being availed for construction of Vasantha Happy Homes Nest at Sainikpuri belonging to him and whereas the building and project thereof is owned by M/s.Vasantha Engineers, represented by Sri A Srinivas Reddy.
10. The 2nd petitioner has also submitted a false declaration cum affidavit dated 17.11.2017 stating that there is no subsisting mortgage, charge, lien or other encumbrance or attachment over the 10 KL,J Crl.P. No.1301 of 2021 property and whereas the property was already mortgaged to Agrasen Cooperative Urban Bank Limited and that the borrower has not executed any agreement of sale, transfer or alienation and whereas at the material time, the property was already subjected to other transfers, one of which was executed by the borrower to the guarantor. The modus operandi adopted by the petitioners is also specifically mentioned in the complaint. There is also serious allegations that Agrasen Bank as part of its recovery measures sold the property to one P. Uday Bhasker and executed two sale deeds both dated 31.03.2017 by obtaining consent from the 2nd respondent and the mother of the 1st petitioner.
11. It is also specifically alleged that the 1st and 2nd petitioners along with said P. Uday Bhasker approached the SBI, Bible House branch, claiming to be the Directors of JBC Broadcasting Corporation Pvt. Ltd.., by using his second identity, for a loan of Rs.6.0 crores and submitted title deeds of the said property (in the second chain) which were already submitted to Agrasen Bank and the said bank has sanctioned the said loan. Since the 1st petitioner could not produce the originals of the said documents, the said Bank has not disbursed the said loan amount. There is also a specific allegation against the petitioners that in collusion with the approved valuers and panel advocates of the 2nd respondent bank, they inflated the value of the property offered as security with dishonest intention. Thus, prima facie, there are specific allegations against both the petitioners herein.
11 KL,J
Crl.P. No.1301 of 2021
12. As discussed supra, there are several factual aspects to be investigated into by the Investigating Officer during the course of investigation.
13. The Hon'ble Apex Court in Parbatbhai Aahir's case (4 supra) categorically held that economic offences involving he financial and economic well-being of the State have implications which lid beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanor. The consequences of the act complained of upon the financial or economic system will weigh in the balance.
14. In this regard, it is apt to refer to the decision rendered by the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v. The State of Maharashtra5, wherein the Apex Court has categorically held that quashing criminal proceedings was called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it was open to High Court to quash same. It was not necessary that, a meticulous analysis of case should be done before trial to find out 5 . AIR 2019 SC 847 12 KL,J Crl.P. No.1301 of 2021 whether case would end in conviction or acquittal. If it appeared on a reading of complaint and consideration of allegations therein, in light of the statement made on oath that the ingredients of the offence are disclosed, there would be no justification for High Court to interfere. The defences that might be available, or facts/aspects which when established during trial, might lead to acquittal, were not grounds for quashing complaint at threshold. At that stage, only question relevant was whether averments in complaint spell out ingredients of a criminal offence or not. The Court has to consider whether complaint discloses that prima facie, offences that were alleged against Respondents. Correctness or otherwise of said allegations had to be decided only in trial. At initial stage of issuance of process, it was not open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of Accused. Criminal complaints could not be quashed only on ground that, allegations made therein appear to be of a civil nature. If ingredients of offence alleged against Accused were prima facie made out in complaint, criminal proceeding shall not be interdicted.
15. In Skoda Auto Volkswagen India Private Limited v. The State of Uttar Pradesh and Ors.6, the Hon'ble Supreme Court referring the principle laid by it in earlier Judgments, categorically held that the High Court has to exercise its inherent powers under Section 482 Cr.P.C., to quash the FIRs and criminal proceedings in 6 Manu/SC/0898/2020 13 KL,J Crl.P. No.1301 of 2021 rarest of rare cases and the said power has to be exercised very sparingly and with circumspection.
16. In M/s. Neeharika Infrastructure Private Limited v. State of Maharashtra and others7, the Three-judge Bench of Hon'ble Apex Court laid certain parameters for the purpose of exercising powers by High Courts under Section 482 of Cr.P.C and also under Article 226 of Constitution of India. The relevant parameters are extracted as under:
"....
i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence;
ii) Courts would not thwart any investigation into the cognizable offences;
iii) It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on.
iv) The power of quashing should be exercised sparingly with circumspection, as it has been observed, in the 'rarest of rare cases ( not to be confused with the formation in the context of death penalty).
v) While examining an FIR/complaint, quashing of which is sought, the court cannot embark upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR/complaint;
vi) Criminal proceedings ought not to be scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be an exception rather than an ordinary rule'
viii) Ordinarily, the courts are barred from usurping the jurisdiction of the police, since the two organs of the State operate in two specific spheres of 7 Criminal Appeal No.330 of 2021, decided on 13.04.2021 14 KL,J Crl.P. No.1301 of 2021 activities and one ought not to tread over the other sphere'
ix) The functions of the judiciary and the police are complementary, not overlapping;
x) Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the Court do not confer an arbitrary jurisdiction on the Court to act according to its whims or caprice;
xii) The first information report is not an encyclopaedia which must disclose all facts and details relating to the offence reported. Therefore, when the investigation by the police is in progress, the court should not go into the merits of the allegations in the FIR. Police must be permitted to complete the investigation. It would be premature to pronounce the conclusion based on hazy facts that the complaint/FIR does not deserve to be investigated or that it amounts to abuse of process of law. After investigation, if the investigating officer finds that there is no substance in the application made by the complainant, the investigating officer may file an appropriate report/summary before the learned Magistrate which may be considered by the learned Magistrate in accordance with the known procedure;"
17. Coming to the facts of the case on hand, as discussed supra, prima facie, there are specific allegations against the both the petitioners herein. There are several factual aspects to be investigated into by the Investigating Officer. The crime is at the investigation stage. In view of the same, this Court is not inclined to exercise its inherent powers under Section 482 Cr.P.C., and the present case is not a rarest of rare case to quash the proceedings in the above said FIR.
18. In view of the fact that the punishment prescribed for the offences alleged against the petitioners is seven years and below seven 15 KL,J Crl.P. No.1301 of 2021 years and the Investigating Officer has already issued notices under Section 41-A of Cr.P.C., and the petitioners have already submitted their replies. Considering the said facts, this Criminal Petition is disposed of directing the Investigating Officer in Crime No. RC0352021A0003 of 2021 pending on the file of CBI, Anti Corruption Branch Police Station, Hyderabad, to follow the procedure laid down under Section 41-A of Cr.P.C., and also the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar's case (2 supra). The petitioners shall cooperate with the Investigating Officer by furnishing the information and the documents as sought by him in concluding the investigation of the crime.
Miscellaneous petitions, pending if any, shall stand closed.
_________________
K. LAKSHMAN, J
Date: 01.06.2021
KTL
16 KL,J
Crl.P. No.1301 of 2021
THE HONOURABLE SRI JUSTICE K. LAKSHMAN
CRIMINAL PETITION No.1301 OF 2021
Date: .06.2021
KTL