Bombay High Court

Capt. Percy Meher Master vs The State Of Maharashtra, Thr. ... on 4 October, 2017

Bench: P.N. Deshmukh

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              IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                        NAGPUR BENCH, NAGPUR.

                    CRIMINAL WRIT PETITION NO. 920 OF 2016

Capt. Percy Meher Master,
aged about 71 years, Occupation
Business, R/o Flat No.3, 'A' Building,
5th Floor, Sealord Apartments, Cuffe
Parade, Mumbai - 400 005.                                          ... PETITIONER

                                            VERSUS

The State of Maharashtra,
through Police Station Officer,
Police Station, Ambazari,
Nagpur.                                                            ... RESPONDENT

                                     ....
Shri Rohit Joshi, Advocate for the petitioner.
Smt. Geeta Tiwari, Additional Public Prosecutor for the respondent/State.
                                     ....


                                        CORAM : P.N. DESHMUKH, J.

DATE OF RESERVING THE JUDGMENT  : 25TH SEPTEMBER, 2017.

DATE OF PRONOUNCING THE JUDGMENT :  04TH OCTOBER, 2017.


JUDGMENT :

Rule. Rule made returnable forthwith. Heard finally with the

consent of learned Counsel appearing on behalf of the respective parties.

2. This petition challenges impugned judgment dated 20th

October, 2016 in Criminal Revision No. 88 of 2014 passed by the learned

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Additional Sessions Judge, Nagpur, thereby dismissing the same filed by

the petitioner against the order of learned Chief Judicial Magistrate,

Nagpur passed in Regular Criminal Case No. 1847 of 2008 dated 29th

January, 2014, rejecting application filed by the petitioner for his discharge

of the offence registered against him vide Crime No. 376/2006 by Ambazari

Police Station, Nagpur for the offence punishable under Sections 406, 409,

420, 467, 468, 471 and 472 read with Section 34 of the Indian Penal Code

registered on the basis of report lodged by one Shri Khushalrao

Mahadeorao Gedam.

3. Shri Rohit Joshi, learned Counsel for the petitioner submitted

that the company by name, "Unique Agro Processors India Limited"

(hereinafter referred as "UAPIL") was promoted by complainant Shri

Khushalrao Gedam and others in the year 1992 which was indulged in the

business of extracting edible and non edible oils of which actual

functioning had commenced from 1995 which due to financial constraints

in the year 1997-98 has suffered huge losses and thus could not repay the

loan obtained from State Finance Corporation and was then declared as

sick company. In this background, it is contended that as affairs of said

company were not properly handled by complainant Shri Khushalrao

Gedam, within a span of two years from its commencement, company was

declared as sick unit since it could not repay the loan and in this backdrop

complainant had approached the petitioner requesting to bail out of this

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situation by investing money through one of his group companies, namely

"Master Industries Private Limited" (hereinafter referred as MIPL), to

which the petitioner agreed. The dues of SICOM were accordingly settled

by petitioner by making payment through his company MIPL and,

therefore, complainant Shri Khushalrao Gedam issued a letter in March,

2004 to release first charge of SICOM over Plant, Machinery and Assets of

UAPIL in favour of MIPL

4. It is further contended that as the petitioner has invested huge

amount to the extent of rupees four crores in UAPIL, he was inducted as a

Director in this company. However, as further funds were required for

setting up oil refinery and for working capital to revive the business,

though complainant Shri Khushalrao Gedam and his associates attempted

to secure loan, no financial institute was willing to extend any such

assistance and in that circumstances petitioner using his good offices with

the officials of Bharat Cooperative Bank Limited, Mumbai arranged loan to

the extent of rupees seven crores.

5. According to the petitioner, UAPIL had current account with

Federal Bank Limited at Nagpur and funds from the loan account with

Bharat Cooperative Bank Limited, Mumbai were routinely transferred in

the current account at Nagpur for meeting expenses of UAPIL. However,

the lending bank at Mumbai raised objection to these transactions and

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suggested that the transaction of UAPIL should be conducted through the

loan account. It is further submitted that after the loan amount was made

available by petitioner, complainant along with his associates started

harassing the petitioner and also siphoned huge amount of funds out of

company's account for their personal use which resulted into company's

plant not running to its optimum capacity, ultimately resulting into losses.

In the meantime, Bharat Cooperative Bank Limited, Mumbai had started

levying penal interest on the loan amount, as the consequences of which,

the amount was being eroded and in that circumstances, it was decided

that the loan account of UAPIL with Bharat Cooperative Bank Limited

should be closed by transferring funds from the account of Federal Bank at

Nagpur to Bharat Cooperative Bank Limited to clear the loan liability. It is,

therefore, contended that accordingly, General Manager of UAPIL at

Nagpur had issued letter dated 23.06.2005 to Federal Bank, Nagpur for

transferring sum of Rs. 1.25 crores to the loan account of UAPIL with

Bharat Cooperative Bank Limited. It is submitted that above stated letter

was a conscious decision by the Director of UAPIL and was issued from its

Nagpur office under the knowledge and control of complainant Shri

Khushalrao Gedam.

6. It is, therefore, contended that in these circumstances, on

27.06.2005, petitioner issued one cheque bearing No. 205578 against

Federal Bank Limited, Nagpur for transfer of amount of Rs.81,00,000/- to

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its loan account with Bharat Cooperative Bank Limited, Mumbai.

Admittedly, both these accounts are of one and the same company i.e.

UAPIL. It is the case of petitioner that though accounts with Federal Bank

at Nagpur were to be operated jointly by petitioner and complainant Shri

Khushalrao Gedam, above numbered cheque was issued by the petitioner

under his signature only having considered to the exigencies of the

situation arose at that material time and had made a request to Federal

Bank to transfer above stated amount under his single signature, assuring

that a signature of other signatories i.e. complainant shall be made

available in due course. Accordingly, an amount of Rs.81,00,000/- stood

transferred from the current account of UAPIL with Federal Bank to their

loan account with Bharat Cooperative Bank Limited, Mumbai. In addition

to above amount, an amount of Rs.1,33,19,254/- was already paid by the

petitioner to close the loan account which account was thus closed on

08.07.2005.

7. It is contended that all the directors of UAPIL were aware of

said transaction of clearing loan account by issuing cheque by the

petitioner, as aforesaid and in this regard the Board of Directors on

31.10.2005 in its meeting has also passed a resolution to request Bharat

Cooperative Bank Limited, Mumbai to return the title deed and other

documents to UAPIL since the loan liability was satisfied. It is contended

that passing of such resolution was in the presence of complainant Shri

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Khushalrao Gedam and said document is also collected by the

investigating agency during the course of investigation.

8. In view of above background, it is further contended that as

complainant Shri Khushalrao Gedam with the assistance of his associates

was trying to sell the unit of UAPIL at Nagpur, petitioner who had invested

his amount in this company, naturally opposed said move and also

initiated civil proceedings by filing Civil Suit No. 107 of 2006 seeking

injunction for creation of third party interest in suit property wherein the

competent Court passed order to maintain status quo. It is submitted that

in this background, complainant Shri Khushalrao Gedam lodged a false

complaint against the petitioner alleging that amount of Rs.81,00,000/-

was unauthorisedly transferred by the petitioner unilaterally. On the basis

of report, crime came to be registered against the petitioner for the

offences, as aforesaid.

9. From the aforesaid submissions, the principal contention of

Shri Rohit Joshi, learned Counsel for the petitioner is that amount of

UAPIL in current account at Nagpur was transferred to its loan account at

Mumbai to clear the loan liability of the same company, as both these

accounts are in the name of UAPIL which admittedly is not disputed fact

and as such demonstrates that by satisfying such loan liability, the

petitioner has not utilized or misappropriated the amount for his personal

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interest. It is also not disputed that above amount was transferred to the

loan account of UAPIL which fact does not appear to have been considered

by the learned Courts below who, on the other hand, have held that facts

as enumerated above, can only be considered on recording the evidence.

Another contention from the submissions of learned Counsel for the

petitioner, which has been canvassed, is about resolution dated 31st

October, 2005 vide which the directors of UAPIL had resolved that the loan

liability of Bharat Cooperative Bank Limited, Mumbai was to be cleared

and as such had knowledge of transfer of amount from the account of

UAPIL from Nagpur to Mumbai and as such the amount in question was

transferred by the petitioner for clearing of loan liability, and on payment

of said amount on 29.06.2005, by transfer, said loan account was closed on

08.07.2005 on making further payment and immediately thereafter

complainant issued letter to Bharat Cooperative Bank Limited, Mumbai

for return of documents. All these documents are filed along with charge

sheet. However, learned Courts below without considering the same,

rejected the case of the petitioner for his discharge.

10. Perusal of cheque dated 27.06.2005, copy of which is on record,

finds signature of petitioner in the capacity of director issued against

Federal Bank and admittedly there is no signature of Chairman on the

cheque though his rubber stamp is put on it which appears to be a

common rubber stamp of UAPIL. This fact even otherwise has not been

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disputed by the petitioner, of his issuing cheque under his signature only

due to the exigency which had arisen to repay the amount. Even

otherwise, said amount of Rs.81,08,394/- from further document on record

is found transferred in the loan account with Bharat Cooperative Bank

Limited, Mumbai and loan account is found to be closed after making

payment. Moreover, resolution of UAPIL dated 31.10.2005 goes to

establish that such a resolution was made in the presence of complainant

and other directors including petitioner. Material portion of the resolution

has been reproduced below :-

"The Board was inform by CMD that Capt. P.M. Master, one of the Director of the company vide his letter dated 08.07.2005 already requested The Bharat Cooperative Bank (Mumbai) Ltd., Ford (Main) Branch, Ford, Mumbai - 400 001 for the release of documents executed by the Company in favour of the said Bank for the facilities availed from the Bank by the Company. Since the Company has already paid back the outstanding amounts due to the Bank and no amount is "now payable to the Bank, the above request was made for release of the documents executed by the company in favour of the above said Bank."

It was further resolved that,

"a certified true copy of this Resolution be forwarded to the Bharat Co-operative Bank (Mumbai) Ltd. as required by the said Bank and request be made to the Bank

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that all these important documents be sent to the Registered office of the Company on the above address."

11. In the background of above resolution and on perusal of FIR

which is lodged on 22nd November, 2006 i.e. much later to resolution dated

31st October, 2006 and from the above stated document, there appears

substance in the case of petitioner that as it was decided by the Board of

Directors to close down the loan account of UAPIL with Bharat

Cooperative Bank Limited, Mumbai, funds in the account of Federal Bank

were transferred to Bharat Cooperative Bank by issuing letter of General

Manager of UAPIL, Nagpur dated 23.06.2005 for transfer of amount of

Rs.1.25 crores to Federal Bank which aspect establishes fact of

complainant Shri Khushalrao Gedam being aware of such decision taken

by the Board of Directors for transferring funds from Federal Bank to

Bharat Cooperative Bank. In view of decision, as aforesaid, it is found that

the petitioner on 27.06.2005 issued cheque bearing No. 205578 valued for

Rs.81,00,000/- from the said account at Nagpur to Mumbai under his

single signature though the account was to be operated by the joint

signature with complainant Shri Khushalrao Gedam because of the fact of

rising of interest in said amount and having given undertaking to the

Federal Bank to get a signature of complainant subsequently. However,

since it remained to sign by the complainant, almost about one year

thereafter complainant had lodged report, as aforesaid which report from

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the basis of resolution of the company on the face of it appears to be false

as on the date of lodging of report, all the authorities concerned with

UAPIL including complainant Khushalrao Gedam were well aware of the

fact that sum of Rs.81,00,000/- was transferred, as aforesaid for clearing the

loan liability and further that petitioner had invested sum of

Rs.1,33,19,254/- in order to close the loan account by clearing the entire

liability of UAPIL and in this regard, resolution was passed on 31.10.2005 to

request Bharat Cooperative Bank to return the title deed of UAPIL which

document is found to be relied by the prosecution since forms part of the

charge sheet. The complainant, however, one year thereafter on

22.11.2006, lodged report as aforesaid which came to be investigated and

the petitioner is charge-sheeted. In that view of the matter, case of

prosecution, that the petitioner unauthorisedly transferred amount of

Rs.81,00,000/- from account of UAPIL at Federal Bank to its current

account at Bharat Cooperative Bank Limited, Mumbai by using a forged

rubber stamp of complainant without obtaining his signature as a

Chairman of UAPIL though account was to be operated jointly, does not

stand for any reason. In fact by issuing the disputed cheque as above

stated, amount lying in the current account of UAPIL was transferred by

the petitioner to the bank having loan account at Mumbai for effectively

utilising the same for clearing the loan liability of which the Board of

Directors of UAPIL were well aware, and in fact had ratified transfer of

amount by its resolution dated 31.10.2005.

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12. With regard to registration of crime against the petitioner

under Sections 467, 468. 471 and 472 of Indian Penal Code are concerned,

it is to be borne in mind that for attracting those sections, making of false

document is an essential element for committing forgery. Section 464 of

Indian Penal Code provides that a person is said to make false document if

he makes signs, seals or executes a document dishonestly and fraudulently

with an intention to create an impression that the document was signed,

sealed or executed by or under authority of a person who has not signed,

sealed or executed the said document or given authority for the same. A

dishonest and fraudulent intention is an essential element to make out an

offence of forgery. Similarly, terms "dishonestly and fraudulently" when

considered to provide that an act is done with intention causing wrongful

gain or wrongful loss to any person, same is to be an dishonest act.

Wrongful gain means receiving property by unlawful means, which the

person receiving is not legally entitled for. Likewise, wrongful loss means

loss of property by unlawful means to which the person loosing is legally

entitled for. In the circumstances, when the case of petitioner along with

the property involved in this petition is concerned, which is money under

the cheque in question belonging to UAPIL, same is found to be utilized for

clearing loan liability of UAPIL itself. In fact, the petitioner/company was

legally bound to pay the debt of Bharat Cooperative Bank Limited and as

such it is found that by making such payment UAPIL has only discharged

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its legal liability and by no stretch of imagination, it can be said that by

issuing cheque, the petitioner has either forged the document or due to his

act caused monetary loss or wrongful loss to UAPIL. This aspect needs

more consideration in view of the fact that apart from transfer of amount

of Rs.81,00,000/-, petitioner has deposited further amount of

Rs.1,33,19,254/- to clear the loan liability. Moreover, it is no case of

prosecution that the petitioner had forged the signature of Chairman-

cum-Managing Director on the disputed cheque. The case of prosecution

as is apparent from the record is that petitioner by issuing said cheque

under his signature had written to the authorities of Federal Bank that

signature of Chairman-cum-Managing Director would be obtained on the

cheque later on. Said conduct of petitioner in fact further establishes that

at no point of time he had misled the bank by making false or misleading

statement. In that view of the matter, even provision of section 420 of

Indian Penal Code cannot be attracted in the present case as under the

transaction in question, amount from current account of UAPIL was

transferred to its loan account and as such there is nothing to establish

that the petitioner in any manner had cheated the company of which he

himself was a director.

13. Insofar as Sections 406 and 409 of Indian Penal Code which are

also applied in the present crime, these provisions can be said to be

attracted only in case of dishonest misappropriation. In the petition in

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hand, admittedly, the petitioner had not received any amount under the

cheque in question. In that view of the matter, there is no question of his

misappropriating any amount nor it is the case of prosecution that the

petitioner has converted amount under the cheque for his personal use.

From the conduct of petitioner, as aforesaid, it is crystal clear that there

was no dishonest intention on the part of petitioner. On the contrary, he

had acted by transferring amount to clear the loan liability. In that view of

the matter, no provisions of 406, 409 of Indian Penal Code are found to be

attracted against the petitioner.

14. By now it is well established that under Section 227 of Code of

Criminal Procedure, a duty is cast on the judge to apply his mind to the

material on record and if on examination of the record he does not find

sufficient ground for proceeding against the accused, he must discharge

him. On the other hand if after such consideration and hearing he is

satisfied that a prima facie case is made out against the accused, he must

proceed to frame a charge as required by Section 228 of the Code. At the

stage of Sections 227-228 the Court is required to evaluate the material

and documents on record with a view to find out if the facts emerging

therefrom taken at their fact value disclose the existence of all the

ingredients constituting the alleged offence.

Section 227 of the Code reads as under :-

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"227. If, upon consideration of the record of the case and the documents submitted therewith, and after hearing the submissions of the accused and the prosecution in this behalf, the Judge considers that there is not sufficient ground for proceeding against the accused, he shall discharge the accused and record his reasons for so doing."

15. In the background facts involved in the petition, reference can

usefully be made to the case of Union of India .v. Prafulla Kumar Samal

(reported in 1979 (3) SCC, 4), wherein the apex Court after considering the

scope of Section 227 observed that the words 'no sufficient ground for

proceeding against the accused' clearly show that the Judge is not merely a

post office to frame charge at the behest of the prosecution but he has to

exercise his judicial mind to the facts of the case in order to determine that

a case for trial has been made out by the prosecution. In assessing this fact

it is not necessary for the court to enter into the pros and cons of the

matter or into weighing and balancing evidence and probabilities but he

may evaluate the material to find out if the facts emerging therefrom taken

at their fact value establish the ingredients constituting the said office. The

apex Court in para 9 and 10 of its judgment issued guidelines which are

reproduced below.

"(1) That the Judge while considering the question of framing the

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charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.

(2) Where the materials placed before the court disclose grave suspicion against the accused which has not been properly explained the court will be fully justified in framing a charge and proceeding with the trial.

(3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence adduced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused.

(4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced Judge cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the court, any basis infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial."

16. From the above discussion it seems well settled that at the

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stage of Sections 227-228 the court is required to evaluate the material and

documents on record with a view to finding out if the facts emerging

therefrom, if taken at their face value disclose the existence of all the

ingredients constituting the alleged offence. The court may for this limited

purpose sift the evidence as it cannot be expected even at the initial stage

to accept all that the prosecution states as gospel truth even if it is opposed

to common sense or the broad probabilities of the case.

17. In view of facts involved in the petition and the law as

aforesaid, the learned Courts below have miserably failed to appreciate the

case of petitioner in its true perspective, who, for the reasons recorded, as