Shrikantha Gopal Mandyam vs State Of Mah. Thr. Pso Ps Tah. Ps ...
2021 Latest Caselaw 9699 Bom

                                                                              apl380.2020.odt (j)
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                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                           NAGPUR BENCH AT NAGPUR


                     CRIMINAL APPLICATION (APL) NO. 380/2020


     APPLICANT :               Shrikantha Gopal Mandyam, aged about 61 years,
                               Occ. Retired, resident of Flat No. S-2, Laxmikrupa
                               Apartment, Plot no. T-7, Laxminagar, Nagpur

                                             ...VERSUS...

 NON-APPLICANTS:               1. State of Maharashtra,
                                  through P.S.O. P.S.Tashil
                                  Police Station, Nagpur.

                                2. Manish Amarchand Mehta, aged about 50
                                    years, Occ. Business, R/o. Bhaji Mandi,
                                    Itwari, Nagpur,
 ----------------------------------------------------------------------------------------------
                       Shri Masood Shareef, Advocate for applicant
                       Shri A.R.Chutke, APP for Non-applicant No.1 - State
                       Shri A.N.Ansari, Advocate for Non-applicant No.2
     ----------------------------------------------------------------------------------------------
                                         CORAM : MANISH PITALE, J.

DATE : 26/07/2021.

Hearing was conducted through video conferencing and

the learned counsel agreed that the audio and visual quality was

proper.

     2]                Heard learned counsel for the applicant.

                       Admit.


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Learned APP appearing on behalf of the non-applicant

No.1 - State and Shri Ansari, learned counsel appearing on behalf of

non-applicant No. 2 waive notice.

3] By this application, the applicant (original accused) has

challenged the order dated 30.11.2013, passed by the Judicial

Magistrate, First Class and the order dated 03.03.2020, passed by

the Court of District and Sessions Judge-5 and Additional Sessions

Judge, Nagpur, whereby the prayer made on behalf of the applicant

for discharge was rejected.

4] The applicant is a retired Branch Manager of a Bank at

Nagpur. The grievance of non-applicant No.2 (original complainant)

is that the applicant by issuing a Discharge Certificate to the non-

applicant No.2, discharging him from liability as a guarantor in

respect of a loan transaction and then allegedly suppressing the

same, has committed offences under Sections 406 and 420 of the

Indian Penal Code (I.P.C.)

5] The non-applicant No. 2 filed a complaint dated

12.01.2011 before the Court of Judicial Magistrate, First Class,

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Nagpur. He specifically claimed that when the bank in question,

wherein the applicant was working as a Manager, enhanced the

credit facility of one M/s. Parshwa Engineering Pvt. Ltd., the non-

applicant No. 2, who was a guarantor for the said company, applied

for discharge from the guarantee in the context of the fresh

transaction pertaining to enhancement of credit facility. The non-

applicant No.2 then claimed that on 23.01.1999, the applicant

issued the Discharge Certificate to him.

6] The aforesaid bank had initiated recovery proceeding

against the aforesaid M/s. Parshwa Engineering Pvt. Ltd. and its

responsible officers by filing Original Application No. 497/2001

before the Debts Recovery Tribunal (DRT) at Nagpur. The non-

applicant No.2 was arrayed as respondent No.7 in the said

proceeding. It is relevant that the said proceeding was initiated by

the Bank and that the applicant before this Court was not a party to

the said proceeding. In the said Original Application, non-applicant

No.2 had moved an application for being deleted from the array of

respondents by relying upon the aforesaid Discharge Certificate.

Only photocopies of the said Discharge Certificate and other such

documents were produced by non-applicant No. 2. The DRT

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considered the said material and rejected the application filed by

non-applicant No.2.

7] In the Original Application, the DRT issued a recovery

certificate by accepting the contention of the Bank. The review

application moved against such an order was also rejected by the

DRT. Thereafter, the Bank and the said M/s. Parshwa Engineering

Pvt. Ltd. and its responsible officers entered into a settlement. The

non-applicant No. 2 was admittedly not a party to the same. Under

the said settlement, the said M/s. Parshwa Engineering Pvt. Ltd. and

the Officers of the said company paid the agreed amount to the

Bank. It is an admitted position that the non-applicant No. 2 was

not required to pay any amount to the Bank in pursuance of the

aforesaid settlement.

8] It is in this backdrop that the aforesaid complaint dated

12.01.2011, was filed by the non-applicant No. 2 under Section

156(3) of the Code of Criminal Procedure (Cr.P.C.) before the

Magistrate. On the basis of the allegations made in the said

complaint, on a direction issued by the Magistrate, FIR dated

11.02.2011 was registered against the applicant for offences under

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Sections 204, 406 and 420 of the IPC. The investigation was

completed and on 18.01.2013 charge-sheet was filed for the

aforesaid offences against the applicant before this Court.

9] At this stage, the applicant moved an application for

discharge before the Magistrate, contending that none of the

ingredients pertaining to the said offences were found on the basis

of the charge-sheet and the material filed therewith. It was

submitted that, therefore, the applicant deserved to be discharged.

10] On 20.11.2013 the Magistrate rejected the said

application on the basis of following reasoning.

"In the present case on perusal of whole charge-sheet, it appears that charge-sheet is filed against accused in the individual capacity. The act of issuing discharge certificate in favour of complainant is against the act of submission of bank before DRT about non-discharging complainant from liability as a guarantor. Discharge certificate is came to be seized during investigation and it is sent to handwriting expert, whose report is yet awaiting. Therefore, after considering all documents and allegations of possession, I am of opinion that there is material to proceed in this matter. Though the initial dispute between the parties was of civil in nature, but by issuing certificate regarding discharge of guarantor (complainant) and then denied the same by the bank also attract ingredient of criminal offence done by concerned Bank Manager in the individual capacity.

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Therefore, whatever the allegation made by prosecution against accused are not appears to be groundless. Hence, I proceed to pass following order.

Order Application (Exh.6) is rejected."

11] Aggrieved by the same, the applicant filed revision

application before the Sessions Court. By judgment and order dated

03.03.2020, the Court of Additional Sessions Judge dismissed the

revision application, confirming the order of the Magistrate, refusing

to discharge the applicant. The aforesaid Court found that the act of

issuing Discharge Certificate by the applicant and it being denied by

the Bank clearly made out the case against the applicant to face trial

concerning the aforesaid offences.

12] Aggrieved by the said orders passed by the Magistrate

and the Sessions Court, the applicant approached this Court by filing

the present application, in which notice was issued on 14.12.2020.

The respondents have appeared before this Court and the

application is taken up for final disposal.

13] Mr. Masood Sharif, learned counsel for the applicant

invited attention of this Court to the proceedings initiated by the

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Bank before the DRT, order passed therein, as also the application

filed on behalf of non-applicant No.2, under Section 156(3) of

Cr.P.C. The learned counsel for the applicant submitted that even if

the allegations levelled against the applicant were to be considered

in the backdrop of the charge-sheet and the material brought on

record, none of the ingredients of offences under Sections 204, 406

and 420 of the I.P.C. could be made out at this stage of the

proceedings. On this basis, it was submitted that the applicant

cannot be forced to face the rigor of trial when the basic ingredients

of the alleged offences were not made out. The learned counsel

placed reliance on the judgment of the Supreme Court in case of -

(1) Priyanka Srivastava and another vrs. State of Uttar Pradesh and

others, reported in (2015) 6 SCC 287; (2) Kotak Mahindra Bank

Ltd. vrs. Nobiletto Finlease and Investment Pvt. Ltd reported in

2005 (3) Mh.L.J. 512 and (3) K. Virupaksha and another vrs. State

of Karnataka and another reported in (2020) 4 SCC 440.

14] On the other hand, Mr. Ansari, learned counsel

appearing for non-applicant No. 2 submitted that while considering

the application for discharge, the Court is not supposed to go into

the veracity of the material placed on record or to examine the

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sufficiency or otherwise thereof. It is submitted that the charge-sheet

and the material brought on record sufficiently demonstrated

existence of the ingredients of the aforesaid offences against the

applicant. It was submitted that the allegation against the applicant

was that despite issuance of the aforesaid Discharge Certificate to

non-applicant No.2, the bank of which the applicant was the Branch

Manager, had all along denied issuance of such certificate in the

proceedings before DRT. It was further submitted that although the

Discharge Certificate issued to non-applicant No. 2, was in the

custody of the investigating authority, office copy thereof was

allegedly destroyed by the applicant and the Bank, thereby

indicating that the ingredients of the said offences were made out

against the applicant. Reliance was placed on judgments of the

Hon'ble Supreme Court in case of - (1) Pallavi vrs. State of U.T

Chandigarh and others, reported in (2019) 18 SCC 206 and

(2) Indu Jain vrs. State of M.P. and others, reported in (2008) 15

SCC 341.

15] Heard learned counsel for the parties and perused the

record. There can be no dispute with the position of law that when

an application for discharge is considered by the Court, a mini trial

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cannot be undertaken and the Court is supposed to examine as to

whether the material brought on record along with the charge-sheet

prima facie makes out ingredients of the offences alleged. If the

Court find upon an analysis of the material on record that the

essential ingredients of the alleged offences are not made out, the

accused is entitled to the benefit of discharge and he cannot be

forced to face the rigor and ignominy of a criminal trial.

16] In the present case, the allegation against the applicant

appears to be that he had issued a Certificate of Discharge, dated

23.01.1999, in favour of non-applicant No.2, thereby stating that the

said non-applicant stood discharged from all liability pertaining to

credit facilities given to the aforesaid M/s. Parshwa Engineering Pvt.

Ltd.. It is alleged that despite issuance of such Discharge Certificate,

when the Bank initiated recovery proceedings against M/s. Parshwa

Engineering Pvt. Ltd. and arrayed non-applicant No. 2 as a

respondent in the proceedings before DRT, the bank denied issuance

of such Discharge Certificate. It is alleged that the said act on the

part of the applicant being his individual act and the denial on the

part of the Bank about issuance of such Discharge Certificate

certainly demonstrated ingredients of the aforesaid offences under

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Sections 204, 406 and 420 of the I.P.C. It was claimed that the

original Discharge Certificate was already in the custody of the

investigating authority, in pursuance of the investigation undertaken

after FIR dated 11.02.2011, was registered. According to the non-

applicant No.2, existence of such material clearly indicated that the

applicant could be tried for the aforesaid offences.

17] A perusal of the proceedings before the DRT show that

the applicant was admittedly not a party to the Original Application

filed by the Bank to recover outstanding amount from M/s. Parshwa

Engineering Pvt. Ltd. The non-applicant No. 2 was indeed arrayed

as respondent No.7. He filed an application for being deleted from

the array of respondents, by relying upon the said Discharge

Certificate. It is significant that the order passed by the DRT

rejecting application of non-applicant No.2 specifically records that

only photocopy of the documents including the said Discharge

Certificate were placed on record by non-applicant No.2. The

original Discharge Certificate was not produced before the DRT. The

Bank denied the issuance of such Discharge Certificate and

consequently the application for deletion filed on behalf of non-

applicant no. 2 stood rejected.

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18] It is an admitted position that eventually the said M/s.

Parshwa Engineering Pvt. Ltd. and its responsible officers entered

into a settlement with the Bank, under which they paid certain

amount to the Bank and there was no liability imposed upon the

non-applicant No.2 in respect of the dues of the said M/s. Parshwa

Engineering Pvt. Ltd.. In other words, non-applicant No. 2 did not

have to part with any amount on the basis of denial of the Discharge

Certificate by the said Bank.

19] It is in this backdrop that the non-applicant No. 2 filed

complaint dated 12.01.2011 before the Magistrate under Section

156(3) of Cr.P.C. alleging that the applicant has committed offences

under Sections 406 and 420 of the I.P.C. The litigation before the

DRT initiated by the Bank and its proceedings were referred to in

detail in the said complaint while making allegations against the

applicant.

20] The charge-sheet, filed in pursuance of the investigation

undertaken after registration of FIR, shows that the original

Discharge Certificate was taken into custody by the investigating

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authority on 16.03.2012 from non-applicant No.2. The said

document and other such material was relied upon while stating in

the charge-sheet that the applicant deserves to be charged for the

offences under Sections 204, 406 and 420 of the IPC.

21] The question that arises for consideration is, as to

whether the material that has come on record in pursuance of the

investigation and filed along with charge-sheet is enough to prima

facie show the ingredients of the said offences, for the applicant to

face trial.

22] In order to examine whether the ingredients of the said

offences are made out or not, it would be necessary to refer to the

relevant provisions of the I.P.C. The said provisions read as follows -

"Sec. 204 - Destruction of document or electronic record to prevent its production as evidence - Whoever secrets or destroys any document or electronic record which he may be lawfully compelled to produce as evidence in a Court of Justice, or in any proceeding lawfully held before a public servant, as such, or obliterates or renders illegible the whole or any part of such document or electronic record with the intention of preventing the same from being produced or used as evidence before such Court or public servant as aforesaid, or after he shall have been lawfully summoned or required to produce the same for that purpose, shall be punished with imprisonment of either description for a term

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which may extend to two years, or with fine, or with both."

Sec.405 - Criminal breach of trust - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or coverts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust"."

"Sec.406 - Punishment for criminal breach of trust - Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both."

"Sec.420 - Cheating and dishonestly inducing delivery of property - Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

23] A perusal of the above quoted portion would show that

in so far as offence under Section 420 of the IPC is concerned, the

essential ingredients would be that the accused dishonestly induces

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a person to deliver any property or to make alter or destroy the

whole or any part of valuable security, such a person shall be liable

for punishment. Section 415 of IPC defines "cheating" and it is

stated therein that when an accused person deceives any person and

fraudulently and dishonestly induces him to deliver any property or

to consent that any person shall retain any property, such an accused

person is said to have cheated the other.

24] Hence, it is necessary for invoking Section 420 r/w

Section 415 of IPC, that the aggrieved person is deceived to deliver

any property to the other person. In the present case, it is not even

the allegation of non-applicant No.2 against the applicant that by the

action of the applicant, the non-applicant No. 2 was deceived into

delivering any property to the applicant. It would have been a

different matter altogether if the allegation was that due to action of

the applicant, non-applicant no. 2 was required to part with certain

amount or property to be paid to the aforesaid Bank. In the present

case, admittedly the said M/s. Parshwa Engineering Pvt. Ltd. and

the responsible officers of the company paid certain amount to the

Bank and the matter stood settled. It is not as if the applicant has

issued the discharge certificate to the non-applicant No. 2, in order

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to dishonestly induce him to part with any amount or property to be

paid either to the applicant or to the Bank. Therefore, the essential

ingredients of the said offence under Section 420 of the IPC are not

made out.

25] Insofar as Section 406 r/w Section 405 of the IPC

pertaining to criminal breach of trust are concerned, the essential

ingredients of the offence are that when the accused person is

entrusted with the property and he dishonestly misappropriates or

converts the same to his own use, he is said to have committed the

offence of criminal breach of trust. In the present case, even if the

allegations made against the applicant and the material that has

come on record along with the charge-sheet are taken into

consideration, there is no allegation of entrustment of the property

to the applicant, muchless any dishonest misappropriation of the

same or conversion of the same to his own use by the applicant. The

material on record is completely bereft of any such allegations.

Therefore, the ingredients of the said offences are also not made out

on the face of record.

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26] Insofar as offence under Section 204 of the IPC is

concerned, persual of the said provision would show that the

ingredients of the said offence would arise when there is a

destruction of a document to prevent its production in evidence. In

the present case, the document in question i.e. the Discharge

Certificate dated 23.01.1999 was produced by non-applicant No.2

himself during the course of investigation. This very document is the

sheet anchor of the allegation made by non-applicant No. 2 against

the applicant. As regards, the contention raised by the learned

counsel on behalf of non-applicant No.2 that the destruction was of

the office copy of the said Discharge Certificate by the Bank and the

applicant, suffice it to say that such an allegation is wholly

misplaced in the facts and circumstances of the case present case.

The record shows that on 16.03.2012 the investigating authority

itself took into custody the original discharge certificate dated

23.01.1999 from non-applicant No. 2 himself. Therefore,

ingredients of the said offence are also not made out against the

applicant.

27] Applying the position of law laid down by the Hon'ble

Supreme Court in various judgments including aforesaid judgments

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on which learned counsel for the applicant and non-applicant No. 2

have placed reliance, it becomes clear that there is absence of

material, in the facts and circumstances of the present case, to allow

the proceedings to go to trial against the applicant. For a person to

face criminal trial is certainly an ordeal, which cannot be permitted

when the material on record filed along with the charge-sheet does

not show essential ingredients of the alleged offences. It is in such

situations that the Court is required to reach a conclusion that even

suspicion is not raised against the accused on the basis of material

on record. Once such a conclusion is reached, the Court must

exercise jurisdiction to discharge the accused, preventing the matter

to go to trial.

28] On the basis of the material on record, this Court is of

the opinion that in the present case, the application for discharge

ought to have been allowed. But the Court of Magistrate as well the

Sessions Court failed to appreciate the material on record in the

correct perspective while dismissing the application for discharge.

29] In view of the above, the application is allowed. The

impugned order dated 30.11.2013, passed by the Magistrate and the

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order dated 03.03.2020, passed by the Sessions Court, are quashed

and set aside. The application for discharge filed on behalf of the

applicant stands allowed.

30] Rule is made absolute in above terms. No order as to

costs.

JUDGE

Rvjalit