Chattisgarh High Court
Smt. Suman Devi Kela vs Central Bureau Of Investigation on 12 May, 2022
1
AFR
HIGH COURT OF CHHATTISGARH, BILASPUR
WPCR No. 678 of 2019
(Judgment/order Reserved on 21.04.2022)
(Delivered on 12.05.2022)
1. Smt. Suman Devi Kela Wd/o Late Parmanand Kela Aged About 51
Years R/o 10/a, Shri Nikunj Sahkari Path -3 , Chaubey Colony, PS
Saraswati Nagar, District Raipur, Chhattisgarh
2. Deepak Kumar Gandhi @ Deepak Gandhi S/o Chiranji Lal Gandhi Aged
About 45 Years R/o - House No., 419, Kela Badi Gali, Sanjay Nagar
Sikshak Colony, Ward -01, District Dhamtari Pin - 493663 District :
Dhamtari, Chhattisgarh
3. Shri Vijay Kumar Kela S/o Late Murlidhar Kela Aged About 55 Years
R/o House No. 16, Panshil Nagar, Civil Lines, District Raipur District :
Raipur, Chhattisgarh
4. Shri Utpal Nimaychandra S/o Late Nimaychandra Harinarayan Sarkar
Aged About 58 Years R/o F-2 Ralas Enclave, Rohini Puram, District
Raipur Chhattisgarh.
5. Bhan Singh Thakur @ Bhan Singh Rajput S/o Late Pawan Singh Thakur
@ Pawan Singh Rajput Aged About 63 Years R/o New Shanti Nagar,
Gorkha Colony, Near Gaurav Provision Store, District Raipur
Chhattisgarh, District : Raipur, Chhattisgarh
6. Madhu Fertilisers Ltd 20-22, Durga College Complex, K.K. Road,
Raipur,492001,Chhattisgarh
--- Petitioners
Versus
1. Central Bureau of Investigation through The Additional
Superintendent of Police /io, CBI BS and FC, Kolkata, C.G.O. Complex,
DF -Block, F- Wing, 1st Floor, Salt Lake City, Kolkata ( West Bengal),
District : Kolkata, West Bengal
2. Zonal Manager UCO Bank, Zonal Officer, Raipur Chhattisgarh, District:
Raipur, Chhattisgarh
--- Respondents
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Appearance:
For the Petitioners : Mr. Anupam Lal Das, Sr. Advocate
(through video conferencing) with
Mr. Sourabh Dangi, Advocate,
Mrs. Surya Kawalkar Dangi, Advocate
Mr. Rakesh Kumar Manikpuri, Advocate
Mr. Sandeep Shrivastava, Advocate.
For respondent No. 1 Mr. Ramakant Mishra, ASG,
For respondent no. 2 : Mr. Ravindra Sharma, Advocate
Hon'ble Shri Justice Goutam Bhaduri
CAV JUDGMENT/ORDER
1. In the instant petition, the petitioner has prayed for quashing the
charge sheet/ final report and the consequent proceeding of Crime
No. RCBSK2016E0006/ 2016 (Annexure P-1) against the petitioners.
2. The facts pleaded are that petitioners 1 & 2 Smt. Suman Devi Kela
and Deepak Kumar Gandhi @ Deepak Gandhi are directors of Madhu
Fertilizers Ltd. (Respondent no.6). Petitioners 3 & 4 Shri Vijay Kumar
Kela and Shri Utpal Nimaychandra are described as authorised
representatives of the Company and respondent no.5 Bhan Singh
Thakur @ Bhan Singh Rajput is proprietor of the sister concern of
Madhu Fertilizers.
3. (i) The challenge is made to the charge sheet filed by the respondent
CBI u/s 420, 468, 471 read with section 120-B of IPC. It is alleged that
the Managing Director of Madhu Fertilizers Limited namely
Permanand Kela initially obtained the loan of Rs.7 crores in the form
of credit facility from UCO Bank, Raipur in the year 2002. Thereafter
from time to time the loan was renewed and the credit facility was
inflated to Rs.106 crores. According to the charge sheet of CBI, it is
alleged that it was Permanand Kela who obtained the entire loan and
signed all the documents and on 28.11.2009 Parmanand Kela passed
away. Subsequently, the loan could not be paid after death of
Managing Director and eventually in May, 2010, the loan was
declared as Non-Performing Asset (NPA). It is stated that the
agreement for settlement of loan was made in the month of March,
2013 but till the year 2016, the entire amount could not be settled.
3(ii) Thereafter, the UCO Bank lodged an FIR before the CBI on the
ground that the mortgaged land worth Rs.7 crores was encroached
by 3rd party and was shown to be over-valued for that reason and
further the loans were obtained for the sister-concern of Petitioner
Company Madhu Fertilizers on the basis of fake Letter of Credit. In
pursuance of FIR, investigation was carried out by CBI which
disclosed that on the basis of fake Letter of Credits (LC), credit
facilities were obtained from the Bank. It is further contended that
initially when the Company requested for settlement of loan, it was
not acceded to and the Bank issued a notice u/s 13(2) of the
SARFAESI Act on 18.05.2011. The borrower Company challenged the
said notice under SARFAESI Act before the Debts Recovery Tribunal
and on adjudication the proceeding u/s 13(4) of the SARFAESI Act was
quashed by the DRT on 17.05.2012 (Annexure P-4). In the said order,
it was further observed that the borrower was willing to liquidate the
dues by selling the mortgaged property and eventually on
14.03.2013, the compromise proposal was approved by the
competent authority of the UCO Bank for acceptance of Rs.6850 lakhs
against the existing book balance of Rs.8516.00 lakhs and eventually
the entire loan was liquidated. It is contended that on 31.03.2013,
the Company paid Rs.13.68 crores during the year 2013-2014 and
further Rs.10.03 crores in the year 2014-2015 as per the agreement.
Thereafter, pursuant to the order of the DRT dated 18.05.2012 the
Company requested the Bank to release the original registered deed
mortgaged with the Bank on the ground that tripartite agreement was
made for sale of mortgaged property to repay the loan but the Bank
did not adhere to terms of the agreement. It is contended that on
19.05.2015, the Company again requested for release of the original
registered deed so that it could proceed to sell the property for
settlement of dues but it was also not acceded to. It is submitted that
due to with-holding of papers of mortgaged property the sale could
not be materialized and despite the financial crisis, the Company
could manage to pay Rs.0.49 crores in the year 2016-2017 as per the
terms of agreement to liquidate the loan amount. However, the debt
remained unpaid. Thereafter on 22.08.2016, the Bank had lodged the
FIR against the Company and its director u/s 120-B read with sections
420, 468, 471 IPC, upon which, the CBI carried out investigation and
filed the charge sheet on 28.11.2017. According to the petitioners,
the company has paid the entire amount due to the Bank in the
month of February, 2018 thereby they complied with the order
passed by the DRT on 30.01.2018 and accordingly, No-Due Certificate
was issued to the Company by Annexure P-9 dated 15.02.2018.
4. Learned counsel for the petitioner would further submit that once the
One-Time-Settlement (OTS) was accepted by the Bank and no-due
certificate has been issued after liquidating the dues and the Bank
agreed to inform to CBI & RBI about the compromise under OTS, it
shows the intention of the petitioners and Bank to abide by the terms
of settlement, therefore, no criminality can be imputed to the
petitioners. Learned counsel would further submit that the entire
transaction and the effort of the Bank was only to recover the dues,
therefore, the proceeding may be quashed. He placed reliance on a
judgment in Ramgopal Versus The State of Madhya Pradesh
2021 (4) Crimes 17 (SC) wherein the principles laid down in Gian
Singh V. State of Punjab (2012) 10 SCC 303 have been
followed and would submit that having regard to the nature of offence
and the fact that the parties have amicably settled their dispute, the
proceedings against the petitioners can be quashed in exercise of
inherent powers u/s 482 of Cr.P.C., even if the offences are non-
compoundable.
5. He further submits that it is alleged that the petitioners have in
wrongful manner have substituted six mortgage properties with one
property which was already encroached is contradicted by the report
of CBI as the charge sheet mentioned that six properties were
released from mortgage but the borrowers took the title deed of only
two properties which means that other four properties were still in the
hold of bank and the bank could have always claim lien on those
properties, if the bank so desired. Further , it is contended that as per
the final report it was late Parmanand Kela who forwarded the
application for substitution of property, therefore, the allegations can
be attributed to him alone, who is no more now. Further it is also
contended that the entire allegation of documentation is attributed to
Parmanand Kela, therefore, coupled with the fact that the entire loan
is repaid, continuance of criminal prosecution would be an abuse of
process of law.
6. Per contra, learned counsel for the CBI would submit that mere
payment of amount would not absolve the petitioners from Criminal
Prosecution. He would submit that the investigation revealed that the
petitioners on the basis of forged bills and Letters of Credit obtained
the credit to a large extent from the Bank beyond the limit which they
were not entitled. As such, the clearance of payment dues will not
exonerate them and No Due Certificate issued by the Bank will not
amount to withdrawal of criminal trial. In support of his contention,
he placed reliance on a judgment in State of Maharashtra
through Central Bureau of Investigation Versus Vikram
Anantrai Doshi (2014) 15 SCC 29.
7. I have heard learned counsel for the parties and perused the final
report, charge sheet and other documents annexed to the petition.
The document attached (Annexure P-4) is an order passed by the DRT
on 17.05.2012 which shows that a petition was filed by borrower after
notice of auction before the DRT u/s 13(2)(4) of the SARFAESI Act of
2002 whereby challenge was made to the notice and proposed
auction of the mortgaged property enumerated in the notice. The
learned DRT after hearing both the parties has passed the order in
S. A. No. 59 of 2012 on 17.05.2012 with the following directions :
01. The possession of the secured assets taken on
13.02.2012 as per A-16 notice affixed and published
as per A-17 is quashed along with the auction notice
IA-1 dtd 21.04.2012 issued by the Respondent Bank
directing the Bank to take measures under Section
13(4) afresh strictly in accordance to the provisions of
the Act, 2002 and rules thereunder.
02. The respondent shall not include the expenses
incurred for recovery proceeding quashed in this
appeal in the account of the borrower and shall pay
costs incurred by the appellant to lodge this appeal
challenging the illegal proceedings initiated against
him.
03. The Ld. Counsel for the appellant had submitted that
the appellant no.4 who is the widow of Shri
Parmanand Kela who was managing the affairs of the
appellant No.1 Company is ready and willing to
liquidate the dues by selling the mortgaged
properties by tripartite agreement through her along
with Bank and the prospective purchaser provided
she given the opportunity of to do so show that the
best price available shall be obtained for the
properties mortgaged with the Bank. Therefore, the
appellant is directed to approach the Bank with the
said request and negotiate for the same within a
period of one month from the date of this Judgment
failing which, the Bank is at liberty to proceed with
the measures under Section 13(4) afresh.
8. A perusal of the order dt. 17.05.2012 would show that the Tribunal
has recorded the submission of the appellants that Petitioner No.1
Suman Kela, who is widow of Parmanand Kela was managing the
affairs of the Company and she was ready and willing to liquidate
the dues by disposal of mortgaged property at the best price available
by tripartite agreement. The agreement was sought to be executed
through her along-with the Bank and the prospective purchaser. The
DRT, therefore, directed the heirs of the borrower to approach the
Bank with the said request and negotiate for the settlement of dues,
failing which, the Bank was given liberty to proceed with the measure
u/s 13(4) of the SARFAESI Act afresh. The document filed as Annexure
P-5 would show that thereafter the compromise proposal which was
sent for approval was accepted by the UCO Bank and the offer was
made by the bank setting the terms of compromise for settlement of
entire dues. Perusal of letter Annexure P-6 would reveal that an
application was filed by one of the petitioners to release the original
registered title deeds mortgaged with the bank for disposal of
property in order to monetize and liquidate the dues on the basis of
tripartite agreement. The said request to release the property was
again made on 19.06.2015 vide Annexure P-7 but it appears that the
documents i.e., the title deeds were not provided. So eventually since
the liquidation of loan was not done, the recovery proceeding was
initiated by the Bank. Therefore, the proceeding for recovery again
started before DRT for recovery of loan. The order sheet of DRT
would reveal that during pendency of proceeding, One-Time-
Settlement was arrived at between the Bank and borrower.
9. The subsequent order of the DRT dated 30.01.2018 wherein all the
petitioners were impleaded as party/respondents would show that
One Time Settlement (OTS) was arrived at between the parties and it
was stated on behalf of the Bank that they have reached an amicable
settlement in terms of acceptance contained in letter dt. 08.01.2018.
The order of DRT dt. 30.01.2018 is relevant here for the issue and is
quoted below :
Order dt. 30.01.2018
"Case has been taken up today on being mentioned
by counsel for both the parties.
An application for passing appropriate order, filed
by the bank on 29.01.2018 is pending consideration. The
application is supported with the affidavit of Shri Prasenjit
Roy, Chief Manager, who has stated on oath that the
parties have reached an amicable settlement in terms of
acceptance contained in letter dtd. 08.01.18 (Annex. A-2).
Perusal of letter dated 08.01.18 reveals that the matter
has been compromised for an amount of Rs.23.28 Crores
(inclusive of Rs.2.80 Crores already realized by sale of
mortgaged properties) on the following terms :-
(A) Entire OTS amount to be paid within 12
months from getting approval from the
Bank with an endeavor to pay the
amount within 31.03.2018.
(B) Interest @ Base rate (simple) to be paid
on the amount paid by the Company
after 28.03.2018 for the period of delay.
(C) Bank will not withdraw any criminal
proceedings filed against the Company
and/or its promoters/guarantor, however,
settlement of the account under OTS
would be informed to CBI & RBI
(D) Bank would get consent decree from
DRT incorporating the terms and
conditions of OTS.
(E) In case OTS amount is not paid within
one year of approval from bank, it will be
treated as failed and bank would be
entitled to recover the entire
outstanding amount with agreed rate of
interest, all other charges, costs,
damages, etc.
(F) This settlement scheme is without
prejudice to the bank's right and
contentious under various loan
documents/securities created by the
Company for availing the loan
In view of the fact that the matter has been settled
between the parties on the above terms, as has been
affirmed by the Competent Officer of the bank and also
consented by Counsel for the Defendants, the present OA
stands finally disposed of on the terms as mentioned
above. Recovery Certificate shall be prepared to recover
entire outstanding on appropriate application, if any, filed
by the bank in case of default in making payments by the
Defendants".
With the above observations, the present OA stands
finally disposed of.
Record be consigned to the record room."
10. Thereafter, admittedly, the document would show that the loan was
liquidated and the entire dues were paid, consequently a "No Due
Certificate" (Annexure P-9) was issued by Bank. The Supreme Court
in Central Bureau of Investigation, ACB, Mumbai Versus
Narendra Lal Jain (2014) 5 SCC 364 while considering the similar
facts situation observed that since the liability to make good the
monetary loss suffered by the Bank was mutually settled and the
accused had accepted the liability in that regard, the High Court had
rightly invoked its power under Section 482 CrPC and quashed the
proceedings. At para 14 of the judgment, the Court observed thus :
"14. In the present case, having regard to the fact
that the liability to make good the monetary loss suffered
by the Bank had been mutually settled between the parties
and the accused had accepted the liability in this regard,
the High Court had thought it fit to invoke its power under
Section 482 CrPC. We do not see how such exercise of
power can be faulted or held to be erroneous. Section 482
of the Code inheres in the High Court the power to make
such order as may be considered necessary to, inter alia,
prevent the abuse of the process of law or to serve the
ends of justice. While it will be wholly unnecessary to
revert or refer to the settled position in law with regard to
the contours of the power available under Section 482 CrPC
it must be remembered that continuance of a criminal
proceeding which is likely to become oppressive or may
partake the character of a lame prosecution would be good
ground to invoke the extraordinary power under Section
482 CrPC."
11. On the other hand, the respondents have relied on a case law
reported in (2014) 15 SCC 29 Para 21 (State of Maharashtra
through CBI Versus Vikram Anantrai Doshi) wherein the case of
Narendra Lal Jain (supra) was also referred. The law laid down in the
case was that even if No Due Certificate has been issued and the
amount was already repaid to the bank, it will not absolve the parties
of their criminal liabilities. At para 21, the Court held thus :
21. Slightly more recently in Gopakumar B. Nair v.
CBI (2014) 5 SCC 800, the Court referred to para 61 of
Gian Singh Case (2012) 10 SCC 303, distinguished the
decision in Narendra Lal Jain regard being had to the fact
that the accused persons were facing charges under
Section 120-B read with Section 13(2) read with Section
13(1)(d) of the 1988 Act and Sections 420/471 IPC and
came to hold that substratum of the charges against the
appellant-accused were not similar to those in Narendra Lal
Jain, wherein the accused was charged under Section 120-B
read with Section 420 IPC only.
12. In the case in hand, the final report of charge sheet would show that
the charge sheet was filed u/s 120-B read with sections 420, 468, 471
of IPC. There were no charges u/s 13(2) read with section 13(1)(d) of
the Act, 1988 as no bank officials were inculpated so as to attract the
charges of Prevention of Corruption Act. The final report would show
that the bank officials are not made accused. The main charge
against the Company, which was alleged to be managed by late
Parmanand Kela is that to avail the credit facilities to an extent to
which the company was not entitled, misrepresentation was made. In
likewise facts situation, as held by Their-Lordship in case of Nikhil
Merchant Vs. CBI 2008 9 SCC 677 , wherein charge-sheet was
filed with an allegation that the main intention was to cheat the Bank
and induce it to part with additional amount of credit to which the
Company was not otherwise entitled, when the repayment of loan was
made in its entirety, the court took notice of fact that dispute has
been settled between the parties and compromise forms part of
decree and exercised the power conferred u/s 482 of CrPC to quash
the charge sheet and to hold that the dispute had an overtone of civil
dispute with certain criminal facts.
13. In the instant case, the event of facts would reveal that it is alleged
the petitioner Company availed the credit facilities by Letter of Credit
by misrepresentation and production of bills to which the Company
was not entitled. Subsequently after death of Parmanand Kela, the
loan became Non-Performing Asset (NPA). Therefore, the proceedings
were drawn for recovery under the SARFAESI Act before the Debts
Recovery Tribunal. Before the Debts Recovery Tribunal, the
compromise was effected and subsequently the entire loan was
liquidated. The compromise orders were also passed on 30.01.2018.
However, before it a report was made by way of FIR u/s 120-B, 420,
468, 471 of IPC bearing No.RCBSK2016E0006 dt. 22.08.2016. During
the compromise though the Bank stated they would not withdraw the
criminal prosecution, however, they would inform the settlement of
account under OTS to CBI and RBI. Therefore, the facts of the case
would be similar to that of Nikhil Merchan Vs. CBI (Supra) and CBI Vs.
Narendra Jain (Supra). Here, in this case the charges of conspiracy
under Prevention of Corruption Act is not there and while accepting
the settlement the Bank undertook to inform the factum of repayment
to CBI & RBI. Consequently, the dispute involves herein has also
overtone of civil dispute with certain criminal facets.
14. Further the final report of CBI speaks that on the basis of fake Letter
of Credits the amount was obtained. Indisputably, the loan was
initially obtained in the year 2002, therefore, at the inception, it can
be inferred that no intention of cheating exists. In Nikhil Merchant
versus Central Bureau of Investigation ( Supra) the Supreme
Court observed that it was a case of availing of credit facility beyond
the limit by misrepresenting the financial status of the Company. In
other words, in that case, the company wanted to avail the credit
facilities to an extent to which the Company was not entitled and
thereby the intention of the Company and its officers was to cheat the
Bank and induce it to part with additional amounts of the credit to
which Company was not otherwise entitled. It is further held at para
30 that the dispute between the Bank and the Company was set at
rest on the basis of 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. The dispute involved
therein has overtones of a civil dispute with certain criminal facets.
The Court further held at Para 31 that the technicality should not be
allowed to stand in the way of quashing the criminal proceedings
since the continuance of proceeding after compromise arrived at
between the parties would be a futile exercise. At paras 30 & 31 the
Court held thus:
"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 where-under the
dues of the Bank having 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
Proceeding 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 versus State of Haryana (2003) 4 SCC 675 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 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.
(Emphasis applied)
15. In a situation of compromise like this, recently the Supreme Court in
2021 (4) Crimes 17 (SC) Ramgopal Versus The State of
Madhya Pradesh (supra) held that the High Court, having regard to
the nature of offence and fact that the parties have amicably settled
their dispute and victim has willingly consented to nullification of
criminal proceedings, can quash such proceedings in exercise of its
inherent powers under Section 482 Cr.P.C., even if the offences are
non-compoundable and the High Court can indubitably evaluate
consequential effects of offence beyond body of an individual and
thereafter adopt a pragmatic approach, to ensure that felony, even if
goes unpunished, does not tinker with or paralyze the very object of
administration of criminal justice system. It held that criminal
proceeding involving non-heinous offences or where offences are
predominantly of a private nature, can be annulled irrespective of the
fact that trial has already been concluded or appeal stands dismissed
against conviction. It further held that handling out punishment is not
the sole form of delivering justice, societal method of applying laws
evenly is always subject to lawful exceptions.
16. Applying the analogy of the said judgment in the instant case when
the documents are seen, it would show that initially the Bank issued
notice u/s 13(2) of the SARFAESI Act on 18.05.2011 and further the
proceedings for sale of property pursuant to notice u/s 13(2)(4) of the
SARFAESI Act was quashed by the order of DRT dated 17.5.2012. The
order further records the submission of appellants that the borrowers
are willing to liquidate the dues by selling the mortgaged property by
tripartite agreement. Thereafter, the compromise proposal of the
Company for acceptance of Rs.6850 lakhs against the existing book
balance of Rs.8516 lakhs was approved by the Bank authorities and
later-on certain amount was also paid in token of acceptance and
thereafter the borrower requested the Bank for release of the
mortgaged property and it was not acceded to and during such
period, when the loan was not liquidated the FIR was lodged on
22.08.2016 by the Bank. In a subsequent proceeding of recovery
before the DRT, One-Time-Settlement (OTS) was arrived at between
the parties, the amount was paid and the security papers i.e.,
mortgage papers were also released. In the settlement order of DRT
dt.30.01.2018 , this was recorded that the Bank will not withdraw any
criminal proceedings filed against the Company or its representatives,
but the settlement of the account under the OTS would be informed
to the CBI & RBI. The said action of the bank would demonstrate the
intention of the Bank and it can be logically inferred that the Bank
was not empowered to compound the offence despite the dues of the
bank are totally liquidated, however, the obligation to inform CBI &
RBI about the OTS was recorded.
17. In like nature case of OTS where the Bank itself has come forward
with a positive posture to make an amicable settlement for
compromise in settled terms and had assured the borrower Company
to part with information of settlement, the event of fact after
settlement of dues by repayment, it would lead to show that the
entire genesis of dispute was for non-payment of loan. Therefore,
following the principles laid down by the Supreme Court in Gian
Singh Versus State of Punjab (supra) which has further been
further followed in an umpteen number of cases including the recent
one of Ram Gopal Vs. State of M.P (supra) , I am of the
considered opinion that the power under Section 482 CrPC can be
invoked by the High Court in criminal cases having overwhelmingly
and predominanatingly civil flavor stand on different footing for the
purposes of quashing, particularly the offences arising from
commercial, financial, mercantile, civil, partnership or such like
transactions where the wrong is basically private or personal in nature
and the parties have resolved their entire dispute.
18. Applying the aforesaid text to the facts of the instant case, it
would also be clear that since the dues of the Bank has already been
liquidated in terms of compromise of one-time-settlement , the power
under Section 482 CrPC can be exercised to quash the proceeding of
criminal nature pending against the petitioners.
19. The final report filed by the CBI for which quashment is sought
is also perused. In the said report/charge-sheet, it is alleged that all
the loan applications were found to be signed by late Parmanand Kela
on behalf of Madhu Fertilizers. It further records that the credit
facility sanctioned to Madhu Fertilizers i.e., appellant no.6 was
enhanced from time to time on applications being moved by late
Parmanand Kela, Managing Director of the said Company till his
death on 28.11.2009 and it was stated that the total exposure of the
UCO Bank to M/s. Madhu Fertilizers was 106 crores (91 + 15 crores).
It further records that after death of Parmanand Kela on 28.11.2009,
the accused Vijay Kumar Kela (A-3) being the authorised signatory
submitted an application for reallocation of working capital within a
sanction limit. Therefore, it shows that after death of Parmanand
Kela, the petitioner did not enhance the credit limit. Further the final
report says that to avail loan, entire modus operandi adopted by
Parmanand Kela, Managing Director of Madhu Fertilizers was to
defraud the UCO Bank and the Letter of Credit used to be got opened
in favour of different Fertilizer Companies on the application for the
purported purchase of pesticides and fertilizers. It further reflect that
the Letter of Credit so opened used to be taken-over from the UCO
Bank by the accused borrower on the pretext that same would be
delivered to the Fertilizer Companies and used to be submitted by the
accused borrower for discounting the bill under the Letters of Credit.
It further shows that when the amounts were credited in the account
of the Fertilizer Companies after discounting, late Parmanand Kela
used to contact the Fertilizer Companies and used to advise to credit
to the ledger accounts of M/s. Madhu Fertilizers Ltd., and other firms.
Thereafter, it further records that during investigation, no proactive
roles were found to be played by the bank officials either at Letter of
Credit Opening Bank i.e., Uco Bank or other Banks at Raipur i.e.,
State Bank of India, United Bank of India, IDBI, HDFC etc.
Consequently the entire allegations revolve around late Parmanand
Kela and not the petitioners. It was therefore the case of the CBI that
the Letter of Credit documents were all operated by late Parmanand
Kela and implication of the present petitioners primarily appears to
be on the principles of vicarious liability for criminal offence for the
reason that few of them were directors and authorised signatories.
20. The Supreme Court in M.A.A. Annamalai Versus State of
Karnataka (2010) 8 SCC 524 has quashed the prosecution of the
Director and held that the directors were not responsible for the
business. Here in the instant case, when the final report of CBI itself
shows that the entire Letter of Credits based on vouchers were
operated by late Parmanand Kela, prima facie it appears that he was
in the helm of affairs and not the petitioners. The present petitioners,
who were not alleged to be in-charge for conduct of business cannot
be put to criminal trial. Further in Shiv Kumar Jatia Versus State
(NCT of Delhi) (2019) 17 SCC 193 the Apex Court while
considering the liability of the Directors/the Controlling authorities of
Company in a corporate criminal liability held that it is the cardinal
principle of criminal jurisprudence that there is no vicarious liability
unless the statute specifically provides for. The Court further held
that an individual who has perpetrated the commission of an offence
on behalf of the Company can be made an accused, along with the
Company, if there is sufficient evidence of his active role coupled with
criminal intent.
21. Reading of the final report would show that the entire
allegations have been attributed to late Parmanand Kela and in
respect of petitioners, it is stated that Smt. Suman Devi Kela is wife of
Parmanand who was M.D., of M/s. Madhu Fertilizers and Vijay Kumar
Kela is brother of late Parmanand Kela who was authorised signatory
after death of Parmanad Kela on 28.11.2009. With respect Deepak
Gandhi, it was only stated that he was director and against him, it was
stated that certain properties were wrongly valued and were
mortgaged with inflated valuation.
22. In Sunil Bharti Mittal versus Central Bureau of
Investigation (2015) 4 SCC 609 the Supreme Court held that
vicarious liability in case of director cannot be accepted unless it is
held that the criminal intent of "alter ego" of the Company, that is
personal group of the persons that guides the business of the
Company cannot be imputed to all other directors who are in the
Company. It is further held if the person or group of persons who
controls affairs of the Company commit an offence with a criminal
intent, their criminality can be imputed to the Company or that
individual. The Court at paras 40, 42, 43 held as under :
"40. It is abundantly clear from the above that the
principle which is laid down is to the effect that the criminal
intent of the "alter ego" of the company, that is the
personal group of persons that guide the business of the
company, would be imputed to the company/corporation.
The legal proposition that is laid down in the aforesaid
judgment in Iridium India Telecom Ltd v. Motorola Inc
(2011) 1 SCC 74 is that if the person or group of persons
who control the affairs of the Company commit an offence
with a criminal intent, their criminality can be imputed to
the company as well as they are "alter ego" of the
company.
42. No doubt, a corporate entity is an artificial
person which acts through its officers, Directors, Managing
Director, Chairman, etc. If such a company commits an
offence involving mens rea, it would normally be the intent
and action of that individual who would act on behalf of the
company. It would be more so, when the criminal act is
that of conspiracy. However, at the same time, it is the
cardinal principal of criminal jurisprudence that there is no
vicarious liability unless the statute specifically provides so.
43. Thus, an individual who has perpetrated the
commission of an offence on behalf of a company can be
made an accused, along-with the company, if there is
sufficient evidence of his active role coupled with criminal
intent. Second situation in which he can be implicated is in
those cases where the statutory regime itself attracts the
doctrine of vicarious liability, by specifically incorporating
such a provision."
23. In view of the foregoing discussion, I am of the opinion that
continuance of criminal proceeding against the petitioners would be
an abuse of process of law for the reasons that the entire outstanding
has been liquidated and the bank has accepted and settled their
monetary dues. Therefore, I am inclined to quash the criminal
proceedings against the petitioners by invoking the jurisdiction of 482
Cr.P.C. Accordingly, the impugned Charge Sheet/Final Report and
the consequential proceedings of Crime No.RCBSK2016E0006/2016
(Annexure P-1) is quashed. In the result, the petition is allowed.
Sd/-
(Goutam Bhaduri)
Judge
Rao
Head-Notes
After liquidating the loan amount due to the Bank
pursuant to a compromise arrived at between the Bank
and borrower, the technicality should not be allowed to
stand in quashing of the criminal proceedings, since
continuance of the same after the compromise would be
illegal.
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