Mayank Rasbihari Bapna S/O ... vs State Of Gujarat
2021 Latest Caselaw 15007 Guj

R/CR.MA/2372/2019                              CAV JUDGMENT DATED: 24/09/2021




     IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

     R/CRIMINAL MISC. APPLICATION NO. 2372 of 2019


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE GITA GOPI

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1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2    To be referred to the Reporter or not ?

3    Whether their Lordships wish to see the fair copy
     of the judgment ?

4    Whether this case involves a substantial question

of law as to the interpretation of the Constitution of India or any order made thereunder ?

============================================= MAYANK RASBIHARI BAPNA S/O RASBIHARI BAPNA Versus STATE OF GUJARAT ============================================= Appearance:

MR MIHIR THAKORE SENIOR ADVOCATE FOR SINGHI AND CO(2725) for the Applicant(s) No. 1,2,3 MR P P MAJMUDAR(5284) for the Respondent(s) No. 2 MR. VIPUL B SUNDESHA(6689) for the Respondent(s) No. 2

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CORAM:HONOURABLE MS. JUSTICE GITA GOPI

Date : 24/09/2021

CAV JUDGMENT

1. Rule. Monali Bhatt, learned Additional Public Prosecutor and Mr. Vipul B.Sundeshal learned advocate waive service of notice of rule on behalf of respective

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parties.

2. This application has been filed under section 482 of the Code of Criminal Procedure for quashing and setting aside the complaint being FIR No.I/9/2019, dated 29.01.2019 registered with Satellite Police Station, Dist.: Ahmedabad City for offfences punishable under sections 406, 420 and 114 of IPC qua the present applicants.

3. Few facts relevant for consideration of the present petition are stated hereinbelow:

3.1 The applicant nos.1 and 2 are the employees of IndusInd Bank Limited (hereinafter referred to as the 'Bank', for short) and the applicant no.3 is a former employee of the Bank, who left the Bank from 06.03.2017.

3.2 A company namely, Gallops Infrastructure Limited (in short 'Gallops'), wherein the respondent no.2

- original complainant appears to be a Director, had approached the Bank with a request to provide facility of Bank Guarantee on account of entering into a development agreement with one Vestas Wind Technology India Private Limited (hereinafter referred to as 'Vestas' for short) and as per proposed agreement the Gallops was required to furnish an Advanced Bank Guarantee as well as a Performance Bank Guarantee in favour of Vestas.

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3.3 On 21.12.2015, the Bank sanctioned a facility in favour of Gallops. Under the said facility, for a period of 12 months, Gallops was eligible to seek Bank Guarantees upto the total sanctioned limit of Rs.44 crores. In the said facility (i) the Gallops was eligible to seek an advance bank guarantee upto Rs.22.88 crores for the tenor of upto 18 months and (ii) a performance bank guarantee upto Rs.21.12 crores for the tenor of 30 months. For availing the said facility, the Gallops was required to make a fixed deposit of Rs.44 crores with the Bank and Rs.46 lakhs were to be charged to the Company by the Bank as commitment fees. The Bank has further indicated that the bank guarantee commission payable by Gallops on issuance of the Bank Guarantee would be adjusted in the commitment fees paid by Gallops for sanction of the facility and the details of the same were laid down in the letter of the Bank dated 30.12.2015.

3.4 In the said letter dated 30.12.2015, it was pointed out that bank guarantee commission for the advance bank guarantee of Rs.22.49 crores for a period of one year was Rs.16 lakhs and bank guarantee commission for the performance bank guarantee of Rs.20.76 crores for a period of one year was Rs.15 lakhs, and for a period of two years was Rs.30 lakhs.

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3.5 Pursuant to the request of Gallops, the Bank issued two bank guarantees in favour of Vestas being Bank Guarantee No.OGT0009160001541 dated 13.01.2016 for Rs.22,45,10,000/-, which was to remain in force till 15.01.2017, with the claim expiry date of 14.02.2017; and Bank Guarantee No.OGT0009160001536 dated 13.01.2016 for Rs.20,72,40,000/-, which was to remain in force till 28.02.2017, with the claim expiry date of 29.03.2017. It is stated that, the aforesaid Bank Guarantee expired on 15.01.2017 and 28.02.2017, respectively. On 01.03.2017, the Bank had addressed an email to Gallops requesting for necessary documents to cancel the expired Bank Guarantees.

3.6 According to the applicants, as per the terms of aforesaid performance Bank Guarantee of Rs.20,72,40,000/-, the claim expiry date occurred on 29.03.2017. On 30.03.2017, the Bank addressed a communication to Vestas informing about the expiry of the claim period, and the fact that the Bank was fully discharged of its liabilities under the said guarantee. Simultaneously, on 30.03.2017, the Bank had also issued a letter to Gallops intimating that the validity and the claim period of the aforesaid performance Bank Guarantee had expired and that no claims had been received from the beneficiary and requested Gallops to follow up with Vestas for the return of the original bank guarantee. The Bank also issued reminders to Vestas vide

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letters dated 08.07.2017, however, no response was received from Vestas.

3.7 The applicants contend that in the month of September 2017, Gallops contacted the Bank and stated that it was under impression that the performance bank guarantee would be renewed automatically. In response, the Bank clarified that there was no agreement in respect of automatic renewal of the bank guarantee. Further, by an email dated 08.09.2017, it was pointed out to Gallops that the facility sanctioned vide letter dated 21.12.2015 was valid for a period of one year, and the same having expired was pending renewal since December 2016.

3.8 By an email dated 21.09.2017 to the Bank, the Gallops claimed that the performance bank guarantee having expired, was to be renewed for second year without any intimation, and that Gallops had not received any renewal document for the same. On receipt of the same, the Bank immediately contacted Gallops, and reiterated that there was no agreement for automatic renewal of the bank guarantee. The Bank addressed an email dated 21.09.2017 to Gallops and requested for necessary documents for renewal of the facility.

3.9 On 02.10.2017, Gallops addressed another email to the Bank that they had been communicating back regarding the matter. In response to the same email

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dated 02.10.2017, the Bank addressed an email dated 03.10.2017 and provided details of all the reminders that were issued by the Bank in respect of the expiry of the bank guarantee as well as the charges that were collected by the Bank. Thereafter, by an email dated 04.10.2017, the bank referred to the telephonic/personal discussion in respect of the matter and forwarded a sample of the request letter required to be addressed by Gallops for issuance of fresh bank guarantee.

3.10. After some another communication, the Gallops addressed a letter to the Bank on 13.12.2017 for refund of the amount collected by the Bank towards bank guarantee commission for the 2nd year of the performance bank guarantee. Thereafter, the Bank received a notice dated 25.04.2018 from the Satellite Police Station calling upon its officers, including the present applicants to appear and provide response within two days in respect of the application filed by Gallops. The applicant nos.1 and 2 appeared before the Satellite Police Station and got recorded their statements.

3.11 Thereafter, the Bank approached the Gallops and offered payment of Rs.15,00,000/- by way of Demand Draft; however the same was not accepted by the Gallops and returned the same to the Bank. Thereafter, on 18.06.2018, a legal notice was issued by the Gallops alleging that the Bank had not renewed the performance

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bank guarantee for the 2nd year, inspite of having charged bank guarantee commission for the same, which resulted into business losses to Gallops and claimed for repayment of Rs.46 lakhs along with service tax and interest @ 18% from 30.12.2015 till date of payment. It also claimed an amount of Rs.50,00,00,000/- towards business losses.

3.12 In response to the said legal notice, the Bank replied by letter dated 09.07.2018 that the amount of Rs.46 lakhs was charged towards commitment fees, which was non-refundable, and the bank guarantee commission was to be adjusted against the commitment fees. The applicant no.3 on 02.02.2019 received a phone call from the Satellite Police Station informing about the impugned FIR. He had visited the police station on 05.02.2019 for recording of his statement. On 05.02.2019, the Bank has also received a separate notice from the Satellite Police Station, calling upon the Bank to produce all the relevant documents in respect of the matter.

4. Mr. Mihir Thakore, learned senior advocate, submits that the present FIR has been lodged by the complainant with a view to harass and humiliate the present applicants. He submits that on bare reading of the impugned FIR, it is evident that the same does not disclose commission of offences alleged to have been committed by the applicants.

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4.1. Mr. Thakore, senior advocate submitted that, the terms and conditions under negotiations was accepted by Gallops. Initially the Gallops had requested for issuance of an advance Bank Guarantee having a tenor of one year plus one month claim period and a performance Bank Guarantee having a tenor of two years with one month claim period and in that circumstances the Bank had informed Gallops by email dated 30.12.2015, that the bank guarantee commission payable on the issuance of such Bank Guarantee for the period of one and two years respectively would be 46 lakhs and such bank guarantee commission was to be adjusted in commitment charges of Rs.46 lakhs payable by the Gallops and thereby total amount payable by Gallops was Rs.48 lakhs which included service tax of Rs.6.67 lakhs and thereby Bank had initiated the process of issuance of Bank Guarantee as per the request of the Gallops, which is reflected in the email dated 04.01.2016.

4.2 Mr. Mihir Thakore, learned senior advocate submitted that, the Bank has issued Bank Guarantees in favour of Vestas as per the request of the Gallops. The Bank Guarantee expired on 15.01.2017 and 28.02.2017 and therefore on 08.03.2017, the Bank addressed an email to Gallops requesting for necessary documents to cancel the expired Bank Guarantees. He submits that as per the Performance Bank Guarantee for Rs.20,72,40,000/-, the claim expiry date was 29.03.2017

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and thereafter, on 30.03.2017, the Bank addressed a communication to Vestas informing about the expiry of the claim period, and that the Bank was fully discharged of its liabilities under the said guarantee and a separate letter was also addressed to Gallops on the same day intimating that the validity and the claim period of the performance bank guarantee has expired and no claim has been received from the beneficiary within the claim period.

4.3 Referring to the documents placed on record to fortify the submissions and the contentions raised in the petition, Mr. Thakore, senior advocate, specifically emphasized upon the letter of the Gallops dated 11.01.2016, wherein the request was made for Bank Guarantee for the beneficiary amount of Rs.20,72,40,000/- and submitted that therein itself the validity is dated 28.02.2017 and the claim period noted as 29.03.2017, and that by way of letter, Gallops authorized the Bank to debit their Account No.201000290349 towards bank guarantee commission and other charges. They even undertook to pay the commission and other charges in the event the Guarantee was renewed / extended till it was completely discharged.

4.4 Mr. Thakore submitted that on 13.01.2016, the performance bank guarantee with Gallops and Vestas being Bank Guarantee No.OGT0009160001536 was executed. He stated that the terms and conditions while

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have been specifically laid down the guarantee was to come into force from the date of its issuance and was to remain in force and effective till 28.02.2017, which is the expiry date and claim expiry date after 30 days is noted as 29.03.2017. He stated that it was observed that this bank guarantee can be enforced by the owner any number of times for their claims or demand to the total extent of Rs.20,72,40,000/- as long as it remained in force.

4.5 Mr. Thakore also referred to the concluding para after condition no.13, which reads thus:

"Notwithstanding anything contained hereinabove:

 Our liability under this Bank Guarantee shall not exceed INR 20,72,40,000/- (Rupees Twenty crore seventy two lakh forty thousand only);

 This Bank Guarantee shall be valid upto 28.02.2017 and;

 We are liable to pay the guaranteed amount OR any part thereof under this Bank Guarantee only if you serve upon us a written claim or demand on or before 29.03.2017.

 All your rights under this Guarantee shall be forfeited and we shall be relieved &

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discharged from all the liabilities w.e.f. 29.03.2017 even though the original bank guarantee is not returned to us."

4.6 Mr. Mihir Thakore, learned senior advocate further referred to the email dated 01.03.2017 of having informed to the Company for cancellation of expired BG and for arranging the original BG, cancellation request letter and discharge letter from the beneficiary. He stated that the Bank had informed the Vestas on 30.03.2017 in connection to Guarantee No.OGT0009160001536 that the validity of the guarantee had expired on 28.02.2017 and the claim period expired on 29.03.2017. It was also informed by the Bank to the Vestas that the Bank has not received any claim under the said Guarantee till the expiry of the period and informed Vestas that since no claim has been lodged with the Bank, the Bank was fully discharged of its liability under the said Guarantee and therefore they were requested that no further claims would be entertained under the above Guarantee.

4.7 Mr. Thakore stated that the facilities provided were repayable and determinable on demand and was made available for the period of one year from the month of sanction. The facilities were to expire on the last date of 12 months. Mr. Mihir, senior advocate, stated that on 08.09.2017, it was informed to the otherside that the Bank may at its sole discretion choose to continue / renew

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the facilities for a period beyond the period of one year. The Company had the knowledge that the Bank is open to renew the facilities beyond the sanction period. Mr. Mihir stated that on 21.10.2017, the Company has responded to the communication in regard to the confirmation of second year period of Performance Bank Guarantee No.OGT0009160001536 and the Bank for the renewal request forwarded the format by way of email.

4.8 Mr. Thakore, senior advocate, further submitted that the controversy arose in connection with the email communication addressed by the Company to the Bank on 23.09.2017, where the Company for the very first time used the phrase "auto renewal" and according to the Company the PBG No.OGT0009160001536 dated 13.01.2016 was stated to be valid up till the defect liability period upto 28.02.2018 and which according to the Company would be issued in two phase with auto renewal and for the first year it would be valid up till 28.02.2017 from the date of issuance and in the second year it would be auto renewed by the Bank for the defect liability period of 28.02.2018. Mr. Thakore submitted that the Company for the very first time, by this letter, alleged that after the first year the said PBG was not auto renewed for which PBG charges was already collected by the Bank from them. The Company alleged that after several telephonic follow up and reminders with the Bank, they neither received any renewal copy of PBG nor

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any proper response from the Bank.

4.9 Mr. Mihir Thakore, senior advocate, stated that by way of Demand Draft No.390577, dated 27.04.2018, the Bank offered payment of Rs.15,00,000/- to the Gallops, however, the same was not accepted and returned to the Bank and thereafter a legal notice was issued by the Company to the Bank through the Advocate calling upon the Bank to refund the amount towards the Bank Guarantee pursuant to the agreement/communication dated 30.12.2015 as well as other amount towards the interest of delayed payment and business losses alleged to have been occurred to the Company. Mr. Thakore stated that a complaint is already before the National Consumer Disputes Redressal Commission at New Delhi between the Company and the Bank under the Consumer Protection Act. Mr. Thakore submitted that during the course of inquiry by the police, the officers had co-operated the investigation. The notice of the Satellite Police Station, Ahmedabad, dated 05.02.2019 were complied with by the officers of the Bank. Mr. Thakore, emphasized that the very letter of the Gallops dated 13.12.2017 of the Company, discloses that there was no case of any cheating or any criminal breach of trust.

4.10 Mr. Thakore, senior advocate stated that, there was no condition of any auto renewal of the PBG. The

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conduct by way of communication from both sides clarifies the said fact and surprisingly for the very first time on 23.09.2017, the Company came with the concept of auto renewal, while prior to that, the Bank had proposed to renew the facilities. Mr. Thakore stated that no ingredients of cheating would be attracted in the present case since there was no such intention from the very inception to be discern from the correspondence and the agreement. In the present case, learned senior advocate submitted that there was no entrustment of any property; charges were paid, but nothing was entrusted to attract the ingredients of Section 420 and 406 to consider as criminal breach of trust.

4.11 Mr. Mihir Thakore further stated that there is no complaint against the Bank, in the impugned FIR. Referring to the letter dated 11.01.2016 of the Gallops, Mr. Thakore, stated that terms and conditions were very well known to the Company and the issuance of Bank Guarantee was for the beneficiary amount of Rs.20,72,40,000/-, which was valid up to 28.02.2017 and the claim period was for 29.03.2017, and the said request letter for issuance of Bank Guarantee of the Gallops, corroborates the fact that the Company was in knowledge of the terms and conditions of the facilities.

4.12 In support of his submission, Mr. Mihir Thakore, learned senior advocate, relied upon the

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following decisions:

(i) R.P. Kapur Vs. State of Punjab, reported in AIR 1960, Supreme Court 866;

(ii) S.W. Palanitkar And Others Vs. State of Bihar And Another, reported in (2002) 1 SCC 241;

(iii) Hridaya Ranjan Prasad Verma And Others Vs. State of Bihar And Another, reported in (2000) 4 SCC

168.

5. Mr. P.P. Majmudar, learned advocate for the respondent no.2 referring to the contents FIR stated that bare reading of the FIR itself constitute the offence under Section 420 and 406. Mr. Majmudar emphasizes that FIR shall not be quashed at the nascent stage. The representatives of the Bank from the very beginning intentionally cheated the Company. He stated that the documents on record clarifies the fact that the Bank Guarantee was auto renewable. The specific averment of the FIR is of misrepresentation and huge amount has been pocketed by way of unlawful gain by the Bank. He submits that breach of contract or pendency of matter before the Consumer Forum could be made a ground to elude a case of cheating. Mr. Majmudar, learned advocate, relied on the Judgment in case of Priti Saraf And Another Vs. State of NCT of Delhi And Another, reported in 2021 SCC OnLine SC 206, in support of his

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submission.

5.1 Relying on the decision in case of SAU. Kamal Shivaji Pokarnekar Vs. The State of Maharashtra & Ors., rendered by the Hon'ble Apex Court in Criminal Appeal No.255 of 2019, Mr. Majmudar submitted that the defence that may be available, or facts when established during the trial, may lead to acquittal, are not grounds for quashing the complaint at the threshold. He submits that at that stage, the only question relevant is whether the averments in the complaint spell out the ingredients of a criminal offence or not. He stated that many a times the offence of cheating is committed in regard to such commercial transactions. He submits that the FIR should not be quashed at the initial stage.

6. The reports of the Police Inspector, Satellite Police Station dated 06.08.2021 and 25.08.2021 were referred by the learned APP, Ms. Monali Bhatt to submit that during the course of investigation it was found that the bank official, Mayank Bapana, Head Relationship Manager and Regional Manager, Darshan Shah in the year 2015 had come to the office of the complainant talked about the Bank Guarantee and Performance Bank Guarantee and by taking the complainant in confidence took the advance of Rs.15,00,000/- for the Bank Guarantee and for Performance Bank Guarantee for the first year, and for the 2nd year Rs.15,00,000/-, total amount of Rs.46,00,000/- plus 6,67,000/- as service tax

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and against that the Bank Guarantee for the year 2015 and 2016 was given, while performance bank guarantee for the year 2016 was denied and for that the Company made the demand of their Bank Performance Guarantee from the responsible authority of the Indusind Bank, Shri Mayank Bapana, Tejas Bipinchandra Shah and Darshan Priyankantbhai Shah, but they gave evasive reply and false information through email and thereby has misdirected the Company, and in spite of taking advance amount of Rs.15,00,000/- against that, though were responsible for giving the Performance Bank Guarantee, it was not granted and it was informed to the officers, there was no satisfactory reply to the Company. Therefore, Company found that their money have been duped and they were cheated. Though, the Bank Guarantee money was taken for the 2 nd year, no Performance Bank Guarantee was granted and this cause financial loss by way of cheating and criminal breach of trust and therefore, the complaint came to be filed.

6.1 The Company by the email dated 23.09.2017 had alleged that one of their current Bank representative was forcing them to get their limits renewed and if failed to adhere, the BG would lapse and the Bank would inform the same to the Vestas, the beneficiary. It is stated by the Company that actually the PBG have to be auto renewed instead of renewing CC limit. It is further alleged in the letter that earlier the Bank representative informed them that the Company need not renew CC limit, as it has

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already expired along with PBG, but thereafter informed that the Gallops was required to renew CC limit as well as PBG. It is also alleged in the letter that actually the Bank representative tried to misguide the Company, but actually the PBG has to be auto renewed instead of renewing the CC limit.

6.2 Thus, it was alleged that because of such wrong pressure and mislead follow up by the representative of the Bank, it has resulted into hypertension among the management and the staff members, as they could not understand why such huge amount of PBG got expired. The Company, therefore, emphasizes that it was actually the Bank who had to renew their PBG and expressed dissatisfaction with the services from the highly professional private sector bank and by way of the said email they had requested the Bank to issue them PBG with auto renewed period valid upto 28.02.2018.

6.3 The Bank on 03.10.2017 responded to the Company in the following terms:

"In the original bank guarantee also it was clearly mentioned in the last four points to submit the original BG on or before the expiry date of 29/03/2017. With respect of bifurcations of charges refer out "In Principal Sanction" Letter dated 30th September 2015 accepted by your esteemed office. Mr. Tejas

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Shah from our team also approached you many times for require documents for limit renewal which also the timely response awaited for long. In this case we can still issue fresh BG for the balance time provided the original BG is submitted back to bank."

6.4 The letter dated 13.12.2017 was by the Gallops to the Relationship Manager, Indusind Bank Ltd., Ahmedabad, requesting to refund bank commission for 2nd year PBG commission in reference to PBG No.OGT0009160001536 dated 13.01.2016 of Rs.20,72,40,000.00, informing that the Company was having Performance Bank Guarantee facility against 100% cash margin, and towards the provided facility they have requested for PBG in the name of Vestas Wind Technology India Pvt. Ltd. of Rs.20,72,40,000.00 only, which expired on 20.03.2017 including the claim period. It is stated in the said letter that as per knowledge of the Company, the Bank Guarantee was in auto renewed mode confirmed by the bank officials at the time of issuance of Bank Guarantee and that they have found that it has already expired on 28.02.2017, where the Bank had collected the bank commission well in advance from their current account for both the years, and they found that PBG had already expired after 1 st year i.e. 28.02.2017 and was not renewed thereafter. They informed the Bank that as per the Bank's letter, there was a clear mention that if the bank could not sanction the limits as per the terms

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and conditions, the bank would refund the fees subject to dues and thus on 13.12.2017, the Company requested to refund the amount for the 2nd year renewal commission, which as per the company was debited well in advance towards PBG commission.

7. In quashing of prosecution at initial stage, the test is as to whether unrebutted allegations made in complaint established the offence or not. It is to be seen whether the averments in the complaint made out a case to constitute an offence of cheating. The essential ingredients to attract Section 420 IPC are: (i) cheating (ii) dishonest inducement to deliver property or to make, alter or destroy and valuable security or anything and (iii) mens rea of the accused at the time of making inducement. The making of a false representation is one of the essential ingredients to constitute the offence of cheating under Section 420 IPC. In order to bring a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but, it is further necessary to prove that the representation was false to the knowledge of the accused and was made in order to deceive the complainant.

7.1 In the case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCI) & Ors. Vs. Nimra Cerglass Technics (P) Ltd & Anr., reported in 2015 LawSuit (SC) 885, the Hon'ble Apex Court held that distinction

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between breach of contract and the cheating would depend upon the intention of the accused at the time of alleged inducement. If it is established that the intention of the accused was dishonest at the time when accused made a promise and entered into a transaction with the complainant to part with the property or money, then the liability is criminal and the accused is guilty of the offence of cheating. On the other hand, if all that is established that a representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a civil court.

7.2 The case relied on by senior advocate Mr. Mihir Thakore, S.W. Palanitkar & Ors. Vs. State of Bihar & Anr., (supra), has been referred to in the case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCI) & Ors. (supra), wherein it was held as under:

"21 In order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to

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cheating."

8. The FIR was lodged by respondent no.2 - Balram Bharatbhai Padhiyar against (i) Mayank Bapana (ii) Tejas Shah, Head Relationship Manager and (iii) Darshan Shah, Regional Sales Manager, other Bank officers have not been named, which according to complainant could be found out during the police investigation. It is stated that the bank employees Mayank Bapana, Tejas Shah and Darshan Shah had gone to the office of the complainant in the year 2015 and had talked about bank guarantee and performance bank guarantee and after taking him into confidence, the advance bank guarantee of Rs.16,00,000/-, performance bank guarantee for first year Rs.15,00,000/- and for the 2nd year Rs.15,00,000/-, in total Rs.46,00,000/- and Rs.6,67,000/- were taken towards service tax.

8.1 It is alleged that for the year 2015 and 2016, bank guarantees were provided to him and for the year 2016, the performance bank guarantee was not given to him and when the complainant has asked for the performance bank guarantee from Mayank Bapana, Tejas Shah and Darshan Shah, they gave him evasive reply and false information was given to him, and after misdirecting they took the advance of Rs.15,00,000/- from him. Though they were responsible for providing the performance bank guarantee for the second year, it was not given to the complainant and when he had informed the same by

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letter to the main Director of the Bank, Ramesh Sadiki, he was not provided any satisfactory reply and therefore he realized that his money would be siphoned off and he would be cheated and therefore, he had given an application against them, so they showed their willingness to return the money taken for performance bank guarantee for the year 2017.

8.2 The complaint was given on the premise that the bank official came to their office and after taking him into confidence had talked about the bank guarantee and performance guarantee and took money from the Company for the services which were not performed, thereby cheated him and by criminal breach of trust, has caused monetary loss to him.

8.3 To the facts of the case on hand, the transaction in regard to the Bank Guarantees of Gallops started with Indusind Bank in the last month of the year 2015. The document of sanction of credit limits dated December 21, 2015 shows that it was issued by authorised signatory, Mr. Naginbhai Ganpatbhai Patel for Gallops Infrastructure Ltd. in presence of three guarantors accepting the terms and conditions and for the Bank, the Zonal CAD / Credit Administrator signed the document, Annexure-I, has laid down Special Covenants For Bank Guarantee, one of which includes that "the Bank will not normally issue any guarantee that requires the Bank to automatically renew / extend the

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guarantee".

8.4 The facts, from the side of the applicants as well as respondent no.2, show that there were documents executed from both the sides and as per the terms and conditions, Bank Guarantees were to put in force; beneficiary had the advantage of the bank guarantees. The terms and conditions were executed in writing. Thus, at present prima facie it cannot be said that there was any misrepresentation by the alleged accused, as sanction credit limits was presumed to have been signed with proper understanding and when the signatory to the documents has consented to the terms and conditions, there would not be any case of false representation. Making of a false representation is one of the essential ingredients to constitute offence under Section 420 IPC. In order to bring a case for the offence of cheating, it is not merely sufficient to prove that a false representation had been made, but it is further necessary to prove that representation was false to the knowledge of the accused and was made in order to deceive the complainant.

8.5 The legal position is well settled that when a prosecution at the initial stage has asked to be quashed, a test applied by the Court is, as to whether the uncontroverted allegations made in the complaint established the offence. The power under Section 482 Cr.P.C. is to be used sparingly only in rare cases which

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would of course ultimately depend upon the facts and circumstances of each case. Distinction between a mere breach of contract and the cheating would depend upon the intention of the accused at the time of the alleged inducement.

8.6 Here in this case, the complainant itself states that subsequently he found out that the bank has not automatically renewed the facilities for the second year. The complainant Company had took the benefit of the Bank Guarantees for the initial year and later on considered that the company was cheated by the Bank.

9. In case of State of Haryana V. Bhajan Lal and others, AIR 1992 SC 604, the Apex Court formulated as many as seven categories of cases, wherein the extraordinary power under Section 482 could be exercised by the High Court to prevent abuse of process of the court. It was clarified that it was not possible to lay down precise and inflexible guidelines or any rigid formula or to give an exhaustive list of circumstances in which such power could be exercised. The Apex Court in the said case made the following observations:-

"8.1. In the exercise of the extra-ordinary power under Article 226 or the inherent powers under Section 482 of the Code of Criminal Procedure, the following categories of cases are given by way of illustration wherein

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such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guide in myriad kinds of cases wherein such power should be exercised:

(a) where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused;

(b) where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code;

(c) where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused;

(d) where the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation

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is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code;

(e) where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused;

(f) where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and / or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party;

(g) where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

10. In case of Rajiv Thapar And Other Vs. Madan Lal Kapoor, reported in (2013) 3 SCC 330, the Hon'ble Apex Court held as under:

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29. .... To invoke its inherent jurisdiction under section 482 Cr.PC the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/ complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 CrPC to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice.

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10.1 The Apex Court in the matter after considering the issue of jurisdiction of High Court under Section 482 Cr.P.C. delineated the following steps, which are reproduced thus:

30. Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashment raised by an accused by invoking the power vested in the High Court under Section 482 CrPC:

30.1. Step one: whether the material relied upon by the accused is sound, reasonable, and indubitable i.e. the material is of sterling and impeccable quality?

30.2. Step two: whether the material relied upon by the accused would rule out the assertions contained in the charges levelled against the accused i.e. the material is sufficient to reject and overrule the factual assertions contained in the complaint i.e. the material is such as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false?

30.3. Step three: whether the material relied upon by the accused has not been refuted by

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the prosecution/complainant; and/or the material is such that it cannot be justifiably refuted by the prosecution/complainant?

30.4. Step four: whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?

30.5. If the answer to all the steps is in the affirmative, the judicial conscience of the High Court should persuade it to quash such criminal proceedings in exercise of power vested in it under Section 482 CrPC. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as proceedings arising therefrom) specially when it is clear that the same would not conclude in the conviction of the accused."

11. In case of International Advanced Research Centre For Powder Metallurgy And New Materials (ARCI) & Ors. (Supra), it was observed that when in a case representation made by the accused has subsequently not been kept, criminal liability cannot be foisted on the accused and the only right which the complainant acquires is the remedy for breach of contract in a Civil

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Court. The documents relied by the accused have not been controverted by the complainant, which are their official communication and are Bank Guarantees, sanction of credit limits with terms and conditions.

12. Here in this case, it cannot be prima facie shown that there was any fraudulent dishonest intention from the very beginning of the transaction and therefore the only recourse available would be to find their remedies before the Civil Court, as observed earlier the parties are before the Consumer Forum. Thus, in view of observation and reasons given herein above, at the initial stage, taking into consideration the facts and circumstances of the case, the impugned FIR is required to be quashed and set aside.

13. In the result, the petition is allowed. The complaint being FIR No.I/9/2019, dated 29.01.2019 registered with Satellite Police Station, Dist.: Ahmedabad City and the proceedings initiated in pursuance thereof are quashed and set aside qua the present applicants. Rule is made absolute to the aforesaid extent. Direct service is permitted.

(GITA GOPI, J.) Pankaj