Madras High Court
Ms.Poonam Anand vs State Represented By on 4 May, 2021
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 17.09.2021
PRONOUNCED ON : 24.09.2021
CORAM
THE HON'BLE Mr. JUSTICE C.V.KARTHIKEYAN
Crl.O.P.No.16189 of 2021
and Crl.M.P.No.8802 of 2021
Ms.Poonam Anand .. Petitioner / 4th Accused
Vs.
State represented by
The Superintendent of Police
CBI, Anti-Corruption Branch
'A' Wing, 3rd Floor, Shastri Bhavan,
No.26, Haddows Road,
Chennai – 600 006. .. 1st Respondent/Complainant
Bank of India
Rep.by its Zonal Manager-Chennai Zone
Mr.Subrata Kumar Roy
“Star House”, II Floor, 30 (Old No.17)
Errabalu Street, Chennai – 600 001.
.. 2nd respondent / De-facto complainant
Prayer: Criminal Original Petition filed under Section 482 Cr.P.C., to call
for the records in Crime No.RC0322021A007 of 2021 dated 04.05.2021 on
the file of the 1st respondent and quash the same in so far as the petitioner is
concerned.
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2
For Petitioner .. Mr.R.Palaniyandavan
For Mr.R.Revanth Kumar
For Respondent .. Mr.K.Srinivasan
Spl. Public Prosecutor for CBI Cases
ORDER
This Criminal Original Petition has been filed under Section 482
Cr.P.C., to quash the First Information Report in Crime
No.RC0322021A0007 dated 04.05.2021 registered by the Superintendent of
Police, CBI, Anti-Corruption Branch, Chennai under Sections 120B, 420
IPC and under Sections 13(2) read with 13(1)(d) of PC Act, 1988 by the
named 4th accused.
2.The FIR was registered on the basis of a complaint dated
04.01.2021 given by the Zonal Manager of Bank of India, Usman Road
Branch, T.Nagar, Chennai. In the complaint it had been alleged that A1,
Hallmark Infrastructure Pvt. Ltd., had availed loan against property of
Rs.2.00 Crores and Project Term Loan of Rs.10.00 Crores for development
of 56 premium residential apartments at Mahendra World City,
Chengalpattu Taluk, Kanchipuram District and also further loan against
property of Rs.2.94 Crores.
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3.It had been further stated in the complaint that A1 and its directors
who had named as A2 to A5 had diverted and misappropriated the funds
received on the sale of the flats. It was very specifically stated that an
internal investigation conducted by the bank revealed that 46 flats out of 56
flats had already been sold and out of that, 34 flats were sold without
obtaining No Objection Certificate from the bank. It was also stated that the
disbursed amount and the sale proceeds were not utilized for the purpose for
which loans were sanctioned and that the funds were diverted for various
purpose.
4.It was also alleged that A1 / Company had not routed the sale
proceeds of sale of the flats into the Escrow Account maintained by the
bank as per the terms of sanction and had also operated the Escrow Account
through Internet Banking which was against the extant guidelines. It was
also stated that the accused and other public servants had hatched criminal
conspiracy to cheat the Bank of India, Usman Road Branch, T.Nagar,
Chennai by availing loan and diverting the disbursed amount and the sale
proceeds for other purposes than for which they were sanctioned. It was
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stated that the Book Outstanding was Rs.12.52 Crores which was claimed to
be wrongful loss to the bank and corresponding wrongful gain for the
accused.
5.On the basis of the said complaint, a FIR was registered by the
respondent / the Superintendent of Police, CBI, Anti-Corruption Branch,
Chennai under Sections 120B, 420 IPC and under Sections 13(2) read with
13(1)(d) of PC Act, 1988.
6.The same is now sought to be quashed by the 4th accused.
7.It is the contention of the petitioner / A4 was that she was appointed
as Professional Director of A1 on 23.06.2015, whereas, the loans were
sanctioned in the year 2013. It was also pointed out that the FIR does not
attribute any specific role / over tact against her. There was also no
averment that she was in-charge of day to day activities of A1. She claimed
that she was not in-charge of the affairs / decisions of A1. She further stated
that merely because a person is appointed as director it would not
automatically make such person as an accused in the absence of specific
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allegations of a specific role in the alleged offence. She also stated that the
bank had approached the Debt Recovery Tribunal at Chennai and also
NCLT Chennai by filing petitions. She also stated that the bank and A1 are
also engaged in settlement discussions. In view of the above reasons, she
urged that the FIR should be quashed against her.
8.Heard argument advanced by Mr.R.Palaniyandavan, learned
counsel appearing on behalf of Mr.R.Revanth Kumar, learned counsel for
the petitioner and Mr.K.Srinivasan, learned Special Public Prosecutor for
CBI.
9.Mr.R.Palaniyandavan, learned counsel after taking the Court
through the averments which had been reduced above stated that the
petitioner would squarely come under the 1st and 2nd clauses as mentioned in
the judgment reported in 1992 SCC Crl 426, State of Haryana & others Vs.
Bhajanlal & others . In that case, the Hon'ble Supreme Court had identified
the following cases in which FIR / complaint can be quashed. Since the
learned counsel stated that the petitioner would fall under the 1 st and 2nd
clauses, they are reduced below:-
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“102.(1)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.
(2).Where the allegations in the first
information report and other materials, if any,
accompanying the FIR 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.”
10.The learned counsel stated that if the allegations in the FIR are
taken at their face value and also accepted they do no constitute any offence
or make out a case against the present petitioner. The learned counsel also
stated that the FIR does not disclose a cognizable offence justifying an
investigation by the respondent.
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11.In the background of the above arguments put forth by the learned
counsel for the petitioner, the FIR will now have to be re-examined.
12.In the FIR, it had been very specifically stated that A1 had
received sanction for loan against property and also Project Term Loan for
development of 56 premium residential apartments at Mahendra World City,
Chengalpet Taluk in Kanchipuram District on 26.12.2013. Subsequently,
46 flats had been sold and out of them, 34 flats had been sold without
obtaining NOC from the bank. It was also alleged that the disbursed loan
amounts and also the sale proceeds were not utilized for the purpose of
which they were sanctioned and the funds were diverted for various
purposes.
13.I hold these are allegations which will have to be further probed
and investigated. It will have to be examined whether the flats which were
said to have been sold without obtaining NOC were sold after the petitioner
herein became a Professional Director and during the period when she
continued to be a Professional Director of the company. It has also to be
examined whether the sale proceeds from the sale of the flats flowed in any
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manner, even in a trickle, to the advantage of the petitioner herein. It has to
be investigated whether the loans which had been sanctioned were diverted
for other purposes. To conduct an investigation on the above aspects and
also on any other incidental aspects, the role of each one of the directors
who had been mentioned, namely, A2 to A5 will have to be necessarily
investigated by the Investigating Agency.
14.The allegations in the FIR certainly give rise to commission of
cognizable offences. Diversion of loan amount obtained from a Public Bank
would in effect mean diversion of public money. Utilization of sanctioned
amount for purposes other than for what it was sanctioned, would indicate
utilization of public money to the detriment of the bank directly and the
public cause indirectly. Selling of flats without obtaining NOC from the
bank would also indicate an intention to divert the sale proceeds or to screen
the sale proceeds from scrutiny by the bank.
15.No doubt the petitioner had became a director only in the year
2015. It has to be examined whether any of the above transactions took
place after the petitioner became a Professional Director of A1. Those
details can be gathered only during the course of investigation.
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16.It had been repeatedly held that FIR is not an encyclopaedia. It can
only contain necessary ingredients to establish the commission of a
cognizable offence. In the present FIR there are more than sufficient
allegations that public money had been sanctioned as loan to A1 and that
public money had been diverted for other purposes and returns from the
investment of such public money by way of building flats and selling the
flats have also been diverted to the detriment of the bank.
17.The learned counsel for the petitioner was put a specific question
during the course of arguments as to whether the petitioner herein had
executed any of the sale deeds mentioned, but there was no direct answer
offered. These informations will surface only during the course of
investigation.
18.I am confident that the 1st respondent would follow due procedure
during the course of investigation. I am also confident that if the 1 st
respondent is not able to gather any material to show that the petitioner
herein had committed the offences as stated in the complaint then, they
would act appropriately in those circumstances. But investigation will have
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to proceed. The petitioner cannot hide behind the screen and cloak that she
is only a Professional Director and that she came to be a Director only in the
year 2015 while the loans were sanctioned in the year 2013.
19.The role of the petitioner will come to light only when further
probe is done and documents are collected and statements are recorded from
the witnesses. The sale consideration from and out of each one of the sale
deeds and the transactions through which it flowed will have to be
determined. The accounts to which the sale proceeds were credited will
have to be determined. The reasons why the sale deeds were executed
without obtaining NOC from the bank will again have to be investigated.
The reasons why the Escrow Account was operated online will have to be
investigated. The nature of transactions conducted will have to be
investigated. The reasons why the sale proceeds were not routed into the
Escrow Account maintained by the bank will have to be investigated. The
flow of sanctioned loan amount from the date when they were sanctioned
till the date of their utilization will have to be found out. The flow of the
sale proceeds out of the sale of flats till the date they were actually parked in
various accounts and not in the Escrow Account are facts which have to be
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investigated. The role of the petitioner if any in any of the above will have
to be screened and scrutinized. I hold that the Investigating Officer must be
given a free hand to examine all these aspects.
20.In 2021 SCC Online 206 [Priti Saraf and Another Vs. State of
NCT of Delhi and Another] , the Hon'ble Supreme Court had held as
follows:-
“28. It is thus settled that the exercise of inherent
power of the High Court is an extraordinary power
which has to be exercised with great care and
circumspection before embarking to scrutinise the
complaint/FIR/charge-sheet in deciding whether
the case is the rarest of rare case, to scuttle the
prosecution at its inception.”
21.In (2021) 5 SCC 795 [ Skoda Auto Volkswagen (India) Vs. State
of Uttar Pradesh and Others], the Hon'ble Supreme Court had held as
follows:-
“40. It is needless to point out that ever
since the decision of the Privy Council in King
Emperor v. Khwaja Nazir Ahmad [King
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Emperor v. Khwaja Nazir Ahmad, 1944 SCC
OnLine PC 29 : AIR 1945 PC 18] , the law is
well settled that the courts would not thwart
any investigation. It is only in cases where no
cognizable offence or offence of any kind is
disclosed in the first information report that the
court will not permit an investigation to go on.
41. As cautioned by this Court in State of
Haryana v. Bhajan Lal [State of Haryana v.
Bhajan Lal, 1992 Supp (1) SCC 335 : 1992
SCC (Cri) 426] , the power of quashing should
be exercised very sparingly and with
circumspection and that too in the rarest of
rare cases. While examining a complaint, the
quashing of which is sought, the Court cannot
embark upon an enquiry as to the reliability or
genuineness or otherwise of the allegations
made in the FIR or in the complaint.
42. In S.M. Datta v. State of Gujarat
[S.M. Datta v. State of Gujarat, (2001) 7 SCC
659 : 2001 SCC (Cri) 1361 : 2001 SCC (L&S)
1201], this Court again cautioned that criminal
proceedings ought not to be scuttled at the
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initial stage. Quashing of a complaint should
rather be an exception and a rarity than an
ordinary rule. In S.M. Datta [S.M. Datta v.
State of Gujarat, (2001) 7 SCC 659 : 2001 SCC
(Cri) 1361 : 2001 SCC (L&S) 1201] , this Court
held that if a perusal of the first information
report leads to disclosure of an offence even
broadly, law courts are barred from usurping
the jurisdiction of the police, since the two
organs of the State operate in two specific
spheres of activities and one ought not to tread
over the other sphere. ”
22.In Neeharika Infrastructure Pvt. Ltd., V. State of Maharastra
and others reported in 2021 SCC OnLine 305, the Hon'ble Supreme Court
had given guidelines to the High Courts regarding the circumstances in
entertaining quash petitions in exercise of power under Section 482 Cr.P.C.,
they are as follows:-
“23.i) Police has the statutory right and duty
under the relevant provisions of the Code of
Criminal Procedure contained in Chapter XIV of the
Code to investigate into a cognizable offence;
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ii) Courts would not thwart any investigation
into the cognizable offences;
iii) It is only in cases where no cognizable
offence or offence of any kind is disclosed in the first
information report that the Court will not permit an
investigation to go on;
iv) The power of quashing should be
exercised sparingly with circumspection, as it has
been observed, in the ‘rarest of rare cases (not to be
confused with the formation in the context of death
penalty).
v) While examining an FIR/complaint,
quashing of which is sought, the court cannot
embark upon an enquiry as to the reliability or
genuineness or otherwise of the allegations made
in the FIR/complaint;
vi) Criminal proceedings ought not to be
scuttled at the initial stage;
vii) Quashing of a complaint/FIR should be
an exception rather than an ordinary rule;
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viii) Ordinarily, the courts are barred from
usurping the jurisdiction of the police, since the two
organs of the State operate in two specific spheres
of activities and one ought not to tread over the
other sphere;
ix) The functions of the judiciary and the
police are complementary, not overlapping;
x) Save in exceptional cases where non-
interference would result in miscarriage of justice,
the Court and the judicial process should not
interfere at the stage of investigation of offences;
xi) Extraordinary and inherent powers of the
Court do not confer an arbitrary jurisdiction on the
Court to act according to its whims or caprice;
xii) The first information report is not an
encyclopaedia which must disclose all facts and
details relating to the offence reported. Therefore,
when the investigation by the police is in progress,
the court should not go into the merits of the
allegations in the FIR. Police must be permitted to
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complete the investigation. It would be premature to
pronounce the conclusion based on hazy facts that
the complaint/FIR does not deserve to be
investigated or that it amounts to abuse of process
of law. After investigation, if the investigating
officer finds that there is no substance in the
application made by the complainant, the
investigating officer may file an appropriate
report/summary before the learned Magistrate
which may be considered by the learned Magistrate
in accordance with the known procedure;
xiii) The power under Section 482 Cr.P.C. is
very wide, but conferment of wide power requires
the court to be more cautious. It casts an onerous
and more diligent duty on the court;
xiv) However, at the same time, the court, if it
thinks fit, regard being had to the parameters of
quashing and the self-restraint imposed by law,
more particularly the parameters laid down by this
Court in the cases of R.P. Kapur Vs. State of
Punjab (AIR 1960 SC 866) and State of Haryana
Vs. Bhajan Lal, (1992 Supp. (1) SCC 335), has the
jurisdiction to quash the FIR/complaint;
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xv) When a prayer for quashing the FIR is
made by the alleged accused and the court when it
exercises the power under Section 482 Cr.P.C.,
only has to consider whether the allegations in the
FIR disclose commission of a cognizable offence
or not. The court is not required to consider on
merits whether or not the merits of the allegations
make out a cognizable offence and the court has to
permit the investigating agency/police to
investigate the allegations in the FIR;
xvi) .....
xvii) .....
xviii) .....
[Emphasis Supplied]
23.It is seen that the Hon'ble Supreme Court had held that Courts
should not thwart any investigation into a cognizable offence and power of
quashing should be exercised sparingly and with circumspection. It had also
been held that the court cannot embark upon an enquiry as to the reliability
of the allegations and that criminal proceedings should not be scuttled at the
initial stage. It had also been held that the quashing of a complaint / FIR
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should be an exception rather than an ordinary rule. It had also been stated
that extraordinary and inherent powers of the Court do not confer an
arbitrary jurisdiction on the Court to act according to its whims and caprice.
It had been further held that the FIR is not an encyclopaedia which must
disclose all facts and details relating to the offence reported. It had also been
stated that the Court should not go into the merits of the allegations in the
FIR. It had been very specifically stated that the police must be permitted to
complete the investigation.
24.I therefore, hold that that the petitioner herein has not made out
any ground to interfere at this stage with the investigation in FIR in Crime
No.RC0322021A0007 dated 04.05.2021 registered by the 1st respondent.
25.With the above observations, the present Criminal Original
Petitions is dismissed. Consequently, the connected miscellaneous petition
is closed.
24.09.2021
Index:Yes/No
Internet:Yes/No
smv
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To
1.The Superintendent of Police
CBI, Anti-Corruption Branch
'A' Wing, 3rd Floor, Shastri Bhavan,
No.26, Haddows Road,
Chennai – 600 006.
2.The Bank of India
Rep.by its Zonal Manager-Chennai Zone
Mr.Subrata Kumar Roy
“Star House”, II Floor, 30 (Old No.17)
Errabalu Street, Chennai – 600 001.
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C.V.KARTHIKEYAN,J
smv
Crl.O.P.No.16189 of 2021
24.09.2021
https://www.mhc.tn.gov.in/judis/
