Madras High Court

G.R.Suresh vs State Of Tamil Nadu on 21 June, 2022

                                                                           Crl.O.P.No.13373 of 2020


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                              DATED: 21.06.2022

                                                      CORAM

                             THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN

                                              Crl.O.P.No.13373 of 2020
                                                       and
                                             Crl.M.P.No.5132 of 2020

                     1.G.R.Suresh
                     2.Manish Sarath Huddar
                     3.Amaresh
                     4.Murugan
                     5.Santhosh Kuttan
                     6.Selvakumar Joseph                               ...Petitioners



                                                       -Vs-

                     1.State of Tamil Nadu
                       The Sub Inspector of Police,
                       Central Crime Branch,
                       Bank Fraud Team,
                       Egmore, Chennai – 600 008.

                     2.The General Manager,
                       Standard Chartered bank,
                       19, Rajaji Salai,
                       Chennai-600 001.                                ... Respondents


                     Prayer: Criminal Original petition filed under Section 482 of the Code of
                     Criminal Procedure, to call for the records in CC.No.2507 of 2017 on the
                     file of the Chief Metropolitan Magistrate, Egmore, in so far it concerns
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                                                                                   Crl.O.P.No.13373 of 2020


                     the petitioners and quash the same.


                                        For Petitioners    : Mr.K.P.Anantha Krishna for
                                                             Mr.Seshadri Aishwarya S.Nathan

                                        For R1             : Mr.A.Gopinath
                                                             Government Advocate (Crl. Side)

                                        For R2             : No appearance




                                                            ORDER

This Criminal Original Petition has been filed, to quash the

proceedings in CC.No.2507 of 2017, pending on the file of the Chief

Metropolitan Magistrate, Egmore, Chennai.

2. Heard both sides and perused the materials available on record.

3.1. The case of the respondent is that the de-facto complainant

lodged a complaint before the Commissioner of Police, Chennai, and the

same was forwarded to the 1st respondent police stating that the

complainant is Standard Chartered Bank (SCB), a Company incorporated

in England by Royal Charter and having its principle office at London

and also having branches at Chennai and Mumbai in India, represented https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

by the authorized representative of the de-facto complainant. The de-facto

complainant engaged in the business of providing financial facilities and

supply chain finance (SCF) facilities to its prospective customers. The

Directors of the Productive Manufacturing Solution Pvt. Ltd., (PMS)

namely Ananth Varadarajan/A1 and A.K.Kumar/A2 opened a supply

chain finance account in SCB A/c.No.22205312000 in the year 2005 in

the capacity of PMS beings dealer of Sandvit Asia Pvt. Ltd., (Anchor

Company) which is a manufacturer and supplier of cutting tools. The said

account was opened under SCF facility recommended by the Anchor

Company. Based on the invoices produced by the dealer, the bank will

remit the amount in favour of the dealer and further the said SCF

Account has no cheque book facility. The PMS did not maintain the said

account as per rules and norms of the Bank and the SCF facility had to be

withdrawn and closed in September 2007.

3.2. In the meantime, the Directors (A1 and A2) of PMS opened a

Current Account No.42705193019 with SCB at Chennai Branch, without

overdraft facility. The PMS can operate the said account with zero

balance and if the PMS deposited any amount it can remit the amount

from the current account, otherwise the PMS cannot remit any amount https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

beyond its balance or deposited amount. While that being so, the PMS

issued number of cheques in favour of it's client VSA Associates, drawn

on SCB at Chennai Branch without sufficient balance in the account.

4. The details of cheques issued by PMS in favour VSA Associates

and which were subsequently deposited by VSA Associates for clearing

at Chennai is as follows;-

Sl.Nos. Date Cheque Nos. Favouring Amount

1. 05.10.2007 950751 VSA Associates 500,00

2. 05.11.2007 950755 VSA Associates 500,00

3. 15.11.2007 950756 VSA Associates 300,00

4. 20.11.2007 950757 VSA Associates 500,00

5. 20.11.2007 950759 VSA Associates 500,00

6. 22.11.2007 950760 VSA Associates 200,00

7. 22.11.2007 950761 VSA Associates 500,00

8. 28.11.2007 950762 VSA Associates 1,000,000

9. 28.11.2007 950763 VSA Associates 55,000

10. 29.11.2007 950765 VSA Associates 8,34,699

11. 30.11.2007 950764 VSA Associates 1,000,000

12. 30.11.2007 950766 VSA Associates 9,42,000

13. 04.12.2007 950767 VSA Associates 1,500,00

14. 05.12.2007 950768 VSA Associates 1,000,00

15. 05.12.2007 950769 VSA Associates 1,500,000

16. 10.12.2007 950770 VSA Associates 1,400,000

17. 10.12.2007 950771 VSA Associates 1,000,000

18. 10.12.2007 950772 VSA Associates 1,400,000

19. 15.12.2007 950773 VSA Associates 1,500,000

20. 15.12.2007 950774 VSA Associates 1,500,000 https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

Sl.Nos. Date Cheque Nos. Favouring Amount

21. 20.12.2007 950775 VSA Associates 3,000,000

22. 20.12.2007 950776 VSA Associates 3,200,000

5. Further, the VSA Associates maintained its account with Canara

Bank at Pallavaram Branch and deposited for clearing all the above

mentioned cheques issued by the PMS at Chennai branch. However, the

following cheques namely Cheque Nos.950768, 950769, 950775 and

950776 were realised from Current Ac.No.42705193019 with SCB,

Chennai Branch without sufficient balance in the said account. The PMS

with fraudulent intention kept on depositing and encashing the aforesaid

cheques without maintaining sufficient balance in the said account and

unlawfully enriched to the extent of Rs.1,51,31,699/- (Rupees One Crore

Fifty One Lakhs Thirty One Thousand Six Hundred and Ninety Nine

only) at the wrongful loss caused to SCB. Even though the PMS was

aware that its act of withdrawing the money on its aforesaid current

account after the SCF was withdrawn without maintaining sufficient

balance and it kept on withdrawing on numerous occasions. Further, with

the malafide intention the said PMS cheated and defrauded the SCB to

the tune of Rs.1,51,31,699/- (Rupees One Crore Fifty One Lakhs Thirty

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Crl.O.P.No.13373 of 2020

One Thousand Six Hundred and Ninety Nine only).

6. Further, the case of the respondent is that the first accused with

the fraudulent intention kept on depositing and encashing the aforesaid

cheques without maintaining sufficient balance in the said Current

Account and unlawfully enriched to the extent of Rs.1,51,31,699/-

(Rupees One Crore Fifty One Lakhs Thirty One Thousand Six Hundred

and Ninety Nine only) at the wrongful loss caused to SCB/2nd respondent.

7. The learned counsel for the petitioner submitted that the 2 nd

respondent Bank followed standard Inward Clearing Process while

dealing with the current account tagged to the Corporate Banking Code

when the occurrence happened.

The following occurrences are extracted hereunder;-

i) When the Clearing Unit receives the cheques, they are required to perform technical verification such as signature verification, date of cheque, amount mentioned in figures and words etc.,

ii) in case of any technical errors that appears on the face of the cheques, the Clearing Unit of the defacto complainant/2nd respondent Bank is required to notify the

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Crl.O.P.No.13373 of 2020

Relationship Manager (handling the account on which such cheque is drawn) of such technical errors;

iii) Upon receipt of such notification as aforesaid, the Relationship Manager is required to revert to the Clearing Unit with his objection/comments, if any, as per the defined clearing cut off time i.e. 1300 Hours.

iv) Apart from reverting to the Clearing Unit with its objection/comments to the technical errors flagged by them, it is the duty of the Relationship Manager to check the Excess Reports auto-generated by the defacto complainant/2nd respondent Bank system for entries, if any, showing insufficiency of funds in the account on which the cheque is drawn. This Excess Report which is auto generated is prepared by the Portfolio Control Team of the defacto complainant/2nd respondent Bank and it is their responsibility to intimate the Relationship Manager handling the account on which the cheque is drawn about insufficiency of funds via fax/emails.

v) Upon finding entries showing insufficiency of funds in the account on which the cheque is drawn, the Relationship Manager has to notify the Clearing Unit of its negative response as regards the clearance of the cheque within stipulated cut off time, i.e. 13.00 Hours i.e. by completing the 'inward clearing cheque return' schedule.

vi) In the event the Relationship Manager reverts with technical errors within stipulated cut off time, i.e. 13.00

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Crl.O.P.No.13373 of 2020

Hours, as aforesaid, or notifies its negative response to the clearing unit within stipulated cut off time, i.e.13.00 Hours, the Clearing Unit of the defacto complainant/2nd respondent Bank is obliged to return/dishonour the cheque.

vii) However, in the event no such objection is received from the Relationship Manager within stipulated cut off time, i.e. 13.00 Hours, or in the even the cheque received for clearance is free of technical objections, or in the event the Relationship Manager does not notify its negative response to the Clearing Unit within stipulated cut off time, i.e. 13.00 Hours, the Clearing Unit of the defacto complainant/2nd respondent Bank is obliged to clear/honour the cheque. The Clearing Unit is an Operations Unit whose work is to implement the Inward Clearing Process laid down by defactor complainant/2nd respondent Bank and they do not have any authority to return or honor any cheque on its own for fund related issues.

8. The learned counsel for the petitioner further submitted that in

accordance with the above procedure laid down for clearance of cheques

drawn on an account tagged to the Corporate Banking Code, examined

the cheques for technical errors and processed it, as per the procedure.

Being unaware of the said Current Account, mistakenly tagged the 2nd

petitioner herein. Upon receipt of E-mails, he did revert to the Clearing

Unit should check with Portfolio Manager of Supply Chain Unit. https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

Therefore, the 2nd petitioner has no authorization to offer any

confirmation or objection as if not allotted to the account. He further

submitted that the question raised by the 1 st respondent while

investigating about the excess. When the 1st respondent raised questions

for which the 2nd respondent answered for that question that all the 18

cheques were systematically passed for encashment, how the Bank did

came to know the mischief. For which the 2 nd respondent answered that

the Bank identified its situation of over drawing in December 2007

through excess reports and on 19 th December 2007 account HOLD was

placed after realizing that this account is not being tracked by anyone and

is erroneously tagged to one Manish Huddar. Thereafter, immediately an

Account Hold was put to return and stop payment for any further

cheques presented. Post this hold on the account two cheques totalling to

INR 62 Lakhs were returned on 20 th December 2007. Therefore, the

petitioners are only employees and they are only responsible for any

incident occurred during clearing the cheques in favour of the other

accused persons. This condition cannot be accepted since the petitioners

are employees of the 2nd respondent herein who cleared cheques which

were presented for collection without sufficient balance in the Current

Account and unlawfully enriched to the tune of Rs.1,51,31,699/- (Rupees https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

One Crore Fifty One Lakhs Thirty One Thousand Six Hundred and

Ninety Nine only) it causes wrongful loss to the 2 nd respondent and it is a

public money.

9. In the light of the above, it is clear that all the accused have

unlawfully enriched to the tune of Rs.1,51,31,699/- (Rupees One Crore

Fifty One Lakhs Thirty One Thousand Six Hundred and Ninety Nine

only). That apart, the grounds raised by the petitioner are mixed question

of facts and it cannot be considered in the quash petition.

10. In this regard, it is relevant to rely upon the judgment of the

Hon'ble Supreme Court of India passed in Crl.A.No.579 of 2019 dated

02.04.2019 in the case of Devendra Prasad Singh Vs. State of Bihar &

Anr., as follows:-

" 12.So far as the second ground is concerned, we are of the view that the High Court while hearing the application under Section 482 of the Cr.P.C. had no jurisdiction to appreciate the statement of the witnesses and record a finding that there were inconsistencies in their

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Crl.O.P.No.13373 of 2020

statements and, therefore, there was no prima facie case made out against respondent No.2. In our view, this could be done only in the trial while deciding the issues on the merits or/and by the Appellate Court while deciding the appeal arising out of the final order passed by the Trial Court but not in Section 482 Cr.P.C. proceedings.

13.In view of the foregoing discussion, we allow the appeal, set aside the impugned order and restore the aforementioned complaint case to its original file for being proceeded with on merits in accordance with law.

11. Recently, the Hon'ble Supreme Court of India dealing in

respect of the very same issue in Crl.A.No.1572 of 2019 dated

17.10.2019 in the case of Central Bureau of Invstigation Vs. Arvind

Khanna, wherein, it has been held as follows:

“19. After perusing the impugned order and on hearing the submissions made by the learned senior counsels on both sides, we are of the view that the impugned order passed by https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

the High Court is not sustainable. In a petition filed under Section 482 of Cr.P.C., the High Court has recorded findings on several disputed facts and allowed the petition. Defence of the accused is to be tested after appreciating the evidence during trial. The very fact that the High Court, in this case, went into the most minute details, on the allegations made by the appellant-C.B.I., and the defence put-forth by the respondent, led us to a conclusion that the High Court has exceeded its power, while exercising its inherent jurisdiction under Section 482 Cr.P.C.

20.In our view, the assessment made by the High Court at this stage, when the matter has been taken cognizance by the Competent Court, is completely incorrect and uncalled for.”

12. Further the Hon'ble Supreme Court of India also held in the

order dated 02.12.2019 in Crl.A.No.1817 of 2019 in the case of

M.Jayanthi Vs. K.R.Meenakshi & anr, as follows:

"9. It is too late in the day to seek reference to any authority for the proposition https://www.mhc.tn.gov.in/judis

Crl.O.P.No.13373 of 2020

that while invoking the power under Section 482 Cr.P.C for quashing a complaint or a charge, the Court should not embark upon an enquiry into the validity of the evidence available. All that the Court should see is as to whether there are allegations in the complaint which form the basis for the ingredients that constitute certain offences complained of. The Court may also be entitled to see (i) whether the preconditions requisite for taking cognizance have been complied with or not; and (ii) whether the allegations contained in the complaint, even if accepted in entirety, would not constitute the offence alleged. ..............

13. A look at the complaint filed by the appellant would show that the appellant had incorporated the ingredients necessary for prosecuting the respondents for the offences alleged. The question whether the appellant will be able to prove the allegations in a manner known to law would arise only at a later stage...................."

The above judgments are squarely applicable to this case and as

such, the points raised by the petitioner cannot be considered by this

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Court under Section 482 Cr.P.C.

13. In view of the above, this Court is not inclined to quash the

proceedings in C.C.No.2507 of 2017, pending on the file of the Chief

Metropolitan Magistrate, Egmore, Chennai. However, The petitioner is at

liberty to raise all the grounds before the trial Court.

14. Accordingly, this Criminal Original Petition stands dismissed.

Consequently, connected miscellaneous petition is closed.

14.06.2022