Telangana High Court

Vht Rama Rao vs The State Of Telangana on 19 February, 2025

          THE HON'BLE SRI JUSTICE E.V.VENUGOPAL

           CRIMINAL REVISION CASE No.94 OF 2023

ORDER:

1 This criminal revision case is filed under Sections 397 and

401 of Cr.P.C. aggrieved by the order dated 05.7.2019 passed by

the learned III Additional Special Judge for CBI cases, Hyderabad

in Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007, whereunder the

learned Judge dismissed the said petition filed by the

petitioner/A.9 under Section 239 Cr.P.C. seeking discharge from

the proceedings.

2 Heard Sri Deepak Misra, learned counsel for the revision

petitioner and Sri T.Srujan Kumar Reddy, the learned standing

counsel for CBI, and perused the record.

3 The facts unfold that the petitioner who is claiming to be

proprietor of M/s. Mareechi Computers, availed housing loan

from Syndicate Bank, Boraganda branch, to a tune of Rs.10.00

lakhs and as on the date of filing of the charge sheet, it was

alleged that the outstanding loan amount was Rs.11,21,471/- and

that the petitioner failed to pay the outstanding dues. The

further allegation is that the bank valuer had colluded with

various borrowers including the petitioner and inflated the area

of flat and its market value so as to get more loan and the value

of the plot owned by the petitioner is Rs.6.00 lakhs only,

however, by inflating the rate by Rs.4.00 lakhs, the petitioner

secured loan of Rs.10.00 lakhs and subsequently the petitioner

committed default.

4 It is further alleged that the petitioner applied for demand

loan of Rs.2.00 lakhs on 12.12.2003 from Syndicate Bank for

domestic purpose to which loan A.6 stood as guarantor. The

petitioner claimed himself to be the Director of M/s. Rupa

Informatics Ltd, and proprietor of M/s. Mareechi Computer

Services and he has enclosed copies of IT returns for the years

2001-02 to 2003-04 showing income tax of Rs.75,578/-,

Rs.93,682/- and Rs.1,91,063/- paid for the above three years

respectively along with the photocopies of IT returns of the A.6

(guarantor). The said loan amount was disbursed to the joint

account of A.6, A.8 and A.9 (petitioner herein) and that the

name of the petitioner was included as joint operator of this SB

account just before sanctioning of the loan.

5 The further allegation levelled against the petitioner was

that the petitioner was not an income tax assessee, similarly, A.6

also did not pay any income tax for the years 2001-02 and did not

file returns for the next two years and that either M/s. Rupa

Informatics Limited or M/s. Mareechi Computer Services did not

file any returns nor paid any tax for the years 2001-02 to 2004-05

respectively. During investigation it was further revealed that no

firm by name M/s. Mareechi Computer Services existed at the

given address.

6 It was the further case of the prosecution that the

petitioner applied for Housing Loan of Rs.10.00 lakhs, to which

loan, A.14 stood as guarantor. In this transaction also, the

petitioner claimed himself to be the Director of M/s. Rupa

Informatics Ltd, and proprietor of M/s. Mareechi Computer

Services and he has enclosed copies of IT returns for the years

2001-02 to 2003-04 showing income tax. A.14 also furnished

photocopies of income tax for the said period showing payment

of income tax for two years.

7 The CBI further submitted that as per the investigation

copies of IT returns of accused Nos.9 and 14 were fake and they

were not assessees and as per the statement of Assistant

Commercial Tax Officer, Sanathnagar, Hyderabad and M/s. Rupa

Informatics Ltd., did not file any returns or paid any tax for the

years 2001-02 to 2004-05 and M/s. Mareechi Computer Services

also did not file any returns nor paid any tax during the years

2001-02 to 2004-05 and as per the investigation no firm by name

M/s.Mareechi Computer Services is existed at the place

mentioned. Hence the prosecution alleged that the petitioner

along with the other accused entered into criminal conspiracy

and cheated the bank by using forged documents as genuine.

8 While the matter was pending before the learned trial

Court, the petitioner filed Crl.M.P.No.253 of 2019 in C.C.No.4 of

2007 seeking discharge from the prosecution. However, the

learned trial Court, by the impugned order, dismissed the

petition. Hence the present criminal revision case.

9 The contention of the learned counsel for the petitioner is

that the trial Court failed to see that the entire grievance of the

bank was only with regard to non-payment of outstanding dues

which the petitioner has ultimately satisfied and the same was

affirmed by the bank also. It is further submitted that the

petitioner genuinely owned the plot which was mortgaged to the

bank at the time of availing the loan and that for recovery of the

dues, the bank initiated proceedings under SARFAESI Act and

hence the allegation that the bank was cheated is absolutely

false, so also, it is not the case of the prosecution that the

mortgaged asset was not genuine property and the bank has lost

the opportunity of realising its dues by selling the mortgaged

asset. He further submitted that it is not even the case of the

prosecution that the title deeds of the property are fake and

false documents and that the bank has sustained loss due to

furnishing fake property in mortgage. It is his further contention

that the learned trial Court failed to see that the intention of the

petitioner at the time of entering into the loan transaction with

the bank was never to cheat the bank by not repaying the loan

amount since at the time of availing the loan amount the

petitioner had parted with his valuable property by conferring all

rights in favour of the bank to deal with the said property and as

such the question of bank sustaining any loss would not arise.

10 He further submitted that the learned trial Court failed to

see that the valuation of the mortgaged property was done by

the approved valuer of the bank who works at the instructions of

the bank and for the benefit of the bank and as such question of

the petitioner entering into conspiracy with the valuer for

inflating the value of the mortgaged asset would not arise and in

any event the market value of the mortgaged asset is much more

than the loan liability.

11 It is the predominant contention of the learned counsel for

the petitioner that though the repayment of the loan amount will

not exonerate the petitioner from criminal liability, in this case

as per the liability of the petitioner as per the charge sheet is

non-payment of outstanding dues and further the loan was fully

secured by way of mortgage of genuine property and further

during the pendency of trial the bank has not only accepted the

repayment but also issued no due certificate and as such the

learned trial Court ought to have discharged the petitioner from

criminal prosecution instead of dismissing the discharge petition.

12 In support of his above contentions, the learned counsel for

the petitioner relied on the following judgments: 1) Nikhil

Merchant v. Central Bureau of Investigation 1, 2) Order dated

07.11.2012 passed in Crl.P.No.7900 of 2009 by the erstwhile High

Court of A.P, 3) Order dated 05.5.2020 passed in Crl.P.No.613 of

2013 by this High Court, 4) Order dated 22.9.2022 passed in

Crl.R.C.No.489 of 2019 by this High Court.

13 On the other hand, Sri T.Srujan Kumar Reddy, the learned

standing counsel for CBI submitted that the petitioner herein

claiming himself to be the Director of M/s. Rupa Informatics

2008 (2) ALD (Crl.) 591 (SC)

Limited and proprietor of M/s. Mareechi Computer Services

availed loan from the Syndicate Bank to a tune of Rs.2.00 lakhs

on 12.12.2003 from Syndicate Bank for domestic purpose A.6

stood as guarantor and that the petitioner also availed loan of

Rs.10.00 lakhs to which loan, A.14 stood as guarantor. In both the

cases the petitioner filed fake income tax returns of both A.6 and

A.14. The petitioner was not an income tax assessee, so also the

other guarantors. Neither the petitioner nor the firms to which

he is claiming to be Director have ever filed income tax returns

and that the firms have never existed. The petitioner availed

housing loan by submitting false documents such as inflated

valuation report, false IT returns of himself and his guarantors

and ultimately failed to repay the loan and thereby committed

the offences punishable under Sections 120-B, 420 and 471 of

IPC. He, accordingly, prayed to dismiss this criminal revision

case. The learned standing counsel relied upon the following

judgments in support of his contentions: 1) Central Bureau of

Investigation vs. Maninder Singh2, 2) Central Bureau of

Investigation vs. Hari Singh Ranka 3, 3) Ishoo Narang vs. State of

Telangana rep. by its Inspector of Police, CBI/ACB, Hyderabad4

(2016) 1 SCC 389

(2019) 16 SCC 687

2020 SCC OnLine TS 3456

and 4) Order passed by this Court in Crl.R.C.No.958 of 2019

dated 10.4.2024.

14 In Nikhil Merchant vs. Central Bureau of Investigation (1

supra) the Hon'ble Supreme Court held at para Nos.21 to 24 held

as follows:

21. The basic intention of the accused in this case appears to have been to misrepresent the financial status of the company, M/s Neemuch Emballage Limited, Mumbai, in order to avail of credit facilities to an extent to which the company was not entitled. In other words, the main intention of the company and its officers was to cheat the Bank and induce it to part with additional amounts of credit to which the company was not otherwise entitled.

22. Despite the ingredients and the factual content of an offence of cheating punishable under Section 420 IPC, the same has been made compoundable under Sub-section (2) of Section 320 Cr.P.C.

with the leave of the Court. Of course, forgery has not been included as one of the compoundable offences, but it is in such cases that the principle enunciated in B.S. Joshi's case (supra) becomes relevant.

23. 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 whereunder the dues of the Bank have 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 proceedings pursuant to the compromise arrived at, should at all be exercised?

24. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi's case (supra) 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.

15 This Court in the Order dated 05.5.2020 passed in

Crl.P.No.613 of 2013 held that

"Recently in Central Bureau of Investigation, New Delhi v. B.B.Agarwal and others ((2019) 15 SCC 522) the Apex Court held as under:

"12. The High Court was of the view that on resettlement of accounts, the parties obtained the consent decree from DRT and paid the entire sum, therefore, there is no live issue, which now survives. The High Court then examined the question as to whether the issue of criminality is involved so as to allow the trial Court to continue on its merits. After examining this issue with reference to charges and documents, the High Court held that no criminality issue is found involved notwithstanding the settlement of the case between the parties."

In the present case also during pendency of the investigation, the matter has been settled in terms of compromise and the entire amount has been paid. It is also not in dispute that the de facto complainant-bank has also issued certificates stating that there are no outstanding dues payable by Shakti Steels and Arien Steels Limited.

Considering the above settled law and also taking into consideration the fact that entire case involved default in repayment of debt to the bank and even before filing of the charge sheet, the liability to make good the monetary loss suffered by the de facto complainant-bank had been mutually settled between the parties and even though trial is commenced, but the material witnesses did not support the prosecution case and more time will be consumed to conclude the trial which is of no use that results in waste of time of the Court and public money, this Court finds that continuation of proceedings against the petitioners/A-1 to A-3 and A-9 would be an abuse of process of law.

Accordingly, the Criminal Petition is allowed and the proceedings initiated against the petitioners/A-1 to A-3 and A-9 in C.C.No.7 of 2007 on the file of the Special Judge for C.B.I. Cases, Hyderabad, are hereby quashed.

16 In the light of the aforesaid findings of this Court as well as

the Hon'ble Supreme Court in the cases cited supra, I am of the

considered view that the petitioner herein also stands on the

same footing and entitled to the relief sought for.

17 In the Order dated 22.9.2022 passed in Crl.R.C.No.489 of

2019 also this High Court observed that when the substantive

offences under IPC are not made out in the FIR and the

complaint, there is absolutely no ground to proceed against the

private individuals for the offences under the P.C Act.

18 In that view of the matter, the order dated 05.7.2019

passed by the learned III Additional Special Judge for CBI cases,

Hyderabad in Crl.M.P.No.253 of 2019 in C.C.No.4 of 2007, is