C.B.I vs. JAGJIT SINGH

-1 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.1580 OF 2013 (arising out of SLP(CRL.)No.8762 of 2010) CENTRAL BUREAU OF INVESTIGATION … APPELLANT VERSUS JAGJIT SINGH … RESPONDENT J U D G M E N T  SUDHANSU JYOTI MUKHOPADHAYA, J. Leave granted. 2. By   this   appeal,   the   appellant­Central   Bureau   of  Investigation   (‘CBI’   for   short)   has   challenged   the  JUDGMENT impugned   order   dated   31st   March,   2010   passed   by   the  High Court of Calcutta in CRR No.719 of 2010. By the  impugned order, learned Judge of the High Court allowed  the   application   preferred   by   the   respondent,   Jagjit  Singh,   under   Section   482   of   the   Criminal   Procedure  Code, 1973 and quashed the proceedings being G.R. Case  No.1508   of   2006   pending   before   the   12th   Court   of  Metropolitan Magistrate, Calcutta. Page 1 -2 3. The said case relates to CBI:SPE:ACB:Kolkata Case  No.R.C. 12(A)/2003 under Sections 420/471 of the Indian  Penal   Code.   The   First   Information   Report(FIR)   in 

CBI, ACB, Kolkata to the effect that one Shri Sanjib  Kumar   Chatterjee   while   functioning   as   Sr.   Manager,  Indian   Overseas   Bank   (IGS),   Shreemani   Market   Branch,  Kolkata during the year 1998­2000 had entered into a  criminal conspiracy with private persons, namely, Shri  Jagjit Singh, Director of M/s. Tag Reachers (P) Ltd.  (respondent   herein),   Shri   Raj   Kumar   Agarwal,   Shri  Virendra   Jain   and   unknown   officers   of   the   Regional  Office,   Business   Department   of   Indian   Overseas   Bank,  Kolkata in order to cause wrongful loss to the said  Bank in the matter of term/demand loans, in favour of  M/s. Tag Reachers (P) Ltd.  It was further alleged in  the   FIR   that   in   furtherance   of   said   criminal  JUDGMENT conspiracy, term/demand loans amounting to Rs.1,94,50  lakhs were fraudulently and dishonestly sanctioned to  the   said   Company   by   the   Regional   Office   of   Indian  Overseas Bank(IOB), Kolkata and out of the said amount  Rs.1.5 crores remained outstanding due to non­payment  by   the   party.   All   the   accounts   of   parties   involved  became inoperative, and this resulted in corresponding  wrongful loss to the said Bank. Page 2 -3 4. It is further alleged that on the recommendation  of the said Shri Sanjib Kumar Chatterjee, Sr. Manager,  three term loans were sanctioned by the Regional Office 

13   Nos.   of   LPG   Tankers   (4+4+5   respectively)   without  proper verification, documentation and by manipulating  exorbitant price of the collateral properties offered  by M/s. Tag Reachers (P) Ltd. 5. The said information has also disclosed that when  M/s.   Tag   Reachers   (P)   Ltd.   started   defaulting   the  repayment   in   the   aforesaid   term   loan   accounts,   the  accused persons connived together and in pursuance of  the   said   criminal   conspiracy   Shri   Jagjit   Singh   as  Director of M/s. Tag Reachers (P) Ltd. approached Shri  Sanjib Kumar Chatterjee, Sr. Manager in the month of  March, 2000 for a demand loan of Rs.32.50 lakhs against  JUDGMENT the   security   of   National   Saving   Certificate/Kishan  Vikash Patra of the face value of Rs.50 lakhs. The said  securities were in the form of NSC for Rs.7 lakhs and  Kishan Vikash Patra of Rs.18 lakhs standing in the name  of   the   aforesaid   Shri   Raj   Kumar   Aggarwal   and   Kishan  Vikash Patra of Rs.25 lakhs standing in the name of the  aforesaid   Shri   Virendra   Jain.   All   the   NSCs   and   KVPs  were alleged to be forged and fabricated and were not  issued   from   the   Middleton   Row   and   Park   Street   Post  Page 3 -4 Offices   from   where   they   were   shown   to   have   been  reportedly   purchased.   Similarly,   no   lien   on   them   in  favour of the IOB were created by the aforesaid two 

Offices for the same. In spite of this and   knowing  fully well that the amount of the aforesaid term loans  were diverted by Shri Jagjit Singh to his restaurant  business,   Shri   Sanjib   Kumar   Chatterjee,   Sr.   Manager  recommended sanction of Demand loan for Rs.32.50 lakhs  in favour of M/s. Tag Reachers (P) Ltd. With the help  of   unknown   officials   of   the   Regional   Office   of   IOB,  Kolkata a demand loan of Rs.32.50 lakhs was sanctioned  in favour of the said company on 30th March, 2002. 6. It has also been disclosed by the said information  that though it was the last day of the financial year,  Rs.27.25 lakhs out of Rs.32.50 lakhs was transferred to  JUDGMENT the Term Loan Account of M/s. Tag Reachers (P) Ltd. on  30th March, 2002 itself towards partial adjustments of  the aforesaid term loan account whereas the rest of the  amount   was   withdrawn   by   M/s.   Tag   Reachers   (P)   Ltd.,  Kolkata. 7. It is found that for the acts of the omissions on  the   part   of   the   accused   persons,   entire   Term/Demand  loans became unsecured and inoperative now. The Bank  suffered   a   loss   of   Rs.1.5   crores   (approx.   Rs.1.59  Page 4 -5 crores   with   accrued   interest)   since   all   the   loan  accounts have become NPA (Non Performing Assets). 8. It   was   further   alleged   that   since   the   above 

13(1)(d)   read   with   Section   13(2)   of   Prevention   of  Corruption Act, 1988 by the aforesaid accused persons,  namely,   Shri   Sanjib   Kumar   Chatterjee,   Sr.   Manager,  Indian Overseas Bank, Shri Jagjit Singh, Director of  M/s.   Tag   Reachers   (P)   Ltd.,   Shri   Raj   Kumar   Agarwal,  Shri Virendra Jain and unknown officers of the Regional  Office,   Business   Department   of   Indian   Overseas   Bank,  Kolkata, a regular case was registered against them and  the said case was entrusted to Shri B.R. Roy Inspector  of Police, CBI, ACB, Kolkata for Investigation.  9. It   appears   that   the   respondent,   Jagjit   Singh  thereafter settled the dispute with the Indian Overseas  JUDGMENT Bank and paid the amount, pursuant to an order No.31  dated   29th   August,   2006   passed   by   the   Presiding  Officer, Debts Recovery Tribunal, Calcutta  in Case No.  OA/35/2003.   Giving reference to the above said order  passed by the Debts Recovery Tribunal the respondent,  Jagjit Singh moved an application under Section 482 of  Cr.P.C. in C.R.R. No.719 of 2010 before the Calcutta  High Court for quashing the proceedings being G.R. Case  No.1508 of 2006.  Page 5 -6 10. From the impugned order, it would be evident that  in view of such amicable settlement made between the  respondent and the Bank officials, learned Judge of the 

“Be that as it may, there cannot be any  rigid   formula   in   regard   to   permitting  the parties to effect a compromise. The  offences   alleged   are   undoubtedly   non­ compoundable and certainly, of serious  nature. The   question   that   arises   whether   in  view of such amiable settlement between  the   parties,   any   fruitful   purpose   is  likely   to   be   served   by   allowing   the  criminal   proceedings   to   proceed  further. In   the   present   case,   as   indicated  earlier   and   that   too,   being   rightly  shown   by   the   learned   senior   counsel,  Mr.   De,   for   reasons   not   known,   the  principal   accused,   Sanjib   Kumar  Chatterjee, had been left out. In   the   aforesaid   facts   and  circumstances,   I   am   inclined   to   hold  that   further   proceedings   of   the   case  before the learned trial court is not  likely   to   serve   any   fruitful   purpose  and,   as   such,   in   exercise   of   this  court’s inherent jurisdiction, the same  be quashed bond at once. JUDGMENT This disposes of C.R.R. No.719 of 2010.” 11. Learned senior counsel for the appellant submitted  that by a mere settlement between two offenders, the  Page 6 -7 personal intent of criminal conspiracy under Sections  420   and   471   IPC   which   are   even   otherwise   not  compoundable cannot be compounded.   According to him, 

and settled law laid down by this Court. 12. Per   contra,   according   to   the   respondent,   it   is  always   open   to   the   Court   to   quash   the   criminal  proceedings if the dispute is of civil nature and if  matter is settled between the parties. It was contended  that the dispute being civil in nature and the parties  to the dispute being reached settlement, the High Court  rightly set aside the criminal proceedings arising out  of the same very dispute.  13. The   very   same   issue   fell   for   consideration  recently before a three­Judge Bench of this Court in  Gian Singh v. State of Punjab and another, 2012 (10)  JUDGMENT SCC 303.     In the said case, this Court discussed the  relative   scope   of   inherent   power   of   the   High   Court  under Section 482 Cr.PC to quash criminal proceedings  involving   non­compoundable   offences   in   view   of  compromise arrived at between the parties.  That was a  case wherein when the special leave petition came up  for hearing, a two­Judge Bench vide order reported in  Gian Singh vs. State of Punjab and another, (2010) 15  SCC   118   doubted   the   correctness   of   the   decisions   of  Page 7 -8 this   Court   in   B.S.   Joshi   and   others   vs.   State   of  Haryana and another, (2003) 4 SCC 675 ,  Nikhil Merchant  vs. Central Bureau of Investigation and another,   2008 

Bench.   Hence, the question before the Bench was with  regard to the inherent power of the High Court under  Section 482 Cr.PC in quashing the criminal proceedings  against an offender who has settled his dispute with  the victim of the crime but the crime in which he was  allegedly involved was not compoundable under Section  320 Cr.PC. Discussing different provisions and taking  into   consideration   the   different   decisions   of   this  Court, the larger Bench in   Gian Singh (supra)  held as  follows:  “61.  The position that emerges from the  above   discussion   can   be   summarised  thus:   the   power   of   the   High   Court   in  quashing   a   criminal   proceeding   or   FIR  or   complaint   in   exercise   of   its  inherent   jurisdiction   is   distinct   and  different   from   the   power   given   to   a  criminal   court   for   compounding   the  offences under Section 320 of the Code.  Inherent   power   is   of   wide   plenitude  with no statutory limitation but it has  to   be   exercised   in   accord   with   the  guideline engrafted in such power viz.:  (i) to secure the ends of justice, or  (ii) to prevent abuse of the process of  any court. In what cases power to quash  the criminal proceeding or complaint or  FIR may be exercised where the offender  and   the   victim   have   settled   their  JUDGMENT Page 8 -9

JUDGMENT Page 9 -10

14. In the present case, the specific allegation made  against the respondent­accused is that he obtained the  loan on the basis of forged document with the aid of  officers of the Bank.   On investigation, having found  the   ingredients   of   cheating   and   dishonestly   inducing  delivery of property of the bank (Section 420 IPC) and  dishonestly using as genuine a forged document (Section  JUDGMENT 471   IPC),   charge   sheet   was   submitted   under   Sections  420/471 IPC  against the accused persons.  15. The debt which was due to the Bank was recovered  by   the   Bank   pursuant   to   an   order   passed   by   Debts  Recovery Tribunal.   Therefore, it cannot be said that  there   is   a   compromise   between   the   offender   and   the  victim.   The offences when committed in relation with  Banking   activities   including   offences   under   Sections  Page 10 -11 420/471   IPC   have   harmful   effect   on   the   public   and  threaten the well being of the society.  These offences  fall   under   the   category   of   offences   involving   moral 

bank   as   the   victim   in   such   cases   but,   in   fact,   the  society in general, including customers of the Bank is  the sufferer.  In the present case, there was neither  an   allegation   regarding   any   abuse   of   process   of   any  Court   nor   anything   on   record   to   suggest   that   the  offenders were entitled to secure the order in the ends  of justice.   In   the   instant   case,   the   High   Court   has   not  considered the above factors while passing the impugned  order. Hence, we are of the opinion that the High Court  erred in addressing the issue in right perspective.  16. In such circumstances, we set aside the impugned  JUDGMENT judgment and order dated 31st March, 2010 passed by the  High Court in CRR No.719 of 2010 and direct the trial  court to proceed the matter in accordance with law and  to   conclude   the   trial   expeditiously.   The   appeal   is  allowed with the aforesaid observation.  …………………………………………………………………….J.             (SUDHANSU JYOTI MUKHOPADHAYA) Page 11 -12 …………………………………………………………………….J.                (RANJAN GOGOI) NEW DELHI, OCTOBER 1,2013. JUDGMENT Page 12