Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 661 OF 2009
(Arising out of SLP (Crl.) No.362 of 2008)
Smt. Rumi Dhar … Appellant
Versus
State of West Bengal and another … Respondents
J U D G M E N T
S.B. SINHA, J.
1. Leave granted.
2. Application of the provisions of Section 320 of the Code of Criminal
Procedure (hereinafter referred to as ‘the Code’) is in question in this
application. The said question arises in the following factual matrix.
3. Appellant and her husband (A-4) along with various other persons
including the officers of the Oriental Bank of Commerce Khidirpur Branch,
Calcutta (hereinafter called ‘the Bank’) were prosecuted for alleged
1
commission of offences under Sections 120-B/ 420/467/468 and 471 of the
Indian Penal Code. The officers of the Bank had also been prosecuted
under Sections 13(2) read with Section 13(1)(d) of the Prevention and
Corruption Act, 1988.
4. A charge sheet was filed against the appellant and seven others. She
was inter alia charged for taking the benefit of overdrafts between the
th th
period 8 February, 1993 to 5 March, 1993 without furnishing any
security.
5. For the purpose of realisation of the said amount, indisputably the
Bank filed an application for recovery thereof before the Debt Recovery
Tribunal. It is not in dispute that before the said Tribunal, appellant and the
Bank had entered into a settlement pursuant whereto or in furtherance a sum
of Rs.25.51 lacs was paid.
6. It is also not in dispute that for the said purpose, the C.B.I. had
returned the title deeds in respect of the property which were kept as
security for obtaining the loan from the bank.
7. On or about 22.02.2006 the Appellant filed an application under
section 239 of the Code for discharge, inter alia, contending:-
2
i) That having regard to the settlement arrived at between her and
the Bank no case for proceeding against her has been out.
ii) That she having already paid Rs. 25.51 Lacs and the CBI
having returned the title deeds which had been kept as security
for the loan from the said bank, the criminal proceeding should
be dropped relying on or on the basis of the said settlement.
iii) That the dispute between the parties were purely civil in nature
and that she had not fabricated any document or cheated the
bank in anyway what so ever, charges could not have been
framed against her.
8. In response to the said application the CBI had contended that mere
payment of loan to the bank could not exonerate the accused from a criminal
proceeding.
9. The learned Judge, Special Court Alipore in Special Case No. 3 of
1993 vide order dated 12.12.2006 dismissed the application of the appellant
noting that mere repayment could not exonerate the accused from the prima
facie charge in a criminal case.
3
10. On or about 06.03.2007 the appellant filed a revision application
under section 401 and 402 of the CrPC before the High Court of Calcutta
which was registered as CRR No. 910 of 2007.
Before the High Court, it was argued that further continuation of the
criminal proceeding, despite repayment of the amount of loan by the
appellant, would amount to an abuse of the process of Court and the same
should, therefore, be quashed.
11. In the said revision application the CBI contended that the criminal
case against the appellant was started not only for obtaining loan but also on
the ground of criminal conspiracy with the bank officials. It was accordingly
contended that the court below had rightly rejected the application and the
impugned order does not warrant any interference.
12. On or about 17.07.2007 the learned Single Judge of the High Court
dismissed the revision application. The court after discussing the arguments
of both the parties opined :
“I have taken into consideration the submissions
of the ld. Advocates for both the sides. It is the
case of the prosecution that the loan in question
was sanctioned in favour of the petitioner by way
of forming a criminal conspiracy, which was
allegedly engineered by the bank officials. It is
further been alleged that this accused/petitioner
also took part in the said conspiracy. Now it is the
4
admitted position that after investigation charge
sheet has also been filed against the petitioner and
the matter is now fixed for framing of charge. Ld.
Trial Judge in his impugned order discussed the
entire matter and thereafter he was of the opinion
that merely because of the fact that the amount in
question has already been paid in favour of the
bank, that cannot exonerate the accused/petitioner,
so far as the charge of conspiracy is concerned.”
13. The learned judge distinguished the case of CBI, New Delhi v.
Duncans Agro Industries Limited Calcutta, (1996) 5 SCC 591 relied on by
the appellant noting that the said case involved quashing of a criminal case
which was still under investigation. The judge noted that the in the case
before him the application for quashing the criminal proceedings was filed
at a stage when the thorough investigation of the case had already been
completed and a charge sheet had been filed. The court concluded that the
trial judge was justified in rejecting the petition filed under Section 239 of
the Code the appellant.
14. Mr. Nagendra Rai, learned senior counsel appearing on behalf of the
appellant, would submit :
(1) Considering the fact that the Bank had filed a suit to recover money
before the DRT and the dispute between the parties having been
settled and the amount in question having been repayed, continuation
5
of the criminal proceeding would be nothing but an abuse of the
process of law.
(2) Settlement having been arrived at by and between the parties and,
particularly having regard to the nature of allegations made against
the appellant herein, the High Court committed a serious error in
refusing to record the settlement and quashing the criminal
proceedings against her.
15. Mr. Amit Anand, learned counsel appearing on behalf of CBI, on the
other hand, would urge :
(i) No case has been made out for composition of the criminal offence,
as the settlement was arrived at by and between the appellant and the
bank only in respect of the civil dispute between the parties relating
to issuance of a certificate by the Debt Recovery Tribunal and not for
the purpose of withdrawal of the criminal case.
(ii) Having regard to the nature of evidence collected against the
appellant during investigation and consequent filing of a charge
sheet, the High Court has rightly refused to exercise its discretionary
jurisdiction.
6
16. Sub-section (1) of Section 320 of the Code specifies the offences
which are compoundable in nature; Sub-section (2) providing for the
offences which are compoundable with the permission of the court.
17. Appellant is said to have taken part in conspiracy in defrauding the
bank. Serious charges of falsification of accounts and forgery of records
have also been alleged. Although no charge against the appellant under the
Prevention of Corruption Act has been framed, indisputably, the officers of
the bank are facing the said charges.
18. It is now a well settled principle of law that in a given case, a civil
proceeding and a criminal proceeding can proceed simultaneously. Bank is
entitled to recover the amount of loan given to the debtor. If in connection
with obtaining the said loan, criminal offences have been committed by the
persons accused thereof including the officers of the bank, criminal
proceedings would also indisputably be maintainable. When a settlement is
arrived at by and between the creditor and the debtor, the offence committed
as such does not come to an end. The judgment of a tribunal in a civil
proceeding and that too when it is rendered on the basis of settlement
entered into by and between the parties, would not be of much relevance in
a criminal proceeding having regard to the provisions contained in Section
43 of the Indian Evidence Act.
7
19. The judgment in the civil proceedings will be admissibile in evidence
only for a limited purpose. It is not a case where the parties have entered
into a compromise in relation to the criminal charges. In fact, the offence
alleged against the accused being an offence against the society and the
allegations contained in the first information report having been
investigated by the Central Bureau of Investigation, the bank could not have
entered into any settlement at all. The CBI has not filed any application for
withdrawal of the case. Not only a charge sheet has been filed, charges
have also been framed. At the stage of framing charge, the appellant filed
an application for discharge. One of the main accused is the husband of the
appellant. The complicity of the accused persons was, thus, required to be
taken into consideration for the purpose of determining the application for
discharge upon taking a realistic view of the matter. While considering an
application for discharge filed in terms of Section 239 of the Code, it was
for the learned Judge to go into the details of the allegations made against
each of the accused persons so as to form an opinion as to whether any case
at all has been made out or not as a strong suspicion in regard thereto shall
subserve the requirements of law.
20. We may also notice that the learned Tribunal, while accepting the
settlement arrived at by and between the appellant and the bank, opined :
8
“It is, thus, clear from this evidence that the
amount of Rs.25.51 lacs has already been paid by
the respondents. The objections of the appellant
that the proposal of OTS stands withdrawn
because the payment was not made by cheques or
in the manner given in their application of OTS
has no merit. There is no need of formal joint
petition of compromise if the record shows in the
applications of the parties and the contents therein
their consent to the OTS could be derived from the
other documents on record of the case. As is
already discussed hereinabove as to the
application of the CHB for OTS dated 7.2.2004
the consent was already recorded by the Ld.
Recovery Officer in his order dated 7,10.2004.
The balance payment of Rs.22.21 lacs by the
respondents certificate debtors was payable in 20
monthly instalments which was to expire by
December 2005. It is immaterial that how the
payment is being made. The parties under the
OTS is that the OTS is agreeable and consent was
at an amount of Rs.25.51 lacs. It is immaterial that
the payment is to be made by equated monthly
instalments by post dated cheques or
evenotherwise if the payment is made at an early
date, then it is not wrong. But if the payments are
made beyond the scheduled date, then it is the
breach of the OTS and in such a situation the
Tribunal may refuse to act upon the OTS. In the
present case the amount has already been paid
prior to December 2—5. Thus, it cannot be said
that the payments as per compromise are not
paid.”
21. The learned Special Judge in his order dated 16.12.2006 rejected the
contention raised on behalf of the appellant herein, stating :
9
“I have gone through the record citation and
considered the circumstances. It is true that the
accd. has put a good gesture by paying of the dues
of the bank but I am at one with the Ld. PP that
this payment cannot exonerate the accd. from a
prima facie charge. If I allow this, then I may
have to swallow in a case of bribery that the accd.
has paid back the amount to the sufferer the
amount received as bribe. It is a question of trial
whether there was any criminal intention on the
part of this Lady accd. in this crime. The criminal
intention is to be inferred from the evidence to be
adduced by the prosecution. Simply because the
money has been returned, I cannot shut the mouth
of the prosecution from adducing evidence against
this accd. Thus, I do not like to pass any order in
favour of the accd. The prayer for discharge of
accd. No.7, Rumi Dhar stands rejected. Let the
case proceed. Fix 7.2.07 for consideration of
charge. The sureties must produce all the accd.
persons on that date.”
22. It has not been argued before us that the learned Judge, in arriving at
the said opinion, committed any error of law or the same otherwise suffers
from any illegality so as to enable the High Court to interfere with the same
matter. A prima facie case has been found out against the appellant. There
is no error apparent on the face of the record warranting interference
therewith.
Strong reliance has been placed by Mr. Rai on a decision of this
Court in Central Bureau of Investigation, SPE, SIU(X), New Delhi v.
10
Duncans Agro Industries Ltd., Calcutta [(1996) 5 SCC 591], wherein this
Court held :
“26. After giving our careful consideration to the
facts and circumstances of the case and the
submissions made by the respective counsel for
the parties, it appears to us that for the purpose of
quashing the complaint, it is necessary to consider
whether the allegations in the complaint prima
facie make out an offence or not. It is not
necessary to scrutinise the allegations for the
purpose of deciding whether such allegations are
likely to be upheld in the trial. Any action by way
of quashing the complaint is an action to be taken
at the threshold before evidences are led in support
of the complaint. For quashing the complaint by
way of action at the threshold, it is, therefore,
necessary to consider whether on the face of the
allegations, a criminal offence is constituted or
not. In recent decisions of this Court, in the case of
Bhajan Lal (supra), P.P. Sharma (supra) and Janta
Dal (supra), since relied on by Mr. Tulsi, the
guiding principles in quashing a criminal case
have been indicated.”
It was furthermore observed :
“27. In the instant case, a serious dispute has been
raised by the learned Counsel appearing for the
respective party as to whether on the face of the
allegations, an offence of criminal breach of trust
is constituted or not. In our view, the expression
'entrusted with property' or 'with any dominion
over property' has been used in a wide sense in
Section 405 I.P.C. Such expression includes all
cases in which goods are entrusted, that is,
voluntarily handed over for a specific purpose and
11
dishonestly disposed of in violation of law or in
violation of contract. The expression 'entrusted
appearing in Section 405 I.P.C. is not necessarily a
term of law. It has wide and different implications
in different contexts. It is, however, necessary that
the ownership or beneficial interest in the
ownership of the property entrusted in respect of
which offence is alleged to have been committed
must be in some person other than the accused and
the latter must hold it on account of some person
or in some way for his benefit. The expression
'trust' in Section 405 I.P.C. is a comprehensive
expression and has been used to denote various
kinds of relationship like the relationship of
trustee and beneficiary, bailor and bailee, master
and servant, pledger and pledgee. When some
goods arc hypothecated by a person to another
person, the ownership of the goods still remains
with the person who has hypothecated such goods.
The property in respect of which criminal breach
of trust can be committed must necessarily be the
property of some person other than the accused or
the beneficial interest in or ownership of it must be
in other person and the offender must hold such
property in trust for such other person or for his
benefit. In a case of pledge, the pledged article
belongs to some other person but the same is kept
in trust by the pledgee. In the instant case, a
floating charge was made on the goods by way of
security to cover up credit facility. In our view, in
such case for disposing of the goods covering the
security against credit facility the offence of
criminal breach of trust is not committed. In the
facts and circumstances of the case, it, however,
appears to us that the Respondents moved the
High Court only in 1991 although the first FIR
was filed in 1987 and the second was filed in
1989. The CBI, therefore, got sufficient time to
complete the investigation for the purpose of
framing the charge.”
12
This is also not a case where unlike Duncans Agro Industries, no case
of criminal breach of trust had been made out.
Our attention has also been drawn to a recent decision of this Court in
Nikhil Merchant v. Central Bureau of Investigation & Anr. [(2008) 9 SCC
677], wherein this Court refused to refer the matter to a larger Bench,
stating:
“30. 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?
31. 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
13
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.”
23. The jurisdiction of the Court under Article 142 of the Constitution of
India is not in dispute. Exercise of such power would, however, depend on
the facts and circumstance of each case. The High Court, in exercise of its
jurisdiction under Section 482 of the Code of Criminal procedure, and this
Court, in terms of Article 142 of the Constitution of India, would not direct
quashing of a case involving crime against the society particularly when
both the learned Special Judge as also the High Court have found that a
prima facie case has been made out against the appellant herein for framing
charge.
24. For the reasons aforementioned, there is no merit in the appeal. It is
dismissed accordingly.
……………………………….J.
[S.B. Sinha]
..…………………………..…J.
14
[Dr. Mukundakam Sharma]
New Delhi;
April 8, 2009
15