STATE BANK OF INDIA vs MR BHARATH DAYANANDA
- Court
- Karnataka High Court
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 27 DAY OF OCTOBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE RAVI V HOSMANI
CRIMINAL PETITION NO. 1573 OF 2019
C/W
CRIMINAL PETITION NO. 852 OF 2019
IN CRL.P.No.1573/2019:
BETWEEN:
1 . STATE BANK OF INDIA
REP BY ITS CHAIRMAN AND
MANAGING DIRECTOR,
SRI RAJNISH KUMAR,
S/O RADHEYLAL,
AGED ABOUT 61 YEARS,
TH
STATE BANK BHAVAN, 14 FLOOR,
MADAME CAMA ROAD,
NARIMAN POINT, MUMBAI,
MAHARASHTRA - 400 021.
2 . SRI RAJNISH KUMAR
S/O RADHEYLAL,
AGED ABOUT 61 YEARS,
TH
STATE BANK BHAVAN, 14 FLOOR,
MADAME CAMA ROAD,
NARIMAN POINT, MUMBAI,
MAHARASHTRA - 400 021.
3 . SRI R PRABHU
S/O RAJAGOPALAN B T,
AGED ABOUT 56 YEARS,
DEPUTY GENERAL MANAGER,
STATE BANK OF INDIA,
STRESS ASSETS MANAGEMENT BRANCH,
II FLOOR,
OFFICE COMPLEX BUILDING,
SIGN
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LOCAL HEAD OFFICE COMPOUND,
NO.65, ST. MARK'S ROAD,
BENGALURU - 560 001.
…PETITIONERS
[BY SRI G.KRISHNA MURTHY, SR. COUNSEL FOR
SRI VEERENDRA PATIL, ADVOCATE]
AND:
MR BHARATH DAYANANDA
S/O DAYANANDA,
AGED ABOUT 25 YEARS,
NO.39/2, A.S.V.N.V BHAVAN,
IV FLOOR,
KEMPE GOWDA ROAD,
BENGALURU - 560 009.
…RESPONDENT
[BY SRI SHEKAR G. DEVARA SR. COUNSEL (VC) FOR
SRI K. NAGABHUSHANA REDDY, ADVOCATE]
THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO (a)
SET ASIDE THE IMPUGNED ORDER DATED 16.01.2019 PASS
ED BY THE V ADDITIONAL CHIEF METROPOLITAN MAGISTRATE
AT BANGALORE IN PCR NO.16121/2018 (VIDE ANNEXURE A).
(b) QUASH THE PROCEEDINGS IN C.C.NO.1863/2019 (VIDE
ANNEXURE B) PENDING BEFORE THE COURT OF V ADDITIONAL
CHIEF METROPOLITAN MAGISTRATE AT BANGALORE FOR THE
ALLEGED OFFENCE P/U/S.499 AND 500 OF IPC.
IN CRL.P.No.852/2019:
BETWEEN:
MR.B.NARASIMHAM
S/O MR.B.SUBRAMANYAM
AGED ABOUT 58 YEARS
PRESENTLY WORKING AS
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ASSISTANG GENERAL MANAGER
STATE BANK OF INDIA,
STRESS ASSETS MANAGEMENT BRANCH,
II FLOOR, OFFICE COMPLEX BUILDING,
LOCAL HEAD OFFICE COMPOUND,
NO.65, ST MARK ROAD,
BENGALURU - 560 001.
…PETITIONER
[BY SRI G.KRISHNA MURTHY, SR. COUNSEL FOR
SRI RAVI SHANKAR C.S., ADVOCATE]
AND:
MR BHARATH DAYANANDA
S/O DAYANANDA
AGED ABOUT 25 YEARS
NO.39/2, A.S.V.N.V. BHAVAN,
IV FLOOR, KEMPE GOWDA ROAD,
BENGALURU - 560 009.
…RESPONDENT
[BY SMT.PRAMILA NESARGI (P/L) SR. COUNSEL FOR
SRI K.N.NAGABHUSHAN REDDY, ADVOCATE]
THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO A.
QUASH THE PRIVATE COMPLAINT DATED 13.12.2018 (VIDE
ANNEXURE-A) FILED BY THE FIRST RESPONDENT AND THE
PROCEEDINGS PENDING BEFORE THE V A.C.M.M., BANGALORE
FOR THE ALLEGED OFFENCES P/U/S 499, 500 OF IPC BY
ALLOWING THE PETITION. B. SET ASIDE IMPUGNED ORDER
PASSED IN C.C.NO.1863/2019, DATED 16.01.2019, BY THE V
A.C.M.M., AT BANGALORE.
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THESE PETITIONS ARE HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 17.08.2026, THIS DAY, THE
COURT, PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE RAVI V HOSMANI
CAV ORDER
Challenging order dated 16.01.2019 and entire
proceedings in CC no.1863/2019 on file of V ACMM, Bangalore
for offences punishable under Sections 499 and 500 of Indian
Penal Code, 1860 ( IPC ), Crl.P.no.1573/2019 is filed by accused
no.1 to 3, while Crl.P.no.852/2019 is by accused no.4.
2. Sri G Krishnamurthy, learned Senior Counsel
appearing for Sri Veerendra Patil and Sri Ravi Shankar CS,
counsel for petitioners submitted that petitioners were accused
( petitioners ) in PCR no.1121/2018 filed by respondent
( complainant ) stating that on 01.08.2011, he was appointed
as Director of Bharath Infra Exports and Imports Ltd.
( Company ). Due to his business proficiency, he was
designated whole time Director on 01.04.2012. Further he had
invested Rs.3.66 Crores in its shares. And utilizing his
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acquaintances from United Kingdom, he ensured growth of
Company from Rs.206 Crores to Rs.838 Crores within 5 years.
3. It was stated that Company maintained current
account no.CA 31279270707 with State Bank of India –
accused no.1 ( SBI ). That on 22.06.2015, with intention of
wrongful gain from commission, SBI illegally transferred
Rs.2.03 Crores from Company's account to SBI Life Insurance
Co. Ltd. ( SBIL ), causing loss, damage and injury to
complainant and Company. Besides, SBI also debited OD penal
interest from Company's account no.30770234121 from
31.1.2016 to 31.05.2016, without any default. Therefore,
complaint was filed. Same was registered as Crime
no.185/2018 by Wilson Garden Police against five Bank officials
including Sri Rajinish Kumar - accused no.2 and Sri
Narasimham - accused no.4, for offences punishable under
Sections 403, 406, 420, 464 read with Section 34 of IPC.
4. It was alleged that when Company demanded
refund of Rs.2.03 Crores, SBI wrote letter to SBIL to direct
Company substitute complainant as a guarantor in place of Late
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BN Thimma Reddy who had died lately. At same time, SBI
increased LC margin from 10% to 15% and withdrew
Company's Export Packing Credit ( EPC ). Aggrieved by same,
Company requested SBI for golden handshake under letter
dated 06.10.2016. It paid Rs.45 Crores and cleared entire fund
based working capital facilities and under letter dated
07.10.2016 discontinued banking with SBI and requested for
transfer of accounts/facilities to South Indian Bank, but SBI did
neither.
5. It was stated, due to withdrawal of LC facilities,
Company could not fulfil commitment to customers, compelling
complainant to resign from Directorship on 17.10.2016 after
intimating SBI as well as Registrar of Companies ( RoC ).
Despite same, SBI continued to describe him as Director.
Therefore, under letter dated 14.12.2016 complainant informed
SBI about his resignation from directorship and sought deletion
of his name from Bank's records. Though under letter dated
27.03.2017, SBI informed him that he was personal guarantor
for Company's loan from SBI, when he demanded proof of
guarantee, it failed to furnish same. In later demand dated
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30.05.2017 by accused no.3 – Prabhu, Deputy General
Manager, SBI name of complainant was omitted.
6. Suddenly on 04.11.2018, accused no.4 –
Narasimham, Asst. General Manager, SBI got published in New
Indian Express/Sunday Express and Samyuktha Karnataka
newspapers, a ‘ Possession Notice ’ under Securitization and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 ( SARFAESI ) naming complainant as
defaulter. After above publication, complainant’s friends,
relatives, business associates and financial institutions began
contacting him for clarification causing him mental agony and
affecting his business/personal life as well as directorship in
other companies etc. destroying his reputation. It was further
alleged that despite legal notice got issued by complainant on
22.11.2018 demanding withdrawal of publication, accused
failed. Alleging that despite knowing that complainant had
resigned as Director and was not guarantor, accused no.1 to 4
with common intention, deliberately and falsely named him as
defaulter to maliciously damage his reputation, business
interests, creditworthiness, social image etc. and thereby
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committed offences leading to filing of private complaint
against accused along with list of documents such as ROC
records, banking correspondence, police complaint, FIR, legal
notice, newspaper publications etc. It was submitted that on
16.01.2019, learned Magistrate directed for registering criminal
case and issued process against accused no.1 to 4. Based on
same, CC no.1863/2019 was registered against accused no.1 to
4 for offences punishable under Sections 499 and 500 of IPC.
Aggrieved, these petitions were filed.
7. At outset it was submitted, allegations in complaint
disclose complainant’s grievances were purely civil in nature
with provision for redress under SARFAESI and there was
deliberate attempt to add criminal flavor to dispute and hence
abuse of process. It was submitted, complainant unsuccessfully
approached State Consumer Commission (‘ KSCDRC ’) and later
National Commission (‘ NCDRC ’). Resort to criminal proceedings
later would be abuse of process.
8. It was submitted that for recovery of its dues, SBI
had filed OA no.725/2018 before Debt Recovery Tribunal
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( DRT ). It was submitted, Hon'ble Supreme Court in K
Virupaksha and Anr. v. State of Karnataka and Anr. ,
reported in (2020) 4 SCC 440 held, SARFAESI was complete
code contemplating remedies to borrowers/guarantors against
Bank and instead of availing same, filing of criminal complaint
would be abuse of process and quashed criminal proceedings
especially when matter is pending before DRT.
9. Further, SBI had branches spread all over nation
and role of accused no.2 as Chairman of SBI was overall
supervision from his office in Mumbai, which was shown in
cause title of complaint and outside territorial jurisdiction of
Court. Besides, incidents alleged occurred within Bengaluru.
Under above circumstances, order taking cognizance and
issuance of process would be in violation of procedural
protection under Section 202 of CrPC. It was submitted,
Hon'ble Supreme Court in Jaideep Bose v. Bid and Hammer
Auctioneers (P) Ltd. , reported in 2025 SCC OnLine SC 348 ,
and this Court in Rahul Gandhi v. Bharatiya Janata Party ,
reported in 2026 SCC OnLine Kar 779 , held, where accused
resided beyond area of jurisdiction of Magistrate, it was
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mandatory to conduct enquiry or investigation before issuing
process, a serious judicial act, requiring application of judicial
mind.
10. It was submitted, accused no.3 and 4 were officials
of Bank entitled for protection under Section 32 of SARFAESI as
their actions were in good faith for recovery of dues to SBI. It
was submitted, Hon'ble Supreme Court in Anil Khandelwal v.
Phoenix India , reported in 2025 SCC OnLine SC 1883 , held
that high-ranking bank officials cannot be held automatically or
vicariously liable for criminal offenses under IPC based solely
on their official designation or status. It was also submitted
that there was no explanation about role of accused no.3 and 4
in offence of defamation and sought quashing of proceedings
against accused no.3 and 4.
11. Further High Court of Bombay in DJ Exim India
Pvt. Ltd. v. SBI , reported in (2015) 1 Comp LJ 138 (Bom)
held Banks had authority to publish photographs of wilful
defaulters and guarantors in newspapers and same was neither
ultra vires their powers nor would violate borrower’s right to
privacy when weighed against larger public interest.
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12. It was submitted, complaint was counterblast to
SBI filing OA no.725/2018 before DRT on 22.03.2018, to
harass Bank officials. Relying on decision of Hon'ble Supreme
Court in Punjab National Bank v. Surendra Prasad Sinha ,
reported in 1993 Supp (1) SCC 499 , it was submitted that
judicial process should not be permitted to be used as
instrument of oppression, harassment or means to wreak
personal vengeance. Relying on decision of Hon'ble Supreme
Court in MN Ojha v. Alok Kumar Srivastav , reported in
(2009) 9 SCC 682 , it was submitted, filing of complaint as
counterblast against bank officials involved in lawful recovery
duties would be abuse of judicial process.
13. It was submitted, Hon'ble Supreme Court in
Maksud Saiyed v. State of Gujarat , reported in (2008) 5
SCC 668 and GHCL Employees Stock Option Trust v. India
Infoline Ltd. , reported in (2013) 4 SCC 505 , held that
Magistrate must apply his mind while entertaining complaint
under Section 156 (3) of CrPC or under Section 200 of CrPC,
evaluate allegations alongside conduct of parties and examine if
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commission of any offence is prima facie indicated against
accused before taking cognizance or issuing process. And
arraignment of officials purely on official position without
mentioning specific role was held to be abuse of process.
14. It was submitted, Hon'ble Supreme Court in
Priyanka Srivastava v. State of UP , reported in (2015) 6
SCC 287 held Magistrates were required to apply their judicial
mind objectively before ordering criminal investigations against
bank officials conducting lawful financial recoveries and avoid
issuing directions mechanically for investigation by police under
Section 156 (3) of CrPC.
15. And relying on decision of Hon'ble Supreme Court in
Kishore Balkrishna Nand v. State of Maharashtra ,
reported in (2023) 8 SCC 358 , held accusations made in good
faith would under Exception 8 to Section 499 of IPC and not
constitute criminal defamation. And relying on decision of Rajiv
Thapar v. Madan Lal Kapoor , reported in (2013) 3 SCC
330 , it was submitted that in a petition under Section 482 of
CrPC, it could permit accused to rely on unrefutable material of
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sterling and impeccable quality to disprove accusation. And if
defence material was indubitable and rules out possibility of
conviction, Court would be justified in relying on same and
quash proceedings to prevent abuse of process, instead of
subjecting parties to trial which would be waste of precious
judicial time.
16. It was submitted that in a defamation case, it was
mandatory for alleged defamatory statement made or
published to be reproduced in complaint and as per decision of
High Court of Kerala in Ramakrishnan and Anr. v. State of
Kerala and Anr. [ 2025:KER:50841 ], failure was fatal for
offence under Section 500 of IPC. On above grounds prayed for
allowing petitions.
17. On other hand, Smt.Pramila Nesargi and Sri Shekar
G. Devasa, learned Senior Counsel appearing for Sri K.
Nagabhushana Reddy, advocate for respondents opposed
petitions. They submitted that complainant was neither a
mortgager nor a personal guarantor to SBI as evident from
Document no.R-13 produced by SBI before CBI and from
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Documents no.R-9 and R10 as well as letter dated 30.05.2017
addressed by DGM of SBI to personnel guarantors omitting
name of complainant. Hence, newspaper publication including
name of complainant as defaulter was defamatory as
petitioners knowingly and deliberately described complainant as
guarantor/mortgager and defaulter. Insofar as naming stranger
as defaulter, petitioners cannot claim protection under Section
32 of SARFAESI and decisions relied by petitioners are
misplaced. Besides, complainant had filed OS no.280/2024
before Principal Civil Judge and JMFC Anekal, seeking for relief
of declaration that alleged Deed of Guarantee dated
21.05.2009 and 25.03.2015 as fraudulent, null and void. It was
submitted, documents sought to be relied on by petitioners
herein were said documents. It was submitted in said suit had
granted order of temporary injunction restraining SBI from
relying on enforcing or using said alleged Deeds/documents. It
was submitted by deliberately suppressing above material facts
and relying on forged and fabricated Deeds present petition is
filed. Hence no interference was warranted.
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18. It was alleged that said deeds were created by SBI
and its officials by conspiring with each other and with sole
intention of wrongful monetary gain and cause corresponding
wrongful loss to complainant. Same was highlighted in order of
temporary injunction passed in civil suit. After passing of order
of injunction, SBI filed I.A no.227 dated 10.03.2026 in
Company Petition (IB) no.42/2024 pending before National
Company Law Tribunal (NCLT), Bengaluru, in which it expressly
stated that complainant had not signed Deed of Guarantee
dated 21.05.2009. Thereafter, SBI sought permission of NCLT
to delete and remove Deed of Guarantee dated 21.05.2009
from records of Petition. Said conduct demonstrates suppressed
material facts from this Hon'ble Court. But petitioners stand
herein is wholly inconsistent and directly contradictory to
admissions, which would by itself amount to abuse of process
of law, disentitling petitioners from relief.
19. It was further submitted, after Company's letter
dated 07.10.2016, SBI was required to cease further
transactions on account of Company. Despite same, there were
unauthorized debit transactions aggregating to Rs.101.80
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Crores during period from 20.10.2016 to 26.12.2016,
purportedly on forged, fabricated and ante-dated Board
Resolution dated 01.09.2009, which is seriously disputed and
forms subject matter of independent civil proceedings. Above
facts also reveal that there was active participation of
petitioners in alleged conspiracy and siphoning off huge
amounts from account of Company. While petitioners have
failed to substantiate their claims before DRT since year 2018,
complainant filed suit and obtained order of temporary
injunction that transactions carried out by SBI and its officials
are fraudulent.
20. It is forlorn that description of complainant as
"personnel guarantor/mortgager" and "defaulter" portray
complainant in negative light in public view and affects his
reputation. And averments in complaint, sworn statement of
complainant, witnesses and documents disclosed essential
ingredients of offences under Sections 499 and 500 of IPC,
constituting prima facie case. Further, grounds urged for
quashing are based on disputed questions of fact, including
genuineness of documents sought to be relied on by petitioners
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which can be done only after full-fledged trial. In view of bar
against mini-trial for evaluation of prosecution material petition
as per decision of Hon'ble Supreme Court in Neeharika
Infrastructure Pvt. Ltd. v. State of Maharashtra & Ors. ,
reported in (2021) 19 SCC 401 , petition was liable for
dismissal. It was submitted Hon'ble Supreme Court in case of
CBI v. Arvind Khanna , reported in (2019) 10 SCC 686 ,
State of Telangana v. Habib Abdullah Jeelani and Ors. ,
reported in (2017) 2 SCC 779 and Dineshbhai Chandubhai
Patel v. State of Gujarat and Ors. , reported in (2018) 3
SCC 104 , held that in a petition under Section 482 of CrPC,
there was bar against examination of defence of accused or
reliance on documents produced by accused, which do not form
part of prosecution record.
21. Rebutting challenge on ground of non-application of
mind, it was submitted sworn statement of complainant was
recorded on 26.12.2018 and 07.01.2019 and documents as
Exs.P1 to P23 marked. Complainant also examined Chetan and
Narayan (as PWs.2 and 3). As impugned order was passed
after above cannot be stated to be without application of mind.
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Therefore, impugned order dated 16.01.2019 was legal and
valid. It was submitted, amendment of Section 202 of CrPC in
2006 was considered and Hon'ble Supreme Court in Vijay
Dhanuka and Ors. v. Najima Mamtaj & Ors. , reported in
(2014) 14 SCC 638 , Birla Corpn. Ltd. v. Adventz
Investments & Holdings Ltd. , reported in (2019) 16 SCC
610 , Union of India Vs. Ashok Kumar Sharma , reported in
(2021) 12 SCC 674 and High Court of Allahabad in Saurav
Gupta & Ors. v. State of U.P. & Anr. , reported in (2023)
SCC OnLine All 2838 , holding that object of amendment was
to ensure innocent persons residing beyond territorial
jurisdiction were not harassed and Magistrate was required to
examine Complainant on oath and where necessary, direct
Complainant to examine his witnesses on oath and on scrutiny
of material if prima facie satisfied (reasons to be recorded)
about need of inquiry issue process. It was submitted that
learned Magistrate in instant case had complied with prescribed
procedure and passed order after application of mind.
22. It was submitted that Hon'ble Supreme Court in
State of Harayana v. Bhajan Lal , reported in 1992 Supp.
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(1) SCC 335 and Neeharika 's cases (supra), State of West
Bengal and Ors. v. Swapan Kumar Guha and Ors. ,
reported in (1982) 1 SCC 561 , held that power of quashing
must be exercised with extreme circumspection and only in
rarest of rare cases. At threshold stage, Court must confine its
scrutiny strictly to whether allegations in FIR/complaint prima
facie disclose a cognizable offence. Once any cognizable offence
was disclosed, statutory right and duty of police to investigate
cannot be delayed. It was submitted, averments in Complaint,
sworn statements of complainant and witnesses and documents
on record, disclosed a prima facie ‘case of defamation against
petitioners’. It was submitted, Complaint, sworn statements,
documents and other material on record disclose prima facie
case against petitioners for offences under Sections 499 and
500 of IPC. On above grounds sought for dismissing petitions.
23. Heard learned counsel and perused material on
record.
24. These petitions are by accused no.1 to 4
challenging order taking cognizance as well as seeking for
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quashing of entire proceedings for offences under Sections 499
and 500 of IPC.
25. Main grounds of challenge are dispute being purely
civil given criminal flavor; complaint as counterblast to harass
petitioners; complaint lacking essential ingredients of offences
alleged, order passed without application of mind on ground of
failure to notice protection of petitioners as Bank employees
under Section 32 of SARFAESI as well as non-compliance with
Section 202 of CrPC and lastly protection under Eighth
Exception to Section 499 of IPC.
26. Insofar as contention about civil dispute sought to
be given criminal flavour, distillate of legal position in view of
decisions in Anukul Singh v. State of U.P. , reported in 2025
SCC OnLine SC 2060 , Neeharika ’s case (supra) and CS
Prasad v. C Satyakumar & Ors. , reported in 2026 SCC
OnLine SC 50 would be that there is no prohibition against
initiation/continuation of civil as well as criminal proceedings, if
act complained of gives rise to cause of action for both and if
essential ingredients of offences are disclosed in complaint.
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Petitioners herein seek to rely on deeds of guarantee dated
21.05.2009 and 23.05.2015 to contend complainant was
defaulter and resort to criminal proceedings was abuse of
process to pressurise officials of Bank. But, very foundation of
complainant’s allegations against SBI/its officials is denying
being mortgager/guarantor and alleging that naming
complainant as mortgager/guarantor and defaulter in public
notice and getting it published in Newspapers was with
intention to harm his reputation and cause financial loss.
27. It is settled law that where prayer for quashing
based on documents/records not part of prosecution material
would be available only on unrefutable material of sterling and
impeccable quality to totally disprove accusation and rendering
conviction impossible. While complainant is denying being
mortgager or guarantor of SBI, petitioners are seeking to rely
on deeds of guarantee dated 21.05.2009 and 23.05.2015 to
rebut said claim to reinforce their challenge of criminal
proceedings on ground of abuse of process. But in OS
no.280/2024 filed by complainant herein for declaring very
same deeds as fabricated and void ab initio and for permanent
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injunction restraining defendants (including SBI) from relying
on them, trial Court on 17.11.2025 granted order of temporary
injunction restraining SBI and its officials from using/enforcing
alleged deeds of guarantee in any manner before
tribunals/authorities for purpose of enforcement of any of
contents of said deeds, during pendency of suit, which is still in
force. Thus, direct consequence of legality of deeds being under
challenge and order of temporary injunction restraining SBI
being in force would be that said documents would not be
unrefutable material of sterling/impeccable quality as would
disprove accusation or remove possibility of conviction.
Question of reliability of documents would be matter for
investigation/trial. For aforesaid reasons, challenge on ground
of civil dispute being given criminal flavour, complaint filed as
counterblast to harass officials of SBI would not hold water.
28. Further, essential ingredients for offences under
Sections 499 and 500 of IPC, are comprehensively dealt with
by Hon'ble Supreme Court in Subramanian Swamy v. Union
of India , reported in (2016) 7 SCC 221 . Referring to Jeffrey
J. Diermeier v. State of West Bengal , reported in (2010) 6
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SCC 243 , it was held that imputation must be made with
intention of harming or knowledge that it would harm
reputation of person concerned. Though Section 499 of IPC has
ten exceptions, First Exception, deals with imputations made
for public good, is held to be question of fact in Subramanian
Swamy 's case (supra) and would require trial. Second
Exception, relates to public conduct of public servants, would
not apply to present case. Third Exception is in relation to
conduct of any person touching any public question, may apply
to present case only if it is established that complainant was
mortgagor or guarantor and defaulter and would also require
trial. Fourth and Fifth Exceptions are about publication of Court
proceedings and conduct of witnesses, would not apply to
present case. Sixth Exception protects criticism of
author/publication, would not apply to present case. Seventh
Exception deals with censure passed in good faith by person in
authority over him, would also not apply to present case.
29. Eighth Exception, deals with accusation made in
good faith to person having lawful authority over person
against whom it is made. But challenge on ground of
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publication being protected under Eighth Exception to Section
499 of IPC would be covered by ratio laid down in Kanwal Lal
v. State of Punjab , reported in AIR 1963 SC 1317, MC
Verghese v. TJ Poonan , reported in (1969) 1 SCC 37 ,
Chaman Lal v. State of Punjab , reported in (1970) 1 SCC
590 , Rajendra Kumar Sitaram Pande v. Uttam , reported in
(1999) 3 SCC 134 , wherein Hon'ble Supreme Court while
dealing with said defence opined that same would be available
only if accused prove that person to whom communication was
made had lawful authority over person complained against, in
respect of subject-matter of accusation. There is no proper
basis laid for said contention and therefore requires to be
rejected.
30. Ninth Exception, protects imputation made in good
faith by person for protection of interest of any person or for
public good. And held to be casting burden on person claiming
said exception, in Subramanian Swamy 's case (supra). Tenth
Exception deals with caution conveyed to a person for his own
or for public good in good faith, would not apply to present
case. In light of above principles, allegation in complaint herein
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about intentionally naming complainant as mortgager and
guarantor and publication of his name as a bank defaulter to
affect his reputation when taken on face value would constitute
prima facie material. Consequently, it has to be held that
petitioners fail to establish total absence of ingredients for
offence under Sections 499 and 500 of IPC, at this stage .
31. Next contention about impugned order suffering
from vice of non-application of mind is based on ratio in
Jaideep Bose and Rahul Gandhi cases etc. wherein taking
note of serious consequences flowing from an order taking
cognizance and issuance of process, procedural protection of
application of mind is mandated. Said requirement in law is not
disputed.
32. While passing impugned order, learned Magistrate
stated about contents of complaint, sworn statement of
complainant, evidence of CW-2 and CW-3 and documents
marked as Ex.P1 to Ex.P23 in brief and arrived at conclusion
that complainant had placed sufficient material to prima facie
establish despite cessation of directorship and absence of
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material showing complainant as guarantor, his name was
published as a defaulter which would prima facie constitute
imputation affecting his reputation attracting offences under
Sections 499 and 500 of IPC. Thus, impugned order prima facie
indicates application of mind.
33. But there are two ancillary grounds, namely failure
by learned Magistrate to notice address of accused no.2 being
beyond territorial jurisdiction mandating enquiry under Section
202 of CrPC and acts of accused no.3 and 4 complained of
being in performance of official duty being protected under
Section 32 of SARFAESI. Said provision reads as follows:
“32. No suit, prosecution or other legal proceedings
shall lie against the Reserve Bank or the Central
Registry or any secured creditor or any of its
officers for anything done or omitted to be done
in good faith under this Act.”
34. Same will clarify that protection available under
said provision is only in respect of anything done in good faith.
Petitioners rely on decision in DJ Exim ’s case (supra), to
contend that publication of names of defaulters was held to be
in good faith. But complainant’s case against petitioners herein
is about inclusion of his name as guarantor and publishing his
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name as defaulter was with malafide intention to spoil his
reputation and cause loss to him. Same can be noted in specific
allegation against accused no.4 that he deliberately and with
malicious intention included name of complainant in publication
as defaulter, despite intimation by accused no.3 about
complainant ceasing to be director and not being guarantor.
There is also specific allegation about failure to have publication
withdrawn even after letter/legal notice by complainant.
35. Though such communication was made only to
Authorised Officer, Stressed Assets Management Branch and
not against all petitioners, question whether for omission to
withdraw publication action for criminal defamation could be
filed is answered by Hon'ble Supreme Court in Google India
Private Limited v. Visaka Industries , reported in (2020) 4
SCC 162 , holding failure to remove or disable access to
defamatory content within reasonable time after receipt of
notice can be cause of action for criminal defamation. And
whether all petitioners had knowledge of defamatory content
and/or request for removal and failed to take action would be
speculative at this stage and would require investigation/trial.
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36. Indeed, compliance with Section 202 of CrPC is held
mandatory in Jaideep Bose 's cases (supra). But in National
Bank of Oman v. Barakara Abdul Aziz and Anr. , reported in
(2013) 2 SCC 488 , non-compliance is held to be non-fatal and
entail remand for compliance. In Vijay Dhanuka ’s case
(supra), however, it is held requirement of Section 202 of CrPC
would be met if witnesses are examined for purpose of deciding
whether there was sufficient ground for proceeding against
accused. As noted above impugned order is passed after
examination of complainant and two others and arriving at
conclusion that there was sufficient material to proceed against
petitioners. Therefore, said contention too would fail.
37. Instance case gives rise to yet another aspect,
whether criminal liability can be attributed to individual officers
of SBI. It was held in Maksud Saiyed 's case (supra) and
reiterated in Anil Khandelwal 's case (supra) that complaint
must contain specific allegations about role and participation of
individual officer in commission of alleged offence and vicarious
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criminal liability cannot be presumed based on designation as
Chairman, Director or officer.
38. Perusal of complaint reveals, SBI is arraigned as
accused no.1. Though most of allegations are against it,
prosecution of accused no.1 would sustain so long as
prosecution against any of its officials sustain. Insofar as
accused no.2, reference in complaint is only as Chairman of SBI
without any specific allegation about his personal participation
in or authorisation of alleged newspaper publication. Even
against accused no.3, allegation is about issuance of demand
notice leading to alleged publication dated 04.11.2018. It is
also noted that name of complainant was not included in
demand notice. And in fact, there is assertion about accused
no.3 issuing communication to accused no.4 about complainant
not being guarantor and ceasing to be director of Company.
Consequently, continuation of proceedings against accused
no.2 and 3 would be impermissible. It would however be open
to prosecution to arraign them as accused at later stage, in
case of any material being unearthed to show their active role
in commission of offence.
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39. However, insofar as accused no.4 there is specific
allegation that being authorised officer of SBI, he caused
inclusion of name of complainant in publication as a defaulter
and Bank is also arraigned as accused no.1. Therefore, at this
stage, this Court cannot hold that complaint against accused
no.1 and 4 is devoid of essential ingredients of Section 499 of
IPC. Thus, petition fails insofar as accused no.1 and 4 but
succeeds insofar as accused no.2 and 3 are concerned petition.
40. Consequently, Crl.P.no.1573/2019 is allowed in
part , proceedings in CC no.1863/2019 on file of V ACMM,
Bangalore for offences punishable under Sections 499 and 500
of IPC is quashed only insofar as accused no.2 and 3, while
Crl.P.no.852/2019 by accused no.4 is dismissed , but with
observations as above.
Sd/-
(RAVI V HOSMANI)
JUDGE
YKL,AV,GRD
List No.: 1 Sl No.: 70