Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2009 Supreme(SC) 1107

2009(4) Supreme 557
SUPREME COURT OF INDIA
(From Madras High Court)
Dalvir Bhandari and Harjit Singh Bedi, JJ.
Central Bureau of Investigation — Appellant
versus
A. Ravishankar Prasad & Others — Respondents
Criminal Appeal Nos. 1080-1085 of 2009.
(Arising out of SLP (Crl.) Nos.8854-57 of 2008)
Decided on : 15-05-2009

Advocates appeared:
For the Appellant :B. Dutta, ASG, Ms. Rajni Ohri Lal, Ms. Binu Tamta, B. Krishna Prasad, Advocates.
For the Respondents:V.J. Francis, A. Radhakrishnan, Anupam Mishra, Advocates.

IMPORTANT POINT
Court should refrain from interfering when the FIR discloses commission of a cognizable offence.

Headnote:(a) Code of Criminal Procedure, 1973 – Section 482 – Allegations in the complaint and charge-sheet taken at their face value constitute the offences alleged – Quashing of the proceedings was not proper. (Para 14)
        (b) Code of Criminal Procedure, 1973 – Section 482 – Scope, ambit and applicability discussed. (Paras 15 and 21)
        [1964] AC 1254; [1977] AC 1; (1960) 3 SCR 388; (1977) 2 SCC 699; 1992 Supp. (1) SCC 335; (1992) 4 SCC 305; (1996) 5 SCC 59; (2003) 4 SCC 675; 2008 (4) Scale 411; (2008) 4 SCC 582; JT 2009 (5) SC 321 – Relied upon.
        (c) Code of Criminal Procedure, 1973 – Section 482 – Court should refrain from interfering when the FIR discloses commission of a cognizable offence – However, technicality should not be allowed to stand in the way of quashing of the criminal proceedings. (Paras 29 and 31)
        (1994) 2 SCC 277; (2008) 9 SCC 677 – Relied upon.
       Facts of the case:
        1. According to the appellant, the respondents herein have committed serious offences, such as forgery, fabrication of documents and using the said documents as genuine. The respondents, A. Ravishankar Prasad and A. Manohar Prasad also entered into conspiracy with the Chairman and Managing Director and other officials of the Indian Bank, Chennai with the object of cheating the Indian Bank in the matter of recommending/sanctioning/disbursing huge credit facilities.
        2. On 28.3.2007 the respondents herein have settled the entire outstanding dues by paying an amount of Rs.157 crores during March 2007 and the petitions before the Debt Recovery Tribunal, Chennai have been dismissed as settled out of court.
        3. Respondent nos.1 and 2 had preferred application under section 482 of the Cr.P.C. before the High Court of Madras, to quash the proceedings against them which was allowed.
       Finding of the Court :
        A clear case is made out u/s 120-B read with section 420 IPC against the respondents.
       Result : Appeal allowed.

JUDGMENT

Dalveer Bhandari, J.—

1. Leave granted.

2. The Central Bureau of Investigation is seriously aggrieved by the judgment of the High Court of judicature at Madras dated 30.4.2008 by which the High Court has quashed the entire criminal proceedings and CC Nos.80, 81 and 82 of 2001 against the respondents herein namely, A. Ravishankar Prasad and A. Manohar Prasad.

3. According to the appellant, the respondents herein have committed serious offences, such as forgery, fabrication of documents and using the said documents as genuine. The respondents, A. Ravishankar Prasad and A. Manohar Prasad also entered into conspiracy with the Chairman and Managing Director and other officials of the Indian Bank, Chennai with the object of cheating the Indian Bank in the matter of recommending/sanctioning/disbursing huge credit facilities in the form of :

“(1) Letter of Credit (LC);

(2) Open Cash Credit (OCC)

(3) Secured- Temporary Overdrafts (SOD/TOO)

(4) Bank Guarantee (BG)

(5) Blocked Loan; and

(6) Taking over of liabilities from other banks and other branches of Indian Bank without proper appraisal, without following banking norms, beyond the delegated powers and without ensuring the end use of the funds in the name of M/s Ravishankar Films Pvt.Ltd., M/s Gemini Arts Pvt.Ltd., M/s Gemini Pictures Circuit Pvt.Ltd. and M/s Prasad Properties and Investments Pvt.Ltd. represented by respondent no.1 A. Ravishankar Prasad and respondent no.2 A. Manohar Prasad who fraudulently produced false documents through their employees and used the same as genuine and defrauded the Indian Bank huge amounts running into hundreds of crores and obtained pecuniary advantage for themselves and others.”

4. On completion of investigation charge-sheets were filed and four cases were registered against M. Gopalakrishnan, formerly CMD, Indian Bank, Chennai and other public servants, bank officials and A. Ravishankar Prasad and A. Manohar Prasad and their group concerns under section 120- B read with section 420 and section 13(2) read with section 13(1)(d) of Prevention of Corruption Act, 1988.

5. On 28.3.2007 the respondents herein have settled the entire outstanding dues by paying an amount of Rs.157 crores during March 2007 and the petitions before the Debt Recovery Tribunal, Chennai have been dismissed as settled out of court.

6. Respondent nos.1 and 2 had preferred application under section 482 of the Cr.P.C. before the High Court of Madras, to quash the proceedings against them contending inter alia that the witnesses so far examined by the prosecution have not stated anything against the respondents. It is also urged that the respondents had entered into a compromise with the Indian Bank and have settled the entire outstanding dues and legal charges to the bank on the recovery certificate issued to the DRT, Chennai. In this view of the matter, proceedings against the respondents need to be quashed.

7. In pursuance of the show cause notice issued by the High Court, the CBI contended that the cases were registered on the basis of written complaint filed by the General Manager, Indian Bank, Chennai. It was submitted that the active trial in the case was in progress and 92 witnesses have already been examined. The CBI also urged that the settlement of the loan transactions between the parties would not absolve the respondents herein from the criminal liability. According to the CBI, the Madras High Court without properly scrutinizing the materials produced by the prosecution quashed the proceedings against the respondents.

8. The High Court has given undue weightage to the settlement entered between the bank and the respondents. The settlement has absolved the respondents at the most from the civil liability but as far as criminal liability under section 120-B read with section 420 IPC is concerned, the respondents share the charges with the Chairman and the Managing Director and other officials of the Bank. Therefore, quashing of the complaint against the respon

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2009 Supreme(SC) 1107

IMPORTANT POINT Court should refrain from interfering when the FIR discloses commission of a cognizable offence.

Cases Referred (10)

IMPORTANT POINT
Court should refrain from interfering when the FIR discloses commission of a cognizable offence.