2017 Supreme(SC) 258

SUPREME COURT OF INDIA
R.K. AGRAWAL, ADARSH KUMAR GOEL, JJ.
K. Sitaram & Anr. - Appellants
Versus
CFL Capital Financial Service Ltd. & Anr. - Respondents
Criminal Appeal No. 2285 of 2011
Decided On : 21-03-2017

IMPORTANT POINT
When four persons were accused and proceeded against on same set of facts in the same complaint and the complainant withdraws complaint against two; continuation of prosecution against officers of State Bank of Travancore, appellants 1 and 2 would not be justified.

Headnote:(a) Administration of justice – Complaint on oath – Renders complainant liable to prosecution and imprisonment, if false – Complainant entitled to be believed – Issue if process only if complaint shows sufficient grounds for proceeding – Power to issue process discretionary, to be utilized with proper care and caution. (Para 16)

       (b) Criminal jurisprudence – Respondent company filing complaint against two officials each of Kotak Mahindra Bank and State Bank of Travancore – All the four being involved in day to day working of the two Banks – Liable for lapses of the Banks – Respondent company withdrawing complaint against officers of Kotak Mahindra Bank – Continuation of prosecution against officers of State Bank of Travancore, appellants 1 and 2 – Not justified – Liable to be quashed. (Para 24)

       (2008) 5 SCC 668; (1979) 4 SCC 396; 2015 (1) SCALE 140 – Referred

       Facts of the case:

       The complainant-respondent Company borrowed a sum of Rs. 900 lakhs comprising Rs. 180 lakhs through cash credits from the consortium of Banks (of which the State Bank of Travancore was the lead bank) and a sum of Rs. 720 lakhs being working capital demand Loan. Due to non-payment of the loan amount, the account became Non-Performing Asset. In order to recover the amount against the borrower, the State Bank of Travancore filed OA before the Debts Recovery Tribunal (DRT), Mumbai. The DRT passed a partial decree awarding a sum of Rs. 812.26 lakhs with 12 per cent interest.

       The State Bank of Travancore assigned the debts due from the complainant-Company to the Kotak Mahindra Bank together with all the securities through an Assignment Deed.

       The respondent Company assigned to Kotak Mahindra Bank the debt due towards it from one Ravishankar Industries Pvt. Ltd. of more than Rs. 32 crores with an agreement that any excess recovery over and above Rs. 90 lakhs from Ravishankar Industries Pvt. Ltd. would be shared equally between the Kotak Mahindra Bank and the complainant-Company. It is pertinent to mention here that the fact of the alleged Assignment Deed came to the notice of the complainant-Company only on 17.01.2007 when the Kotak Mahindra Bank handed over a copy of the application for substituting themselves in place of State Bank of Travancore to the respondent-Company.

       The Kotak Mahindra Bank initiated process for substituting its name in place of the assignor-State Bank of Travancore in the recovery application and also withdraws two criminal complaints filed by the respondent-Company against Ravishankar Industries Pvt. Ltd. without any information to the respondent-Company. The Kotak Mahindra Bank moved an application before the Recovery Officer-I for appropriating Rs. 67.5 lakhs due towards the complainant-Company, being 50 per cent of the amount of Rs. 135 lakhs received in excess of Rs. 90 lakhs from the Ravishankar Industries Pvt. Ltd., against the claim towards the State Bank of Travancore.

       The complainant-respondent Company filed a complaint against the Kotak Mahindra Bank and its officers being No. 18/SW/07 before the Metropolitan Magistrate, Bandra, Mumbai under Sections 409, 418, read with 120-B of the Indian Penal Code, 1860. The Additional Chief Metropolitan Magistrate issued process against all the accused in the complaint dated 16.05.2007.

       The accused therein preferred Criminal Revision Applications before the Court of Sessions for Greater Bombay. Additional Sessions Judge allowed the revision applications.

       A fresh complaint was filed by the complainant-the respondent Company against the State Bank of Travancore, Kotak Mahindra Bank Limited and its officers. The Metropolitan Magistrate issued process against the officers of the State Bank of Travancore and Kotak Mahindra Bank Limited. The Magistrate excluded the officers of the Kotak Mahindra Bank Limited in view of an application filed by the respondent-Company to withdraw the complaint against them.

       The appellants herein preferred a Criminal Writ Petition before the High Court. A single Judge of the High Court dismissed the writ petition filed by the appellants herein for setting aside the order of issue of process by learned Magistrate dated 25.01.2008 against the appellants.

       Finding of the Court:

       Continuation of prosecution against officers of State Bank of Travancore, appellants 1 and 2 is not justified.

       Result: Appeal allowed.