2017 Supreme(SC) 1512

SUPREME COURT OF INDIA
ARUN MISHRA, MOHAN M. SHANTANAGOUDAR, JJ.
Central Bureau of Investigation - Appellant
Versus
Hari Singh Ranka and Ors. - Respondents
Criminal Appeal No. 1289 of 2017
Decided on : 18-07-2017

The court found that a large number of documents had been forged and accused persons thereby induced the Bank for disbursing the working capital limits to M/s. Modern Denim Ltd. The accused persons had availed credit facility from the Bank in 33 specific instances during the period 19th June 1998 to June 1999 by submitting forged purchase orders purportedly placed on M/s Modern Denim Ltd. by the foreign buyers. The accused persons had obtained letters of credit in favour of fictitious companies and got letters of credits discounted by attaching their bogus bills. The accused persons had secured the credit facility by submitting forged documents and utilized such facilities in a dishonest and fraudulent manner.

Headnote:

Forgery - Criminal Conspiracy - Indian Penal Code 1860 (IPC) - Sections 120B, 420, 467, 468, 471 - The court found that a large number of documents had been forged and accused persons thereby induced the Bank for disbursing the working capital limits to M/s. Modern Denim Ltd. The accused persons had availed credit facility from the Bank in 33 specific instances during the period 19th June 1998 to June 1999 by submitting forged purchase orders purportedly placed on M/s Modern Denim Ltd. by the foreign buyers. The accused persons had obtained letters of credit in favour of fictitious companies and got letters of credits discounted by attaching their bogus bills. The accused persons had secured the credit facility by submitting forged documents and utilized such facilities in a dishonest and fraudulent manner. The trial court's observation that forged documents had not been used to defraud the Bank was found to be a palpably incorrect and perverse finding and cannot be sustained. The court held that the OTS merely deals with the civil liability and cannot wipe out the criminal liability of the accused persons. The OTS could wipe off only the civil liability, not the criminal one. The court directed the trial court to frame the charges and proceed further in accordance with law, and conclude the trial positively within a period of one year from the date of the judgment.

Fact of the Case:

The CBI preferred an appeal aggrieved by the orders passed by the Additional Chief Metropolitan Magistrate discharging the accused persons for the offences registered under sections 120B, 420, 467, 468, 471 of the Indian Penal Code 1860 (IPC). The accused persons had availed credit facility from the Bank in 33 specific instances during the period 19th June 1998 to June 1999 by submitting forged purchase orders purportedly placed on M/s Modern Denim Ltd. by the foreign buyers. The trial court discharged the accused persons opining that there is no allegation that the documents were forged and the loss was caused. The CBI filed a Criminal Revision Application and a Criminal Writ Petition in the High Court, both of which were dismissed.

Finding of the Court:

The trial court's observation that forged documents had not been used to defraud the Bank was found to be a palpably incorrect and perverse finding and cannot be sustained. The court held that the OTS merely deals with the civil liability and cannot wipe out the criminal liability of the accused persons. The OTS could wipe off only the civil liability, not the criminal one. The court directed the trial court to frame the charges and proceed further in accordance with law, and conclude the trial positively within a period of one year from the date of the judgment.

Issues: The main issue was whether the accused persons had used forged documents to defraud the Bank and whether the OTS could wipe out the criminal liability of the accused persons.

Ratio Decidendi: The court found that a large number of documents had been forged and accused persons thereby induced the Bank for disbursing the working capital limits to M/s. Modern Denim Ltd. The accused persons had availed credit facility from the Bank in 33 specific instances during the period 19th June 1998 to June 1999 by submitting forged purchase orders purportedly placed on M/s Modern Denim Ltd. by the foreign buyers. The accused persons had obtained letters of credit in favour of fictitious companies and got letters of credits discounted by attaching their bogus bills. The accused persons had secured the credit facility by submitting forged documents and utilized such facilities in a dishonest and fraudulent manner.

Final Decision: The court set aside the orders passed by the trial court, the revisional court, and the High court. The court directed the trial court to frame the charges and proceed further in accordance with law, and conclude the trial positively within a period of one year from the date of the judgment.