The petitioners figure as accused in Cr.No.57 of 2011 on the file of the Police Station, Panjagutta, Hyderabad. The offences alleged against the petitioners are under Sections 120-B, 406, 420 read with Section 34 of the Indian Penal Code, 1860 and 156(3) of the Criminal Procedure Code. The petitioners have filed this petition seeking for quash of the proceedings against them, in the above crime.

2. Heard the counsel for the petitioners, the counsel for the second respondent and the learned Public Prosecutor appearing on behalf of the first respondent.

3. The revocation of bank guarantee, which was taken with the first petitioner bank herein, is the basis of this complaint. From the averments in the complaint, it can be understood, that the complainant is a company incorporated under the Companies Act, 1956. During the course of its business, the complainant entered into a contract with M/s. Orissa Computer Associates (OCA), for construction and implementation of e-books and as per the terms of the contract, the said OCA gave a bank guarantee for Rs.2.2 crores, through the first petitioner and the bank guarantee was executed by the first petitioner and its Manager and Vice President, D. Bhattacharaya. The OCA provided copy of the said bank guarantee to the complainant company, which is known to the first petitioner, which was formally known as UTI Bank Limited. The tenure of the said bank guarantee is one year from the date of its execution. One of the conditions in the bank guarantee is that the first petitioner shall not revoke the bank guarantee without prior written unconditional approval/permission from the beneficiary, before expiry of the claim period of the said bank guarantee. Based on and acting upon letter dated 15.10.2003 given by the first petitioner, the complainant company proceeded and opened a letter of credit for US $ 2,00,000 through Barclays Bank dated 18.11.2003 through Habib Bank Ag Zurich. The first petitioner did not send the original copy of the bank guarantee, in spite of the demand by the complainant company, though the same has to be made available to the complainant.

4. The complainant company has been expecting the same to be delivered to it by the bank, but to its surprise, received a communication from the first petitioner, dated 10.10.2003, stating that the bank guarantee has been cancelled at the request of the applicant for the same i.e. OCA and that the original has been submitted to it by OCA. This act of cancellation of the bank guarantee by the bank without written confirmation from the beneficiary is contrary to well established business norms and is a clear violation of the trust reposed by the complainant company. It is clear that A1 and A2 colluded with OCA and acted in concert and made the complainant company to believe that there is existence of valid and subsisting bank guarantee and acting upon the said belief, the company opened valuable letters of credit. The Ombudsman, Reserve Bank of India, Bhuvaneshwar, after scrutinizing all the documents and transactions, found something fishy and suspicious in the matter and passed an order awarding damages of Rs.5.75 crores from Axis Bank Limited and also advised them to file both criminal complaint and civil suits against the Axis Bank. Now the said amount has bulged into Rs.10.76 crores with interest. A1 is the company incorporated under the Companies Act while A3 to A18 are the Chairman cum Managing Director, Directors and Company Secretary respectively.

5. Aggrieved by the said complaint, which is filed in the year 2010, that is almost after seven years of taking the bank guarantee, the petitioners come before this Court by way of this quash petition, on the following grounds.

The petitioners have nothing to do with the alleged offences. The transaction, even if it is assumed to be true, is purely civil in nature and hence, the registration of crime is unsustainable. The petitioners issued bank guarantee at the request of its constit