J.G. Chitre, J.

1. 1. The petitions are assailing correctness, propriety and legality of the order passed by the Judicial Magistrate, F.C., Palghar in the matter of Criminal Case No. 211/1990, by which he dismissed the application moved by the petitioner for exonerating them by discharging them from the said criminal prosecution.

2. 2. Some facts need to be quoted for the purpose of understanding the controversy between the litigating parties

i.e. petitioners and Union Bank of India, Boisar Branch. The petitioners 1 and 2 are Directors of M/s Lyka Silk Mills Ltd. (hereinafter referred to as Company for convenience). That company does the business in textile. In the year 1980 the petitioners who happen to be customers of Union Bank of India - respondent No. 1 made a request to the said bank for various credit facilities including cash credit with hypothecation facility. The said cash credit with hypothecation was granted in favour of the petitioners as the facts narrated indicate. The records shows that the petitioners took the loans on various occasions from the respondent NO. 1, Union Bank of India, which were granted. The raw material was hypothecated with respondent No. 1. Stock in process and finished goods lying with the petitioners were also hypothecated in favour of respondent No. 1. In addition to that the agreements of guarantee were signed by petitioners No. 1 and 2 in respect of the said loan transactions. On 6th of February 1982, the agreement took place between the petitioners No. 1 to 3 and respondent No. 1 Union Bank of India. The said agreement also took place on 23rd of June 1982. The letter of continuity was issued on 23rd of June, 1982 to said transactions and letter of guarantee was executed by petitioner No. 1 and 2 on 23rd of June 1982 guaranteeing Rs. 3 lacs. On 4th of February, 1983 another hypothecation agreement was executed for Rs. 15 lacks in respect processed and finished goods. On the same day, letter of continuity was also executed by the petitioners 1 and 2 in favour of respondent No. 1 for Rs. 20 lacs.

1. 3. Another hypothecation agreement was executed by petitioner No. 1 and 2 in favour of respondent No. 1 on 6/6/1986 and letter of guarantee was also executed. it was clarified, that the said date 4th of July, 1986 was erroneously mentioned, but it was 4th July, 1987. Vide that letter of guarantee the suitings, shirtings, yarns, semi-finished goods, finished goods lying at factory premises and elsewhere were hypothecated in favour of respondent No. 1, and they were worth Rs. 38,03,992.46 paise.

4. The respondent No. 1 the original complaint alleged in the said complaint that the petitioners 1, 2 and 3 agreed by such an agreement that they would not part with said hypothecated goods, by way of sale in the ordinary course of

their business. Respondent No. 1 pointed out that by declaration Clause (15) the petitioners declared that "all hypothecated goods are the absolute property of the borrowers at the sole disposal of the borrower and a free from any prior charge or encumbrance." The respondent No. 1 contended that, as the said goods were hypothecated with respondent No. 1, the petitioners should have obtained prior permission from Respondent No. 1 for sale of said goods, which they did not do and failed to repay the dues to the respondent No. 1. On account of that the respondent No. 1 was required to file civil suit in Bombay High Court in the year 1987 for recovery of their dues and the said suit happens to be numbered, as 3478/1987. The High Court appointed a receiver in respect of said goods. Thus, with all these facts and allegations the said complaint was filed in the said Court alleging that the petitioners No. 1 to 3, mainly 1 and 2 had committed an offence punishable under Section 403, 406 r/w Section 34 and 120B of Indian Penal Code.

2. 5. When such an application was moved, the learned Magistrate heard both the parties and dismissed the said application by holding that the o