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2014 Supreme(Bom) 1375
High Court of Judicature at Bombay
SADHANA S. JADHAV, J.
Ashoo Surendranath Tewari & Another
Versus
The Deputy Superintendent of Police Economic Offences Wing, Central Bureau of Investigation & Another
Criminal Writ Petition Nos. 3024 of 2012 & 3137 of 2012
Decided on: 11-07-2014
For the Petitioners:Subhash Jha a/w Rushita Jain i/.b. M/s. Law Global, Advocates, Rebecca Gonsalves for CBI.
For the Respondents: S.S. Pednekar, APP.
Exoneration by Competent Authority does not bar trial for IPC offences; Evidence of fraudulent transactions and lack of good faith justifies framing of charges.
Headnote:
Quashing of Proceedings - Public Servants - Indian Penal Code, Sections 406, 420, 120B - Summary
Fact of the Case:
The petitioners, public servants of SIDBI, were prosecuted for offences under Sections 406, 420, 120B of the Indian Penal Code (IPC) for fraudulent transactions involving a vendor introduced by Tata Motors Ltd. The petitioners sought discharge, citing exoneration by the Competent Authority and lack of evidence.
Finding of the Court:
The Special Court discharged the petitioners under the Prevention of Corruption Act but framed charges under IPC Sections 120B, 420, and 406, citing evidence of fraudulent transactions and lack of good faith.
Issues: Exoneration by Competent Authority, Evidence of Fraudulent Transactions, Good Faith Defense
Ratio Decidendi: Exoneration by Competent Authority does not preclude trial for IPC offences; Evidence of fraudulent transactions and lack of good faith justifies framing of charges.
Final Decision: The Court rejected the quashing of proceedings, ordered trial by a Judicial Magistrate, and separated the trial of an absconding co-accused.
1. By these petitions, the petitioners are seeking the relief of quashing the proceedings pending before the Special Court in Special Case No.19 of 2011, wherein the petitioners are being prosecuted for the offence punishable under Sections 406, 420 read with Section 120B of Indian Penal Code pursuant to Crime No.13/E/2009/CBI/EOW/MUMBAI.
2. The petitioners are public servants. They are the officers of Small Industries Development Bank of India (hereinafter referred to as `SIDBI'), which is a Corporation established by the Central Government of India by an Act of 1989 of Parliament. SIDBI is the financial institution established by the Government for promotion and development of micro, small and medium enterprises. It is an Authority empowered to frame different rules for achieving the objects of the institution.
3. The petitioner in Writ Petition No.3024 of 2012 is working as the Deputy General Manager in SIDBI, whereas the petitioner in Writ Petition No. 3173 of 2012 was, at the relevant time, working as Manager at Pune Branch office and was assigned direct business and accounts. The petitioner in W.P. No.3173 of 2012 was assigned the work related to MSME Receivable Finance/Bills Scheme sanctioned to Tata Motors Ltd. (TML) after Shri Muthukumar (original accused No.5) submitted his resignation to the Bank.
4. The work in respect of Tata Motors Ltd. was voluminous and therefore one special officer was assigned the work to handle the transactions relating to Tata Motors Ltd. and the other officer was entrusted with the work in relation to other corporates other than TML.
5. The work regarding payments related to TML was handled by Shri S. Muthukumar and the work in respect of other corporates was handled by Maganbhai Jadhav, who was officiating as Assistant Manager.
6. The facts are that one MOU was signed between SIDBI and Tata Motors Ltd. mutually agreeing with the details of transactions and the amount due would be furnished by TML and the payment would be sent directly by SIDBI as per the MOU. The payment was to be sent by cheque to the vendors. No other mode of remittance was agreed between TML and SIDBI. One of the vendors introduced by TML was Ranflex India Pvt. Ltd. situated at Banglore. Tata Motors Ltd. had not furnished the bank account details of Ranflex India with Federal Bank to SIDBI. TML had never advised SIDBI for remittance of the amount to RIPL through RTGS. However, the money was transferred through RTGS.
7. On 11.8.2009, a complaint was received by the Superintendent of Police, Central Bureau of Investigation, Economic Offences Wing, Mumbai from the General Manager, R.M. Yadav, who was in charge of SIDBI Branch at Pune, and was authorised to file the report. It was informed to the police that SIDBI operates a Scheme know as “MSME Receivable Finance Scheme”. Large corporates furnish a list of such MSME vendors who make supplies to it to whom the payment is due from them along with the name and address of such vendor, code numbers and invoice details etc. are furnished. Payment is made by SICBI to such vendor directly and such corporate pays the amount due to SIDBI. By the said scheme, MSME vendors get advantage of timely payment. Tata Motors Ltd. has been sanctioned a limit under the above Scheme covering its purchasers from MSME. Tata Motors Ltd. had introduced Ranflex India as one of the MSME vendor under the arrangement. SIDBI based on intimation received from TML had made payment to RIPL of Rs.1,51,97,111/- only through various cheques from 31.3.2009 to 29.4.2009. On 25.5.2009, SIDBI received an e-mail message purportedly from Ranflex India giving RTGS details and requesting SIDBI for making future payments through RTGS instead of cheque payments. Pursuant to the said e-mail, 12 payments to the tune of Rs.1,64,17,551/- were made through RTGS by SIDBI in the account mentioned in e-mail with Federal Bank. The payments were made during the period 27.5.2009 to 4.8.2009.
8. On 5.8.2009, RIPL telephoni
