Anil Kumar Sinha, J.—Two petitioners have filed the present writ application for quashing of the F.I.R bearing Riga P.S. Case No. 244 of 2020 [Annexure-1] dated 18/08/2020 registered for the offences under Sections 406, 409, 420 & 34 of the I.P.C. and for quashing of entire prosecution against the petitioners including the order of cognizance dated: 16/04/2022 taken by the court of learned A.C.J.M.-VI, Sitamarhi in G.R. Case No. 2917 of 2020 under Sections 406, 420 & 34 of the I.P.C., which has been challenged by way of I.A. No. 1 of 2022.

2. The petitioner No. 1 is the Chairman-cum-Managing Director and the petitioner no. 2 is the General Manager (Commercial) of the Riga Sugar Company Limited [hereinafter referred to as the ‘sugar company’].

3. The factual background of the case in brief is that in the year 2013 a tie-up arrangement was entered into by the bank for KCC loan in favour of sugarcane growers in which sugar company was a guarantor for the repayment. On 20.09.2013 a letter was issued by the Bank of India providing the procedure for KCC loan in favour of the sugarcane farmers at the instance of sugar company which became the guarantor and took the liability to re-pay the loan amount. Clause (vi ) of the aforesaid letter states that the loan was to be disbursed only as per the advice of the sugar company and in terms of clause (vii ) the repayment was to be made by the sugar company along with interest and other charges. Similar arrangement was again entered into with the bank on 07.07.2016 [Annexure-2A]. Agreement was also entered with the sugarcane growers and sugar company and in terms of the same the sugarcane growers / farmers authorized the sugar company to pay to the bank the sale proceeds of the sugarcane, which is sold by the farmers to the sugar company, as against re-payment of KCC advance / loan. Copy of the agreement is at Annexure-3 to the writ application.

4. The sugar company thus gave an undertaking to the bank with regard to recovery of advances meaning thereby that the sugar company undertook to pay the sale proceeds of the sugarcane to the bank itself against liability towards advance / loan given to the farmers / sugarcane growers. The sugar company executed a deed of guarantee for re-payment of the advance / loan. The guarantee agreement is at Annexures- 4 & 5 to the writ application.

5. The KCC advance / loan was paid to the farmers by the bank at the instance of sugar company. The sugar company instead of directly paying the sugarcane prices to the farmers had to repay the loan / advance given to the farmers by the bank under KCC. Thus, it was an alternative arrangement of cane price payment as could be evident from the tripartite / tie-up arrangement between the company, bank and the farmers. The bank gave three lakh KCC loan / advance to the farmers. The farmers were not required to pay the loan amount but the sugar company had to re-pay the loan of the farmers on condition that the farmers had to give / supply sugarcane to the sugar company. In other words, the farmers appointed the sugar company to re-pay the loan amount on their behalf to the bank for sugarcane supply made by them to the sugar company. As per the arrangement the farmers would not claim the price of sugarcane from the sugar company as the said amount was to be paid to the bank as against re-payment of KCC advance / loan. This process was going on smoothly since 2013 and cane prices to the farmers were duly being paid to them by way of repayment of KCC advance amount by the sugar company in terms of the above mentioned understanding.

6. According to the petitioners the said arrangement from the very beginning was within the knowledge of the State Officials and the Officers of the Cane Department, Government of Bihar. The interest of the farmers, bank and the sugar company was duly protected by way of such arrangement as the cane prices were timely being paid to the farmers without casting any liability upon them. On 22.08.2016 t