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High Court Of Calcutta
Arunabha Barua
ICICI BANK LTD. - Appellant
Versus
MAIKAAL FIBRES LIMITED - Respondent
C. R. R. 2095 Of 2003
Decided On : 11/29/2004
CRIMINAL REVISION - SECTION 203 OF THE CODE OF CRIMINAL PROCEDURE - COMPANY PROSECUTION - ESSENTIAL INGREDIENTS - OFFENCES UNDER SECTION 406/420/120B OF THE INDIAN PENAL CODE - CORPORATE GUARANTEE - COMMON SEAL - DENIAL OF EXECUTION - ISSUANCE OF PROCESS - SCOPE AND OBJECT OF ENQUIRY UNDER SECTION 202(1) OF THE CODE OF CRIMINAL PROCEDURE - ABUSE OF THE PROCESS OF LAW - PRIMA FACIE MATERIALS OR EVIDENCE - CRIMINAL CONSPIRACY - INDUCEMENT - FRAUD - MENS REA - MISREPRESENTATION - FINAL DECISION OF THE APEX COURT ON THE ISSUE OF PROSECUTION OF COMPANIES - INTEREST OF BOTH PARTIES.
Fact of the Case:
The ICICI Bank Ltd. filed a criminal revision application before the Calcutta High Court challenging the order of the learned Metropolitan Magistrate, 8th Court, Calcutta, dismissing the complaint under section 203 of the Code of Criminal Procedure in connection with Case No. 4581 of 2003 under section 406/420/120b of the Indian Penal Code.
Finding of the Court:
The High Court held that the complaint together with the initial deposition of the witnesses, in view, must not inevitably lead to an answer to that in the affirmative. A close reading of paras 5, 6, 7, 8 and 9 is necessary and they are reproduced below: "in terms of such agreement the corporate guarantee was executed by the accused No. 3 through the accused No. 4 by using the common seal of the company whereby and wherein the said accused No. 3 agreed to be treated as a principal borrower in case of default on the part of accused No. 1 and to pay off the entire dues with all interest whatsoever. The said and/or other terms will appear from the said corporate guarantee dated 29th September, 2000 is annexed hereto and marked with the letter 'b' as part of this application. In the said Deed of Guarantee the accused No. 3 categorically undertaken to indemnify your petitioner against all losses, damages, costs, claims and expenses whatsoever which your petitioner may suffer, pay or incur by reason of or in connection with such default on the part of the borrower including legal proceedings taken against the accused No. 1 and / or accused No. 3 for recovery of loan, interest, liquidated damages or other monies to your petitioner. The said guarantee is a continuing, irrevocable, unconditional guarantee. Inasmuch as the accused No. 1 company filed to pay off the dues of your petitioner, your petitioner duly invoked the guarantee vide its letter dated 28th June, 2003. A copy of the said letter is annexed hereto and marked with the letter 'c' as part of this application. Such notices as stated above had to be issued by your petitioner since the accused persons started taking peculiar, fraudulent mala fide stand and it stated that the accused No. 3 did not execute any guarantee whatsoever. In this connection letters exchanged between the parties are annexed hereto and collectively marked with the letter 'd'. It is proved from the facts as stated above that the accused Nos. 2, 3 and 4 induced in Bank to disburse the loan of Rs. 50 millions by furnishing the guarantee of accused No. 3. The accused persons wilfully and deliberately and with full knowledge and executed the Guarantee with sole motive of depriving your petitioner from realising and/or recovery of its legal lawful dues which is a public money for wrongful rains and unjust enrichment knowing fully well that your petitioner deals with public money. It appears that the accused persons especially the accused person No. 2 and accused No. 4 who are father and son and are controlling the accused Nos. 1 and 3 respectively and have connived illegal with each other and your petitioner respectfully states taht the accused persons have adduced and abetted with each and entered into a criminal conspiracy and thereby cheated your petitioner causing wrongful gain to themselves and wrongful loss to your petitioner as there has been a sum of Rs. 6,45,37,658/- as on June 27, 2003 is due and payable by the accused No. 1 to your petitioner and such illegal and wrongful acts have been committed deliberated to prevent your petitioner to realise its such legal lawful dues. Your petitioner respectfully submits that in view of the above unlawful activities committed by the accused should be taken into account as the accused persons are guilty to the charges punishable under section 406 read with sections 420, 120b of the Indian Penal Code. In the facts and circumstanes of the case it is humbly submitted that the learned Court should direct for issuance of process as against the accused so as to frame charge and stand the accused on trial in due process of law. "
Issues: 1. Whether the complaint together with the initial deposition of the witnesses, in view, must not inevitably lead to an answer to that in the affirmative. 2. Whether the allegations even taken on their 'face value' do not at all constitute the offence so as to nip the process in the bud. 3. Whether the fact of the matter is, there may be more than what meets the eyes, such as, conduct of the parties and attending circumstances entwined with the transactions in question which only the material evidence at the trial can really elicit.
Ratio Decidendi: 1. The settled proposition is, in the context of our instant case, the 'prima facie' materials or evidence are the determining factor to close the case no sooner than it has begun or to proceed with the case, see to the trial after evidence are adduced by both sides. 2. Unless, of course, the complaint together with evidence of witnesses on solemn affirmation are so blatantly shorn of substance, so frivolous or fanciful that "on the face of it", the very foundation of the alleged offences is not laid out. 3. It would appear from the chain of allegations spelt out in the complaint together with the initial testimony of the witnesses that at least the foundation of the offences complained of is firmly laid - it is just not all frivolous and fanciful. 4. There appears to be prima facie materials for the complainant for the satisfaction of the Court to set the wheel of criminal justice moving by issuing of the process and see to the end of the dispute by means of the trial on the basis of material evidence both parties may adduce. 5. Conversely, to my mind, it cannot be said that, the allegations even taken on their 'face value' do not at all constitute the offence so as to nip the process in the bud.
Final Decision: The revisional application succeeds and is accordingly allowed. The impugned order of the learned Metropolitan Magistrate dated September 2, 2003, is hereby set aside and the learned Magistrate is directed to issue process to all the accused persons, proceed with the trial and dispose of the case on the merits in accordance with law as expeditiously as possible.
( 1 ) THE criminal revision arises out of the order dated 2nd September, 2003, passed by the learned Metropolitan Magistrate, 8th Court, calcutta whereby the learned Magistrate had dismissed the complaint under section 203 of the Code of Criminal Procedure in connection with Case No. 4581 of 2003 under section 406/420/120b of the Indian Penal Code.
( 2 ) THE revisional applicant, namely ICICI Bank Ltd. was the patitioner-complainant and it alleged commission of an offence by the opposite parties under section 406/420/120b IPC.
( 3 ) ACCUSED No. 1 was the company, namely Maikaal Fibres Ltd. and accused No. 4 namely, Migrenda Jalan. Accused No. 3 is another company namely, Dinjoyee Tea Estate Pvt. Ltd. and accused No. 2 Mahadeo Jalan was the Managing Director of accused No. 3 that is Dinjoyee Tea Estate pvt. Ltd.
( 4 ) THE sum and substance of the allegations made out in the complaint is this: the accused No. 2 Mahadeo Jalan, was the Managing Director and/or the livewiare of accused No. 3 that is the Dinjoyee Tea Estate Pvt. Ltd. and he was in complete control of the day-to-day business and/or affairs of the accused No. 3. Accused No. 4 that is Mrigendra Jalan being the Managing director of accused No. 1 that is Maikaal Fibres Ltd. was in complete control of the day-to-day business and/or affairs of the accused No. 1 that is Maikaal fibres Ltd.
( 5 ) NOW, these accused persons had approached the petitioner-Bank (ICICI bank) for providing Corporate Rupee Loan facility for the purpose margin money for working capital and normal capital expenditure for not exceeding Rs. 50 millions. A Corporate Rupee Loan agreement was entered into on 29th september, 2000 between the accused No. 1 and the ICICI Bank Ltd. The said money of 50 millions (5 crores) was advanced by the ICICI Bank as a result of false representation made by the accused persons. Necessary documents including a deed of guarantee whereby Dinjoyee Tea Estate Pvt. Ltd. , that is accused No. 3, guaranteed repayment, were executed. The terms of repayment was mentioned in the agreement between the parties. When repayment became due the accused opposite party No. 3, Maikaal Fibres Pvt. Ltd. , its managing Director refused to make any payment. In terms of the agreement of the said guarantee the complainant was free to proceed against the guarantor and as such the complainant made a demand for payment from the guarantor that is the accused No. 3, Dinjoyee Tea Estate and its Managing director. But on receipt of a notice of demand the Managing Director/accused denied that he ever executed such a guarantee. The accused persons had entered into a criminal conspiracy and thereby cheated the complainant of the entire sum of money obtained as advance from the Bank upon false inducement and representation. The said illegal and wrongful acts had been committed by the accused persons deliberately to prevent the petitioner to realise its legal dues. Therefore, it was alleged that the accused persons were guilty of offences punishable under section 406 read with sections 420, 120b of the Indian Penal Code. And so, prayer was made before the learned Court to direct issuance of process against the accused so as to frame charge and for the accused to stand trial in due process of law.
( 6 ) THE said complaint was filed by the ICICI Bank Ltd. before the learned chief Metropolitan Magistrate, Calcutta, and the complaint was registered as complain case No. 4581 of 2003. The learned Chief Matropolitan Magistrate, calcutta, thereafter took cognizance of the offence alleged in the said complaint and transferred the case to the learned 8th Metropolitan Magistrate, Calcutta, for enquiry and disposal.
( 7 ) THE learned 8th Metropolitan Magistrate, Calcutta, thereafter examined two witnesses adduced by the petitioner that is the ICICI Bank Ltd. in its favour. Thereafter, the learned Magistrate was pleased by his impugned order dated 2. 9. 2003 to dismiss the complaint filed by ICI
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