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IN THE HIGH COURT OF CALCUTTA
Ananda Kumar Mukherjee, J.
Bhaskar Banerjee - Appellant
Versus
Central Bureau Of Investigation And Another - Respondent
C.R.R. No. 1920 of 2014, CRAN 1 of 2014 (OLD CRAN 2773 of 2014)
Decided On : 08-04-2022
Criminal Liability - Legal Advice - Indian Penal Code - 420, 468, 471, 120B - The court discussed the legal provisions of sections 420, 468, 471, and 120B of the Indian Penal Code and their interpretation in the context of providing false legal advice instrumental in sanctioning a bank loan to a company. The court's decision was influenced by the absence of tangible evidence to establish any connection or collusion between the petitioner and other co-accused persons for defrauding the bank, leading to the quashing of the proceeding against the petitioner only.
Fact of the Case:
The petitioner, an advocate, was fastened with criminal liability under sections 420, 468, 471, 120B of the Indian Penal Code for providing false legal advice instrumental in sanctioning a bank loan to a company. The petitioner sought quashing of the proceedings, arguing that the complaint did not disclose any incriminating material against him and that he had been falsely implicated.
Finding of the Court:
The court found that there was no tangible evidence to establish any connection or collusion between the petitioner and other co-accused persons for defrauding the bank. The court held that the continuation of the proceeding against the petitioner would amount to an abuse of the process of the court and quashed the proceeding against the petitioner only.
Issues: The issues revolved around the petitioner's alleged criminal liability for providing false legal advice instrumental in sanctioning a bank loan to a company, and the abuse of the process of the court.
Ratio Decidendi: The court's decision was influenced by the absence of tangible evidence to establish any connection or collusion between the petitioner and other co-accused persons for defrauding the bank, leading to the quashing of the proceeding against the petitioner only.
Final Decision: The court quashed the proceeding against the petitioner only, citing the absence of tangible evidence to establish any connection or collusion between the petitioner and other co-accused persons for defrauding the bank.
JUDGMENT
ananda Kumar Mukherjee, J. - The revisionist herein is an advocate who has been fastened with a criminal liability under section 420, 468, 471, 120B of IPC for providing false and improper legal advice which was instrumental in sanction of a bank loan to a company which turned NPa.
2. Petitioner filed this application under section 401 read with section 482 of the Code of Criminal Procedure, 1973 praying for quashing of proceedings in GR Case No. 4105 of 2013, arising out of Central Bureau of Investigation, Enforcement Offences Wing, Kolkata Case No. RC 07/E/011-Kolkata dated 16.12.2011 under sections 420, 468, 471 read with section 120B of the Indian Penal Code, pending before Learned Metropolitan Magistrate 22nd Court at Kolkata.
3. Mr. Partha Das Chowdhury and Smt. Baisali Mukherjee the two directors of Emotions Infomedia Private Limited applied for cash credit loan facility before Opposite Party no.2/ Bank. The petitioner an empanelled advocate of IDBI Bank/ Opposite Party no.2. prepared a favorable Search Report on the basis of two Title Deeds of immovable property produced as collateral security and cash credit accommodation was sanctioned in favour of the said company. The Opposite Party no.2/bank initially sanction a loan of Rs. 100.00 lakhs on 15.07.2008 in favour of the company against current and fixed assets of the company and on Collateral security by mortgage of the immoveable property, purportedly owned by Jitendra Nath Biswas. Title Deeds bearing no. 3441 of 1961 and 558 of 1964 in the name of Jitendra Nath Biswas were deposited with the bank in respect of 5.37 acres of land situated over various plots. Jitendra Nath Biswas also submitted false and forged Record of Rights (porcha) and Rent receipt in his name. For enhancement of loan limit the Chartered accountant prepared false and fabricated Balance Sheet for submitting before the Bank. Whereas the Balance Sheet for ROC showed sales turnover as only 35 lakhs, another Balance sheet of the accused company deposited with IDBI dishonestly showed inflated sales turnover of Rs. 335 lakhs. The petitioner as an advocate for the bank after considering the documents submitted a search report on 12.08.2008 on the basis of a report prepared by the Krishnendu Chakraborty, a junior advocate.
4. The sanctioned amount of loan was disbursed to the company between 25.8.2008 and 01.11.2008. Thereafter the cash credit limit was enhanced to Rs. 150.00 lakhs against personal guarantee of one abdul Razzak Molla, who created equitable mortgage of immovable properties standing in his name and the enhanced limit of loan was disbursed to the company on 31.08.2009. Emotions Infomedia Private Limited through his directors again applied for enhancement of the cash credit limit to Rs. 200.00 lakhs which was disbursed in January, 2010. Title Deed no. 1164 for the year 1992 in the name of abdul Razzak Molla and Title Deed no. 1887 for the year 1972 in the name of abdul Wadud were used for creating equitable mortgage on 04.06.2009 and 31.12.2009 respectively. The loan account of the company was declared as Non Performing asset (NPa) with an outstanding due of Rs. 2.57 crores. It was also revealed that Title Deed bearing no 3441 of 1961 and Title Deed 558 of 1964 which were deposited with the opposite party/bank for equitable mortgage were forged documents and the actual owner of the property was Yar ali Mondal .
5. The General Manager of the opposite party/bank lodged a complaint against the Directors of the borrowing company alleging that they entered into criminal conspiracy with Jitendra Nath Biswas, abdul Razzak Molla and abdul Wadud Gazi the purported owners of the mortgage property and other unknown persons for availing the cash credit facility from IDBI bank, City SME Branch Kolkata and cheated the bank by syphoning the money on the basis of forged and fabricated Title Deeds and other false supporting papers like Record of right (porcha), Tax Receipt etc.
6. On completion of investi
The absence of tangible evidence to establish any connection or collusion between the petitioner and other co-accused persons for defrauding the bank led to the quashing of the proceeding against the....
The judgment emphasizes the need for 'grave suspicion' and tangible evidence to establish criminal conspiracy, and highlights the limited role of a lawyer in providing legal opinions.
The liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the bank.
A lack of prima facie evidence for conspiracy negates the framing of criminal charges against a bank valuer who submitted inflated property valuations.
The court upheld that specific allegations of fraudulent conduct can sustain criminal charges against a property valuer providing inflated valuations to facilitate loan approvals.
A lawyer can be held criminally liable for providing false legal opinions if it is established that they knowingly participated in a fraudulent scheme, and the mere act of providing legal advice does....
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