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IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT (PAUL), J.
Central Bureau of Investigation - Petitioner
Versus
Subir Rudra & Anr. – Respondents
CRR 1272 of 2019
Decided On : 09-04-2024
Fraud - Discharge from Section 420 IPC - 420, 467, 468, 471 IPC, Section 13(2) r/w 13(1)(d) of P.C. Act, 1988 - The court found that the accused had repaid the entire dues to the bank before the charge sheet was filed, and there was no intention to cheat the bank. The accused were discharged from the charge under Section 420 IPC, but prima facie materials existed to frame charges under other sections.
Fact of the Case:
The accused were charged with fraudulently obtaining loans from a bank and diverting the funds. The accused argued that the company had repaid the entire dues to the bank before the charge sheet was filed.
Finding of the Court:
The court found that there was no intention to cheat the bank and discharged the accused from the charge under Section 420 IPC, but prima facie materials existed to frame charges under other sections.
Issues: The main issue was whether the accused had committed fraud and whether there was an intention to cheat the bank.
Ratio Decidendi: The court considered the timing of the repayment of the dues and the absence of intention to cheat the bank in reaching its decision.
Final Decision: The accused were discharged from the charge under Section 420 IPC, but prima facie materials existed to frame charges under other sections. The trial court was directed to proceed with the trial for the other offences as stated in the charge sheet.
JUDGMENT :
Shampa Dutt (Paul), J.
1. The present revision has been preferred against an Order No. 118 dated 15.01.2019 passed by the Special Judge, CBI Court No. 2 at Alipore in Special Case No. 06/2005 Judge, arising out of RCBSK2005E0003 discharging the accused Subir Rudra and Alok Beriwala from the charge under Section 420 Indian Penal Code.
2. During the pendency of this revision, the opposite party no.1 expired.
3. The relevant portion of the order under revision is as follows:-
RC BSK2005E0003
Order No. 118
Dated 15.01.2019
Decision With Reasons
Let us come to the questions raised by the accused persons by filing their petition. The crux of the contention of this petitioner is that M/s. Janmahal Agencies Pvt. Ltd. having cash credit loan account number 12146, repaid the entire the dues in favour of the bank on the basis of a compromise settlement with the bank on 01.12.2005 and bank in turn issued “No Dues Certificate” in it’s favour on 01.12.2005. So the disputes turn into a civil disputes with certain criminal facets. So these accused persons prayed for discharge. Therefore these two accused persons raised only question of law.
In the instant case written complaint was filed on 06.01.2005. FIR was registered on 31.03.2005 by the CBI. Charge sheet was submitted on 30.12.2005 against these two accused persons along with others. Ld. Advocate for these two accused persons filed the copy of No Dues Certificate dt. 01.12.2005 duly certified by the bank authority on 14.01.2019 by firisty. Which is very important and relevant. From this document it appears that UCO Bank Madhyamgram Branch issued one “No Dues Certificates” on 01.12.2005 in favour of M/s. Janmahal Agencies Pvt. This document clearly and undoubtedly reveals that M/s. Janmahal Agencies Pvt. repaid the entire amounts by way of settlement arrived at by this company and the bank on 01.12.2005 and on that day bank issued this certificate declaring that it has no outstanding dues against this company. Therefore settlement was done before filing of charge sheet since charge sheet was submitted on 30.12.2005. Prosecution investigated this case in depth. So obviously it can safely be presumed that this fact of settlement certainly had come to the knowledge of prosecution during the course of investigation. But unfortunately there is no whisper about this fact of settlement within the four corners of the charge sheet. However it is fact that company repaid the entire settlement amount to the bank on 01.12.2005, that is before the filing of charge sheet.
In view of the discussions referred above it is found that M/s. Janmahal Agencies Pvt. had no intention to cheat the bank. So this court comes to the conclusion that there is no prima facie materials to frame charge U/Sec. 420 IPC against these two accused persons in the context of the allegations brought by the prosecution against them.
That apart Section 420 IPC is compoundable in nature with the leave of the court as prescribed by Section 320 (2) Cr.P.C.
Again other charges punishable U/Secs. 120B/467/468/471 IPC brought against these accused persons by the prosecution are not compoundable and those are independent in nature. Further in the context of the allegation brought by the prosecution against them, prima facie materials exist to frame charge U/Secs. 120B/467/468/471 IPC against these accused persons.
Consequently the application U/Sec. 239 dt. 31.08.2018 filed by accused Sri Subir Rudra (A-2) and accused Alok Beriwala (A-3), is allowed in part on contest. Accordingly they are discharged only from the charge U/Sec. 420 IPC. But prima facie materials exist to frame charge U/Secs. 120B/467/468/471 IPC against these accused persons.
The above petition is hereby disposed off ………………
Sd/-
C.B.I. Court No. 2, Alipore,
South 24 Parganas”
4. The allegations in the petition of Complaint are as follows:-
AI
The main legal point established in the judgment is the commission of criminal breach of trust and cheating under the IPC, leading to the conviction of the accused.
Intention to cheat must exist from the outset for a conviction under IPC Section 420; absence of deceitful intent and no pecuniary advantage mandated an acquittal.
Point of Law : Hon’ble Supreme Court has observed that at stage of framing of charge, trial court is not to examine and assess in detail material produced by prosecution nor to consider sufficiency o....
Criminal liability under Sections 420 IPC is negated by repayment of loans, indicating lack of wrongful loss to the bank.
A breach of contract does not constitute cheating unless fraudulent intent is proven at the outset of the agreement, as established in relevant legal precedents.
The court reaffirmed that misappropriation of loan funds constitutes a criminal offense regardless of subsequent recovery through civil actions.
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