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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Ratan Exports and Industries Ltd. – Petitioner
Vs.
Central Bureau of Investigation – Respondent
Crl. M.C. No. 986 of 2013, Crl. M.A. No. 3057 of 2013
Decided On : 13-06-2022
Code of Criminal Procedure, 1973 - Section 482 r/w 397 and 227– Indian Penal Code, 1860 – Sections 120-B, 109 r/w 409, 109 and 420 - Prevention of Corruption Act 1988 - Sections 13(2) and 13(l)(d) – Criminal Conspiracy and Criminal breach of trust by public servant, or by banker, merchant or agent - Enhancement of credit limits – Quash of criminal Proceedings - Petitioner ( “Company”) started its business in the year 1979, having its current account with the United Bank of India, petitioner company was engaged in export of tea, coffee, fruit, juice concentrate, canned food products, rice, garments, leather goods, computer peripherals, V belts, electronic items, brushes etc. in erstwhile USSR and CIS countries - Company being a proprietorship concern was subsequently converted into a Private Limited Company at instance of bank and later to a Public Limited Company with effect from 4th Aril 1984 and enjoyed status of a government recognized trade house - Scope of Section 482 of Cr.P.C. is well defined and inherent powers could be exercised by High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of process of any Court or otherwise to secure ends of justice. (Para 41)
Finding of the court:
A bare reading of Section 357(1)(b) of the Cr.P.C. clearly shows that a fine at best can be imposed to undo the pecuniary loss, which in the present case has already been settled by way of full and final payment. Therefore, even if the petitioner is prosecuted, it would not result into any further punishment on the petitioner, who is a juristic person - Court opinion that if trial is allowed to go, it will amount to gross miscarriage of the justice, since, the petitioner Company cannot be punished/sentenced after being held guilty of committing an offence being a juristic person. Therefore, there would be no purpose to proceed with the trial against the petitioner. In such an eventuality, jurisdiction of this Court under Section 482 of the Cr.P.C. comes to rescue.
Result: Petition allowed.
JUDGMENT :
Chandra Dhari Singh, J.
1. The instant criminal miscellaneous petition under Section 482 read with Section 397 of the Code of Criminal Procedure, 1973 (hereinafter “Cr.P.C.”) has been filed on behalf of the petitioner seeking following prayers:
(b) quash the criminal proceedings as against the petitioner in FIR/ Criminal Case No. RCA/BD1/2001(E)/2005/CBI/BS u/s 120B r/w 409/420 of IPC and sections 13(2) and 13(l)(d) of the Prevention of Corruption Act 1988, pending in the Court of Special Judge (CBI)-09, Central District, Delhi, entitled as CBI v.. V.K. Maheshwari 86 Ors…”
FACTUAL MATRIX
2. The petitioner M/s Ratan Exports and Industries Ltd. (hereinafter “Company”) started its business in the year 1979, having its current account with the United Bank of India, Asaf Ali Road Branch, Delhi (hereinafter “UBI”). The petitioner company was engaged in export of tea, coffee, fruit, juice concentrate, canned food products, rice, garments, leather goods, computer peripherals, V belts, electronic items, brushes etc. in the erstwhile USSR and CIS countries. The Company being a proprietorship concern was subsequently converted into a Private Limited Company at the instance of the bank and later to a Public Limited Company with effect from 4th Aril 1984 and enjoyed the status of a government recognized trade house.
3. The petitioner Company was given an overall limit of Rs. 1250 lakhs by the bank which was further enhanced by the Board of Directors to Rs. 1672 lakhs by the board approval dated 19th November, 1991. Request was made for enhancement of the credit limit from Rs. 1672 lakhs which was actively followed up by the Head Office with the Branch Manager, Regional Manager, etc. The Head Office vide its letter dated 28th April, 1992, advised the Branch Manager, Janpath Branch of UBI Bank to obtain requisite documents from the company for forwarding enhancement proposal of the company which was endorsed by Head Office to the Regional Manager and Zonal Manager too.
4. The Janpath Branch of UBI made recommendation to the Regional Manager, North India Region for sanction of enhanced limit, which was forwarded by him with similar recommendation to Zonal Manager, New Delhi Zone vide letter dated 24th June, 1992. The Zonal Manager, New Delhi Zone, based on the recommendation of the Regional Manager, Sh. Hari Ram Pandey and the Branch Manager, Janpath Branch Sh. M. P. Sharma sent his recommendation dated 27th June, 1992 for the enhancement of credit limits to the Head Office for scrutiny of the relevant data furnished by the company and sanction of the proposal subject to the fund position of the bank permitting so.
5. Since, petitioner's account was a 'Head Office Controlled Account', the process was initiated by the Head Office by letter dated 28th April, 1992 addressed to the Janpath Branch and copies were endorsed to the Regional Manager and Zonal Manager. The Head Office of the bank recommended enhancement of overall credit limit from existing Rs. 1672 lakhs to Rs. 4442 lakhs by way of a board note and also mentioned that in view of urgent need of fund by the company for export commitment, the management committee of Board of Directors in the meeting dated 9th October, 1992, had approved adhoc export credit limit of Rs.700 lakhs within the aforesaid recommended credit limit of Rs. 4442 lakhs, subject to approval from Reserve Bank of India in respect of letter of credit (Inland & Foreign) facility for Rs. 400 lakhs.
6. The Head Office also in advance sought for approval of Reserve Bank of India for enhancement of overall credit limit of Rs. 4442 lakhs. T
It is not permissible for High Court to appreciate evidence as it can only evaluate material documents on record to extent of its prima facie satisfaction about existence of sufficient ground for pro....
Settlement of monetary disputes does not automatically justify the quashing of criminal proceedings in cases involving serious allegations of criminality.
Redundant criminal proceedings should not be allowed to continue.
Quash of Criminal proceedings - Mere because the criminal law was set into motion on filing of a complaint, it cannot be the cardinal principle for continuity of proceedings as wherein the recovery p....
The court ruled that serious non-compoundable offenses, including those under the Prevention of Corruption Act, are not susceptible to quashing due to private settlement.
A corporation can be prosecuted for criminal offences requiring mens rea, as the intent of its directors can be attributed to the company.
Exercise of inherent jurisdiction – Stage and timing of settlement play a crucial role in determination as to whether to exercise power under Section 482 of Cr.P.C. 1973 or not.
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