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2019 Supreme(Guj) 309
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.P. THAKER, J.
VIRAL CHANDRAKANT SHAH - Appellant
Versus
STATE OF GUJARAT & others - Respondent
R/CRIMINAL MISC.APPLICATION NO.30395 of 2017
Decided On : 10-04-2019
Advocate Appeared:
For the Appellant : Mr. Chetan K Pandya
For the Respondent: Mr. RC Kodekar, Ms Moxa Thakkar Addl. Public prosecutor
Headnote:
Code of Criminal Procedure, 1973 – Section 482 – Penal Code, 1860 – Sections 120-B, 417 and 420 – Offence of Cheating – Quash petition – secret information was received that Shri Bhaskar R. Soni while working as Manager (Second-in-command) and Assistant Branch Head of UCO Bank, St.Xavier’s Branch, in conspiracy with the applicant herein and other persons deposited huge Specified Bank Notes (SBNs) in Current Account No.0838021000632 of UCO Bank during demonetization period from 10.11.2016 to 30.12.2016. It is also alleged that Shri Bhaskar R. Soni made the status of aforesaid current account operative/active on 22.11.2016 without obtaining required documents as per KYC guidelines for dormant category accounts. Last entry was carried out in this account on 18.3.2013. The maximum amount deposited in the above account was Rs.3.50 Lacs on 23.2.2013. It is also alleged that while accepting huge SBNs, Shri Bhaskar R. Soni did not inquire about the proof of source of funds of Rs.32 Lacs and when it was deposited on 22.11.2016, Shri Bhaskar R. Soni also did not obtain any mandatory documents for justification of deposit of such huge amount after a period of three and a half years. It is alleged that Shri Bhaskar R. Soni did not carry out proper diligence as stipulated in RBI circulars and accepted the amount from the applicant herein and transferred the same through RTGS during demonetization period – Held, applicant was used to purchase gold bars, which were sold to various people accepting cash in old currency notes, which were declared to be no more legal tender and such notes are deposited by the applicant in his account. Cheating is an essential ingredient for an act to constitute an offence under Section 420 and for “cheating” as defined in Section 415 there should be fraudulent or dishonest inducement of a person by deceiving him. In the present case, there cannot be said to be any fraudulent or dishonest inducement. Even if the case of the prosecution is believed, the applicant has deposited the cash for the purpose of exchanging it as the old notes have been withdrawn by the Reserve Bank of India. By depositing huge amount in his Bank Account, the applicant has expose himself as to his income and if it is found that no income tax or other taxes are paid by him on such disclosed income, then, necessary legal action / proceedings can be initiated against him under the relevant statute. Further necessary taxes in such income including penalty and interest could also be recovered from him under the relevant statute. On such exercise being carried out, there will be no case of loss to the exchequer as has been canvassed on behalf of the prosecution. However, by mere deposit of huge amount in his dormant account cannot be termed as cheating or any offence under the Indian Penal Code or under the Prevention of Corruption Act – Application is allowed
1. Rule. Ms.Moxa Thakkar, learned APP waives service of rule for respondent no.1, learned counsel, Mr.R.C.Kodekar waives service on behalf of respondent no.2-CBI.
2. By filing this application under Section 482 of the Code of Criminal Procedure, 1973, the applicant-original accused no.2 has prayed to quash and set aside the FIR being RC No.0292017A0007 registered with CBI/ACB/Gandhinagar for the offences under Sections 120-B, 417 and 420 of IPC and also offence under Sections 13 (2) read with Section 13 (1) (d) of the Prevention of Corruption Act.
3. It is the case of the informant that a secret information was received that Shri Bhaskar R. Soni while working as Manager (Second-in-command) and Assistant Branch Head of UCO Bank, St.Xavier’s Branch, in conspiracy with the applicant herein and other persons deposited huge Specified Bank Notes (SBNs) in Current Account No.0838021000632 of UCO Bank during demonetization period from 10.11.2016 to 30.12.2016. It is also alleged that Shri Bhaskar R. Soni made the status of aforesaid current account operative/active on 22.11.2016 without obtaining required documents as per KYC guidelines for dormant category accounts. Last entry was carried out in this account on 18.3.2013. The maximum amount deposited in the above account was Rs.3.50 Lacs on 23.2.2013. It is also alleged that while accepting huge SBNs, Shri Bhaskar R. Soni did not inquire about the proof of source of funds of Rs.32 Lacs and when it was deposited on 22.11.2016, Shri Bhaskar R. Soni also did not obtain any mandatory documents for justification of deposit of such huge amount after a period of three and a half years. It is alleged that Shri Bhaskar R. Soni did not carry out proper diligence as stipulated in RBI circulars and accepted the amount from the applicant herein and transferred the same through RTGS during demonetization period. Accordingly, it is alleged that Shri Bhaskar R. Soni in connivance with the applicant herein and others deposited SBNs to the tune of Rs.1,49,00,000/- on different dates in a dormant account and converted the unaccounted money by bringing the same in banking channel, which was further transferred to other accounts by way of RTGS/NEFT. With these allegations, the complaint came to be lodged on 7.4.2017.
4. Mr.Chetan Pandya, learned advocate for the applicant submitted that on plain reading of the FIR it is manifest that none of the ingredients of offence under Sections 120-B, 417 and 420 of IPC and offence under Sections 13 (2) read with Section 13 (1) (d) of the Prevention of Corruption Act are made out so far as present applicant is concerned. He further submitted that by Circular dated 8.11.2016, Annexure-B to present application, Reserve Bank of India informed all the banks for withdrawal of Legal Tender Character of existing Rs.500/- and Rs.1000/- Bank Notes with the required guidelines. He also submitted that as per paragraph 3 (c) (ii) thereof, no limits was prescribed to deposit High Denomination Notes and by condition No.3(c)(vi) no restriction on the use of any non-cash method for operating the account. He also submitted that by clarification dated 10.11.2016, Reserve Bank of India enhanced the limit of cash withdrawn but did not restrict any non-cash method for withdrawal of amount from the account. He also submitted that even if the applicant is allowed to deposit the amount in his dormant account by any bank official without obtaining required documents as per KYC guidelines, no offence of cheating can be said to have been made out. He also submitted that an offence of cheating under section 420 of IPC also cannot be said to have been made out against the present applicant. In support of his submissions, learned advocate has relied upon the following decisions:-
(i) S.V.L.Murthy v. State, represented by CBI, Hyderabad, (2009) 6 SCC 77;
(ii) Harmanpreet Singh Ahluwalia and Others v. State of Punjab and Others, (2009) 7 SCC 712;
(iii) Mohammed Ibrahim and Others v. State of Biha
