Point of Law: When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.”

JUDGMENT :

1. Heard learned Senior Counsel Shri N.K. Pahwa for learned Advocate Shri Nandish H. Thackar for the applicants, learned APP Ms. Moxa Thakkar for the respondent No.1 – State and learned Advocate Shri S.S. Panesar for the respondent No.2 – original complainant.

2. Rule. Learned APP Ms. Moxa Thakkar waives service of Rule on behalf of the respondent No.1 – State and learned Advocate Shri S.S. Panesar waives service of Rule on behalf of the respondent No.2 – original complainant. With consent of the parties, this application is taken up for final hearing today.

3. By way of this application, the applicants seek quashing of criminal complaint being C.R. No. I - 10 of 2017 registered with Nilambaug Police Station, Bhavnagar, for the offences punishable under Sections 406, 420 and 409 of Indian Penal Code, dated 27.01.2017. It appears that vide an order dated 06.03.2017, this Court while issuing Notice upon the respondents had directed that the investigation may continue further and whereas no coercive action shall be taken against the present applicants herein.

4. Brief facts leading to this application as well as relevant facts, which have occurred during the pendency of this application, are summarized as hereunder:

4.1 The applicants herein were doing business at Bhavnagar in the name of “M/s. Aman Ispat” and whereas the applicants had approached the respondent No.2 Dena Bank, Panwadi Branch, Bhavnagar, for availing cash credit facility in the year 2011 and a loan amounting to Rs.3 Crores had been sanctioned, which was primarily secured by security being hypothecation of stocks and book debts and collateral security namely mortgage of immovable properties. That the terms of cash credit facility included that sale purchase of scrap materials, which was the primary business of the Firm, would be through the respondent Bank and whereas from the year 2011 to 2016, numerous transactions had happened in cash credit facilities and at various points of time, account had become overdue and after accepting penalties from the applicants, the account had been regularized by the bank. It is the case of the applicants that there was an over payment of interest between 2015 to 2016 to tune of Rs. 6 Lakhs and whereas the bank had returned an amount of Rs.3 Lakhs, whereas since this issue is not touching upon the criminal complaint per se, this Court is not delving into the same. Be that as it may, since the applicants allegedly did not conduct the transactions as per the terms of the loan agreement and whereas since the applicants had not paid the interest levied upon them inspite of reminders from the bank, therefore, in the month of September, 2016 as per the Regulations of RBI, said account was declared as NPA (Non-Performing Assets). Thereafter, the officials of the bank as well as Stock Auditor had visited the office and godown of the applicants and whereas it was found that the sufficient stock was not found as per the declaration of existing stocks and book debts. It appears that the bank had thereafter approached the Chartered Accountant of the applicant, who had certified the statement of existing stock and book debts and had sought for addresses of sundry debtors and the bank had been provided list of 8 debtors upon which the bank had written to the said debtors requesting them to give credit of respective book debts directly to the account of the applicants with the Dena Bank. Some of the debtors had replied intimating that they have no outstanding payable to the applicants. It is also the case of the bank that upon inquiry, it was revealed that the applicants had opened an account with M/s. HDFC Bank Ltd., Waghvadi Branch, which was in contravention of the terms of the agreement with the complainant bank and in which account, the applicants had deposited the receivables of the transactions including transaction whereby existing stock had been sold.

4.2. Thereafter the aforementioned criminal complaint came to be filed inter al