Prashant Kumar, J.-This is an application for quashing the First Information Report bearing Jasidih P.S. Case No. 126 of 1995 dated 01.07.1995 under Sections 406, 420 and 403 of the IPC.

2. The case of prosecution in brief is that petitioners being Managing Director and Directors of Sharda Hosiery Pvt. Ltd (hereinafter referred as 'Company') applied for loan from Bihar State Financial Corporation (hereinafter referred as ‘B.S.F.C.’). It is further stated that B.S.F.C. sanctioned Rs. 7.80 Lakhs as loan in favour of company. However, company availed only Rs. 6.09 Lakhs. It is further stated that as on 31.3.1994 a sum of Rs. 27,48,420.45/was outstanding against company, which includes principal amount as well as interest accruing on it. It is further alleged that at the time of obtaining loan, petitioner No. 1 (the Managing Director of the Company) on being authorized by the Board of the Company had issued letters of hypothecation dated 16.6.1982 and 16.12.1982. It is further stated that indenture of agreement execute on 16.8.1982 and 16.12.1982. It is stated that in the letter of hypothecation it is stipulated that borrowers agreed to held hypothecated assets as BSFC's exclus