Back
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. Karpagavinayagam, J.
N. Sekar, Proprietor, M/s.Leo Furnaces and another
Versus
Superintendent of Police, SPE/CBI/SCB, Madras.
Crl.R.C. No. 688 of 1996 and Crl.M.P. No. 3044 of 1996.
Decided On : 27 August 1999
CRIMINAL PROCEDURE CODE - SECTION 239 - DISCHARGE OF ACCUSED - FRAMING OF CHARGES - SECTION 240 - GROUNDS FOR PRESUMING OFFENCE COMMITTED - JUDICIAL MIND - SUFFICIENCY OF EVIDENCE - CONSIDERATION OF DEFENCE DOCUMENTS - REFUND OF AMOUNT IN CRIMINAL BREACH OF TRUST - RELEVANCE.
Fact of the Case:
The petitioners, N. Sekar and N. Sridhar, were charged with offences under Sections 120-B read with Sections 420, 419, 467 read with 471, IPC, for allegedly obtaining a loan from Bank of India by submitting forged documents and using the loan amount for personal use. The petitioners filed a petition for discharge under Section 239 of the Criminal Procedure Code, which was dismissed by the trial court, and charges were framed against them.
Finding of the Court:
The court held that the trial court was justified in framing charges against the petitioners based on the materials available on record, which raised a strong suspicion that they had committed the offences. The court noted that there were materials to show that the pro forma invoices and cash receipts submitted by the petitioners were not genuine and that the companies from which they were alleged to have been issued were fictitious. The court also noted that there were materials to show that the petitioners had opened bank accounts in the name of these fictitious companies and encashed the drafts issued by the Bank in their name.
Issues: 1. Whether the trial court was justified in framing charges against the petitioners based on the materials available on record? 2. Whether the petitioners should have been discharged from the case based on the "No due certificate" issued by the bank?
Ratio Decidendi: 1. The court held that the trial court was justified in framing charges against the petitioners based on the materials available on record, which raised a strong suspicion that they had committed the offences. The court noted that there were materials to show that the pro forma invoices and cash receipts submitted by the petitioners were not genuine and that the companies from which they were alleged to have been issued were fictitious. The court also noted that there were materials to show that the petitioners had opened bank accounts in the name of these fictitious companies and encashed the drafts issued by the Bank in their name. 2. The court held that the "No due certificate" issued by the bank did not absolve the petitioners of the offences with which they were charged. The court noted that it is a settled law that the mere refund of the amount, which is the subject matter of the criminal breach of trust, made subsequently, would not absolve the accused of the offence with which he is charged.
Final Decision: The court dismissed the revision petition filed by the petitioners, upholding the order of the trial court framing charges against them.
2. Superintendent of Police, SPE/CBI/SCB, Madras, filed a charge -sheet against the petitioners for the offences under Sec.120-B read with Secs.420, 419, 467 read with 471, I.P.C. This was taken on file by the trial court in C.C.No.6607 of 1995.
3. The petitioners filed a petition under Sec.239 of Criminal Procedure Code, seeking discharge from the above case for the reason that there were no materials to frame the charges for the offences under sections mentioned above.
4. The respondent filed a counter.
5. The trial court, after hearing the counsel for the parties and on perusal of the records, dismissed the petition for discharge and framed the charges under Sec.20-B read with 420, 468, 471 and 419, I.P.C. When the charges were read over, petitioners pleaded not guilty. After recording the same, the trial court posted the matter for trial. At that stage, the petitioners have filed this revision, seeking to set aside the order dismissing the petition for discharge and framing charges against them.
6. Few facts shall be stated before dealing with the point that arises for consideration for the disposal of the case:
(a) The first petitioner is the sole proprietor of M/s.Leo Furnace situated at Chennai. During the year 1990, he applied for a term loan and bills purchase clean loan for an amount of Rs.4,6 lakhs and Rs.35,000 respectively from Bank of India, Mount Road Branch, Chennai. To secure the said loan, the first petitioner executed the loan documents as well as mortgaged an immovable property of Mr.M.V.Ramakrishnan and one Mr.S.D.Madhavan stood as guarantor for the said loan. The loan was applied on 6.1.1990 for the purpose of putting up a unit of melting copper scrap. It is stated in the loan application that they purchased a new Melting Furnace from M/s.Mac Arch Engineering and a new casting chamber from M/s.Pyrotech Equipments and Tools for the prices at Rs.4,90,000 and Rs.72,972 respectively. The Manager, Bank of India, granted the loan on 16.2.1990 vide sanction letter No.MT.ADV:MT:1079 stating that the loan amount had been sanctioned and the principal security for the term loan would be hypothecated to the machinery proposed to be purchased apart from the collateral security and personal guarantee. The first petitioner gave two cash receipts to the bank, which were purported to have been issued by M/ s.Mac Arch Engineering, Bangalore for Rs.1,25,000 and another one purported to have been issued by M/s.Pyrotec Equipments and Tools, Bangalore for Rs.50,000 to show that he has already made the above payments to the above firms for the purchase of the machineries. The Manager, Bank of India, on the basis of the receipts, released the loan for the remaining amounts i.e., Rs.3,55,000 and Rs.54,722 respectively through the Demand Drafts, The first petitioners collected those demand drafts.
(b) In the meantime, the first petitioner and his brother, second petitioner opened two current Accounts in the assumed names as N.Subramaniam and S.Prakash. The fictitious current accounts were also opened at Bangalore in the names of M/s.Mac Arch Engineering and M/s.Pyrotec Equipments and Tools. They used the current Accounts to encash the Demand Drafts, which were issued in the name of those fictitious companies. When these things came to light, the respondent-police registered a case and investigated into the matter. Bank officials inspected the factory premises and found out that the new machineries have not been purchased from the companies mentioned above and those companies are fictitious companies and the amounts obtained as loan, were not spent for the intended purpose and they committed fraud by using the forged documents and thereby, cheated the bank.
(c) On the basis of the materials collected by the investigating agency, the charge-sheet had been filed before the trial court. The contents of th
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
