Partners can be held criminally liable for cheating if specific allegations of fraudulent intent are made, distinguishing between civil and criminal liability.

ORDER :

(J. SREENIVAS RAO, J.)

This Criminal Petition is filed under Sections 482 of the Code of Criminal Procedure, 1973 (for short ‘ Cr.P.C .’) by the petitioner, seeking to quash the proceedings in C.C.No.437 of 2016 on the file of the Principal Junior Civil Judge, Kodad, Suryapet District.

2.1 The case of prosecution in brief is that LWs.1 to 3 namely Pinupa Bhaskar Rao, Injamuri Dayakar and Kilambi Ranganath are officials of Andhra Bank working as Chief Manager, Andhra Bank, Kodad, Assistant General Manager, Andhra Bank, Rayavaram of East Godavari District and Deputy General Manager, Corporate Finance Branch, Hyderabad respectively. On 13.07.2011 LW.3 had sanctioned Rs.2 Crores to the accused Nos.1 to 4, who are the managing partners, as financial facility by Andhra Bank, Kodad Branch to run M/s. Rajyalaxmi Rice Industries at Thellabelli Village of Nadigudem Mandal on the recommendation of LW.2, by executing all necessary documents i.e., 1) two storey house building door No.1- 229 having 46 yards owned by Pandiri Malleswari (A-3) situated at Guntur road, Miryalaguda, 2) 379 yards house site in plot No.1, block No.28 in survey No.706 of Paidimarri Sathyanarayana to an extent of 952 yards in Sy.No.1031/B1 and block No.12 situated at Ramapuram road, Kodad, 4) A house site registered in the name of Nalla Rathnamma to an extent of 300.50 yqrds, plot Nos.23, 24 in Sy.No.639/E situated at Gayathrinagar, Miryalguda, 7) A house site of Damera Achutharamaiah to an extent of 121 yards, plot Nos.23, 24 in Sy.No.639/E in Sy.No.639/E situated at Gayathrinagar, Miryalguda, 8) 900 yards business and residential plot in block No.4 and Sy.No.528/Ae near Srinivas Mechanical Showroom, Gudibanda road, Kodad of Vangaveeti Pushpavathi, 9) the land admeasuring Ac.1-51 guntas in Sy.No.193/1/4, 193/1/F of Vangaveeti Pushpavathi situated backside of Raja Rajeswari Parboiled Rice Mill, Komarabanda village of Kodad, 10) Residential house door No.4-67/1, block No.4 of Vangaveeti Pushpavathi to an extent of 200 yards in Komarabanda village of Kodad and 11) Rajyalaxmi Rice Industries in Sy.No.129/3 situated in the Revenue limits of Tellabelli village of Nadigudem Mandal with composite agreement as security to inform the Bank time to time of hypothecation of inventory and receivable i.e, goods, produce, merchandise, stock, book debts and other similar assets. But, said M/s. Rajyalaxmi Rice Industries, Thellabelli represented by its Managing partners/accused nos.1 to 4 submitted stock statement in the month of July, 2012 and failed to submit subsequent monthly statements of stock, which are to be submitted by them mandatorily to the Bank, though the Bank so many times demanded the said firm for deposit of the sale proceeds of the hypothecation of the Bank. But there is no proper response from the borrower.

2.2 It is further case of prosecution that the accused failed to pay the loan amount to the bank. Thus shows the accused with a malafide intention obtained the loan, dishonestly failed to repay the loan and failed to maintain the stocks as per the agreement and gained wrongfully from the bank and caused wrongful loss to the bank. Thus, the investigation establishes that accused Nos.1 to 4 dishonestly cheated the Andhra Bank, Kodad branch and failed to submit subsequent monthly statements of stock which are to be submitted by them mandatorily to the Bank though the Bank so many times demanded the said firm for deposit of the sale proceeds of the hypothecation of the Bank. Thus, the accused have committed an offence punishable under Sections 406 and 20 of IPC .

3. Heard Mr. T.V.Kalyan Singh, learned counsel for the petitioner and Mr.G.Bharath Reddy, learned counsel appearing on behalf of respondent No.2-Andhra Bank (Presently Union Bank of India), who appeared through video conference, and Mr.Syed Yasar Mamoon, learned Additional Public Prosecutor appearing for respondent No.1-State.

4.1 Learned counsel for the petitioners submitted that the petitioner has not