The presentation of a security cheque following a loan default does not constitute criminal breach of trust. Criminal proceedings initiated as a retaliatory measure against legitimate recovery litigation, lacking essential elements of mens rea or entrustment, constitute an abuse of judicial process.

CORAM:

HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

NEENA BANSAL KRISHNA, J.

1. The aforesaid two Petitions have been filed by China Trust Commercial Bank (hereinafter referred to as “M/s CTBC”) and the employees of M/s CTBC i.e. Mritunjay Narayan Jha, Sarvjeet Singh Ahuja, Subhasis Banerjee, Mayank Goel to challenge to challenge the summoning Order dated 12.07.2017 in the CC No. 621809/2016 under Sections 409, 465, 467, 468, 471, 109, 120-B, and 34 of the Indian Penal Code, 1860 (hereinafter referred to as “IPC”) and the Order dated 01.12.2017 whereby Non-Bailable Warrants (NBWs) were issued against them.

2. The Complaint Case under Sections 409, 465, 467, 468, 471, 109, 120-B, and 34 IPC along with an Application under Section 156(3) of the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) was filed by Arun Jain, Ex-Director of M/s Lilliput Kidswear Limited (hereinafter referred to as “M/s LKL”) (“the Complainant”), against the Petitioner Company i.e. M/s CTBC (Accused No.1), its senior officials and Managers/Director of this Bank and other unknown persons who may have been involved in committing the alleged cognizable offences.

3. It was stated in the Complaint that during March 2011, representatives of the Accused Bank approached the Company with proposals for business expansion and offered to provide loan facilities at concessional rates, emphasizing lucrative benefits if the loan was secured before the conclusion of that financial year.

4. As per the Loan Arrangement involved the Bank’s requirement for an “undated” cheque, the undated cheque was issued as a trust security as a protective measure, against the sanctioned loan amount, with an assurance that it would not be utilized for any other purpose. It was specifically mentioned in the loan Sanction Letter that the cheque would be retained strictly as an undated security instrument.

5. However, during June/July 2012, the Complainant was shocked to receive summons from Ld. MM, pertaining to a Complaint Case filed under Section 138 NI Act, from where the Complainant came to know that the cheque which had been entrusted for security purposes, was presented to the Banker by the Petitioner Company for encashment, which got dishonoured. Furthermore, while all other details in the Cheque were typed, the date had been filled in by hand. The accused persons, acting with malicious intent and in conspiracy with one another, committed criminal breach of trust by misappropriating the cheque.

6. Furthermore, by filling the date in the cheque before presenting it to their bankers, without the knowledge, consent, or authorization of the Petitioner Company, a false document was created, thereby committing the offence of forgery for the purpose of cheating.

7. The accused persons conspired together to commit the aforementioned offences and have therefore, committed offences under Section 120B IPC, and common intention to defame the Complainant and cause wrongful loss to the company while securing wrongful gain for themselves, as contemplated under Section 34 IPC. Through their actions and omissions, they abetted the commission of offences within the meaning of Section 107 IPC, thereby committing an offence under Section 109 IPC.

8. Thus, the Accused Persons are liable for the