1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CRIMINAL APPLICATION NO.2016 OF 2009 M/s.Sunain Trading Pvt. Ltd. & Anr. : Applicants V/s. C.B.I. Anti Corruption Branch, Mumbai & Ors. : Respondents .... Ms Sandhya Goswami i/b. Mr.Amit Sheth for the applicants. Mrs.P.H. Kantharia with Mr.M.S.Bhardwaj and Mr.Y.M. Nakhwa for respondent no.1. Mr.S.A.Shaikh, Addl. Public Prosecutor for respondent no.2. Mr.Rabaindra Hazari for respondent no3. .... CORAM : B.R. GAVAI, J. DATE : MARCH 18, 2010. P.C.: Rule, returnable forthwith. The learned counsel for the respective respondents waive service. Heard by consent. 2. By way of the present application, the applicants pray for quashing and setting aside the F.I.R. being RC 33(A)/93 and Criminal 2 Case No.45/2001 filed by the C.B.I. against the applicants and pending in the Court of the learned Special Judge, C.B.I., Mumbai. 3. The allegation of the prosecution is that the accused no.1, 3 and 9 entered into a criminal conspiracy with accused nos.11 and 20 and others for the purpose of cheating Central Bank of India by way of opening of Letters of Credit. It is the allegation of the prosecution that the accused no.11 issued accommodation bills in the name of M/s.Chitij Trading (P) Ltd. (accused no.8) which was not backed by genuine business transaction. In this factual background, a crime was registered for the offences punishable under sections 120-B, 420, 468 and 471 of the Indian Penal Code. 4. Perusal of the entire charge-sheet would reveal that the main allegations in the said charge-sheet are against the accused Dinesh Vithal Chaturvedi. The allegation that officers of Central Bank of India who have been made accused had hatched a criminal conspiracy with accused Dinesh Chaturvedi who had floated two companies, viz., M/s.Sunain Trading Pvt. Ltd., and M/s.Chitij Trading Pvt. Ltd. and various Current Accounts were opened in Central Bank of India for opening Letter of Credit for huge amounts. It is alleged that this was done without offering any collateral securities. The allegation as against the present applicant as 3 could be gathered from the charge-sheet is as follows:- “Shri Thaklurji Chaturvedi (A-17) of M/s.Sirdar Sales Private Limited issued accommodation bills in the name of Chitij Trading Private Limited (A-8), which were not backed by the genuine business transactions.” 5. In a nutshell, therefore, the allegation of the prosecution as against the present applicants are concerned is that the conspiracy which was hatched by said Dinesh along with Officers of Central Bank of India was for the benefit of the present applicants which are companies incorporated under the Companies Act. 6. One of the Directors, viz., Narayan Chaturvedi had approached this Court by way of Criminal Application no.5264 of 2004. Since it was brought to the notice of the Court that the matter was amicably settled between the various borrowers and Central Bank of India, a notice was issued in the said matter to Central Bank of India. Central Bank of India had filed an affidavit in the said proceedings that there was no outstanding against the applicant therein and that the Bank had issued no Outstanding Certificate in favour of M/s.Sunain Trading Pvt. Ltd., M/s.Chitiz Trading 4 Pvt. Ltd., and M/s.Vidalni Engineering Ltd. The learned single Judge of this Court, therefore, vide judgement and order dated 22.12.2006 allowed the said application and quashed and set aside the proceedings and the F.I.R. insofar as the applicant herein was concerned. 7. Another accused, viz., Dinesh Vithal Chaturvedi had also filed Criminal Application No.543 of 2007 and the said application was allowed by order dated 6.7.2007 to the extent of the applicant therein. It is pertinent to note that the judgement and order passed by this Court in Criminal Application No.5264 of 2004 was challenged before the apex Court and the apex Court was pleased to dismiss the SLP. It is further pertinent to be noted that the judgement and order in Criminal Application No.543 of 2007 was also challenged before the apex Court and the apex Court vide order dated 3.3.2008 dismissed the SLP. 8. This Court also vide order of even date in Criminal Application No.2070 of 2009 has quashed and set aside the proceedings against the other accused Thakurji Ramanlal Chaturvedi. It can thus clearly be seen that some of the accused who were Directors of the present applicants and some other persons have already been discharged by this Court. 9. The present applicants have been made the accused in the 5 complaint by taking recourse to the provisions of section 120-B of the Indian Penal Code. 10. Ms Sandhya Goswami, the learned counsel appearing on behalf of the applicants, submits that insofar as the aforesaid Officers are concerned, unless there is a mens rea against the accused, criminal proceedings cannot proceed. She submits that as the present applicants are juristic persons, there is no question of there being mens rea and as such, the proceedings cannot continue against the present applicants. She relies on the judgement of this Court in Natural Sugar and Allied Industries Ltd. v. Razzak s/o. Hazi Gaffar (2006 All MR (Cri.) 2822). 11. As against this, Mrs.Kantharia, the learned counsel appearing on behalf of the respondent no.1, submits that the present applicants have been arraigned as accused in view of the provisions of section 120-B of the I.P.C. It is submitted that the entire conspiracy which was hatched was for the benefit of the present applicants and, as such, the application is without any merit and, therefore, liable to be dismissed. The learned counsel relied on the judgement of the apex Court in Standard Chartered Bank v. Directorate of Enforcement (2005 (4) SCC 530 and in the case of Ballarpur Industries Ltd. v. State rep. by Dy. Superintendent of Police (MANU/SC/0347/2009). 6 12. The F.I.R. was registered for offences punishable under sections 420, 468 and 471 of the I.P.C. The said sections read thus:- “420. Cheating and dishonestly inducing delivery of property.-- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. 468. Forgery for purpose of cheating.-- Whoever commits forgery, intending that the document or electronic record forged shall be used for the purpose of cheating, shall be punished with imprisonment of either description a term which may extend to seven years, and shall also be liable to fine. 7 471. Using as genuine a forged document or electronic record.-- Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record.” 13. As already quoted hereinabove, this Court in the case of three accused persons, viz., Narayan Chaturvedi in Criminal Application No.5264 of 2004, Dinesh Chaturvedi in Criminal Application No.543 of 2007 and Thakurji Ramanlal Chaturvedi in Criminal Application No.2070 of 2009 has allowed their applications and quashed and set aside the proceedings against them. That leaves us the question as to whether criminal proceedings against the present applicants who are juristic persons can be quashed or not. It can further be seen that all the three offences for which an FIR is lodged require mens rea. Insofar as the offence under section 420 is concerned, deceit or dishonest intention is one of the essential ingredients of the said offence. Insofar as offence under section 468 is concerned, it can be seen that intending that the document or electronic record forged shall be used for the purpose of 8 cheating is necessary ingredient. Therefore, an intention is an essential ingredient of the said offence. Section 471 also requires the document which is genuine to be used as genuine with a fraudulent or dishonest intention. It can thus be seen that in all these offences, mens rea is an essential ingredient. While deciding Criminal Application No.2185 of 2005 in the case of Natural Sugar and Allied Industries Ltd. (supra), I have observed thus:- “25. It cannot be disputed that the offences punishable under Sections 406 and 420 require mens rea. It is, therefore, necessary that “whoever” is alleged to have deceived must be a person capable of having the requisite mens rea. Since Company is juristic person and not a natural person, by no stretch of imagination, it can be said to have requisite mens rea. In so far as the reliance placed by the learned Counsel on the judgment of the Constitution Bench of the Apex Court in the case of Standard Chartered Bank and Others Vs. Directorate of Enforcement and others [2006 ALL MR (Cri) 1209 (S.C.)] (cited supra) is concerned, I do not find that said judgement would 9 be applicable to the facts of the present case. In the aforesaid case, the Apex Court was considering a question of statutory offence. The Apex Court in the said case has held that in the case of absolute liability where the legislature by the clearest intendment establishes an offence where liability arises instantly upon the breach of the statutory prohibition, no particular state of mind is a prerequisite to guilt. It has been held that Corporation and individual person stand on the same footing in the face of such a statutory offence and that it is a case of automatic primary responsibility. The Apex Court itself has observed in paragraph 8 thus: “It is only in a case requiring mens rea, a question arises whether a corporation could be attributed with requisite mens rea to prove the guilt.” Insofar as the reliance placed on the judgement of the apex Court in the case of Standard Chartered Bank is concerned, this Court has held that in the said case, the apex Court was dealing with the case which provided 10 absolute liability upon a breach of statutory prohibition which requires no particular state of mind as a pre-requisite to guilt. This Court has relied upon the observations made by the apex Court in paragraph 8 of the said judgement. 14. In that view of the matter, since the applicants are juristic persons and all the offences with which they are charged with, mens rea is a necessary ingredient, I am of considered view that the proceedings against the present applicants cannot proceed further. Accordingly, the rule is made absolute in terms of prayer clause (b). B. R. GAVAI, J.