IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO.2243 OF 2007 Kavita Suresh Rajpal & Anr. .. Petitioners Vs. Corporation Bank & Ors. .. Respondents Mr.Laxman Venkatesan for the Petitioners. Mr.A.P.Mundargi, Sr Advocate with Mr.Sunil Chavan i/by M/s.M.V.Kini & Co for the Respondent Nos.1 and 2. Mr.J.P.Yagnik, A.P.P for the Respondent No.4. CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE : 10th July 2008. P.C.: . The submissions of the learned counsel appearing for the parties were heard yesterday. 2. By this Writ Petition under Article 227 of the Constitution of India, the petitioner has taken an exception to the judgment and order dated 13th September 2007 passed by the learned Additional Sessions Judge, Bombay in a Criminal Revision Application filed by the 1st to 3rd respondents. 3. With a view to appreciate the submissions made by the learned counsel appearing for the parties, it will be necessary to refer to the facts of the case in : 2 : brief. The petitioners filed a private complaint before the learned Metropolitan Magistrate against the 1st to 3rd respondents herein. The allegation in the compliant was that the 1st to 3rd respondents have committed offences punishable under section 389, 409, 499, 506, 120A, 120B and section 107 of the Indian Penal Code. M/s.Paras Impex is a proprietary concern of the 1st petitioner. There were facilities sanctioned by the 1st respondent-Corporation Bank in favour of M/s.Paras Impex. According to the case of the petitioners security of Flat No.103 on the 1st floor of Manisha Apartments, Bombay and Gala No.217 on the 2nd floor of Bhusa Industrial Estate, Century Bazar, Prabhadevi, Bombay, by way of mortgage was offered by the said M/s.Paras Impex in favour of the 1st respondent. Infact the said Gala No.217 was already given by way of security in favour of United Commercial Bank by M/s.Paras Impex. 4. According to the case of the petitioners, in the year 2003 and 2004 garment industry in general suffered losses. The said proprietary concern committed defaults in repayment of the amounts to the 1st respondent. Therefore, recovery proceedings were initiated by the 1st respondent bank against the proprietary concern and the petitioners. The 2nd petitioner had guarantied : 3 : repayment of loan by the 1st petitioner. The 1st respondent alleged that the creation of mortgage in respect of Gala No.217 by the 1st petitioner in favour of the 1st respondent was fraudulent as the same Gala was already mortgaged in favour of the United Commercial Bank. It is the case of the petitioners that as the 1st respondent was contemplating of initiating criminal proceedings against the petitioners, a suggestion was given by the officials of the 1st respondent-Bank that the petitioner should provide a security of another property. It is the case of the petitioners that with a view to avoid any criminal proceedings, the 1st petitioner handed over keys of flat No.103, Manisha Apartments to the 1st respondent. The said flat was sold by the 1st respondent for realisation of the amount payable by the 1st petitioner. It is alleged in the complaint that the flat was sold by the 1st respondent at a very low price and the details of the auction sale conducted under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Securitisation Act) were not furnished to the petitioners. 5. It is stated in the complaint that the original documents of flat No.103 in Manisha Apartments standing : 4 : in the name of the 2nd petitioner were also handed over to the 1st respondent. It is alleged that in the covering letter dated 18th August 2005 it is stated that the documents were handed over with a clear understanding of the 1st respondent agreeing not to initiate any criminal or civil proceedings against the petitioners. It is alleged by the petitioners in the complaint that though documents relating to the said flat were handed over to the 1st respondent for safeguarding the interests of the petitioner, but no security was created over the said flat No.102. It is contended that the transaction relating to flat No.102 "as additional comfort" to the 1st respondent read with the letter dated 18th August 2005 amounts to compounding of offences, if any, allegedly committed by the petitioners and the same forms part of the contract between the petitions and the 1st respondent. It is alleged that the same forms basis of compromise of the money claims of the 1st respondent against the petitioners. 6. The allegation is that on 01st September 2005, 3rd respondent and officer of the 1st respondent and bank, rushed to Paltan Road Police Station and the Economic Offences Wing of CID and lodged a complaint against the 1st petitioner. It is alleged that the 1st : 5 : respondent through the 3rd respondent also filed proceedings before the Debt Recovery Tribunal for recovery of certain amount against the petitioners. The allegation is that the act of filing a criminal complaint and the act of filing proceedings for recovery before the Debt Recovery Tribunal amount to committing a breach of trust. It is alleged that the 3rd respondent acted as per instructions of the 2nd respondent. It is alleged that the 3rd respondent has been frequently using foul and abusive language while speaking to the petitioners. The petitioner alleged commission of offences under section 107, 120-A and B, 389, 409, 499 and 503 against the 1st respondent Bank and its officers. 7. On the said complaint filed by the petitioners, the learned Magistrate passed an order under section 202 of the Code of Criminal Procedure, 1973 calling for the report of MRA Marg Police Station. A report was submitted stating therein that no criminal offences have been committed by the 1st to 3rd respondents. An objection petition was filed by the petitioners to the said report. The learned Magistrate called further report from the police station. A report was again submitted by the police station recording that there was no offence made out. However, the learned Magistrate : 6 : issued process against the 1st to 3rd respondents under sections 406 and 409 of the Indian Penal Code. In the revision application preferred by the 1st to 3rd respondents, by the impugned order, the order issuing process was set aside and a direction was issued against the petitioners to pay compensation of Rs.10,000/- to the 1st to 3rd respondents in purported exercise of powers under section 250 of the said Code. 8. The learned counsel appearing for the petitioners submitted that apart from the allegations made in the complaint, what was set out in the objection petition filed by the petitioners was required to be considered while issuing process and therefore, the learned Additional Sessions Judge has committed a gross error by not looking at the assertions made in the objection petition. He submitted that the documents relating to flat No.102 were handed over by the 2nd petitioner to the 1st respondent in consideration of the 1st to 3rd respondents agreeing not to take any action against the petitioners, both civil and criminal. He invited my attention to what is set out in the objection petition and in particular in sub clause (ii) of paragraph 5 of the said objection petition. He submitted that in any event an order could not have been passed under section 250 of the said Code directing the : 7 : petitioners to pay compensation of Rs.10,000/- to the 1st to 3rd respondents as requisite procedure was not followed. The learned senior counsel appearing for the 1st to 3rd respondents supported the impugned order. 9. I have perused the complaint and the objection petition as well as the impugned order. It must be stated here that the learned Magistrate had issued process only under sections 406 and 409 of the Indian Penal Code and there was no grievance made by the petitioners as regards failure of the learned Magistrate to issue process under other sections. In this behalf, it will be necessary to refer to the averments made in the complaint. In paragraph 4 of the complaint it is alleged that as the petitioner No.1 had created a mortgage in respect of Gala No.217 in favour of the United Commercial Bank and again a mortgage was created in favour of the 1st respondent Bank, an action of filing a criminal proceeding was contemplated by the 1st respondent. Paragraphs 6 and 7 of the complaint read thus: "6. That in addition the complainant No.1 handed over to the officials of Accused No.1 original documents relating to another Flat : 8 : No.102 in the Manisha Apartments, standing in the personal name of complainant No.2 alongwith a letter dated 18/08/2005. The original documents relating to Flat No.102, are referred to in the said letter dated 18/08/2005, and the same were collected by one Mr.Sudhakara Sarma, the Chief Manager of the Accused No.1, attached to their Zonal Office, who was duly authorized to collect them. At that time Mr.Sarma was accompanied by one Mr.Ramesh Bhatt, Sr.Manager/law officer of the Accused No.1 attached to their Zonal Office in Mumbai. This letter clearly states that the documents relating to Flat No.102 were being handed over to the Bank with clear understanding and in consideration of the Accused No.1 agreeing not to initiated any criminal or civil proceedings against the complainants. Further the letter also stated that the documents in question were being handed over to the accused No.1 to safeguard their interest, but at the same time it was made abundantly clear that no security was created over the said Flat No.102 in favour of the accused No.1, as the security of Flat No.103 referred above was considered more than adequate to cover the Firm’s due to them. : 9 : Annexed hereto is copy of the said letter dated 18/08/2005 signed by the Complainant No.1 and duly acknowledged by the said Mr.Sudhakara Sarma the competent officer of the accused No.1. The same is marked as Exhibit 1. 7. That this transaction of handing over documents relating to Flat No.102, as additional comfort (without prejudice) to the Accused No.1, taken in its entirety together with the contents of Exhibit 1 amounts to compounding of the criminal offences, if any, purportedly committed by the complainants and forms a contract between the complainants and the accused No.1, who had promised and agreed to forbearance from taking out any criminal or civil proceeding against the complainants which the complainants are entitled to enforce. It also forms the basis for a compromise of the money claims made against the complainants by the accused, only thing remaining to be done being working out a repayment schedule and the time-frame therefor." It is alleged that the action of filing a complaint against the petitioners and the action of filing : 10 : proceedings before the Debt Recovery Tribunal constitute a breach of trust. Reliance was placed on clause (ii) of paragraph 5 of the objection petition filed by the petitioners. The said clause (ii) alleges commission of offence under section 379 of the Indian Penal Code. However, process was not issued by the learned Magistrate under section 379. Reliance has been placed on the letter dated 18th August 2005. It must be stated here that even according to the case of the petitioners the 1st respondent Bank sold the flat No.103 under the Securitisation Act and not the flat No.102. Flat No.103 was admittedly given by way of security by the petitioners. In so far as flat No.102 is concerned, even according to the case of the petitioners it was not given by way of security. The petitioners cannot rely upon what is stated in their own letter dated 18th August 2005 as even according to the petitioners there is no assurance given by the 1st to 3rd respondents in writing that no civil and criminal action will be initiated against the petitioners. What is stated in the letter is a unilateral statement on the part of the petitioners. In the circumstances, on the basis of the action of the 1st respondent bank of initiating proceedings for recovery before the Debt Recovery Tribunal and of filing a complaint against the petitioners with the police cannot amount to commission : 11 : of offences under section 406 and 409 of the Indian Penal Code. Therefore, there is no scope to interfere with the order passed by the learned Additional Sessions Judge by which he has set aside the order of the learned Magistrate issuing process. 10. The second challenge is to that part of impugned order by which compensation under section 250 of the said Code is made payable. Admittedly, even a show cause notice was not issued to the petitioners calling upon them to show cause as to why compensation should not be ordered to be paid by them. Therefore, that part of the impugned order directing the petitioners to pay compensation must be held to be illegal. 11. Hence, I pass the following order: (i) That part of the impugned judgment and order by which the order issuing process passed by the learned Magistrate is set aside and the complaint is dismissed is confirmed. However, the direction issued by the learned Additional Sessions Judge against the petitioners to pay compensation of Rs.10,000/- is quashed and set aside. : 12 : (ii) Criminal Writ Petition is disposed of accordingly. (A.S.Oka, J)