* THE HON’BLE SRI JUSTICE A.GOPAL REDDY + CRIMINAL PETITION Nos.5940 and 7866 of 2007 and CRIMINAL PETITION No.256 of 2008 % Dated:30.09.2010 J.Sri Ram Surya Prakash Sharma and others .. Petitioners And The State of Andhra Pradesh, rep., by Public Prosecutor, High Court of Andhra Pradesh, Hyderabad and others .. Respondents ! Senior Counsel for the Petitioners : C.Padmanabha Reddy #Counsel for Respondent No.1 : Public Prosecutor ^Counsel for Respondent Nos.2 and 3 : Sri M.Narender Reddy <Gist: >Head Note: ? Citations: 1. AIR 1996 SC 3390 2. 1996 (2) ALT (CRI) 682 3. AIR 1992 SC 605 4. 2002 (3) SCC 89 THE HON’BLE SRI JUSTICE A.GOPAL REDDY CRIMINAL PETITION Nos.5940 and 7866 of 2007 and CRIMINAL PETITION No.256 of 2008 DATED: 30.09.2010 Between: J. Sri Ram Surya Prakash Sharma and others .. Petitioners And The State of Andhra Pradesh, rep., by Public Prosecutor, High Court of Andhra Pradesh, Hyderabad and others .. Respondents THE HON’BLE SRI JUSTICE A. GOPAL REDDY CRIMINAL PETITION Nos.5940 and 7866 of 2007 and CRIMINAL PETITION No.256 of 2008 COMMON ORDER: 1. The petitioners in these three petitions filed under Section 482 Cr.P.C. are seeking to quash the proceedings against them in C.C.No.1444 of 2004 on the file of the XI Additional Chief Metropolitan Magistrate, Secunderabad, for the offence punishable under Sections 468, 471, 498, 406, 420 read with Section 109 IPC. Since all the petitions arise out of same proceedings, they were heard together and disposed of by this common order. 2. Heard Sri C.Padmanabha Reddy, the learned Senior Counsel appearing for petitioners, the learned Public Prosecutor for respondent No.1, and Sri M.Narender Reddy, learned counsel for respondent Nos.2 and 3. 3. The facts, in brief, are that, on 10.07.1998, the Assistant General Manager of State Bank of India, the second respondent herein, lodged a complaint stating that a person styling himself as Sri C.R.Mohan Rao approached their office to create an equitable mortgage as security for the Bank’s advance of loan to M/s.Rashmi Die Casting Limited (for short ‘RDCL’). He deposited title deeds purportedly relating to a plot of land admeasuring an extent of Acs.4.10 guntas in Survey No.59 of Karmanghat Village, Saroornagar Mandal, Rangareddy District. He also deposited link documents, Urban Land Ceiling clearance, pattedar pass book and pahanies. The loan advanced to RDCL went bad and, in the process of recovery of loan amount, their efforts to trace Sri K.S.S.Niranjan Rao, Managing Director of RDCL and the person purported to have acted as Sri C.R.Mohan Rao, failed. During enquiry, they were taken to another person, who was claiming to be the owner of the property and whose name is Sri C.R. Mohan Rao. Based on the complaint given by the second respondent, a case in Crime No.136 of 2002 on the file of Ramgopalpet, Hyderabad City, was registered for the offence punishable under Section 420 IPC. After investigation, charge sheet was filed wherein the petitioners in these three petitions are arrayed as accused Nos.7, 5 and 6, respectively, and the same has been numbered as C.C.No.1444 of 2004 on the file of the XI Additional Chief Metropolitan Magistrate, Secunderabad for the offence punishable under Sections 468, 471, 419, 406, 420 read with Section 109 IPC and the same is pending. 4. Sri C.Padmanabha Reddy, the learned Senior Counsel appearing for petitioners, contends that petitioners are employees of the Bank and the allegations made against them are only regarding procedural lapses of accountancy and it is not the case of the prosecution that they either involved in forging the documents or they were equipped with any knowledge of detection of fake documents, as those documents were examined by the counsels appointed by the Bank, who gave legal opinion about the said document for advancing loan. It is further submitted that in the absence of any allegation either in the report or in the charge sheet to the effect that the petitioners have committed forgery for the purpose of cheating or used the forged documents as genuine, the Sections of law under which charges are framed against them have no application. 5. The learned Senior Counsel further contends that the allegations made against the petitioners in the complaint as well as the charge sheet are only procedural lapses in discharging their official functions and so initiation of criminal proceedings against them in the absence of any accusation or allegation of abetment on their part in commission of offence is an abuse of process of law. The averments made against the petitioners either in the report or in the charge sheet, prima facie, do not constitute any offence much less the charges framed against them and if the proceedings against them are allowed to continue, it is nothing but harassment and even abuse of process of law, and so the same are liable to be quashed. To substantiate his contentions, the learned Senior Counsel has drawn the attention of this Court to the complaint, the charge sheet and more particularly the statement of Chief Manager (Vigilance Department) recorded under Section 164 of Cr.P.C. He further submits that inasmuch as the proceedings against accused No.9 in the above said C.C., who was also charged along with other accused for the very same offence and who gave legal opinion upon verifying the very same documents, have been quashed by order of this Court dated 30.03.2007 in Crl.P.No.1037 of 2007, on the same grounds, the proceedings against the petitioners are also liable to be quashed. The learned Senior Counsel further contends that violation of any circulars and instructions and commission of administrative irregularities cannot be said to have been done by the official concerned with any corrupt or dishonest intention and such irregularities or administrative lapses could only have resulted in a departmental action against the officials but criminal prosecution is not justified. To substantiate these contentions, strong reliance is placed on the judgments in C. CHENGA REDDY vs. STATE OF A.P.[1] and M.V. SUBBA LAXMI AND P.SEETHARAMAIAH vs. STATE, REPRESENTED BY P.P.[2]. 6. Sri M.Narender Reddy, learned counsel appearing for the respondent Nos.2 and 3, submits that departmental enquiry has already been conducted on the lapses committed by the petitioners and the proceedings against A9 have been quashed by this Court. Though the allegations made against the petitioners in the complaint and the charge sheet do not indicate the possibility of their collusion with A1, A3 and A4, the impersonation of A2 as Sri C.R.Mohan Rao in collusion with the petitioners cannot be ruled out. On the complaint given by the second respondent, police investigated into the same and filed charge sheet against nine accused alleging that A1 - K.Sai Satya Niranjan Rao @ K.S.S. Niranjan Rao, A3 - Smt. K.S.Shobha, who is wife of A1, and A4 Sri K.D.S.Sundar, are Managing Director and Directors of RDCL, which was initially incorporated as a Private Limited Company and later changed as a Public Limited Company. At the request of A1, the State Bank of India, Secunderabad Branch, during February 1987 sanctioned a working capital of Rs.121.75 lakhs for the business of RDCL. After availing the said loan facility, in security, documents were executed on 05.02.1987 and also availed enhanced working capital loan facility from State Bank of India, Secunderabad Branch, after executing security documents from time to time. The Board of Directors of the said company in the meeting held on 09.07.1998, accepted to avail the enhanced working capital limit facility from Rs.620 lakhs to Rs.870 lakhs and authorized A1 to execute the security documents. On 10.07.1998, A2 styling himself as Sri C.R.Mohan Rao, approached the Bank in order to create an equitable mortgage as a security for the Bank’s advance to RDCL and deposited title deeds purported to be relating to a plot of land bearing Survey No.59 admeasuring an extent of Acs.4.10 guntas situated at Karmanghat Village, Saroornagar Mandal. A2 also deposited the link documents, Urban Land Ceiling clearance, pattedar passbook and pahanies in the Bank. A2 created the said mortgage as a guarantor to the company in the presence of A1. When the advances made to the company went bad, in the process of recovery of loan, their efforts to trace out A1 and also A2, who purportedly acted as Sri C.R.Mohan Rao, failed. During the course of enquiry, they were taken to LW.6, Sri C.R.Mohan Rao, who is the real owner of the land. A2 was identified on the basis of photograph, which has been verified in 1998 by Bank of Baroda, Tilak Nagar branch. The amount owning to the Bank from RDCL is Rs.6.59 crores as on 30.06.2002 and the property mentioned was valued at Rs.1.23 crores. It was established that A1 in collusion with A3 and A4 produced A2 impersonating him as Sri C.R.Mohan Rao and availed credit facilities extended by the Bank. At that time, A5, who is the petitioner in Crl.P.No.7866 of 2007, has released the extended limit without obtaining additional security; A6, who is the petitioner in Crl.P.No.256 of 2008, who is the then Chief General Manager, has not properly certified the title deeds and did not identify the guarantor, which resulted impersonation; A7, who is the petitioner in Crl.P.No.5940 of 2007, who is the then Chief Manager, debited the loan amount without debiting C.C. account towards margin/commission for opening letter of credits, though the amount is irregular; A8, who is the then Deputy Manager and the Field Officer, did not properly verify to detect the depositing of fake title deeds and impersonation of guarantor; and A9, who gave legal opinion as to the documents, has failed to detect the fake documents submitted by A2. 7. Principles governing the quashing of charge sheet are laid down by the Supreme Court in STATE OF HARYANA vs. BHAJANLAL[3] and reiterated in STATE OF KARNATAKA vs. M. DEVENDRAPPA[4]. In Bhajanlal’s case (3 supra) their Lordships at para-108 held as follows. “In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. 1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. 2. Where the allegations in the First Information Report and other materials, if any, accompanying the F. I. R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156 (1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code. 3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. 4. Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. 5. Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. 6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/ or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. 7. Where a criminal proceeding is manifestly attended w i t h mala fide and/ or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.” 8. Therefore, it is now fairly well settled that, while deciding a petition under Section 482 Cr.P.C., this Court should not act as a trial Court and appraise the evidence to be adduced by the parties to find out if ultimately the accused would be convicted or acquitted, and that this Court has to go by the allegations in the complaint/charge sheet only and only if the allegations in the complaint/charge sheet, if taken to be true, do not constitute an offence, the charge sheet can be quashed. 9. In C. Chenga Reddy’s case (1 supra), relied on by the learned Senior Counsel for the petitioners, their Lordships observed as follows. “20-A. In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and such circumstances must be conclusive in nature. Moreover, all the circumstances should be complete and there should be no gap left in the chain of evidence. Further, the proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence. In the present case the courts below have overlooked these settled principles and allowed suspicion to take the place of proof besides relying upon some inadmissible evidence.” “37. … … … The maximum that can be said against the appellants is that they committed some indiscretion in the matter of allotment of jungle clearance work on nomination basis and also violated codal provisions in the matter of preparation of estimates, drawing up of the agreements and making payments. These acts of omission and commission do give rise to a strong suspicion that the appellants so acted with a view to misappropriate Government funds but suspicion, howsoever, strong cannot take the place of proof. … …” “55. This takes us to one other aspect of the case, Mr. L. R. Kapoor who conducted an inquiry from 4-4-81 to 6-4- 81 and submitted his report on 28-4-81 to the Government found that there had been defiance of the authority of the Superintending Engineer in the matter of execution of work and spending of grants besides violation of codal provisions and breach of departmental instructions and circulars. He recommended departmental action against the accused. However, before the accused could be proceeded departmentally, the case was entrusted to ACB and the accused were tried by the learned special judge and were convicted and sentenced. Their appeals, except for reduction of sentence, failed in the High Court. Both the courts found that grave irregularities were committed by the officers concerned in the matter of allotment of work and the method followed by them was in violation of the codal provisions departmental instructions and circulars. The courts below have also found that the officials had committed serious administrative irregularities and lapses. Reference has been made both by the trial court and the High Court to the codal provisions i.e. A.P. PWD Code, A.P. Financial Code etc. and the circulars and instructions issued from time to time which were respected in their breach by the official accused. We have not found it possible to take a view different than the one taken by the courts below in this regard though in our opinion the breach of codal provisions or violation of the circulars and instructions and commission of administrative irregularities cannot be said to have been done by the officials concerned with any corrupt or dishonest intention. Learned counsel appearing for all the appellants also during the course of their arguments were unable to point out any error in those findings and according to them in the established facts and circumstances of the case, the irregularities, administrative lapses and violation of the codal provisions, could only have resulted in a departmental action against the officials but criminal prosecution was not justified. Their argument has force and appeals to us. … … …” 10. Further, the second respondent, who lodged the complaint, in her statement under Section 164 Cr.P.C., stated that she strongly suspects that Sri Sai Satyaniranjan Rao (A1) by colluding with his Directors has produced a false person in the name of C.R.Mohan Rao (A2) and availed extended credit facility by the Bank and that, at the time of above loan, A5 being the then Assistant General Manager released the adhoc limit without obtaining additional security; A6 being the then Chief Manager has not properly verified the title deeds and did not identify the guarantor which resulted impersonation; and A-7 being the then Chief Manager has debited the loan amount without debiting C.C. account towards commission for opening letter of credits though the account is irregular. 11. In his statement under Section 164 Cr.P.C., the Chief Manager (Vigilance Department) of the Bank stated that as per their investigation they have noticed some procedural lapses on the part of their staff. At the time of above loan, A-5 being the then Assistant General Manager has released the adhoc limit without obtaining additional security, A-6 the then Chief Manager has not properly verified the title deeds and did not identify the guarantors which resulted impersonation, and A-7 being the then Chief Manager debited the loan amount without debiting the amount towards margin/commission for opening letter of credits though the account is irregular. 12. Having regard to the facts and circumstances of the case, the observations made in the decisions cited supra and the statements of the second respondent and the Chief Manager (Vigilance Department) recorded under Section 164 Cr.P.C., I find force in the contention of the learned Senior Counsel appearing for the petitioners that the allegations made against the petitioners in the complaint as well as the charge sheet are only procedural lapses in discharging their official functions and so initiation of criminal proceedings against them in the absence of any accusation or allegation of abetment on their part in commission of offence is an abuse of process of law and that the averments made against the petitioners either in the report or in the charge sheet, prima facie, do not constitute any offence much less the charges framed against them for the offences and if the proceedings against them are allowed to continue, it is nothing but harassment and even abuse of process of law, and so the same are liable to be quashed. The case on hand clearly falls under the guideline Nos.1, 3 and 5 extracted supra laid down by the Supreme Court in Bhajanlal’s case (3 supra). I am also in agreement with the contention of the learned Senior Counsel, relying upon the observations made in C. Chenga Reddy’s case (1 supra), that violation of any circulars and instructions and commission of administrative irregularities cannot be said to have been done by the official concerned with any corrupt or dishonest intention and such irregularities or administrative lapses could only have resulted in a departmental action against the officials but criminal prosecution is not justified. 13. Therefore, I hold that continuation of proceedings against the petitioners in C.C.No.1444 of 2004 on the file of the XI Additional Chief Metropolitan Magistrate, Secunderabad, is nothing but an abuse of process of law and the same are liable to be quashed. 14. Accordingly, these criminal petitions are allowed quashing the proceedings in C.C.No.1444 of 2004 on the file of the XI Additional Chief Metropolitan Magistrate, Secunderabad, so far as the petitioners – accused Nos.7, 5 and 6 only. __________________ A. GOPAL REDDY, J 30th September 2010 Note:- L.R. Copy to be marked. (B/o) KH [1] AIR 1996 SC 3390 [2] 1996 (2) ALT (CRI) 682 [3] AIR 1992 SC 605 [4] 2002 (3) SCC 89