1 Criminal Application No.4488/2010 IN THE HIGH COURT OF JUDICATURE OF BOMBAY, BENCH AT AURANGABAD CRIMINAL APPLICATION NO.4488 OF 2010 Shekhar s/o Bhaskar Borhade & ors. ... APPLICANTS VERSUS The State of Maharashtra & ors. ... RESPONDENTS ..... Shri R.N. Dhorde, Advocate holding for Shri S.B. Jadhav, Advocate for applicants Shri D.R. Korde, A.P.P. for respondent No.1. Shri S.P. Brahme, Advocate for respondent No.2 Shri N.B. Suryawanshi, Advocate for respondent No.3. ..... CORAM : K.U. CHANDIWAL, J. DATED : 29th June, 2011. PER COURT : 1. Heard both the counsel extensively. The applicants question legality and propriety of F.I.R. dated 25.11.2009, vide C.R. No.144/2009 with Loni Police Station for offences punishable under Sections 406, 408, 409, 420 and 120-B of the Indian Penal Code, at the instance of respondent, the Auditor. 2. Several features of the matter are analysed threadbare by the respective counsel. The credit Co-operative Society (respondent No.3), in its affidavit-in-reply, in material 2 Criminal Application No.4488/2010 terms, supports the cause propagated by the accused/ applicants, Directors, Chairman of Society. 3. The grievance of the applicants is, the respondent No.2, the auditor, by acting as a tool in the hands of a political figure in the District, lodged false prosecution. To highlight the instances, reference was given to a notice issued under section 82 of the Maharashtra Cooperative Societies Act, dated 12.10.2009, which mandatorily incorporate three months period to rectify the deficiencies. Without allowing the ink of the said notice to be dried, F.I.R. dated 25.11.2009 is initiated against the accused/ applicants. The learned counsel read the observations of the brother Judge recorded while releasing the Directors/ the accused/ applicants on bail, to impress the legal position. He criticised conduct of the Government Pleader at Ahmednagar, in giving a favourable opinion to the auditor to initiate criminal prosecution against the accused/ applicants. It is repeated, none of the ingredients of criminal prosecution are surfaced to allow the F.I.R. to remain in force. Its continuation is an abuse of process of Court. Learned counsel relied to the celebrity judgment in the matter of (State of Haryana Vs. Bhajanlal & ors, (1992 SCC (Cri.) 682). 4. The learned counsel for the respondent No.2, auditor, has also threadbare dealt with submissions to inform 3 Criminal Application No.4488/2010 that user of powers under Section 482 of the Criminal Procedure Code should not be routine feature and in exceptional circumstances when there is apparent error and the omission is manifested with malices, the powers should be exercised. The learned counsel placed reliance to the judgment in the matter of S.M. Datta Vs. State of Gujarat & anr. reported in Judgment Today 2001 (6) SC 361 ( AIR 2001 SC 2353). 5. In the matter ofr Rajesh Bajaj Vs. State NCT of Delhi & Ors. (1999 Cri.L.J. 1833), the Hon’ble Lordships have observed in para No.9 as under : “It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has been laid in the complaint the Court should not hasten to quash criminal proceedings during investigation stage merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence. In State of Haryana V. Bhajan Lal AIR 1992 SCW 237 (supra) this Court laid down the premise on which the FIR can be quashed in rare cases. The following observations made in the 4 Criminal Application No.4488/2010 aforesaid decisions are a sound reminder (para 109 of AIR) “We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.” This legal position need not be obliterated to accept that the F.I.R. of the auditor is short of details of fabrication of several loan documents. 6. The scheme of section 82 of the Maharashtra Cooperative Societies Act creates an obligation on the Credit Co-operative Society when deficiencies are pointed by the auditor to carry rectification of the defects in the accounts. Society has to regularise the irregularities and report to the Registrar the action taken by it thereon. Thus, Section 82 deals with rectification of defects in the accounts of irregularities. It will not provide a licence to create illegalities and to perpetuate the same. Pending such action, criminal prosecution is not inhibited. Reference repeatedly to Section 82 in the present scenario is not applicable. 5 Criminal Application No.4488/2010 7. The instances quoted in the F.I.R. highlight a very startling situation. It shows, how a person in authority has placed regular norms of conduct of business to shelves. The funds of society are calculatedly diverted for personal gains. Loan was disbursed to Oriental Infocare Solution Pvt. Ltd. to the tune of around Rs.20 Lakhs. The said disbursement was certainly in contravention of the bye-laws, there was a ceiling limit of Rs.1,50,000/-, however, bye-passing all the rules and regulations, such loan was disbursed. Another feature of the matter is, the petitioners/ applicants accept that such loan was availed by applicant No.1 and his other family members, this is so indicated in the format of the loan application and the account statement. On the date of audit there was staggering balance in the said loan account, amount was allowed to be piled up. However, no sooner the F.I.R. is lodged, Rs.6,50,000/- are deposited on 9.12.2009 and Rs.1,19,000/- on 15.12.2009. This shows the mindset of the applicants to deal with the Co- operative Society. The faith of the borrowers/ depositors had in the society is systematically tried to be squeezed and consequently the depositors' hard earned money was duped. Incomplete documentation are quoted in the F.I.R. The deception and cheating is primarily established, as indicated in Section 420 of the Indian Penal Code, surfacing at the threshold in the transaction actuated by the accused/ applicants in the capacity as Directors. 6 Criminal Application No.4488/2010 8. The Manager or the staff of the Society representing respondent No.3 are stooge and shadow of applicants and consequently towed and adhered to their command without adherence to the rules. Repayment of loan would not mitigate criminality in the conduct. It was Auditor who has raveled the bunglings in the management. 9. The legal position has again been reiterated by the Apex Court in the matter of Hardeo Singh Vs. State of Bihar & others (AIR 2000 SC 2245). In the said case, the borrower came with the defence that since after lodging F.I.R. they have cleared the dues/ borrowed money and consequently no criminal liability exists. The Hon'ble Apex Court did not approve such practice/ such mode and informed that, petition to quash is beyond the scope of exercise of powers under Section 482 of the Criminal Procedure Code. 10. In the matter of Preeti Gupta & anr. Vs. State of Jharkhand [2010 ALL MR (Cri) 2947 (S.C.)], the Hon'ble Lordships have referred judgment in the matter of State of Haryana indicated hereinabove and also to the judgment in the matter of Indermohan (2007 (12) SCC 1). The Hon'ble Lordships of the Apex Court observed in para 25 of the said judgment : 7 Criminal Application No.4488/2010 "Inherent powers under Section 482, Cr.P.C., though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the Court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the Statute.” 11. Reverting back to the position of the F.I.R., to illustrate other events, society has not invested the deposits to the tune of 30% of the total deposit, due to which the liquidity of the society has come down. The recovery of the disbursed loan is contrary to rules. The F.I.R. also illustrate the Board of Directors have also fabricated the record to show the society is in profit. On the contrary, the penalty that has been shown as income could not have been so credited to the account as has been done, illegally. It was a camouflage and an eye wash to show that the affairs of the society are in profit. However, it was not so. The credit entry of Rs.2,86,726/- was illegal and the society was apparently seen in losses nearly of Rs.85 Lakhs. The account statements were prepared to mislead account holders or the depositors. 12. Survey of above facts, primarily indicate that lodging of F.I.R. cannot be said to be sole purpose to pressurise the accused/ applicants to succumb to the demands of the 8 Criminal Application No.4488/2010 political barons in the district. Consequently, application lacks merits, dismissed. Observations are prima facie in nature. (K.U. CHANDIWAL, J. ) fmp/cri4488.10