IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY THE NINETEENTH DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.16595 of 2000 Between: 1 Gajender Pal Singh S/o.Mahinder Pal Singh, Hindu Central Bank of India, Forest Research Institute Branch, Dehradun, Uttar Pradesh State. 2 Shivasankaran Kannan, S/o.K. Sivasankaran, Hindu Central Bank of India, Astley Hall Branch, Dehradun, Uttar Pradesh State. 3 Duvvuri Bapanna, S/o.Gangadharam, Hindu, Central Bank of India, Musheerabad Branch, Hyderabad. ..... PETITIONERS AND 1 The Station HOuse Officer, Musheerabad Police Station, Musheerabad Hyderabad. 2 M. Balakrishnna Reddy, I.F.S., Resident of Door No.1-4-880/36/9/1, New Bakaram, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a Writ of Mandamus or any other appropriate Writ order or direction, declaring the proceedings in Crime No. 182 of 2000 on the file of the 1st respondent as illegal, and not maintainable and consequentially Quash the same and pass such other order or orders as deem fit and proper in the circumstances of the case. Counsel for the Petitioner:MR.M.CHANDRASEKHAR REDDY Counsel for the Respondent : MR.CH.DHANAMJAYA FOR R GP FOR HOME FOR R The Court made the following: Form-NIC-OGS/WP{BDLNM} THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.16595 of 2000 O R D E R: The Branch Manager and Chief Manager of Central Bank of India, Dehradun, Upptar Pradesh and the Branch Manager of the Central Bank of India, Musheerabad are the petitioners 1, 2 and 3 herein respectively. They filed the present writ petition seeking to issue a Writ of Mandamus to quash the proceedings in Cr.No.182/2000 on the file of the Station House Officer, Musheerabad P.S, which was registered on the complaint made by the 2nd respondent herein. 2. The 2nd respondent Mr.Balakrishna Reddy, Indian Forest Service, lodged a complaint, based on which the Station House Officer, Musheerabad PS registered a case in Cr.No.182/2000 on 13.06.2000 against the petitioners herein for the offence punishable under Sec.420, 403 and 477-A of IPC. The contents of the complaint are that the complainant opened a savings bank account No.16649 at Central Bank of India, Musheerabad branch and a cheque bearing No.63197, dated 15.02.2000 drawn on Union Bank of India, Forest Research Institute Branch, Dehradun for an amount of Rs.2,56,094/- was deposited in his account at the Central Bank of India, Musheerabad branch on 22.02.2000. The cheque was issued by the Director, Indira Gandhi National Forest Academy, New Forest, Dehradun, Uttar Pradesh towards his back wages. Thus the 2nd respondent/complainant is the account holder in the Central Bank of India, Musheerabad branch and therefore, the said cheque issued by the employer of the complainant drawn on Union Bank of India, Dehradun was deposited in the current account of the complainant in the Central Bank of India, Musheerabad branch. The cheque was honoured by the drawee branch i.e. Union Bank of India, Dehradun and remitted the same to the Central Bank of India, Dehradun for the purpose of transmitting the same amount to the account of the complainant at Musheerabad branch. Out of the total cheque amount of Rs.2,56,094/- an amount of Rs.2,30,000/- was deducted by the Central Bank of India, Dehradun branch and the remaining amount of Rs.26,094/- was deposited in the account of the complainant at the Central Bank of India, Musheerabad branch on 29.03.2000. Thus, it is the case of the 2nd respondent/complainant that the writ petitioners 1 and 2 being Branch Manager and Chief Manager of the Central Bank of India, Dehradun branch, entered into conspiracy and defrauded the complainant for a sum of Rs.2,30,000/- and remitted only Rs.26,094/- to the current account of the petitioner at the Central Bank of India, Musheerabad branch. 3. It is the case of the petitioners that the Central Bank of India is a Nationalized Bank having its branches through out the country and the 2nd respondent is having an account in the Central Bank of India at Musheerabad Branch and he has deposited a cheque for of Rs.2,56,094/- on 22.02.2000 at Musheerabad branch which was drawn on Union Bank of India, Dehradun branch and the said cheque was sent for realization in normal course of business to the Central Bank of India, Dehradun branch. 4. It is stated that the 2nd respondent/complainant obtained a credit card in his name from the Central Bank of India, Dehradun branch in the month of March, 1995 while he was at Dehradun. The said card is known as Central card. Though he used the said card liberally, but did not pay the amount to meet the purchase bills. Therefore, the Branch Manager, Central Bank of India, Dehradun branch filed O.S.No.26/98 on the file of the 1st Additional Civil Judge, Senior Division, Dehradun against the 2nd respondent herein for recovery of Rs.96,742/- with future interest at the rate of Rs.2.5% per month. It is stated that the 2nd respondent also availed a term loan of Rs.30,000/- for purchasing of goods in the month of February, 1995, which was not repaid and committed default. Therefore, the Branch Manager, Central Bank of India, Dehradun filed another suit O.S.41/1998 on the file of the 1st Addl.Civil Judge, Senior Division, Dehradun for recovery of Rs.36,716/- with future interest and costs. The 2nd respondent at the time of taking the Central Card and availing the term loan, he was working in Indira Gandhi National Forest Academy, Dehradun. In the above pending suits, two applications have been moved seeking attachment of amounts payable to the 2nd respondent, by the Indira Gandhi National Forest Academy, Dehradun, and by order dated 18.02.2000 both the applications were ordered for attachment of an amount of Rs.1,75,000/- and Rs.55,000/- respectively until further orders. In spite of the said attachment orders, the amounts payable to the 2nd respondent were not withheld by the Director of Indira Gandhi National Forest Academy, Dehradun and the 2nd respondent managed to obtain the aforesaid cheque only with a view to frustrate the said applications though he was aware of pendency of the said suits. The 2nd respondent failed to contest the said suits and accordingly, the said suits were decreed as prayed for on 30.05.2000. 5. Be that as it may, from out of the cheque amount presented by the 2nd respondent/complainant, the Central Bank of India, Dehradun after collection of the amount, deducted a sum of Rs.2,30,000/- and the remaining amount of Rs.26,094/- was paid to his current account. Thus, it is the case of the petitioners that the contents of the complaint alleging that the petitioners are forged the relevant documents and fraudulently obtained the signatures of the 2nd respondent/complainant are incorrect and the bank is entitled to set off the dues under the term loan and Central card obtained by the 2nd respondent and there was no any mala fide, arbitrary or criminal intention on the part of the petitioners and therefore, the petitioners are not liable for the prosecution. 6. The 2nd respondent filed counter stating that the claim of the petitioners for recovery of the said alleged amount is exaggerated and only an amount of Rs.57,998/- is due and payable as on 15.10.1999 and the suit filed for a sum of Rs.96,742/- is false and fraudulent, and further stated that he has not availed the term loan for Rs.30,000/- but the petitioners are forged certain records showing that he has availed the loan. It is further stated that a case was registered in Garhi Police Station, Dehradun on a complaint lodged by the 2nd respondent against Mr.Solanki, the then Branch Manger of the Central Bank of India, Dehradun and the suit O.S.No.41/1998 filed before the Civil Court, Dehradun was initiated by the said Mr.Solanki only to escape from the criminal liability in the matter. The petitioners obtained ex parte attachment orders against the 2nd respondent on 18.02.2000, whereas the cheque issued by the Director of Indira Gandhi National Forest Academy, Dehradun was dated 15.02.2000 and withholding the suit amount from the said cheque amount is illegal and fraudulent and therefore, the petitioners are liable for criminal prosecution for the offence under Sec.420, 477-A, 403 r/w.sec.120-B IPC. It is stated that the complaint discloses cognizable offences, as such the registration of the First Information Report is legal and valid. 7. Heard on either side and perused the material available on record. 8. The facts born out from the record goes to show that the 2nd respondent, while he was working at Indira Gandhi National Forest Academy, Dehradun, obtained a credit card bearing No.5414 4500 0995 1506 from the Central Bank of India, Forest Research Institute Branch Dehradun in the month of March, 1995 and he failed to discharge the purchase bills though he availed the card liberally. Accordingly, the Bank filed a suit against him for recovery of amounts along with service charges for a sum of Rs.96,742.76 ps on 04.02.1998 in O.S.26/1998 on the file of the 1st Addl.Civil Judgde, Senior Division, Dehradun. It is also born out from the record that the 2nd respondent has also availed a term loan of Rs.30,000/- by executing necessary documents with the then Branch Manager, Mr.Solanki and failed to pay the said amount. It is also stated that the 2nd respondent also executed a letter of authority dated 06.02.1995 authorising the Director, Indira Gandhi National Forest Academy, Dehradun to remit the instalments from his salary and pay to Central Bank of India. Thus, it is the case of the petitioners that there was no any forgery, conspiracy or fraudulent action with regard to the availing of the term loan and obtaining the Central Card from the Central Bank of India by the 2nd respondent. It is stated that in fact, no criminal case has been filed against Mr.Solanki, the then Manager as alleged by the 2nd respondent in his complaint. For recovery of the term loan amount O.S.41/1998 was filed on the file of the 1st Addl.Civil Judge, Senior Division, Dehradun against the 2nd respondent within the period of limitation and in both the suits an order of attachment was obtained and during subsistence of attachment orders, the 2nd respondent received the said cheque and deposited same with the Central Bank of India at Musheerabad Branch. 9. It is stated that before filing the complaint, the 2nd respondent filed CD.803/2000 before the Consumer Disputes Redressal Forum, Hyderabad-I complaining about the adjustment of loan amount by the Central Bank of India, Dehradun branch from the proceeds of the cheque without his consent, and the District Consumer Disputes Redressal Forum allowed the complaint. Aggrieved by the same, the Central Bank of India filed F.A.411/2000 on the file of the A.P.State Consumer Disputes Redressal Commission, Hyderabad and the said Commission held that the Central Bank of India can exercise the right of set off for the loans availed at Dehradun branch and there is no deficiency in the service of the Bank. However, pursuant to an observation made by the said Commission that it is open for the 2nd respondent to approach the Civil Court or other Forum for redressal of his grievances, the 2nd respondent resorted to file a false complaint alleging the criminal liability on the part of the petitioners. It is stated that the deduction of Rs.2,30,000/- was the due payable by the 2nd respondent to the Central Bank of India, Dehradun and after deducting the said amount, remitting the balance amount of Rs.26,094/- to the credit of the account of the 2nd respondent at Central Bank of India, Musheerabad branch is not illegal and arbitrary and there is no any criminal action being taken on the part of the petitioners against the 2nd respondent. 10. The petitioners are representing the Nationalized Central Bank of India and they were discharging their duties as responsible bank officers. The fact that the 2nd respondent while working at Dehradun, has taken the credit card and also availed the term loan are not in dispute. The suits filed by the Central Bank of India, Dehradun are also not in dispute. The 2nd respondent could not dispute that there was an order of attachment in both the suits and subsequently they were decreed. If there was any dispute, the 2nd respondent could have contested in the said suits, but for the reasons best known to him, he has chosen not to contest and therefore, it cannot be said that the said suit amounts are not due and payable by the 2nd respondent to the Central Bank of India. When there was an order of attachment, the employer at Dehradun ought not to have given cheque drawn on Union Bank of India to the 2nd respondent/complainant, which was presented to be credited into his current account at Central Bank of India of Musheerabad branch. The cheque presented at Central Bank of India, Musheerabad was sent for realization to Central Bank of India, Dehradun and as the said suit amounts are recoverable with the Central Bank of India, the Central Bank of India at Dehradun branch deducted and set off the suit amounts and credited the remaining amount to the current account of the 2nd respondent at Musheerabad branch. 11. I am of the opinion that there was no fraud, conspiracy, and forgery on the part of the petitioners as alleged by the 2nd respondent. The aforesaid transactions are purely banking transactions or civil in nature and therefore, it cannot be said that there was mens rea, and criminal intention on the part of the petitioners to defraud the 2nd respondent/complainant in respect of the money payable by himself to the Central Bank of India. 12. A Division Bench of this Court in the case of Central Bank vs. Taraka Prabhu Publishers Pvt.Ltd.[1] held that when borrowed loan amount from the bank has been failed to be repaid, the bank is entitled to set off all claims of the bank. It was also further held that such matters fall within the domain of Law of Contract and the right of set off claimed by the Banks cannot be denied on the pretext that the transfer of the amounts in the current account will result in negation of the activities of the creditors in their activities. It is further stated that such actions of the Bank for enforcement of doctrine set off for the amounts realized by the bank is also in the ultimate analysis in public interest and cannot be termed as arbitrary or mala fide. The parties cannot wriggle out of their contractual obligations by pleading that their fundamental rights are affected if terms of the contract are enforced against them. 13. The Supreme Court in the case of Syndicate Bank vs. Vijay Kumar[2] also held that by mercantile system, the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of customer in the ordinary course of Banking business and that the general lien is a valuable right of the Banker judicially recognized in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer’s debit balance. Such a lien is also applicable to negotiable instruments including FDRs, which are remitted to the Bank by the customer for the purpose of collection. 14. In view of the aforesaid facts of the case, as the petitioners while working as Branch Manager and Chief Manager have exercised the general lien over cheque deposited by the 2nd respondent by deducting the suit amounts, and as the 2nd respondent did not contest the suits, it cannot be said that there is a fraudulent action on the part of the petitioners in deducting the suit amounts and crediting the balance amount to the current account of the 2nd respondent. Merely because the State Consumer Disputes Redressal Commissioner observed that it is open for the 2nd respondent to approach Civil Court or other Forum for redressal, it cannot be said that it was open for the 2nd respondent to file a criminal complaint, as there was no any criminal action on the part of the petitioners. If there was any dispute with regard to the amounts due and payable, it was always open for the 2nd respondent to dispute and contest the suits. Having failed to contest the suits and having disputed the credit amounts due and payable by the 2nd respondent on the Central Credit Card as well as term loan, it cannot be said that the 2nd respondent was not due and payable the amounts and the petitioners have fraudulently credited the amounts. 15. In view of the aforesaid discussion, I am of the opinion that as there was no any criminal action on the part of the petitioners in respect of the 2nd respondent/complainant, the 1st respondent ought not to have registered a case in Cr.No.182/2000 against the petitioners. 16. Accordingly, the Writ Petition is allowed, quashing the crime No.182/2000 pending against the petitioners on the file of the Station House Officer, Musheeraba P.S. No order as to costs. ___________________ V.ESWARAIAH,J Dated: 19.06.2008 Dsr ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1 The Station HOuse Officer, Musheerabad Police Station, Musheerabad Hyderabad. 2.2CCs to 3.2CD copies [1] AIR 1991 Andhra Pradesh 258 [2] 1992 Bank.J.641