IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN TUESDAY, THE 3RD AUGUST 2010 / 12TH SRAVANA 1932 Crl.MC.No. 937 of 2006() ------------------------ CC.103/2006 of CHIEF JUDICIAL MAGISTRATE COURT, KASARAGOD .................... PETITIONER(S)/ACCUSED 5 AND 7: ----------------------- 1. MODEEN KUNJU, S/O. ABDUL KHADER, AGED 74 YEARS, AZAD MANZIL, KUTTIKKUL, VIDYA NAGAR, KASARAGOD. 2. ZOURABI, W/O. MOIDEEN KUNJU, AGED 64 YEARS, AZAD MANZIL, KUTTIKKUL, VIDYA NAGAR, KASARAGOD. BY ADV. SRI.K.M.SATHYANATHA MENON RESPONDENT(S)/COMPLAINANT & STATE: ----------------------------------- 1. THE LORD KRISHNA BANK LTD., REPRESENTED BY ITS BRANCH MANAGER K.C. SHEFEEQ, KASARAGOD. 2. THE STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. PUBLIC PROSECUTOR SMT.REKHA C. NAIR SRI.GEORGE VARGHESE (MANACHIRACKEL) FOR R1 THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 27/07/2010, THE COURT ON 03/08/2010 PASSED THE FOLLOWING: ORDER ON CRL.M.A.NO.1475 OF 2006 IN CRL.M.C.NO.937 OF 2006 DISMISSED. 03.08.2010 SD/- S.S.SATHEESACHANDRAN, JUDGE //TRUE COPY// P.A. TO JUDGE S.S.SATHEESACHANDRAN, J. --------------------------------------- Crl.M.C.No.937 of 2006 --------------------------------------- Dated this the 3rd day of August, 2010 O R D E R The above petition has been filed by two accused (accused 5 and 7) in C.C.No.103/06 on the file of the Chief Judicial Magistrate, Kasaragod to quash the criminal proceedings against them under Section 482 of the Code of Criminal Procedure. The first petitioner/5th accused is reported to have passed away during the pendency of the above petition, and so much so, petition survives for consideration only as against the other petitioner/7th accused in the case. 2. The first respondent bank had filed a complaint against the petitioners and 5 others imputing the offence under Section 420 of the Indian Penal Code against them in relation to the security furnished to avail a Crl.M.C.No.937 of 2006 :: 2 :: loan from the bank for the business operation of the 1st accused, a partnership concern. The case of the allegations imputed to constitute the offence alleged against the accused is that the 3rd accused, the then Manager of the Kasargod Branch of the complainant bank with the active connivance and assistance of the 4th accused, an approved valuer of the bank, colluded with the other accused, the firm and its partners, in causing production of a valuation certificate much in excess of the value of the property offered as security by way of a mortgage to avail the financial facility by way of a loan for the firm - 1st accused, from the bank. Two items of properties belonging to the 2nd accused were offered as collateral security by way of Crl.M.C.No.937 of 2006 :: 3 :: mortgage for the loan facility and in respect of the second item, having an extent of 8.36 acres of land in Meecha Village, after inspection of the land with the 3rd accused and the 2nd accused – the Managing Partner of the 1st accused firm, the valuer – the 4th accused had produced a certificate showing the value of the land at Rs.75.24 lakhs and that was acted upon by the bank to extend the loan to the firm. After a span of three years, the bank conducted a revaluation of the properties offered as security through the same valuer/4th accused and then he had produced a valuation certificate showing the value of the above land at Rs.1.67 lakhs. On verification of the two valuation certificates, the bank had come to the conclusion that some other property had Crl.M.C.No.937 of 2006 :: 4 :: been valued as item No.2, and a value much in excess of item No.2 of property was shown in the certificate of 5th accused. That was done intentionally by the manager/3rd accused, and the 4th accused, in collusion with the other accused firm and its partners, to deceive and defraud the bank, is its case to prosecute all the accused, accused 1 to 7, for the offence punishable under Section 420 of the Indian Penal Code. 3. I heard the learned counsel for the second petitioner and also the learned counsel for the first respondent bank. The complaint does not spell out the complicity of the firm or its partners, leave alone the second petitioner in the acts alleged to have been committed by the Manager of the complainant Crl.M.C.No.937 of 2006 :: 5 :: bank and its approved valuer, and so much so, prosecution of the second petitioner for the offence under Section 420 of the Indian Penal Code would only be an abuse of the process of the court, is the submission of her counsel. Wrongful gain was made by the firm and its partners and wrongful loss was caused to the complainant bank by the deception carried out in production of a valuation certificate over item No.2 of the property offered as security for availing the loan and that act was committed by all the accused conjointly with the intention to deceive the bank, submits th learned counsel for the complainant bank. The beneficiaries, who have enjoyed wrongful gain by virtue of the false valuation certificate produced, are the firm and its partners, and Crl.M.C.No.937 of 2006 :: 6 :: the role played by each of the partners in collusion with the Manager/3rd accused and the approved valuer of the bank - 4th accused, is a matter to be established by letting in evidence in the complaint, and on the face of the two valuation certificates produced by the 4th accused in respect of the very same property with the certificates prepared over a span of three years, but showing gross dis- proportionality in the value of the secured property, is itself sufficient to show the complicity of all the accused prima facie for the offence imputed and it was rightly so taken cognizance of by the learned Chief Judicial Magistrate and, necessarily, the complaint has to reach its logical conclusion, affording an opportunity to the complainant bank to Crl.M.C.No.937 of 2006 :: 7 :: establish its case, is the further submission of the learned counsel for the bank. 4. Perusing the complaint, a copy of which is produced as Annexure V, I find it difficult to accept the submissions made by the learned counsel for the bank. The only allegation imputed against accused 5 to 7 is that the act of cheating committed by accused 1 to 4, the firm/1st accused, its Managing Partner/2nd accused, the Manager/3rd accused and the approved valuer of the bank/4th accused was done 'with the knowledge of accused 5 to 7, who are partners of the said firm'. Dishonest intention of the accused in the commission of the act constituting the offence of cheating is an essential ingredient to prove his/her complicity in such offence. Even assuming that Crl.M.C.No.937 of 2006 :: 8 :: the Managing Partner or one or the other partner were also parties to the deception and fraud alleged to have been committed by the Manager and approver of the bank accused 3 and 4, it is not possible to rope in all the partners of the firm with a mere statement that they too had knowledge as to the acts of deception committed by some others. Something more must be established that such partners were also involved and they too had the dishonest intention in deceiving the bank by producing false valuation certificates from the 4th accused, the valuer with the assistance of the Manager of the bank. There is nothing to indicate that the second petitioner, a lady, who shown to be aged 62 years when the complaint was filed in 2005 was actively Crl.M.C.No.937 of 2006 :: 9 :: engaged in the business activities of the firm/1st accused, to which the loan had been extended by the bank, on the basis of the security offered including the mortgage created over the properties of the 2nd accused Managing Partner of the firm. Prosecution of the second petitioner for the offence under Section 420 of the Indian Penal Code on the basis of the complaint, in the facts and circumstances of the case, and the nature of the vague allegations set out in the complaint i.e. As a partner, she too had knowledge of the cheating committed by accused 1 to 4 is not only conducive to justice, but would amount to abuse of the process f the court. The criminal proceedings as against the 2nd petitioner (7th accused) in C.C.No.103/06 on the file of the Crl.M.C.No.937 of 2006 :: 10 :: Chief Judicial Magistrate, Kasargod is accordingly quashed. Crl.M.C is accordingly allowed. Sd/- (S.S.SATHEESACHANDRAN) JUDGE sk/ //true copy// P.S. to Judge.