1 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. CRIMINAL APPLICATION NO.: 1796 OF 2008 Subhash S/o Rajaram Patil Versus State of Maharashtra and another. *** CRIMINAL APPLICATION NO.: 1802 OF 2008 Madhukar Tukaram Choudhari, Versus State of Maharashtra and another. *** CRIMINAL APPLICATION NO.: 1803 OF 2008 Sudambhai Mangu Patil Versus The State of Maharashtra and another. *** Mr. R. S. Deshmukh, Advocate for the Applicant. Mrs. B. R. Khekale, A.P.P. for the Respondent/ State. Mr. S. B. Yawalkar, Advocate for Respondent No.2. *** 1. Heard learned counsel for the respective parties. Rule. By consent of the parties, rule is made returnable forthwith and heard finally. 2. These three applicants are taken together, arising out of Crime No.11 of 2008 dated 22nd February, 2008 registered with Jalgaon City Police Station. The applicants herein, by invoking provisions of section 482 of Criminal Procedure Court have urged to quash the prosecution launched against them. The Applicant Subhash (Application No.1796 of 2008) 2 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. [retired on 30th June, 2008], is the Incharge General Manager of the Bank. The Applicant Madhukar (application NO.1802 of 2008) is the Recovery Manager working in the bank while the Applicant Sudambhai (application 1803 of 2008) is Managing Director of the Bank (Incharge), retired on 31st May, 2008. 3. The counsel Mr. Deshmukh, while meticulously analysing the documents and correspondence, coupled with various entries, affidavit, notices, contended that the three officers of the bank, having shown their duty to resist the Directors' activities to square off the loan by accepting meagre amount as eyewash of settlement, have been paid the reward of prosecution by the Auditor. It is contended, such prosecution is a mere abuse. The bank has inherent powers to set off into a non-performing asset and to write-off the interest if the bank feels that recovery has become only a farce. 4. The factual matrix, not in dispute, is a loan was advanced to Sant Muktai Sansthan, Muktainagar, to the extent of initial Rs.30 Lakhs [extended to 89 Lakhs and odd]. There was also cash credit facility to the said 3 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. institution. 5. Chairman of institution is one of the Director of the said bank. Indeed as per the banks rules and R.B.I. directives there is inhibition for advancing loan to the sister concern wherever the director is personally involved. However, obliterating such statutory arrangement disbursements were made, even requisite precaution to get proper surety was not followed. The amount as against the said Muktabai Sanstha was allowed to be piled up and mounting. On 22nd February, 2003 there was an amount of Rs. 1,23,61,807/- towards the said society. It is contended that the present applicant and particularly Applicant Sudambhai has objected to giving concession, however, without resorting to his objections the bank management proceeded to give concession in waiver of the interest. 6. It is matter of record, there was a recovery certificate in favour of the bank effective from 1998. It is pointed out by Mr. Deshmukh by reading paragraph 7 of the petition, that the recovery certificate was tried to be executed by putting property of the said Sanstha 4 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. for sale through open auction in the year 1999 to 2001 however the things could not be materialised as no bidder could come forward. It is under these circumstances that on 11th February, 2003 the President of the said Sanstha submitted an application with the Chairman of the Bank requesting to waive amount of loan and interest thereon by accepting meager amount. The matter was referred, based on the resolution of the bank, to the authorities in cooperative department, however such exercise was apparently not done in time but request was made beyond 26th February, 2003. 7. At this stage of the matter, the recitals in the F.I.R. will have to be taken into consideration. Though, as stated earlier, a meticulous narration, as to how the present applicants could not be held responsible, was advanced. The allegations from the Auditor are in a concert, these applicants in order to put the bank to financial losses, have extended concession/ waiver in interest that to the hopping sum of Rs.1,27,94,245/-. This aspect was not indicated to the authorities when the matter was to be heard for fixing liability/ responsibility. 5 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. 8. On 4th September, 2006 fictitious accounts were prepared and an amount of Rs.89,16,999/- were shown as due. The F.I.R. if taken to its face value, at this stage, indicate involvement of the accused applicant. This court is not required to address on merits of prosecution. 9. Counsel for the Applicants took recourse to the judgment in the matter of "Som Mittal V/s Government of Kaqrnataka" [ (2008) 3 SCC 574] and particularly paragraph 8 therein. IN the said paragraph, Honourable Lordships of the Apex Court taking recourse to the judgment of "State of Haryana V/s Bhajan Lal" [1992 SCC (Cri) 426] highlighted that the terms indicated therein in view of section 482 needs to be adhered.. These terms were precisely to be followed but they cannot be treated to be rigid formula or there cannot be an exhaustive list of the circumstances in which the powers under section 482 Cr.P.C. could be exercised. 10. Counsel placed reliance to the judgment in the matter of [ (2006) 5 SCC 302] "Salim Akbarali Nanji V/s Union of India and others", it was a case of 6 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. recovery of debts and non-performing assets of the bank and writing off N.P.A. The observations of the Honourable Lordships were in relation to the bank's powers of treating the loss and converting them. However, the fact therein dealt with the powers conferred to Reserve Bank of India, in relation to various sections of Securitisation Act and section 19, 31-A of Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Those principles will not be applicable to the facts herein as the request is for quashment of F.I.R. under section 482 of the Criminal Procedure Code. 11. At this stage, it is not expected to have meticulous investigation of the analysis as has been tried to be done by the learned counsel. The fact remains on prima facie reading F.I.R. there is specific attribution as against the accused applicant to their role in dealing with the financial transactions of the bank and putting the bank into losses owing to embezzlement of huge amount. 12. The counsel representing the Auditor informed that the F.I.R. is at the stage of investigation and 7 FARAD CONTINUATION SHEET NO. IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD. Office Notes, Office Memoranda of Coram, appearances, Court’s orders or directions Court’s or Judge’s orders. and Registrar’s orders. governed by sections 154 to 173 of Criminal Procedure Code. Therefore, having gone through the said provisions it is amply clear that the manner and method of conducting the investigation are left entirely to the officer in-charge of the police station. Chapter 14 of Code of Criminal Procedure, gives powers of investigation into congnizable offences. At the stage of investigation of F.I.R. generally the Court should not interfere with the investigation. 13. I quite see that, at this stage, it is not proper to go into truthfulness, sufficiency and acceptability of the material produced by the present applicants. The case being, at the stage of investigation and consequently, based only on the F.I.R. I find that it is not abuse of process of law. The applications seeking to quash the proceeding being without merit, are dismissed. The observations are prima facie in nature. Rule discharged. Interim protection vacated. [K. U. CHANDIWAL, J.] Dated:10/08/2009. ans/1796