IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. Cr.MMO No. 26 of 2009 Judgment reserved on : 5.11.2009 Date of decision : 7.11. 2009. Parveen Kumar Jain and others …Petitioners. Versus C.B.I. and another ....Respondents. Coram The Hon’ble Mr. Justice Kuldip Singh, Judge. Whether approved for reporting ? Yes For the Petitioners : Mr. Ramakant Sharma , Advocate. For the Respondents : Mr. Sandeep Sharma, Asstt. Solicitor General of India, for respondent No.1. Mr. K.D.Sood, Advocate for respondent No.2. __________________________________________________________ Kuldip Singh, Judge This petition has been filed under Section 482 Cr.P.C. for quashing the proceedings arising out of RC (E)/2007/EOW-1 Del. Dated 30.4.2007 (Special Judge case No. COR 6 of 2008 CBI - v- P.K.Jain and others) pending in the court of learned Special Judge (District and Sessions Judge), Shimla. 2. It has been submitted on behalf of the petitioners that a case was registered on 30.4.2007 on the basis of a complaint made by Sh. S.K.Bhalla, Chief Manager, State Bank of Patiala, _____________________ 1 Whether reporters of Local Papers may be allowed to see the Judgment ? yes 2 Asset Recovery Branch, Chandigarh under Section 120-B read with Sections 420, 467, 468, 471 IPC and Section 13 (1) (d) of Prevention of Corruption Act, 1988. The Central Bureau of Investigation Economic Offences Wing-1, New Delhi had registered the case and thereafter the case has been sent for trial to the court of learned Special Judge, Shimla. The petitioners had put in appearance before the learned Special Judge, Shimla and the case was fixed for consideration of charge on 28.3.2009. 3. The case of the prosecution is that petitioners No. 1 and 3 being Directors of M/s High Voltage Magnet Wires Private Limited took loan from State Bank of Patiala, Baroti Branch, District Solan by submitting documents of properties offered as collateral securities. The further case is that such properties were in fact not belonging to the petitioners and the petitioners had obtained loans by cheating etc. The petitioner No.1 was Managing Director, petitioners No. 2 and 3 Directors of the aforesaid Company. According to complaint of the bank as on 31.3.2004 an amount of Rs. 2.85 crores was outstanding. 4. It has been alleged that bank had accepted the compromise proposal of the petitioner No.1 vide communication dated 17.3.2008 and in pursuance of the compromise the entire dues of the bank were cleared. The bank had given in writing on 6.8.2008 that the bank has no claim against the petitioners. In pursuance of the communication of the bank, the petitioners had withdrawn all the cases against the bank. 3 5. On 27.2.2009 the petitioner No.1 had written to respondent No.2 that since the matter stands compromised, therefore appropriate instructions be issued to the Central Bureau of Investigation and had also requested for return of original title deeds which were submitted by the petitioners and mortgaged with the bank. The bank vide communication dated 4.3.2009 had informed the Superintendent of Police, C.B.I. New Delhi regarding receipt of full amount of compromise from the Company. 6. The petitioners were summoned by the learned Special Judge on 5.6.2008. It is the case of the petitioners that in view of compromise with the bank the proceedings may not be permitted to be continued. The continuance of the proceedings before the learned Special Judge would not serve any fruitful purpose. 7. It has been alleged that the loan was advanced by the bank in the year 2000. There was no intention on the part of the petitioners to cheat or defraud. On account of losses suffered by the Company, the account went in default and had become NPA. There was no intention on the part of the petitioners not to repay the loan. On these facts, the petitioners have prayed for quashing of the proceedings pending before the learned Special Judge. 8. The respondent No.1 has filed the reply and has submitted that case No. RC-1(E)/2007 was registered by the CBI, EOW-1, Delhi on 30.4.2007 under Section 120-B read with Sections 420, 467, 468, 471 IPC on the basis of written complaint of Sh. S.K.Bhalla, Chief Manager, State Bank of Patiala, Assets Recovery 4 Branch, Chandigarh against Praveen Kumar Jain and others. It has been alleged that Praveen Kumar Jain and other accused entered into a criminal conspiracy and in pursuance thereof credit facilities to the tune of Rs. 305 lac in the account of M/s Hi-Volt Magnets Wires Pvt. Limited was obtained during 2000-03 from State Bank of Patiala, Baroti Branch, Solan by submitting documents of dubious nature as collateral securities. The same properties were also mortgaged with Oriental Bank of Commerce and some of the properties were fraudulently sold to Sh. Rajesh Mittal and others. The account became NPA as the Company defaulted in repayment of dues amounting to Rs. 285 lacs. 9. On completion of investigation, charge sheet was filed on 16.4.2008 in the court of learned Special Judge, CBI, Shimla against Praveen Kumar Jain S/o Sh. Santosh Kumar Jain, Praveen Jain S/o Sh. M.P.Jain, Jai Deep Jain, Sudesh Gupta, Nita Deep Rastogi, Advocate and Jiwan Pal Gupta under Section 120-B, read with Sections 420, 467,468, 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The case is at framing of charge stage. The facts in detail have been submitted in the reply regarding loans, properties offered for collateral securities, various sales and fake transactions and facilities availed by the petitioners from Oriental Bank of Commerce. The respondent No.1 has made averments in the reply on the point how the petitioners allegedly defrauded, cheated the bank for obtaining the loan and connected facilities. In brief, the stand of respondent No.1 is that Sh. Praveen Kumar Jain and others in 5 connivance with each other committed offence punishable under Section 120-B read with Sections 420, 467, 468, 471 IPC and Section 13 (2) read with Section 13( 1) (d) of the Prevention of Corruption Act, 1988. 10. It has been submitted that the bank has no power to withdraw the complaint after registration of the case. However, C.B.I. has not received any communication from the bank in this regard. It has been alleged that the accused persons in connivance with the Branch Manager hatched a criminal conspiracy and obtained the credit facilities on the basis of forged / bogus title deeds and siphoned off the term loan and other funds and cheated the bank. The respondent No.1 has prayed for dismissal of the petition. 11. The respondent No.2 has also filed the reply. It has been submitted by the bank that the record of the case shows that petitioners and others have committed offence punishable under Section 120-B read with Sections 420, 467, 468, 471 IPC. It has been submitted that no case for quashing of the proceedings has been made out. The bank has taken more or less the same stand as has been taken by respondent No.1. In substance the bank has opposed the petition and prayed for dismissal of the petition. 12. I have heard the learned counsel for the parties. Mr. Ramakant Sharma, Advocate appearing on behalf of the petitioners has reiterated the stand of the petitioners pleaded in the petition. Mr. Sharma has relied Nikhil Merchant Vs. Central Bureau of Investigation 2008 (9) SCC, 677 and has prayed for quashing of the proceedings. Mr. Ramakant Sharma has primarily 6 submitted that the petitioners had not cheated the bank for obtaining loan and other connected facilities. The petitioners had no intention not to repay the loan. There was recession in the market and for that reason default was committed in the account by the petitioners and their account became NPA. He has submitted that petitioners have settled the matter with the bank and had fully repaid the loan. Mr. Sharma has prayed for quashing of the proceedings on the ground that no case is made out against the petitioners for having committed various offences alleged by respondent No.1. He has submitted that no fruitful purpose will be served for continuance of criminal proceedings in view of settlement, compromise between the petitioners and the bank. 13. The petition has been opposed by the respondents on the ground that the petitioners for obtaining loan and other connected facilities from the bank have committed various offences for which the petitioners have been chargesheeted by the C.B.I. and the matter is pending before the learned Special Judge, Shimla. It has been submitted that the petitioners cheated and defrauded the bank for obtaining facilities. Most of the collateral securities which were offered for obtaining the loan were already with another bank for extending some other loan. The petitioners prepared forged and fake documents for obtaining the loan. In brief, the offences for which the petitioners have been chargesheeted by the CBI are clearly made out from the conduct and other acts of the petitioners. The subsequent alleged compromise between the petitioners and the bank is of no consequence so far criminal offence is concerned. 7 It has been submitted that there is clear cut distinction between criminal and civil liabilities. The learned counsel for the respondent No.1 has relied State of Madhya Pradesh Vs. Rameshwar & Others, J.T. 2009 (5) SC 171, Smt. Rumi Dhar Vs. State of West Bengal and another, JT 2009 (5) SC 321 and also judgment dated 15.5.2009 in Criminal Appeal Nos. 1080-1085 of 2009 (arising out of SLP (Crl.) Nos. 8854-57 of 2008) Central Bureau of Investigation Vs. A. Ravishankar Prasad and others and has prayed for dismissal of the petition. 14. In substance the submission of the learned counsel for the petitioners is that the petitioners had committed no offence while taking loan and connected facilities from the bank. The matter has been settled and compromised between the petitioners and the bank and, therefore, no fruitful purpose would be served in continuing the proceedings pending before the learned Special Judge. The charge sheet has been filed by the CBI. In reply, the respondent No.1 has given facts in detail in support of the alleged offence committed by the petitioners. On the basis of narration of facts elaborated by the respondent No.1 in the reply, it cannot be said that it is a case of no evidence for submission of chargesheet. It is however, for the learned Special Judge to consider the facts of the chargesheet whether case is made out for framing of the charge or not. It will not be in the interest of either party that this Court should comment whether on the basis of facts narrated by respondent No.1 in the reply no case for framing the charge is made out or not. 8 15. In so far second contention of the learned counsel for the petitioners that the matter has been settled in view of the compromise between the petitioners and the bank, no purpose will be served for continuing the proceedings pending before the learned Special Judge, Shimla, has also no force. 16. In State of Madhya Pradesh Vs. Rameshwar & Others, (Supra) one of the submissions made before the Supreme Court was unless there was a criminal intent disclosed in the chargesheet, no charge either under Section 406 or Section 409 would lie. The Supreme Court noticed Nikhil Merchant Vs. Central Bureau of Investigation & Anr. JT 2008 (9) S.C. 192 : ( 2008 (9) SCC 677) and several other judgments and held that those judgments will not apply to the facts of the case where conspiracy to cheat the bank is alleged. In the present case, the respondent No.1 has taken the stand that the accused in connivance with the Branch Manager had obtained the credit facilities on forged/ bogus title deeds and siphoned off the term loan and other funds and cheated the bank. In Smt. Rumi Dhar (Supra), the Supreme Court has held as follows :- “It is now a well settled principle of law that in a given case, a civil proceeding and a criminal proceeding can proceed simultaneously. Bank is entitled to recover the amount of loan given to the debtor. If in connection with obtaining the said loan, criminal offences have been committed by the persons accused thereof including the officers of the bank, criminal proceedings would also indisputably be maintainable. When a settlement is arrived at by and between the creditor and the debtor, the offence committed as such does not come to an 9 end. The judgment of a tribunal in a civil proceeding and that too when it is rendered on the basis of settlement entered into by and between the parties, would not be of much relevance in a criminal proceeding having regard to the provisions contained in Section 43 of the Indian Evidence Act.” The Supreme Court in Central Bureau of Investigation Vs. A. Ravishankar Prasad & Others, has observed that mere re-payment of loan under a settlement cannot exempt the accused from the criminal proceeding in the facts of that case. 17. The emphasis of submission of the learned counsel for the petitioners that the matter has been settled between the bank and the petitioners and, therefore, proceedings may be quashed, has no legal force in view of the law laid down by the Supreme Court. In view of reply filed by the respondents, it cannot be said that no case is made out for filing the chargesheet against the petitioners, however, whether a case is made out for framing of the charge against the petitioners will be looked into by the learned Special Judge on the basis of the facts of the case. There is no merit in the petition. 18. No other point was urged. 19. As a result of above discussion, the petition is dismissed. The parties through their learned counsel are directed to appear before the learned Special Judge (District & Sessions Judge), Shimla on 23.11.2009. November 7, 2009 . ( Kuldip Singh ), (GR) Judge.