Vesa Holdings P.Ltd.& Anr vs State Kerala & Ors

2. The undisputed facts in brief are as follows: The appellant in Criminal Appeal No.2341 of 2011 is a Limited company of which appellants Venkataraman in Criminal Appeal No.2344 of 2011 and appellant Mani Prasad in Criminal Appeal No.2343 of 2011 were Directors and the appellant Chandrasekhran in Criminal Appeal No.2342 of 2011 was the promoter. The Company availed a loan from the Industrial Investment Bank of India and respondent No.3 herein/complainant as the AGM of the said bank at the relevant time, dealt with their loan application and had sanctioned the same. The company defaulted in repayment and wanted to settle the loan amount. The 3rd respondent on retirement from the bank agreed to act as a Consultant of the company in settling the loan and the company issued a letter dated 6.8.2008 stating that the settlement of the Company dues should be at Rs.8.25 crores and the acceptance letter from the IIBI should be obtained on or before 30.10.2008 and it was also agreed that Rs.75 lakhs would be given towards consultancy fees for the above settlement, out of which Rs.5 lakhs was given in advance to the 3rd respondent and the balance amount to be paid on the completion of the assignment. The Company also issued a cheque dated 6.8.2008 for a sum of Rs.30 lakhs drawn on HDFC Bank Limited and the same was agreed to be presented to the bank after obtaining the acceptance letter from IIBI on or before 30.10.2008 or otherwise the cheque should be returned to the company. The 3rd respondent made an endorsement in writing in the said letter agreeing to the said terms and signed it. The 3rd respondent filed a private complaint dated 13.10.2010 against the company, its Directors and Promoter in the Court of Judicial First Class Magistrate Changanasserry and the same was forwarded to the police for investigation under Section 156(3) of the Code of Criminal Procedure and the Police registered a case in Crime No.1461 of 2010 for the alleged offences under Sections 417, 418, 420, 120B and 34 IPC. It is alleged in the complaint that the loan transaction of the company with IIBI was settled with the efforts of the complainant/respondent No.3 herein but the company, Directors and Promoter did not pay him the consultancy fee as promised and they conspired together to deceive the complainant and committed offences as alleged. The company and its Directors filed petitions under Section 482 Criminal Procedure Code in Criminal M.C.No.220 to 222 of 2011 on the file of the High Court of Kerala at Ernakulam contending that the understanding between the company and the complainant was that the settlement with the IIBI should be completed by 30.10.2008 and the complainant was not able to settle the loan before the said date and hence he could not present the cheque in the light of the condition imposed on him in the letter dated 6.8.2008 and the settlement was completed only on 5.1.2009 due to the efforts of the company itself and not at the instance of the complainant and at any rate it can only be breach of contract for which no criminal liability can be fastened against the company and its Directors. The High Court dismissed the petitions by holding that the truth of the allegations have to be ascertained by the investigating agency. Challenging the said order the present appeals have been preferred.

10. Accordingly all the appeals are allowed and the impugned order dated 28.1.2011 rendered by the High Court is set aside and the complaint and the proceedings in Crime No. 1461/2010 of Changanasserry Police Station against the appellants are hereby quashed.

March 17, 2015 ITEM NO.1B-For Judgment COURT NO.9 SECTION IIB S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Criminal Appeal No(s). 2341/2011 VESA HOLDINGS P.LTD.& ANR Appellant(s) VERSUS STATE KERALA & ORS. Respondent(s) WITH Crl.A. No. 2342/2011 Crl.A. No. 2343/2011 Crl.A. No. 2344/2011 Date : 17/03/2015 These appeals were called on for pronouncement of JUDGMENT today.

For Appellant(s) Mr. A. Ramesh, Sr. Adv.

Mr. R.Anand Padmanabhan, Adv.

Mr. R. Pathak, Adv.

Ms. Amritha S., Adv.

Mr. Shashi Bhushan Kumar,Adv.

For Respondent(s) Mr. Devashish Bharuka,Adv.

Mr. Jogy Scaria,Adv.

Hon'ble Mr. Justice C. Nagappan pronounced the judgment of the Bench comprising Hon'ble Mr. Justice V.Gopala Gowda and His Lordship.

The appeals are allowed in terms of the signed Reportable Judgment.

(Signed Reportable Judgment is placed on the file)