CBI, ACB, Mumbai Vs. Narendra Lal Jain & Ors.
Email[Arising out of Special Leave Petition (Crl) No. 6138 of 2006]
[From the Judgement and Order dated 28.10.2005 of the High Court of Judicature at Bombay in Criminal Writ Petition Nos. 1339/2005, 1636/2005 and Crl. Application No. 838/2002 in Special Case Nos. 20/1996 and 15/1995 arising out of RC. 21(A)/93-Bom. and RC. 22(A)/93-Bom.]
[Arising out of Special Leave Petition (Crl) No. 6138 of 2006]
[From the Judgement and Order dated 28.10.2005 of the High Court of Judicature at Bombay in Criminal Writ Petition Nos. 1339/2005, 1636/2005 and Crl. Application No. 838/2002 in Special Case Nos. 20/1996 and 15/1995 arising out of RC. 21(A)/93-Bom. and RC. 22(A)/93-Bom.]
Mr. P.P. Malhotra, ASG, Mr. Rajiv Nanda, Mr. T.A. Khan, Mr. B.V. Balramdas, Mr. P. Parmeswaran, Mr. Sushil Karanjkar, Mr. K.N. Rai, Mr. A.P. Mayee, Mr. Sunil Kumar Verma, Advocates, with him, for the Appearing Parties.
Criminal Procedure Code, 1973
Section 482 – Prevention of Corruption Act, 1947, Sections 5(2), 5(1)(d) – Quashing of charges and criminal proceedings – Accused persons allegedly conspired with bank officials – Inflated figures of creditworthiness of companies, they represented, projected – Secured more loans/ advances than they were entitled to – Bank instituted recovery suits – Same disposed under consent decree – Specific agreement that bank has no grievance against accused including CBI complaint – No corruption charges against these persons but only under Section 120B/420 IPC – Proceedings against these private persons quashed – If justified. Held that in the facts of the case, the High Court exercised its inherent jurisdiction and same cannot be faulted. No interference called for.
2. Nikhil Merchant v. Central Bureau of Investigation and Another [2008 (9) SCC 677] (Para 9)
3. B.S. Joshi and Others v. State of Haryana and Another [AIR 2003 SC 1387] (Para 8)
4. Central Bureau of Investigation, SPE, SIU(X), New Delhi v. Duncans Agro Industries Ltd., Calcutta [1996 (5) SCC 591] (Para 8)
1. Leave granted.
2. The appellant, Central Bureau of Investigation (CBI) ACB, Mumbai seeks to challenge an order dated 28.10.2005 passed by the High Court of Bombay quashing the criminal proceedings against the respondents Narendra Lal Jain, Jayantilal L. Shah and Ramanlal Lalchand Jain. The aforesaid respondents had moved the High Court under Section 482 Code of Criminal Procedure, 1973 (for short Cr.P.C.) challenging the orders passed by the learned Trial Court refusing to discharge them and also questioning the continuance of the criminal proceedings registered against them. Of the three accused, Jayantilal L. Shah, the court is informed, has died during the pendency of the present appeal truncating the scope thereof to an adjudication of the correctness of the decision of the High Court in so far as accused Narendra Lal Jain and Ramanlal Lalchand Jain are concerned.
3. On the basis of two FIRs dated 22.03.1993, R.C. No. 21(A) of 1993 and R.C. No.22 (A) of 1993 were registered against the accused-respondents and several officers of the Bank of Maharashtra. The offences alleged were duly investigated and separate chargesheets in the two cases were filed on the basis whereof Special Case No. 15 of 1995 and Special Case No. 20 of 1995 were registered in the Court of the Special Judge, Mumbai. In the chargesheet filed, offences under Sections 120-B/420 IPC and Sections 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947 corresponding to Sections 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (for short PC Act) were alleged against the accused persons. In so far as the present accused-respondents are concerned the gravamen of the charge is that they had conspired with the bank officials and had projected inflated figures of the creditworthiness of the companies represented by them and in this manner had secured more advances/loans from the bank than they were entitled to.
4. While the criminal cases were being investigated the bank had instituted suits for recovery of the amounts claimed to be due from the respondents. The said suits were disposed of in terms of consent decrees dated 23.04.2001. Illustratively, the relevant clause of the agreement on the basis of which the consent decrees were passed reads as follows:
10. Agreed and declared that dispute between the parties hereto were purely and simply of civil nature and on payment mentioned as aforesaid made by the Respondents the Appellants have no grievance of whatsoever nature including of the CBI Complaint against the Respondents.
5. Applications for discharge were filed by the accused-respondents which were rejected by the learned Trial Court by order dated 04.09.2011. The learned Trial Court, thereafter, proceeded to frame charges against the accused. In so far as the present accused-respondents are concerned charges were framed under Sections 120-B/420 of the Indian Penal Code whereas against the bank officials, charges were framed under the different provisions of the Prevention of Corruption Act, 1988 (PC Act). The challenge of the respondents to the order of the learned Trial Court refusing discharge and the continuation of the criminal proceedings as a whole having been upheld by the High Court and the proceedings in question having been set aside and quashed in respect of the respondent, the CBI has filed the present appeal challenging the common order of the High Court dated 28.10.2005.
6. We have heard Mr. P.P. Malhotra, learned Additional Solicitor General appearing on behalf of the appellant and Mr. Sushil Karanjkar, learned counsel appearing on behalf of Respondent Nos. 1 and 4.
7. Shri Malhotra, learned Additional Solicitor General, has taken us through the order passed by the High Court. He has submitted that the High Court had quashed the criminal proceeding registered against the accused-respondents only on the ground that the civil liability of the respondents had been settled by the consent terms recorded in the decree passed in the suits. Shri Malhotra has submitted that when a criminal offence is plainly disclosed, settlement of the civil liability, though arising from the same facts, cannot be a sufficient justification for the premature termination of the criminal case. Shri Malhotra has also submitted that the offence under Section 120-B alleged against the accused-respondents is not compoundable under Section 320 Cr.P.C.; so also the offences under the PC Act. Relying on the decision of a three Judges Bench of this Court in Gian Singh v. State of Punjab and Another [2012 (10) SCC 303], Shri Malhotra has submitted that though it has been held that the power of the High Court under Section 482 Cr.P.C. is distinct and different from the power vested in a criminal Court for compounding of offence under Section 320 of the Cr.P.C., it was made clear that the High Court must have due regard to the nature and gravity of the offences alleged before proceeding to exercise the power under Section 482 Cr.P.C. Specifically drawing the attention of the Court to para 61 of the report in Gian Singh (supra) Shri Malhotra has submitted that any compromise between the victim and the offender in relation to the offences under special statutes like the Prevention of Corruption Act. cannot provide for any basis for quashing criminal proceeding involving such offences. Shri Malhotra had contended that having regard to the gravity of the offences alleged, which offences are prima facie made out, in as much as charges have been framed for the trial of the accused-respondents, the High Court was not justified in quashing the criminal proceedings against the accused-respondents.
