Criminal Appeal No. 2048 of 2014 (Arising out of S.L.P. (Crl.) No. 6461 of 2011). Case: State of Maharashtra Vs Vikram Anantrai Doshi. Supreme Court (India)

Case NumberCriminal Appeal No. 2048 of 2014 (Arising out of S.L.P. (Crl.) No. 6461 of 2011)
JudgesDipak Misra and Vikramajit Sen, JJ.
IssuePrevention of Corruption Act, 1988 - Sections 13(1), 13(2); Code of Criminal Procedure (CrPC) - Sections 239, 307, 482; Indian Penal Code (IPC) - Sections 20, 120B, 406, 420, 467, 468, 471; Constitution of India - Article 226
Judgement DateSeptember 19, 2014
CourtSupreme Court (India)


Dipak Misra, J.

1. The centripetal issue that strikingly emerges, commanding the judicial conscience to ponder and cogitate with reasonable yard-stick of precision, for consideration how far a superior court should proceed to analyse the factual score in exercise of its inherent jurisdiction bestowed upon it Under Section 482 of the Code of Criminal Procedure or Under Article 226 of the Constitution of India, to quash the criminal proceeding solely on the ground that the parties have entered into a settlement and, therefore, the continuance of the criminal proceeding would be an exercise in futility, or the substantial cause of justice warrants such quashment to make the parties free from unnecessary litigation with the assumed motto of not loading the system with unfruitful prosecution, of course with certain riders, one of which, as regards the cases pertaining to commercial litigations, appreciation of predominant nature of civil propensity involved in the lis or social impact in the backdrop of the facts of the case. The primary question that we have posed has a substantial supplementary issue; i.e. should the courts totally remain oblivious to the prism of fiscal purity and wholly brush aside the modus operandi maladroitly adopted, as alleged by the prosecution, on the part of industrial entrepreneurs or the borrowers on the foundation that money has been paid back to the public financial institutions. We think not, especially regard being had to the obtaining factual matrix in the case at hand.

2. Presently to the factual exposition. On the basis of a written complaint of chief vigilance officer, Bank of Baroda a case was registered against the Respondents on 6.1.2006 and after completion of investigation a report was filed before the Special Court, CBI cases, Mumbai with a prayer to forward the chargesheet to the learned Magistrate who was competent to take cognizance of the offences as the involvement of R.C. Sharma, the concerned Bank Officer, a public servant, in the crime in question, could not be prima facie found during the investigation. As the facts would undrape, on 3.2.2006 upon perusal of the chargesheet the learned Special Judge, CBI cases directed to place the chargesheet before the appropriate court and accordingly a fresh chargesheet was filed before the ACMM, 19th Court, Esplanade, Mumbai vide criminal case No. 82/CPW/2006 for commission of offences punishable Under Section 120B, Section 406, 20, 467, 468 and 471 Indian Penal Code against the accused persons.

3. On a perusal of the charge sheet, it is evincible that there are allegations to the effect that Vikram Doshi, A 1, Vineet Doshi, A 2, and Sanjay J. Shah, A 3, made number of applications to the Bank of Baroda for sanction of various credit facilities, stating that they wanted to induct the said bank as a new consortium member to replace the existing members, namely, the UTI Bank and the Federal Bank. They requested the said Bank to sanction 15% of the total Working Capital facility sanctioned by the consortium of Banks, so that, that much amount could be transferred to the UTI bank and Federal Bank to take over the existing liabilities with the said two banks. It was revealed during investigation that the account of the company, with the consortium of banks as well as the finance institutions, was highly irregular and in the said condition the accused persons approached the Bank for sanction of loan. In the application to the Bank, the accused persons concealed the fact relating to the dues outstanding against them. Thereafter, when asked for the outstanding position with the existing consortium members, the accused persons willfully and with the criminal intent to mislead the Bank of Baroda, furnished wrong statements about the outstanding position by giving considerably lesser amount as outstanding than the actual.

4. As further alleged, the amount of loan sought was sanctioned on 24.01.2003 by one Mr. K.K. Aggarwal, General Manager and communicated to the branch. As per the terms and conditions of the said Term Loan, the primary security for the same was the first charge to be created on the fixed assets of the company ranking pari passu with the existing Term Lending Institutions. The primary charge for the cash credit and working capital demand loan was the hypothecation of current assets such as stocks, stocks in trade, raw materials and book debts, and, that apart, one of the important terms and conditions was that the CC, WCDL and Term Loan amounts were to be directly paid to the company's account with the UTI Bank and Federal Bank so as to take over the liabilities as well as the securities mortgaged with the two banks. Despite the said situation, the Bank on 29.01.2003 intimated the sanction to ATCOM, the company in question. It is further demonstrable from the chargesheet that A-1 and A-2, with the intention to escape personal liabilities, made A-3 and one Mr. Chirag Gandhi directors in ATCOM and got all the loan documents including the Demand Promissory Note (DPN) signed by the said persons. The terms and conditions of the sanction was that the entire Working Capital of Rs. 570.00 lakhs (Rs. 114.00 lakhs + Rs. 456.00 lakhs) and the Term Loan of Rs. 360.00 lakhs were to be directly paid to the UTI Bank and Federal Bank. Consequently, the Term Loan was released and paid as per the sanction terms and conditions. As alleged, A-1 induced the Bank to release the sanctioned Working Capital Funds to the Current Account and from the said account money was dishonestly diverted to his own accounts with SBI and Dena Bank, to bring down the outstanding liabilities in those accounts. As per the Chargesheet, Rs. 114.00 lakhs of Cash Credit (the Fund Based portion of Working Capital) and Rs. 456.00 lakhs (the Demand Based portion of Working Capital) were released into the Current Account on 27.03.2003. Thus, the total funds released into the Current Account was Rs. 560.00 lakhs out of which A-1 dishonestly transferred Rs. 352.00 lakhs to SBI and about Rs. 200.00 lakhs to Dena Bank, which amounted to diversion of concerned Bank's funds dishonestly and caused wrongful loss to the said Bank.

5. As is evident from the chargesheet the transfer of funds of CC and DL to the current account was with a dishonest intention to further divert the funds from the current account, and for transfer of the said funds of CC and WCDL. A-1 used the cheque leaf available with him for the Current Account and substituted out the words "Current Account" and substituted them with "Cash Credit". It has come out in the investigation that in order to further divert the funds from the Current Account, A-3 used to issue "Pay Yourself cheques" by obtaining Banker's Cheque favouring their account with SBI and Dena Bank. It is also perceivable from the chargesheet that though the accused A-1 and A-3 knew that the said Working...

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