IN THE HIGH COURT OF KERALA AT ERNAKULAM Crl.MC.No. 1365 of 2010() 1. GOPAKUMAR B.NAIR, ... Petitioner Vs 1. CBI/SPE, ... Respondent 2. THE INDIAN OVERSEAS BANK, For Petitioner :SRI.T.A.SHAJI For Respondent :SRI.M.V.S.NAMBOOTHIRY,SC, C.B.I. The Hon'ble MR. Justice THOMAS P.JOSEPH Dated :21/06/2011 O R D E R THOMAS P JOSEPH, J. ---------------------------------------- Crl.M.C.No.1365 of 2010 --------------------------------------- Dated this 21st day of June, 2011 ORDER
Petitioner is the second accused in C.C.No.13 of 2005 of the Court of learned Special Judge for CBI cases, Ernakulam (for short, "the Special Judge") for offences punishable under Secs.420, 471 and 120B of the Indian Penal Code (for short, "the IPC") and Secs.13(2) and 13(1)(d) of the Prevention of Corruption Act (for short, "the PC Act"). The first accused was Manager of the Indian Overseas Bank, Thiruvananthapuram branch (for short, "the Bank") and the third accused, its approved valuer (I am told that the third accused is no more). The charge in short is that petitioner/second accused hatched up a conspiracy with accused 1 and 3 and obtained loan from the Bank on the strength of forged documents. As per the final report submitted by the CBI, it is alleged that petitioner availed a loan of `.5,00,000/- from the Bank for purchase of a car on the strength of a forged agreement for sale. The further allegation is that petitioner who then was undergoing study with the SAE Technology College (for short, "the College") availed an educational loan of `.4,00,000/- from the Bank and produced two forged receipts in the Bank Crl.M.C.No.1365 of 2010 -: 2 :- claiming that the same were obtained from the said College (for a total sum of `.1,60,000/-) while the actual payment made by petitioner in the College was only `.47,500/-). The third allegation is that a fraudulent certificate of valuation (prepared by the third accused) showing inflated value of property of petitioner offered as collateral security was made use for the purpose of securing a cash credit facility. After the case was registered, petitioner wanted to make use of the one time settlement scheme with the Bank and pay the entire amount due to it. Since the Bank was reluctant in that regard since the CBI had registered the case against petitioner and others, petitioner approached this court with W.P(C).No.7422 of 2005 and obtained a direction to the Bank to receive the amount subject to certain riders. Accordingly petitioner paid the entire amount due to the Bank. Request of petitioner is to quash proceeding against him with two grounds; that allegations do not constitute any offence as alleged, and; secondly, the entire amount is paid to the Bank and hence proceeding need not continue. Learned counsel has placed reliance on the decision of the Supreme Court in Nikhil Merchant Vs. Central Bureau of Investigation (2008)3 KLT
769). Learned Standing Counsel for the CBI has contended that Crl.M.C.No.1365 of 2010 -: 3 :- notwithstanding that petitioner has discharged liability of the Bank and as such, no civil liability existed, the CBI may be allowed to proceed with the case which involved forgery of documents and its dishonest use. According to the learned Standing Counsel, a public sector undertaking has been cheated by petitioner with the connivance of its own then Manager and approved valuer making use of the forged documents. It is contended that in such situation, interfering with the prosecution would affect the society at large and would give a wrong message to wrong doers. It is also submitted by learned counsel that decision referred supra has been explained in a later decision in Sushil Suri Vs. CBI and Anr. (2011(1) KLD 760).
2. So far as first allegation regarding making use of alleged forged agreement for sale to avail loan for purchase of a car is concerned, it is not disputed that petitioner has availed loan of `.5,00,000/- from the Bank and according to the petitioners, he paid `.5,25,000/- for the purchase of the car. In the disputed agreement for sale, value of the vehicle was shown as `.6,65,000/- (since as per the scheme of the Bank, it could advance only 80% of the total value of the car). The disputed agreement was sent to the expert for opinion and the expert after Crl.M.C.No.1365 of 2010 -: 4 :- comparison of signature in the disputed agreement with the specimen signature of the person who is said to have executed that document has come to the conclusion that the signature in the disputed agreement is a forgery. That opinion of the expert prima facie indicate that the document made use of by the petitioner to avail loan for the purchase of car is a forged document coming within the definition of Secs.464 of the IPC. I do not forget that petitioner has an explanation how he got possession of the said document. That is a defence which petitioner has in the course of trial. Petitioner has also an argument that in so far as there is no charge under Sec.468 of the IPC and in the absence of any dishonest intention, petitioner cannot be made liable for offence under Sec.471 of the IPC which I will advert to a little later.
3. The second allegation is regarding alleged making use of forged receipts in connection with the educational loan. It is not disputed that loan of `.4,00,000/- was sanctioned to the petitioner in connection with his education. It is also not disputed that petitioner produced two receipts for a total sum of `.1,60,000/- allegedly issued from the College before the Bank and got release of the said sum of `.1,60,000/-. Learned counsel Crl.M.C.No.1365 of 2010 -: 5 :- has invited my attention to the letter dated May 16, 2003 issued from the College where it is stated that the said receipts are absolutely authentic. But in the course of investigation witness No.11, Controller of Accounts of the College came with a statement (said to be given to the Investigating Officer) referring to the letter dated May 16, 2003 that though it was stated in the said letter that the receipts are authentic, subsequent examination of records (of the College) revealed that receipts for `.1,60,000/- are fictitious. The witness is also seen to have stated that as against the sum of `.1,60,000/- mentioned in the said receipts, the amount actually paid by petitioner on the relevant dates was only `.47,500/-. It is further stated by the witness that the receipts are not issued from the College (details of the statement are given in page 36 of the paper book) and it was got printed elsewhere. In short, going by the said statement of the witness, the impugned receipts were not issued from the College wherefrom petitioner purports to have obtained it and a much inflated sum than what was actually paid by petitioner in the College is mentioned in the said receipts. It is not disputed before me that on the strength of the said receipts, petitioner obtained release of `.1,60,000/- from the Bank. Crl.M.C.No.1365 of 2010 -: 6 :-
4. Last allegation is regarding the inflated valuation of property offered as security for cash credit loan. The third accused who was then the approved valuer of the Bank valued the property at `.18,00,000/- while witness No7, a Retired Executive Engineer from the Kerala PWD through him the CBI officials got the said property assessed, stated its value as around `.8,00,000/-, at the rate of `.24,000/- per cent (market value). Learned counsel has contended that the said statement of witness No.7 cannot be accepted at all since he has simply given his opinion about the land value without referring to any material document. It is also pointed out that the said witness was about 85years at the relevant time and hence his assessment need not be proper (learned counsel submitted that the said witness is suffering from Alzheimers).
5. As I stated, even if the last allegation regarding inflated value of the property is not taken into account for the reason stated by the learned counsel and referred above, fact remained that the first two charges glared at petitioner. So far as the first document is concerned, I stated that there is opinion of the expert stating that the document is forged. So far as the second, two documents - receipts are concerned, I referred to Crl.M.C.No.1365 of 2010 -: 7 :- the statement of witness No.11 attached to the college that those receipts are not printed by the said college, no such receipts have been issued from that college and no such amount of `.1,60,000/- was received on the dates mentioned in the receipts.
6. Learned counsel has invited my attention to Secs.24 and 25 of the IPC as to what exactly is 'dishonestly' and 'fraudulently'. It is contended by learned counsel that to attract offence under Sec.471 of the IPC, necessary ingredients are dishonest or fraudulent intention on the part of the offender. It is pointed out that petitioner did not stand to gain anything by using the forged documents as it only increased his liability to the Bank which itself is secured by his property and though, subsequently petitioner has discharged entire liability of the Bank which indicate lack of malafides on the part of petitioner. It is also submitted by learned counsel that the CBI has not so far charged petitioner or any other accused with offence under sec.468 of the IPC and has not come up with the case who exactly forged the documents. Learned counsel submitted that proof of forgery and knowledge for petitioner as to such forgery is essential to attract offence under Sec.471 of the IPC. Crl.M.C.No.1365 of 2010 -: 8 :-
7. So far as Sec.471 of the IPC is concerned, no doubt prosecution has to prove that knowing the documents to be not genuine it was used by the offender. But, it appears to me that whether the offender had the requisite knowledge or not is not always possible to be proved by direct evidence and it may depend on various circumstances. The Court may have to consider whether any inflated value was shown for the property given as security and that has any bearing on petitioner drawing larger amounts from the Bank on the strength of the disputed documents. Whether materials on record are sufficient to draw such inference is a matter which the trial court has to decide and I think, that is not a matter this Court should decide under Sec.482 of the Code. Sec.468 of the IPC makes the forgerer liable for punishment while Sec.471 makes the person who (whether he himself is the forgerer or not) fraudulently or dishonestly uses as genuine any document which he knows or has reason to believe is a forged document. In my view, the offences can independently stand. These matters are to be decided by the trial court and not by this Court invoking power under Sec.482 of the Code.
Crl.M.C.No.1365 of 2010 -: 9 :-
8. What remains is the subsequent discharge of civil liability. It is relevant to note that while W.P(C).No.7422 of 2005 was disposed of by this Court made certain riders in directing the Bank to receive the amount and close accounts of petitioner. This Court observed that the writ petitioner (petitioner before me) submitted through counsel that the benefit of one time settlement will not be urged by him as a ground in opposition to the on going investigation by the CBI. Learned counsel submitted that the said observation only concerned the CBI proceeding with investigation of the case. I find myself unable to accept the argument. For, the investigation should have a logical conclusion and if the final report disclosed commission of any offence, logical conclusion is that the CBI is entitled to pursue the matter. However, I am not relying on the said observation in the judgment in W.P(C).No.7422 of 2005 to disallow the prayer of petitioner.
9. So far as the decision relied by the learned counsel is concerned, true in that case the offences involved were under the PC Act as well and on there being a settlement of the claim of the Bank the Supreme Court in exercise of its power under Article 142 of the Constitution interfered and quashed proceeding. The Crl.M.C.No.1365 of 2010 -: 10 :- decision of the Supreme Court delivered on May 06, 2011 in Sushil Suri Vs. CBI and Anr.(supra) states that the decision in Nikhil Merchant Vs. Central Bureau of Investigation (supra) is based on the particular facts of that case. The Supreme Court observed in paragraph 20:
"A bare reading of the afore-extracted paragraphs would indicate that the question posed for consideration in that case was with regard to the power of this Court under Article 142 of the Constitution of India to quash the criminal proceedings in the facts and circumstances of a given case and not in relation to the powers of the High Court under Sec.482 of th Cr.P.C. The Court came to the conclusion that it was a fit case where it should exercise its powers under Article 142 of the Constitution. In our opinion, Nikhil Merchant (supra) does not hold as an absolute proposition of law that whenever a dispute between the parties, having overtones of a civil dispute with criminal facets is settled between them, continuance of criminal proceedings would be an exercise in futility and, therefore, should be quashed. Similarly, in B.S Joshi and Ors. (Supra), which has been relied upon in Nikhil Merchant (supra), the question for consideration was whether the High Court in exercise of its inherent powers can quash Crl.M.C.No.1365 of 2010 -: 11 :- criminal proceedings or FIR or complaint for offences which are not compoundable under Sec.320 of the Cr.P.C. It was held that Sec.320 cannot limit or affect the powers of the High Court under sec.482 of the Cr.P.C, a well settled proposition of law. We are of the opinion that Nikhil Merchant (supra) as also the other two judgments relied upon on behalf of the appellant are clearly distinguishable on facts. It needs little emphasis that even one additional or different fact may make a world of difference between the conclusions in two cases and blindly placing reliance on a decision is never proper."
10. This is a case of (alleged) cheating of a public sector undertaking. It has wider ramifications. It is not a matter purely personal to and between the Bank, its officials and the customer. It is something which affects the society at large. If the official of the Bank was (allegedly) a party to the alleged cheating etc, it erodes confidence of the public in such public sector undertakings. That ultimately affects the society at large and public sector undertakings. In such a situation, the personal concerns, constraints or even the settlement of claim of the Bank cannot be taken as a ground to quash proceeding under Sec.482 of the Code.
Crl.M.C.No.1365 of 2010 -: 12 :-
11. I make it clear that the observations and findings made above will strictly be confined to the disposal of this criminal miscellaneous case and the trial court shall decide the case untrammelled by any findings or observations herein. I also make it clear that it is open to the petitioner to raise all available defences before the trial court.
With the above observations, this criminal miscellaneous case is dismissed.
(THOMAS P JOSEPH, JUDGE) Sbna/-