C.B.I. Vs. MANINDER SINGH

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Crl.), 1496 of 2009, Judgment Date: Aug 28, 2015

REPORTABLE

IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1496 OF 2009

CENTRAL BUREAU OF INVESTIGATION ...Appellant

Versus

MANINDER SINGH ...Respondent

J U D G M E N T

R. BANUMATHI, J.

This appeal is preferred challenging the order of the High Court of Delhi
in Crl. M.C. No.2083 of 2006 dated 10.02.2009, in and by which, the High
Court exercising its inherent power under Section 482 Cr.P.C. quashed the
criminal proceedings in RC No.3 of 1987 under Sections 420, 467, 468 and
471 IPC read with Section 120-B IPC and all proceedings consequent thereto
qua the respondent.
2. Brief facts which led to the filing of this criminal appeal are
as under:- The complainant-Chief Vigilance Officer of the New Bank of India
(presently ‘Punjab National Bank’ for short ‘PNB’) lodged the complaint
alleging that two persons namely Suresh Kumar Puri and Maninder Singh
introduced themselves as proprietors of M/s Fashion India and M/s Ronney
Exports respectively and opened their current accounts with their branch at
Miller Ganj in Ludhiana on 08.11.1986. One Manger namely A.K. Satija of
IBD Cell of the New Bank of India at Ludhiana allowed advance amount worth
Rs.5.31 lakhs each to these two firms on production of Bill of Lading, GR
form and other bills and those foreign bills purchased by the Bank on
27.11.1986 returned unpaid. During the enquiry made by the bank, Bill of
Lading presented by the proprietors of the abovesaid two firms were found
forged. Manager-A.K. Satija helped Maninder Singh to avail advance upto
Rs.10.62 lakhs by opening two different accounts just to ensure that the
pecuniary limits allowed may fall under his power; however according to
prosecution nature of transactions reveal that parties were one and the
same. Respondent and other co-accused thus entered into a criminal
conspiracy during the period November-December 1986, with intention to
cheat New Bank of India (PNB) to the tune of Rs.10.62 lakhs. On the basis
of the above complaint, case was registered under Section 120-B IPC read
with Section 420 IPC and Section 5(2) read with Section 5(1)(d) of
Prevention of Corruption Act, 1947 and further substantive offences under
Sections 420, 467, 468 and 471 IPC & Section 5 (2) read with Section 5 (1)
of Prevention of Corruption Act, 1947 in Crime No.RC.3/87-SIU(X)/CBI/SPE
dated 28.08.1987. After completion of the investigation, a chargesheet was
filed on 22.12.1990 in the Court of Chief Metropolitan Magistrate, Tis
Hazari Court, Delhi against the accused persons collectively for the
offences under Section 120-B IPC read with Section 420 IPC and substantive
offences under Sections 420, 467, 468 and 471 IPC.
3. Noticeably, on 01.02.1995 i.e. after four years the accused-
respondent Maninder Singh was arrested by CBI from IGI Airport and the CMM
vide order dated 16.09.1995 framed charges against accused respondent
Maninder Singh and other accused. In the trial, thirty nine prosecution
witnesses were examined. However on 29.01.2005, Maninder Singh arrived at a
settlement with the New Bank of India, Ludhiana and on 29.11.2005, the
respondent-accused filed an application before the CMM for pleading guilty
for the offences alleged, but on the date of hearing i.e. 08.12.2005, the
accused respondent Maninder Singh did not appear in the court and his
advocate withdrew the aforesaid application. Respondent herein moved a Crl.
Misc. Petition bearing No.2083 of 2006 under Section 482 Cr. P.C. for
quashing of the FIR against him on the ground that a settlement is arrived
between the parties and amounts are repaid to bank. The High Court placing
reliance on Nikhil Merchant vs. CBI & Anr., (2008) 9 SCC 677, vide impugned
order dated 10.02.2009 allowed the petition and thereby directed that
criminal proceedings in RC No.3 of 1987 and all consequential proceedings
thereto against the respondent shall stand quashed. The appellant-CBI
herein assails the correctness of the order passed by the High Court.
4. Ms. Pinki Anand, learned Additional Solicitor General contended
that Nikhi Marchant case is not an authority on the question involved and
in Rumi Dhar (Smt.) vs. State of West Bengal & Anr., (2009) 6 SCC 364, this
Court raised doubts as to the correctness of the judgment passed in Nikhil
Merchant’s case. It was submitted that the facts of the present case are
totally different and in this case thirty nine prosecution witnesses were
already examined and substantial progress has been made in the criminal
case and while so, High Court was not right in quashing the criminal
proceedings qua the respondent. Learned Additional Solicitor General has
drawn our attention to State of Maharashtra through CBI vs. Vikram Anantrai
Doshi and Ors., 2014 (10) SCALE 690 and submitted that this Court has
distinguished Nikhil Merchant’s case and held that availing loan from the
bank by producing forged documents has immense societal impact and the High
Court ignoring the facts and circumstances of the present case was not
justified in quashing the criminal proceedings qua the respondent.
5. Learned Senior Counsel for the respondent Mr. K.K. Menon
submitted that availing facilities from the bank is purely of civil dispute
which are personal in nature and therefore High Court was totally justified
in quashing the proceedings in view of the judgment rendered in Nikhil
Merchant’s case. It was further submitted that the judgment rendered in
Nikhil Merchant’s case was upheld in Gian Singh vs. State of Punjab And
Anr., (2012) 10 SCC 303; Shiji @ Pappu & Ors. vs. Radhika & Anr., (2011) 10
SCC 705 and other judgments.
6. We have carefully considered the rival contentions advanced by
the parties and perused the material on record.
7. In the case at hand, respondent and one Suresh Kumar Puri
introducing themselves as proprietors of M/s Ronney Exports and M/s Fashion
India opened current accounts Nos.4443 & 4441 on 08.11.1986 with New Bank
of India (PNB) and by forged documents they had availed various facilities
viz.:- (i) Anticipated case incentive advance Rs.50,000/- to each of the
firms; (ii) F.B.P. against order documents (the bills of ladings now turned
out to be forged) Rs.3,05,000/- each; (iii) F.B.P. against order documents
(the bills of ladings now turned out to be forged) additional funds
released Rs.22,000/- each; (iv) P.C.L. against orders (Packing Credit
Loans) Rs.1,50,000/- each and interest Rs.4,000/- to each of the firms. In
the charges, it is further alleged that A.K. Satija, the then Manager, IBD
Cell, New Bank of India, Ludhiana has sanctioned various credit facilities
to respondent and Suresh Kumar Puri viz.: (i) Packing Credit against
confirmed orders; (ii) Advance against anticipated cash incentive/duty draw
back; (iii) Advance against cash incentive and duty draw back and (iv)
Advance against foreign bill purchase. Chargesheet refers to various
transactions by which bank amounts were credited to the accounts of the
said firms based on forged documents.
8. Accused-respondent Maninder Singh and his brother Arvinder
Singh did not cooperate with the investigating agency and were absconding
and declared proclaimed offenders by CMM, Tis Hazari, Delhi vide order
dated 03.10.1989. In the trial, thirty nine witnesses were examined and
thus substantial progress was made. In fact, on 29.11.2005, respondent-
accused filed an application before the trial court for pleading guilty;
but the accused did not appear in the court and his advocate withdrew the
aforesaid application.
9. Placing reliance upon Nikhil Merchant’s case, the High Court
quashed the criminal proceedings qua the respondent on the ground that the
respondent has settled the matter with the bank. In Nikhil Merchant’s case
the dispute between the company and the bank which was set at rest on the
basis of compromise arrived at by them and dues of the bank have been
cleared. In Nikhil Merchant’s case certain documents were alleged to have
been forged by the respondent thereon in order to avail credit facilities
beyond the limit to which the company was entitled. The case at hand is
clearly distinguishable on facts. The chargesheet referred to number of
transactions based on such forged documents bank money was credited to the
accounts of firms of the respondent. For instance, respondent Maninder
Singh and Suresh Kumar Puri are said to have submitted the forged documents
of shipment for bill purchased on 27.11.1986. These documents included Bill
of Lading and invoices which were found forged and according to the
prosecution no consignment was sent by the respondent to foreign companies.
It is further alleged that the Bill of Lading and G.R. Form and Shipping
Bill also contained forged signatures of customs officers.
10. The allegation against the respondent is ‘forgery’ for the
purpose of cheating and use of forged documents as genuine in order to
embezzle the public money. After facing such serious charges of forgery,
the respondent wants the proceedings to be quashed on account of settlement
with the bank. The development in means of communication, science &
technology etc. have led to an enormous increase in economic crimes viz.
phishing, ATM frauds etc. which are being committed by intelligent but
devious individuals involving huge sums of public or government money.
These are actually public wrongs or crimes committed against society and
the gravity and magnitude attached to these offences is concentrated at
public at large.
11. The inherent power of the High Court under Section 482 Cr.P.C.
should be sparingly used. Only when the Court comes to the conclusion that
there would be manifest injustice or there would be abuse of the process of
the Court if such power is not exercised, Court would quash the
proceedings. In economic offences Court must not only keep in view that
money has been paid to the bank which has been defrauded but also the
society at large. It is not a case of simple assault or a theft of a
trivial amount; but the offence with which we are concerned is a well
planned and was committed with a deliberate design with an eye of personal
profit regardless of consequence to the society at large. To quash the
proceeding merely on the ground that the accused has settled the amount
with the bank would be a misplaced sympathy. If the prosecution against
the economic offenders are not allowed to continue, the entire community is
aggrieved.
12. In recent decision in Vikram Anantrai Doshi (supra), this Court
distinguished Nikhil Merchant’s case and Narendra Lal Jain’s case where the
compromise was a part of the decree of the court and by which the parties
withdrew all allegations against each other. After referring to various
case laws under subject in Vikram Anantrai Doshi’s case, this Court
observed that cheating by bank exposits fiscal impurity and such financial
fraud is an offence against society at large in para (23), this Court held
as under:-
“23. …Be it stated, that availing of money from a nationalized bank in the
manner, as alleged by the investigating agency, vividly exposits fiscal
impurity and, in a way, financial fraud. The modus operandi as narrated in
the chargesheet cannot be put in the compartment of an individual or
personal wrong. It is a social wrong and it has immense societal impact.
It is an accepted principle of handling of finance that whenever there is
manipulation and cleverly conceived contrivance to avail of these kind of
benefits it cannot be regarded as a case having overwhelmingly and
predominantingly of civil character. The ultimate victim is the
collective. It creates a hazard in the financial interest of the society.
The gravity of the offence creates a dent in the economic spine of the
nation. The cleverness which has been skillfully contrived, if the
allegations are true, has a serious consequence. A crime of this nature,
in our view, would definitely fall in the category of offences which travel
far ahead of personal or private wrong. It has the potentiality to usher
in economic crisis. Its implications have its own seriousness, for it
creates a concavity in the solemnity that is expected in financial
transactions. It is not such a case where one can pay the amount and obtain
a “no due certificate” and enjoy the benefit of quashing of the criminal
proceedings on the hypostasis that nothing more remains to be done. The
collective interest of which the Court is the guardian cannot be a silent
or a mute spectator to allow the proceedings to be withdrawn, or for that
matter yield to the ingenuous dexterity of the accused persons to invoke
the jurisdiction under Article 226 of the Constitution or under Section 482
of the Code and quash the proceeding. It is not legally permissible. The
Court is expected to be on guard to these kinds of adroit moves. The High
Court, we humbly remind, should have dealt with the matter keeping in mind
that in these kind of litigations the accused when perceives a tiny gleam
of success, readily invokes the inherent jurisdiction for quashing of the
criminal proceeding. The court’s principal duty, at that juncture, should
be to scan the entire facts to find out the thrust of allegations and the
crux of the settlement. It is the experience of the Judge comes to his aid
and the said experience should be used with care, caution, circumspection
and courageous prudence. As we find in the case at hand the learned Single
Judge has not taken pains to scrutinize the entire conspectus of facts in
proper perspective and quashed the criminal proceeding. The said quashment
neither helps to secure the ends of justice nor does it prevent the abuse
of the process of the Court nor can it be also said that as there is a
settlement no evidence will come on record and there will be remote chance
of conviction. Such a finding in our view would be difficult to record.
Be that as it may, the fact remains that the social interest would be on
peril and the prosecuting agency, in these circumstances, cannot be treated
as an alien to the whole case. Ergo, we have no other option but to hold
that the order of the High Court is wholly indefensible”.

13. In this case, the High Court while exercising its inherent
power ignored all the facts viz. the impact of the offence, the use of the
State machinery to keep the matter pending for so many years coupled with
the fraudulent conduct of the respondent. Considering the facts and
circumstances of the case at hand in the light of the decision in Vikram
Anantrai Doshi’s case, the order of the High Court cannot be sustained.
14. The appeal is allowed and the order passed by the High Court is
set aside and the trial court is directed to proceed with the matter
expeditiously in accordance with law. We make it clear that we have not
expressed any opinion on the merits of the matter.

…………………………J.
(DIPAK MISRA)

…………………………J.
(R. BANUMATHI)
New Delhi;
August 28, 2015
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