M.N. OJHA & ORS. v. ALOK KUMAR SRIVASTAV & ANR

Citation: [2009] 13 S.C.R. 444

Court: Supreme Court of India

Bench: R.V. RAVEENDRAN, B. SUDERSHAN REDDY

Case summary

M.N. OJHA & ORS. v. ALOK KUMAR SRIVASTAV & ANR.pdf

Judgment text

[2009] 13 (ADDL. ) S. C. R. 444 M. N. OJHA & ORS. + v. ALOK KUMAR SRIVASTAV & ANR. (Criminal Appeal No. 1582 of 2009) AUGUST 21, 2009 [R. V. RAVEENDRAN AND B. SUDERSHAN REDDY, JJ. ] -.. ,,.. ... CODE OF CRIMINAL PROCEDURE, 1973: s. 482 - Powers of High Court - Explained - Complaint case by one of the guarantor against bank officials alleging criminal breach of trust on their part in encashing FDRs offered by guarantors as security- Judicial Magistrate issuing summons to bank officials - Petition uls 482 by Bank officials seeking to quash the proceedings - Summarily dismissed by ... _ ~ High Court. - Held: The averments made in the complaint do nC? t reveal commission of any offence by bank officials, who were only taking steps to realize the loan amount - The Magistrate did not apply his mind and took cognizance of the case without considering allegations on merits - High Court abdicated its duty in refusing to exercise its jurisdiction u/s.

482 though the case required its interference in order to prevent abuse of the process of court - A clear case is made out for • interference by Supreme Court - Order of High Court set y aside - Criminal proceedings against bank officials quashed - Constitution of India, 1950 - Article 136. Respondent no. 1 and others stood guarantors for a proprietary concern which obtained loan from the bank of which the appellants were the employees. When the borrower defaulted in repayment of the. loan amount, the bank informed the borrower as also the guarantors and -~ ~ later field an FIR against them for cheating and misappropriation . of hypothecated goods and also initiated proceedings under the Public Demand Recovery ANR. Act for recovery of balance amount after adjustment of + fixed deposit amounts placed as security by guarantors. Respondent no. 1 filed a complaint case before the Judicial Magistrate against bank officials alleging offences punishable u/ss.

409, 422, 476 and ,120-B IPC and stated that the Branch Manager in conspiracy with the brother of the borrower who was also an employee of the bank allowed operation of the account and t --'(' committed criminal breach of trust. The Judicial Magistrate took cognizance of the complaint and directed non-bailable warrants to issue against the bank officials. The petition filed u/s. 482 Cr. P. C. by the bank Officials having been summarily dismissed, they filed the appeal. Allowing the appeal, the Court ~ HELD: 1. 1. Normally, the High Court, in exercise of ... its jurisdiction u/s 482 of the Code of Criminal Procedure, 1973, would not intervene in the criminal proceedings at the preliminary stage/when the investigation/enquiry is pending.

But, at the same time the High Court cannot refuse to exercise its jurisdiction if the interest of justice so required where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no fair-minded and informed observer ... can ever reach a just and proper conclusion as to the 'i" existence of sufficient grounds for proceeding. In such cases refusal to exercise the jurisdiction may equally result in injustice more particularly in cases where the complainant sets the criminal law in motion with a view to exert pressure and harass the persons arrayed as accused in the complaint. [Para 15] [454-C-G] State of Kamataka v. L. Muniswamy (1977) 2 SCC 699 I- . +-and Kurukshetra University v. State of Haryana (1977) 4 SCC 451, relied on. 1. 2. The instant case is one where the averments and.. + allegations made in the complaint do not disclose· commission of any offence by the appellants or any one of them.

They were merely discharging their duties to realize and recover the amounts due to the bank from the borrower as well as the guarantors. Sequence of events undoubtedly suggests that the criminal proceedings have been maliciously instituted with an ulterior motive of wreaking vengeance on the appellants and with a view ')- . , to spite them due to personal grudge. It was clearly intended to prevent the public servants from discharging their duties. The SDJM took cognizance of the case and issued non-bailable warrants against the appellants without even examining the allegations and averments made in the complaint filed by the respondent- . complainant. There was material before the SDJM to 0 show that the complainant himself admitted about-his .

~ executing the agreement of guarantee and other documents unconditionally agreeing to discharge the loan amount in case of failure of the principal borrower to pay the said amount to the bank and that the complaint was only a counter blast to the FIR lodged by appellant no. 1 against the complainant and the borrower and other guarantors for cheating and misappropriation with regard to same transaction. This is a clear case of nonapplication of mind by the Magistrate. He did not -+scrutinize even the contents of the complaint, leave aside the material documents available on record. [Para 13, 14 and 16] [455-A-E; 452-F-H; 453-A-C; 453-H; 454-A] Pepsi Foods Ltd. & Anr. v. Special Judicial Magistrate & Ors. (1998)5 SCC 749, relied on. 1. 3. The High Court committed a manifest error in -~ _.. , disposing of the petition filed by the appellants u/s•. 482 of the Code without even adverting to the basic facts which were placed before it for its consideration. The ANR.

High Court almost abdicated its duty in refusing to exercise its jurisdiction u/s. 482 Cr. P. C. though the case on hand required its interference in order to prevent abuse of the process of court subordinate to it. A clear case is made out requiring interference by this Court to secure the ends of justice. Jherefore, the impugned order of the High Court is set aside and the criminal proceedings arising out of Complaint Case No. 916 (c) of 2003 are quashed. [Paras 15 and 17] [454-8-E; 455-G] Case Law Reference: ~ the said legal notice, he would have realized that the complainant himself admitted about his execution of agreement of guarantee and other documents unconditionally agreeing to discharge the loan amount in case of failure of the principal borrower to pay the said amount to the bank.

Had the learned SDJM applied his mind to the facts and circumstances and sequence of events and as well as the documents filed by the complainant himself along with the complaint, surely he would have dismissed the complaint. He would have realized that the •• complaint was only a counter blast to the FIR lodged by the Bank against the complainant and others with regard to same transaction. This Court in Pepsi Foods Ltd. & Anr. vs. Special Judicial Magistrate & Ors. [(1998)5 SCC 749 held: "28. Summoning of an accused in a criminal case is } serious matter. Criminal law cannot be set into motion as .. a matter of course. It is not that the complainant has to bring only two witnesses to support hfs allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto.

He has to examine the nature· of allegations made in the complaint and the evidence both oral and documentary in support thereof and > would that be sufficient for the complainant to succeed in ... bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or ~ +· ,. ,,.... any of the accused. " The case on hand is a classic illustration of non-application of mind by the learned Magistrate. The learned Magistrate did not scrutinize even the contents of the complaint, leave aside + the material documents available on record.

The learned Magistrat' truly was a silent spectator at the time of recording ~ of preliminary evidence before summoning the appellants. 15. The High Court committed a manifest error in disposing of the petition filed by the appellants under Section 482 of the Code without even adverting to the basic facts which were placed before it for its consideration. It is true that the court in '+- ~ exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure cannot go into the truth or otherwise of the allegations and appreciate the evidence if any available on record. Normally, the High Court would not intervene in the criminal proceedings at the preliminary stage/when the investigation/enquiry is pending. Interference by the High Court ~ ~ in exercise of its jurisdiction under Section 482 of Code of ,. ,. Criminal Procedure can only be where a clear case for such ~ interference is made out.

Frequent and uncalled for interference even at the preliminary stage by the High Court may result in causing obstf1:JCtion in progress of the inquiry in a criminal case which may not be in the public interest. But at the same time the High Court cannot refuse to exercise its jurisdiction if the interest of justice so required where the allegations made in the FIR or complaint are so absurd and inherently improbable .... on the basis of which no fair-minded and informed observer can ~ ever reach a just and proper conclusion as to the existence of sufficient grounds for proceeding. In such cases refusal to exercise the jurisdiction may equally result in injustice more particularly in cases where the Complainant sets the criminal law in motion with a view to exert pressure and harass the persons arrayed as accused in the complaint. It is well settled and needs no restatement that the saving of inherent power of the High Court in criminal matters is intended to achieve a ~__.

_-< salutary public purpose "which is that a court proceeding ought .... ,. ,, not to be permitted to degenerate into a weapon of harassment or persecution. If such power is not conceded, it may even lead to injustice". [See: State ofKamataka vs. L. Muniswamy (1977) M. N. OJHA & ORS. v. ALOK KUMAR SRIVASTAV & + 2 SCC 699). We are conscious that inherent powers do not confer an arbitrary jurisdiction on the Hiph Court to "act according to whim or caprice. That statutory power has to be exercised sparingly, with circumspection and in the rarest of rare cases". [See: Kurukshetra University vs. State ofHaryana (1977) 4 sec 451). 16. This is one case where the averments and allegations ... made in the complaint do not disclose the commission of any offence by the appellants or any one of them. They were merely discharging their duties to realize and recover the amounts due to the bank from the borrower as well as the guarantors. The complaint obviously has been filed as counter .

blast to the proceedings already initiated by the bank including the first information report lodged by the first appellant against the .. complainant and the borrower for the offences of cheating and misappropriation. Sequence of events undoubtedly suggests that the criminal proceedings have been maliciously instituted "' with an ulterior-motive of wreaking vengeance on the appellants and with a view to spite them due to personal grudge. It was clearly intended to prevent the public servants from discharging their duties. The criminal law has been set in motion by the learned SDJM by mere asking to do so by the complainant. The High Court almost abdicated its duty in refusing to exercise • its jurisdiction under Section 482 of the Code of Criminal 4' Procedure though the case on hand required its interference in order to prevent abuse of the process by a court subordinate to it. A clear case is made out requiring our interference to secure the ends of justice. 17.

For all the aforesaid reasons, the impugned order of the High Court is set aside and the criminal proceedings arising out of Complaint. Case No. 916 (c) of 2003 are quashed. The appeal is, accordingly, allowed. r R. P. Appeal allowed.