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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.  

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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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