REPORTABLE IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 175 OF 2020 (ARISING OUT OF SLP (CRIMINAL) NO. 172 OF 2017)

STATE OF MADHYA PRADESH .....APPELLANT(S)

VERSUS

YOGENDRA SINGH JADON & ANR. .....RESPONDENT(S)

J U D G M E N T

HEMANT GUPTA, J.

1. The State is aggrieved against an order passed by the High Court

of  Madhya  Pradesh  on  2nd May,  2016 whereby  the  proceedings

against the respondents, both sons of late Manohar Singh Jadon,

for an offence under Sections 420, 120-B of the Indian Penal Code,

18601 were quashed.

2. A  charge  sheet  for  the  offences  under  Sections  420,  406,  409,

120B IPC and 13(1)(d) and 13(2) of the Prevention of Corruption

Act, 19882 was filed on 9th July, 2008 consequent to registration of

FIR No.  3 of  2007 on 23rd June,  2007.   The allegation was that

Manohar  Singh  Jadon,  deceased  father  of  the  respondents  in

connivance with other employees of District Cooperative Kendriya

Bank Maryadit, Shajapur3 committed financial irregularities on the

1  for short, ‘IPC’ 2  for short, ‘Act’ 3  for short, ‘Bank’

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basis of forged documents by misusing his post and by providing

fake loan to the relatives.  Manohar Singh Jadon was President of

the Bank from 5th February, 1997 to 26th March, 2002 and from 27th

March,  2002  to  7th May,  2004.   Harshvardhan  Singh  Jadon

(accused-respondent No. 2) is the proprietor of M/s. Harshvardhan

& Brothers whereas Yogendra Singh (accused-respondent No. 1) is

the  proprietor  of  M/s.  Sarohar  Trading  Company.   Ghanshyam

Sharma, General Manager, Ramanlal Acharya, Manager, Ram Singh

Yadav,  General  Manager  were  also  arrayed as  accused.   It  was

alleged  that  accused  Harshvardhan  Singh  Jadon  submitted  an

application on 2nd November, 2000 for grant of cash credit limit of

Rs.25 lakhs and that the cash credit limit was sanctioned without

following the due procedure.  It  was also alleged that mortgage

deed was not registered nor signature of original loanee was found

on the mortgage paper.  It is also pointed out that an amount of

Rs.59,88,327/-  was  balance  on  1st December,  2001  even  after

depositing Rs.25 lakhs and that the President has done the renewal

of cash credit limit at his own level and its confirmation was got

done later on from the loan Sub-Committee, while the case was of

the son of the President alone.  In respect of Yogendra Singh, again

the  allegation  is  that  cash  credit  limit  of  Rs.25  lakhs  was

sanctioned on the basis  of  his  application  dated 30th July,  2001

without  completing  any  of  the  procedural  requirements  and

without  mortgage  of  any  of  the  property.   Smt.  Saroj  Singh

mortgaged  the  land  but  without  any  valuation.   The  surety  of

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Ishwar Singh was taken.  The same person mortgaged land as in

the case of Harshvardhan.  Similar is the assertion in respect of

registration  of  mortgage.   It  was  also  alleged  that  a  sum  of

Rs.25,65,894/- is  the balance as on 31st March,  2002 even after

withdrawal beyond the approved credit limit of Rs.25 lakhs.

3. The Special Judge passed an order of framing of charges against

Harshvardhan Singh Jadon and Yogendra Singh Jadon apart  from

other accused on 24th February, 2014.  Such order was challenged

by the respondents by way of a criminal revision.   

4. The  High  Court  in  the  Revision  Petition  found that  the  offences

under Sections 420 and 120-B IPC are not made out against the

respondents.  The Court held that there is no assertion that the

cash credit  facility obtained with a knowledge that they will  not

repay the loan amount.  The Court held as under:

“12.  It may be that the Officers of the Bank, because of the fact that father of the applicants was President of the Bank, had acted in disregard of the relevant rules and regulations in that behalf of confer benefit upon the applicants, but that will give rise to liability against the officers of the bank who failed to discharge their duties in accordance with prescribed norms and regulations. However, that may not be a ground to proceed against a person who has been granted cash credit facility.

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14.  In the instant case, the uncontroverted allegations taken in their entirety do not prima facie establish that the  applicants  deceived  the  Bank  Authorities  or fraudulently  or  dishonestly  induced  them to  sanction cash  credit  facility.   Thus,  the  basic  ingredient  to constitute the offence of 420 of IPC is totally missing in the chargesheet.”

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5. We find that the High Court has examined the entire issue as to

whether the offence under Sections 420 and 120-B is made out or

not at pre trial stage.  The respondents are beneficiary of the grant

of cash credit limit when their father was the President of the Bank.

The power under Section 482 of the Code of Criminal Procedure,

1973 cannot be exercised where the allegations are required to be

proved in court of law.  The manner in which loan was advanced

without any proper documents and the fact that the respondents

are beneficiary of benevolence of their father prima facie disclose

an offence under Sections 420 and 120-B IPC.  It may be stated

that other officials of the Bank have been charge sheeted for an

offence under Sections 13(1)(d) and 13(2) of the Act.  The charge

under Section 420 IPC is not an isolated offence but it has to be

read  along  with  the  offences  under  the  Act  to  which  the

respondents may be liable with the aid of Section 120-B of IPC.   

6. Consequently, we find that the order of the High Court quashing

the charges against the respondents is not sustainable in law and

the same is set aside.  The appeal is allowed.  It shall be open to

the respondents to take such other action as may be available to

them in accordance with law.

.............................................J. (L. NAGESWARA RAO)

.............................................J. (HEMANT GUPTA)

NEW DELHI; JANUARY  31, 2020.

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