Daud, J.:— This petition under Article 227 and section 482 of the Criminal Procedure Code, 1973, is aimed at an order directing the issue of process against petitioners for the alleged commission of various offences punishable under the Penal Code.
2. Respondent No. 2-complainant before the Magistrate—Initiated a prosecution against the petitioner and two others for the alleged commission of offences punishable under sections 406, 420, 468 and 471 read with sections 109/120B of the Indian penal Code. This complaint—briefly stated—is following effect:—
Complainant was a businessman trading in the name and style of Navinchandra & Co. In his capacity as a businessman he and his concerns were dealing with the processing of industrial diamonds, export of cut and polished diamonds, building construction transport and quarrying. Despite these expensive and varied interests complainant and his concerns were ignorant of the export business and never had anything to do with Letters of Credit—hereinafter to be described as “L/Cs.” Complainant's concerns had accounts with the Bank of India's branch at Khand Bazar. In fact, that branch's premises were located in a building constructed by Somaiya Construction Co. The branch at Khand Kazar know of complainant never being involved in transactions involving L/Cs, Accused Nos. 1 to 6 were high officials of the Bank of India. Accused No. 7 succeeded accused No. 8 as the Manager of the Khand Bazar branch. At the period figuring in this complaint accused Nos. 8 and 7 were the Managers of the Khand Bazar branch with which complainant had dealings, Accused Nos. 9 and 10 were partners of a firm doing business in the name and style of Parikh Brothers. This firm was in the Export-Import business. Mayur Exports of India had entered into a contract with Kuwait Supply Co. of Kuwait to sell to the latter 8,000 metric tonnes of barley. Mayur Exports assigned the contract undertaken by it to Parikh Brothers with the concurrence of Kuwait Supply Co. To facilitate the execution of the contract, Kuwait Supply Co. had to open a L/C and for that purposes utilised the services of a banking house doing business in the style of Kuwait Finance House. For the opening of the L/C through their bankers the Kuwait Supply Co. wanted Parikh brothers to furnish a 5% performance guarantee. The total value of the consignment was placed in the neighbourhood of Rs. 1,60,00,000/-. The 5% performance guarantee sought covered a total sum of about 8,00,000/-. Parikh Brothers approached the Khand Bazar branch to provide the 5% guarantee on their behalf. The said branch was willing but only if the suppliers could find a guarantor to cover the risk which the branch was to face. At that time, accused No. 8 was the Manager of the Khand Bazar branch. This gentlemen was known to the complainant since January 1981. On February 1, 1982, accused No. 8 called the complainant to the bank's premises with an offer to put some business his way. Complainant responded and reached the office of accused No. 8. Accused No. 8 introduced him to the Parikh Brothers viz. accused Nos. 9 and 10. Prior to this date, complainant was not acquainted with the Parikh Brothers, though in the year 1972 they had acquired some off ice premises in Navjivan Building from his construction company. Complainant was informed that Parikh Brothers had entered into a big deal for supply of barley to Kuwait Supply Co.; that this was a profitable transaction; that the Khand Bazar branch was willing to furnish the 5% performance guarantee, provided complainant guaranteed performance on behalf of Parikh Brothers; that Parikh Brothers had a highly-rated credit-worthiness; that the contract was to be performed shortly and swiftly, that for a small risk of Rs. 8,00,000/-, complainant would be getting commission at rate 2% covering the value of the entire consignment thus fetching him an attractive profit of Rs. 3,20,000/-. In others words, the transaction was “100% safe”. Complainant made it clear to accused No. 8 that he could not understand much of the nature of the business he was being invited to participate in. However, so great was his faith in accused No. 8, that if that person recommended the transaction, complainant would blindly go through with it. One more meeting took place in the office of Parikh Brothers, accused No. 8 again being in attendance. The commission promised to him was paid in two instalments of Rs. 30,000/- and Rs. 2,00,000/- respectively on 8-3-1882 and 27-4-1982. On 4-2-1982, in pursuance of the inducement offered by accused Nos. 8 to 10, complainant executed a document titled “General Counter Guarantee”. This document recorded complainant's undertaking to indemnify the Bank of India against loss incurred by the neglect or failure of the Parikh Brothers to perform the contract. The indemnity was however not to exceed a sum of Rs. 8,00,000/-. Pursuant to the execution of the counter-guarantee the Kuwait Finance House communicated the terms of the L/C to Parikh Brothers as also the complainant. Later on it transpired that Parikh Brothers were not as credit worthy as touted to be. This however was a later discovery for complainant. On about 9-2-1982 accused Nos. 8 to 10 visited the complainant and explained that Parikh Brothers were encountering some difficulty in financing the purchase and despatch of some part of the barley. To allay his fears, it was made clear to complainant that the money would eventually come from Kuwait but that the shipment was likely to be delayed because of this paucity of ready cash with the Parikh Brothers. He was asked to aid Parikh Brothers with a short-term advance and it was pointed out that this was necessary to guarantee some part of the ??? still due to him. Complainant was made aware that getting of licence would not be difficult for him. He was entitled to receive Rs. 27,00,000/- vis-a-vis the Andheri property passed out and delivered to the Bank of India in January 1982. The sum had been withheld bscause a “No Objection Certificate” had not been tendered by the complainant. Accused No. 8 gave an assurance that the inability to tender the NOC would no longer be a real hurdle as he would see to it that the bank released the amount advanced. Accused No. 8 had a letter drafted which he got typed on the letter head of the complainant. This letter purported to show a request made by the complainant for the advance of a sum of Rs. 15,00,000/- to him, the money being urgently requited by him as he was executing an export order. The truth was that this was done to ??? the advance of money by the complainant to the Parikh Brothers at the behest and insistence of officers of the Bank. Taking advantage of the letter addressed by him, a sum of Rs. 13,50,000/- credited to his account was made available to the Parikh Brothers. The credit in favour of Parikh Brothers was made even before the final sanction of the advance to complainant 6,000 metric tonnes of barley were shipped by Parikh Brothers to the Kuwait Supply Co. and disbursements under the L/C were made to Parikh Brothers. The suppliers also received the money meant for the remaining shipment of the remaining 2,000 metric tonnes of barley. But the documents in respect of the remaining consignment were found to be defective. As a result of this flew the Kuwait Finance House rejected the said documents and intimated the rejection to the Khand Bazar branch. This branch for the first time on 2-7-1982, called upon the complainant to pay the amount advanced against the negotiation of documents together with interest. In this manner, complainant was called upon to make good a sum of Rs. 41,00,000/-. This was unwarranted for the guarantee given by him did not make him liable for any sum in excess of Rs. 8,00,000/-. Complainant pointed out the true position to the officers of the bank but to no avail. At the end of August 1982, accused Nos. 5 to 8 made an attempt to get three documents signed by the complainant and his father. They refused to comply as by this time their suspicions of the motivations and bona fide of the bank's officers had been throughly roused. With a view to get a loan against the lease of Andheri premises, complainant at the insistence of accused Nos. 5 and 6, handed over four fetters of appropriation signed by him and three of his relations. It was understood that the letters gave the Khand Bazar branch a lien on the fixed deposits made by the executants of the letters. In some vital parts, the four letters were left blank. These four letters had nothing to do with the transaction between Parikh Brothers and the complainant or them and the bank etc.. Therefore, it was a great surprise for the complainant to be informed in the first 10 days of October 1982, that the fixed deposits would be appropriated against the sum of Rs. 41,00,000/- which the Parikh Brothers had failed to pay the bank to reimburse it for the loss pursuant to the non-shipment of the last consignment of barley to Kuwait. Complainant's advocates in a letter addressed to accused No. 7 made it clear that the appropriation of the fixed deposits by the bank was wrongful, illegal and malafide. The bank did not pay heed to the protest and appropriated Rs. 38,00,000/- belonging to the complainant and his relations which monies were subject to the control of the bank. When an attempt was made to seek redress, accused No. 4 declined to come to the aid of the complainant, making it clear that he would not do so as the bank was well protected with the appropriations afore-mentioned. A request to meet accused No. 3 was turned down by that Officer, the rejection being conveyed through accused No. 4. It was complainant's case that all the accused had perpetrated a serious fraud upon him so as to deprive him of a sum of Rs. 38,00,000/- by the commission of serious offences such as cheating criminal breach of trust and forgeries of valuable securities and documents. At a later stage, a document bearing the title OD174 was sought to be made the king-pin of the liability fastened upon him. As the document stood. It gave the impression of having been executed by the complainant and his father on 17-2-1982. As a matter of fact, OD174 was not executed on 17-2-1982 and came into existence quite some time after December 1982. The document relied upon had been touched up to support a fraudulent claim. Accused Nos. 1 to 8 were guilty of the offences of forgery with intention to chest the document being OD174, 17 reasons were given in support of the contention that OD174 was a forgery. The circumstances in which the signed OD174 came to be in possession of the bank were explained in para 26 of the complaint. The blank, but signed paper, had been furnished to the bank by the complainant and his father as guarantors of Navinchandra & Co. It had nothing to do with the advances made or transactions in which the Parikh Brothers were interested. For the reasons mentioned in para 24 and the circumstances set out in para 25 (being paras of the complaint) it was averred that accused Nos. 1 to 8 were patently guilty of an offence of forgery with intention to cheat under section 468 I.P.C Next, accused Nos. 1 to 8 were seeking to utilise OD174 to fasten upon the complainant the liability to pay Rs. 41,00,000/- ??? been dishonestly converted and the fixed deposits had been mis-appropriated. This rendered accused Nos. 1 to 8 liable for the commission of an offence punishable under section 408 I.P.C The advance of Rs. 13,50,000- by the complainant to Parikh Brothers was at the ??? of accused No. 8. It was aided by deception practised upon him by accused Nos. 6 to 8. Six reasons have been cited to bear out this contention. Accused Nos. 1 to 8 with knowledge of the true position had been parties to the forgery and misuse of the documents. This was done with a view to benefit accused Nos. 8 and 10. An overall view of the transaction, indicated that accused Nos. 1 to 10 had acted in concept and conspiracy with each other. They had by their gross fraud accused a serious loss to the bank of India. To cover up this loss they had sought to pass on the liability to complainant and his father.
3. After presentation of the complaint, the preliminary statement of complainant was recorded. Complainant in his verification dated that OD174 had not been signed by him and his father on 17-2-1982. In this connection, he referred to the report given by the Chief Vigilance Officer (C.V.O) of the bank. Next complainant spoke of accused No. 8 introducing Parikh Brothers to him and the striking of the deal whereupon he executed the Counter Performance Guarantee rendering him liable to the extant of Rs. 8,00,000/- vis-a-vis the execution of the barley contract by Parikh Brothers. He complained of being kept in ignorance about the Parikh Brothers poor reputation for credit-worthiness. It was clarified that the advance of Rs. 13,50,000/- was only to enable the Parikh Brothers to despatch the last lot of 2,000 tonnes. Accused No. B had induced him to enter into this part of the transaction, giving him to understand that he would persuade accused Nos. 5 and 6 to release the money required for that purpose. The Bills of Lading which had been rejected by the Kuwait party were per se bogus. Despite that the bank had released Rs. 41,00,000/- in favour of Parikh Brothers. The grant of Rs. 27,00,000/- was made to hustle him into obliging Parikh Brothers. The fixed deposits made by him and his relations were not to be used for the transaction figuring in this case. Each accused had used a forged document to recover Rs. 41,00,000/- from him. Accused Nos. 1 to 7 had relied upon those documents despite full knowledge of the true position.
4. After the above statement of the complainant was recorded, the learned Magistrate on 19th November 1983, passed an order worded thus:—
“Issue process u/s 468 and 471 against accused Nos. 1 to 10 r.w 109 I.P.C, u/s 406 against accused Nos. 1 to 7 r.w 109 and u/s 420 against accused Nos. 8, 9 and 10 r.w 109 I.P.C Issue bailable warrant for Rs. 10,000/- each against all above accused.”
5. In the instant petition accused Nos. 1 to 8 plead that there was no material warranting the issue of process against them. Accused Nos. 1 to 8 were “public servants” within the meaning of section 21 of the Indian Penal Code. The complaint was not preceded by a sanction of the concerned Government to prosecute them. Therefore, it was not maintainable. Next, the negations in the complaint and the verification taken together did not make out an offence against any of the petitioners. At any rate there was no legal evidence to warrant the issue of process against the petitioning accused. From the correspondence proceeding the complaint, it was clear that the real nature of the dispute between the parties was civil in nature. It was submitted that in so far as petitioners Nos. 1 to 7 were concerned they had been wrongly made parties to the complaint. This was done in order to snatch an order from the Criminal Court to intimidate and harass petitioners who were persons of high status and respectability. The ill-concealed motive was to pressurize the bank into not pressing claims against complainant. The Magistrate had erred in directing the issue of process. Proceedings taken before the Magistrate required to be quashed and it was that relief which the accused Nos. 1 to 8 sought in this petition.
6. In reply, complainant contends that there was material not only to warrant the issue of process against the petitioners, but sufficient to warrant their, “conviction”. As a general principle, a magisterial order directing the issue of process was non-reviewable. This is because the aggrieved party had the right to seek a discharge after putting an appearance before the Magistrate. In so far as the present case was concerned the complaint had to be read along with the many documents relied upon by the complement. This material clearly indicated the existence of efficient ground for proceeding further. In so far as the defence of section 197 Cr. P.C was concerned the petitioners were not public servants. Alternatively, when there was no evidence on record, it could not be said that section 197 Cr. P.C applied. It was submitted that commission of crimes could not be said to be a discharge of official duties by a public servant. It was this which had been attributed to the petitioners, and therefore, they could not take recourse to section 197.
7. Having regard to the submissions narrated above the points for decision would be:—
1. Whether no ground for further proceeding had been made out against accused Nos. 1 to 8 to warrant the issue of process against them?
2. Whether the complaint against the accused persons was not tenable inasmuch as sanction to prosecute them had not been obtained?
8. As a preliminary to a consideration of the points mentioned above it will be necessary to dilate upon the nature extent and limits of the jurisdiction invoked by the petitioners. The title to the petition also refers to Article 227 of the Constitution. This however is a formality for in substance and in reality, the sheet-anchor of the petition are the “inherent powers” of the High Court which have been given statutory recognition under section-482 of the Code of Criminal Procedure, 1973. Section 482 is a verbatim reproduction of section 561 of the Code of Criminal Procedure, 1898. I mention this to show that precedents given under section 561A are also opposite for a proper consideration of the powers of the High Court under section 482 of the 1973 Code. The High Court has general jurisdiction over all the Criminal Courts subordinate to it and has been invested with inherent powers to prevent the abuse of process of any Court or otherwise secure the ends of justice. In the very nature of things as the power is broad, there is need for circumspection. It ought not to be exercised capriciously or arbitrarily. The object of exercising this power is to do real and substantial justice for the administration of which alone, Courts exist. The section saves the inherent powers of the High Court designedly with a view to achieve a salutary public purpose viz. to prevent the degeneration of a Court proceeding into a weapon of harassment of the innocent. In the instant case, the accused seek to quash the prosecution initiated against them. The normal rule in such cases is to let the law take its course. In other words, the person whose attendance is requisitioned by a Criminal Court, has to attend that Court, face an enquiry be charged if an offence is made out, face a trial, be questioned, and, if so desired, permitted to lead evidence in defence and then await the verdict. This however is not to any that every person who is proceeded against for the alleged commission of an offence, has to undergo this long and arduous or deal. Where the allegations set out in the complaint or charge-sheet do not constitute any offence, but the Magistrate has wrongly assumed the existence of some offence, it is open to the High Court exercising its inherent power to quash the order of the Magistrate. If there be prima facie grounds for proceeding against the accused, and, the Magistrate, therefore, issues process against them, it is not open to the High Court to launch a detailed and meticulous examination of the case on merits, and set aside the order of the Magistrate. Conversely, where there is no material on record to connect the accused with the incident leading to their prosecution, the High Court will quash the proceeding launched against the accused. A criminal proceeding started by a complaint which does not contain any definite accusation, is an abuse of the process of the Court and has to be quashed. Faced with a private complaint, the Magistrate has to go by the provisions of Chapters XV and XVI of the 1973 Code. The position is that if the allegations in the complaint be clear they are to be taken as reflective of the truth. If the Magistrate after a consideration of the recitals in the complaint and other material before him, takes cognizance, the High Court will not interfere. Shortly stated and to use the language of the statute Itself, it all depends upon whether “sufficient ground” has been made out or is absent. If it is absent the Magistrate has to dismiss the complaint and record in brief his reasons for so doing. If he believes otherwise viz. that “Sufficient ground for proceeding” exists, then he has to direct the issue of process to the accused. The subject under consideration has been the topic of a wide-ranging debate covering decades and numerous precedents. One of the celebrated decisions on the subject, is that of the Supreme Court in 1(Smt. Nagawa v. Vearana), reported in 1976 Cri. L.J 1633, Fazal Ali, J., speaking for the Bench categorised four typos of cases in which an order of a Magistrate issuing process could be quashed or set aside. These were:—
“(1) where the allegations made in the complaint or the statement of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused;
(2) where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused;
(3) where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or no materials which are wholly irrelevant or ??? and
(4) where the complaint suffers from fundamental legal defects, such as, want of sanction or absence of a complaint by legally competent authority and the like.”
8. The nature, extent and the limit of the jurisdiction can be best understood, to quote Mr. Justice Fazal Ali again in 2(Municipal Corooration Of Delhi… v. Ram Kishan….), reported in 1983 Cri. L.J 159—
“It is therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482 of the present Code”.
9. On behalf of the complainant it is contended that an order of a Magistrate directing the issue of process, though theoretically justiciable should not be reviewed except in the grossest passible case. To support this contention reliance was placed upon certain words used in sections 203 and 204 of the 1973 Code. The submission is that if the Magistrate wants to dismiss a complaint because of the opinion that there is no sufficient ground for proceeding, he is under an obligation to briefly record his reasons for so doing. In contrast, no reasons are required to be given when he takes cognizance of an offence because of the belief that there is sufficient ground for proceeding. This according to learned Counsel indicates the desire of the Legislature to keep unfettered the process of the Court so that crimes can be tried and the offenders punished or exonerated if they be innocent. To put it differently, if there be specific allegations made against the accused which are capable of being translated into evidence and if the said evidence constitutes a crime, an order directing the issue of process cannot be interdicted. But section 482 permits quashing of cognizance wrongly or illegally taken. It is no answer to say that cognizance is taken of on offence and not of the offender and therefore, when cogizance has been taken and process directed to be issued, the same cannot be quashed. The word “cognizance” means becoming aware of and when used with reference to a Court or Judge means to take notice of judicially. A specific offence and a specific person are amongst the essentials of taking cognizance of an offence. It is true that the complaint need not specify the name of the offender, for the complainant can very well say that the offence has been committed by a person unknown to him. It will then be for the Magistrate to take cognizance and direct investigation of the offence so that the offenders can be traced. But this argument is of no consequence where it is alleged that the transaction set out in the complaint constitutes an offence and that the commuters of the offence are the persons arraigned. In such a case to allow the complaint to continue, if there be no material against the named offenders would be to allow the continuation of an instrument of oppression. Complainant cannot say that he has made out an offence and that cognizance having been taken of the offence, the enquiry should proceed apace so that he cannot get an opportunity to rope in later as many as he wants, though in the complaint itself, there be no material to warrant the belief or even suspicion that they have committed an offence. Reliance was placed upon 3(Union of India v. Prafulla Kumar Samant), reported in 1979 Cri. L.J 154 wherein it was held that even material warranting grave suspicion sufficed for the framing of a charge against an accused. Yes, this exposition of what constitutes material sufficient for framing of a charge is undoubtedly applicable to what constitutes “sufficient ground for proceeding” vide section 204 of the 1973 Code. But the material contemplated by the observations must be comprised in specification of facts which should be objectively ascertainable. Invective, vituperation, surmise, suggestion, inference or insinuation however cleverly and strongly expressed, cannot take the place of material which would constitute sufficient ground for proceeding further. If the complaint consists of the assertions or insinuations even if coupled with conclusions, that would not make out “sufficient ground” for proceeding further. Bearing this exposition in mind. I now turn to a scrutiny of the material that led the Magistrate to direct the issue of process against the petitioners.
10. Accused Nos. 1 to 4 are high officials of the Central office of the Bank of India, but not concerned with day-to-day operations of the several branches of the bank, much less, any particular branch in the metropolitan city of Bombay. Accused Nos. 5 and 6 are Officers of the bank dealing with affairs of the bank's branches in the Bombay Metropolitan Zone. It is necessary to consider the case of these six persons apart from that against the remaining two accused viz. accused Nos. 7 and 8. The admitted position is that except in a supervisory capacity, accused Nos. 1 to 6 could have had nothing to do with the day-to-day conduct of the bank's Khand Bazar Branch.
11. Accused No. 1 is the Managing-Director/Chairman and as such, the senior-most Officer of the Bank of India. In the complaint, he has been described as “senior-most Officer attached to Bank of India and incharge of its banking operations”. It the idea is to point accused No. 1 as some sort of a master Don, the depiction fails to carry conviction. A person may be in over-all charge of an institution. That does not render him liable for all the misdemeanors and crimes committed by every employee of the organization Complainant's advocates wrote a number of letters to accused No. 1 complaining of the conduct of accused Nos. 3 to 5. On 2-2-1983, complainant had an interview with him and gave a full picture of the true position. On that occasion, accused No. 1 is said to have given an assuence that he would take a proper decision after going through the entire papers which were in a mess. Letter dated 9-2-1983 was addressed to accused No. 1 by complainant's advocates wherein a detailed picture of the forging of OD174 was set out and there was a definite allegation that the forgery was the work of bank Officers at all levels. Another letter sent by the complainant's advocates to accused No. 1 was that dated 16-5-1983. It is said that in reply to that letter, despite knowledge, the bank continued to maintain that OD174 and the appropriation letters which were alleged to be forgeries were genuine. There is a recital in the complaint about all accused, inclusive of accused No. 1 having perpetrated a serious fraud upon the complainant with the object of depriving him of Rs. 38,00,000/- and forging and making use of forged documents. Para 24 of the complaint contained a number of grounds designed to show that OD174 was a forgery. These grounds are argumentative find inferential. How OD174 must have been fabricated is explained in para 25 of the complaint Para 26 suddenly, overs that for the reasons stated in paras 24 and 25, accused Nos. 1 to 8 are patently guilty of forgery etc.. The conclusion does not follow from what precedes it. The preceding paragraph is argumentative and inferential. It does not specify facts indicating the place, manner and mode of committing the offences ascribed to various offenders, to effect complainant jumps from a conclusion to the reasoning and not vice-verse. The allegation is that because OD174 and the appropriation letters had been forged, it followed that accused No. 1 along with others, was guilty of the forgery, of making use of forged documents and breach of trust etc. Para 29 of the complaint is another attempt to fasten guilt upon the second persons. The accused mentioned in this paragraph are accused Nos. 5 to 10. Para 30 of the complaint is a summary of what has been set out in the preceding paragraph vis-a-vis accused Nos. 6 to 8. This does not restrain the complainant from reciting in para 31 that all the accused inclusive of accused No. 1, were therefore parties to forgery and the of documents. Para 32 contains a recital that the guilt of accused Nos. 1 to 10 be obvious and that they had acted in conspiracy with each other to commit offences of cheating forgery breach of trust etc.. At the and it is said that accused Nos. 1 to 8 parted with Rs. 41,00,000/- long before the completion of the shipment and thereby caused a serious loss to the Bank of India. To cover up their culpability, they had forged documents and tried to get the bank reimbursed at the cost of the complainant.
12. In relation to accused No. 2, the specification is that he had received a report of the CVO which showed that OD174 and four appropriations letters came into existence after December 1972; his being the recipient of notices sent on behalf of the complaint; and his being informed by complainant of the true position and in particular the attempts made by accused Nos. 5 and 6 to get from him a receipt in full and final satisfaction of the claim amounting to Rs. 46,00,000/-. It is further said that he promised to convey the views of the complainant to accused No. 1. Accused No. 2 is also alleged to have been privy to the design to recover Rs. 41,00,000/- from complainant.
13. I need not detail the specifications in relation to accused Nos. 3 and 4. These are a mere reproduction of whatever has been said against accused Nos. 1 and 2.
14. There is slightly more material against accused Nos. 5 and 6. They are the Manager and Deputy Manager of the Bank of India's Bombay Metropolitan Zone. In so far accused No. 5 is concerned, it is said that he sanctioned a loan of Rs. 13,50,000/- to complainant. The loan was sanctioned on 23.3.1962 though the actual disbursement was made on 13-3-1982. This could have been done only if accused No. 5 had an unhealthy interest in accused Nos. 9 and 10. But it must not be forgotten that the loan was sanctioned upon a request made by the complainant, who pleaded urgency in the grant thereof because “We are executing urgent export orders” (see letter dt. 15-2-1982 addressed by complainant to Khand Bazar branch). Complainant admittedly was an esteemed constituent of the Bank. At the end of August 1982, an attempt is said to have been made by accused Nos. 5 to 8 to get complainant and his father to sign three documents which already bore the signature of accused Nos. 9 and 10. A reference to this is to be found in para 16 of the complaint. This apart, what is clear is that the efforts of accused Nos. 5 to 8, were rebuffed. Thus at the most accused Nos. 5 to 8 in trying to get complainant and his father to sign the documents, may be said to have committed an act property to the commission of an offence. In the first week of September 1982, accused No. 5 is said to have informed complainant of the bank's readiness to grant him the balance of loan given against the lease of the Andheri premises without the production of a NOC. All this is said to have been done to enable the Parikh Brothers to fatten upon money belonging to the complainant. Complainant, unaware of the true intentions of the bank's Officers and Parikh Brothers made over four blank appropriation letters to accused No. 5. These ??? letters were later utilised, rather misused, to denude complainant and his relations of the fixed deposits made by them with the bank. The money of course went for the use of the Parikh Brothers. Accused No. 5 denied in writing a claim of complainant that the bank acted illegally is appropriating the fixed deposits pursuant to the letter of appropriation. He refused to grant inspection of documents to complainant on the ??? ground of absence of litigation. An advance of Rs. 13,50,000/- was given to the complainant to enable him to come to the aid of the Parikh Brothers. This was done upon a request made by him on 15-2-1982. Accused Nos. 5 to 8 who are said to have aided him in getting this money at an early date are accused of having been “helpful” so as to aid the Parikh Brothers and thus cheat the complainant. The material in relation to accused No. 6 consists of all that recited against the fifth accused and accused Nos. 1 to 4.
15. Mr. Desai for petitioners says that the material against accused Nos. 1 to 8 is totally deficient in showing the existence of any ground, much less sufficient ground for proceeding further with an enquiry. The object of the enquiry must be discovery of the truth or falsehood of the allegations in so far as they pertain to these accused. In reply quite apart from the details referred to above, it is contended that despite the receipt of the report of the CVO, the petitioners went on maintaining that OD174 and the appropriation letters were genuine. On the basis of these documents, complainant was sought to be deprived of Rs. 41,00,000/-. Sums lying with the bank to the credit of himself and his relations were appropriated towards advances made to Parikh Brothers. This if nothing else, made the accused guilty of the offences punishable under section 471 of the Penal Code. Section 471 is claimed against ??? or dishonest use, as genuine of any documents, which the user known or has reason to believe to be a forged document. According to complainant's Counsel even the insistence upon the use of the document by the petitioners was enough to render them liable under section 471. In this connection, reliance was placed upon 4(Legal Remembrancer Of Govt. Of West Bengal v. Haridas Mundra ) reported in 1976 Cri. L.J 1732. In that case two forged bills were used to make entries in the books of accused of a concern. This led to a prosecution under section 471. But that by itself is of no relevance to the present case. The very words of section 471 indicate that the use as genuine of a forged document has to be with an intent dishonest or fraudulent. A mere erroneous belief and persistence in a wrong or perverse opinion cannot be said to be offences tainted with a dishonest or fraudulent intent.
16. The other material said to establish the existence of a prime facie case against the petitioners is the preliminary statement of the complainant, commonly referred to as the verification, has this—
OD174 though it bore the signatures of complainant and his father, was not signed by them on 17-2-1982 as the document purported to show on the face thereof. In this connection, complainant relied upon the CVO's report. That report made no reference to OD174 or the appropriation letters. In other words, and that is a conclusion of the complainant these documents in a fabricated state, came into existence after December 1982 when the report of the CVO was drawn up and circulated. Presently. I shall not refer to the allegations against accused No. 8 in the verification. All that is said against accused Nos. 5 and 6 is an assurance on the part of accused No. 8 that he would see to it that they sanctioned at an early date the loan of Rs. 13,50,000/- which was required to finance purchase of barley by Parikh Brothers, complainant refers to the patently bogus character of the bills of lading and mentions, that despite this, a sum of Rs. 41,00,000/- was released to finance Parikh Brothers. The appropriation letters were taken from him on the understanding that they would be used to give him a sum of Rs. 27,00,000/- against the Andheri property. This sum was not to be utilised for the purpose of Parikh Brothers. Yet, the appropriation letters were later utilised to reimburse the bank for advances made to Parikh Brothers. Complainant makes a reference to the insistence of the petitioners upon using forged documents to recover Rs. 41,00,000/-. At the end, complainant says that the reliance placed on the documents by accused Nos. 1 to 7, is, despite full knowledge of the true position. The true position, according to him is: that OD174 and the appropriation letters were forged and could not have been used to advance his monies to the Parikh Brothers or to reimburse the bank for the defaults committed by the Parikh Brothers in respect of monies granted to them. In fact at the very inception Parikh Brothers had undertaken not to seek any finance except the Counter Performance Guarantee from bank. As to the documents, these consist of the alleged forgeries, correspondence exchanged between parties, extracts from accounts etc.. It is on the above material that the exgistence or otherwise of sufficient ground has to be tested.
17. As said earlier, material warranting belief that a prima facie case exists, or to put it differently, that there is sufficient ground for proceeding, has to consist of ??? specification. It is not enough to say that so and so has forged such and such document, has committed criminal breach of trust to this or that extent or has knowingly used as genuine a document which he knows or has reason to believe to be false. These are conclusions, assertions inferences and allegations bereft of material whereupon a belief can be founded. Even for the formation of a suspicion one is not to be carried away by strong words indignantly uttered. The indignation may be simulated and the strong language may be cloak to cover the hollowness of the accusation. If this is borne in mind, it will be clear that there is not the slightest material against the accused Nos. 1 to 6. Accused No. 1 is the Principal Officer of the Bank of India. From this it does not follow that he was conversant with the doings of the various branches of the said bank. It is not complainant's case that OD174 and four appropriation letters were ever in his custody. That he was made conversant with complainant's case or that he pave an assurance to look into the matter, cannot be construed as evidence of a fake show of reasonableness designed to ward off the complainant or his suspicions. Accused No. 1's directing a refutation of complainant's version contained in communications sent by his advocates can certainly not be described as criminal. That the CVO's report had come to him, does not warrant the inference that he had reed it. But even otherwise, a refusal to accept the correctness of the said report does not mean that accused No. 1 harbored any criminal intentions. That the CVO's report was a well-reasoned are or that it could be rejected only for good reasons cannot render accused No. 1 liable for a crime. If mistaken opinions and beliefs are to be equated with crimes, everyone of us would be in the danger of being booked under the Penal Code. Fortunately, things have not come to this pass-till now. Accused Nos. 1 to 4 have been dragged in because they preferred to accept the version of their subordinate rather than complainant supported as he was by the CVO. But that would not make them guilty of an indictable offence. Complainant is not unaware of the hollowness in his complaint as against accused Nos. 1 to 4. That is why the recourse to the slightest that could help him to implead these four persons. Para 22 of the complaint speaks of a letter written to accused No. 4 and the meeting with that person. The impression sought to be given is that accused No. 4 though convinced of the genuineness of the version, fobbed him off by saying that he did not want to render any assistance inasmuch as the bank stood reimbursed by having frozen all the monies lying to the credit of the complainant and his relations. Stunned by this, complainant and his advocates requested for an appointment with accused No. 3. Accused No. 4 after meeting accused No. 3 replied that person was not in a position to meet complainant and his advocates. At the most, this would show bureaucratic insensitiveness. As yet, the statute book does not recognise this callousness as a crime. Can it be viewed as suspicious conduct, conduct indicative of accused Nos. 3 and 4 being a party to the conspiracy spoken of in the last paragraph of the complaint? But there is no evidence of the conspiracy, except in the use of strong words to that effect in the complaint of the complainant. Para 23 of the complaint speaks of “total lack of response from the concerned Officers of the bank”. Now a bank, even the Khand Bazar branch, consists of hundreds of employees, apart from accused Nos. 1 to 6. The complaint is liberally sprinkled with words like forgery, fraud, dishonesty, fabrication, cheating, breach of trust conspiracy, concoctions, beneficiaries of fraud etc. etc.. These words do not make good the missing essentials, though they may seem a good cloak to the basic hollowness of the complaint, Accused Nos. 5 and 6 are sought to be dragged in because of the work done by them in the grant of an advance to complainant to enable him to finance the purchase of barley by Parikh Brothers. On his own admission, complainant was led into this because of the commitment he had already made. Letter dated 15-2-1982 speaks of the urgent requirement for the advance as an export order had to be executed it some concessions were given to a privileged client, and, complainant was that, I do not see how the assistance rendered by accused Nos. 5 and 6 can be looked upon as evidence of dishonesty, fraud or even a desire to favour the Parikh Brothers at the cost of the complainant Prima facie, letter dated 15-2-1982 gives the impression of complainant executing, not financing an export order. The plea that this letter was written at the behest of accused No. 8 may be true. Nonetheless, complainant knew the true Implications of the words to which he was lending his signature. That accused Nos. 5 and 6 wanted him to sign the documents which already had the signatures of accused Nos. 9 and 10, is hardly proof of their culpability. Possibly they were trying to take steps to protect the interests of the bank. That accused No. 5 obtained the letters of appropriation from complainant and his relations is again an indication of steps being taken to protect the interests of the bank. An advance was going to be given to the complainant. This was to be done in the absence of a vital document lite the NOC. The bank had to have sufficient security for making the advance. Letters of appropriation to act upon the fixed deposits in the event of defaults, were perfectly legitimate. In fact, so legitimate were they that even the complainant saw nothing wrong in making them over after deliberation to accused No. 5. That these letters were subsequently touched up to give the impression of their being eligible for use in the case of default by the Parikh Brothers, is neither here nor there. The touching up is not shown to be the handi-work of accused No. 5. Because he requisitioned them, it does not follow that he was responsible for the alleged fabrication. To recapitulate, the material placed before the Magistrate in relation to accused Nos. 1 to 6, does not indicate the existence of such facts or circumstances as would be reflective of the commission of any crime. This deficiency is not made good by the mere use of expressions like perpetration of fraud, forging of document to cheat, commission of criminal breach of trust and dishonest use of a false document to foist a liability etc. etc.. Accused Nos. 1 to 6 had no direct connection with complainant in the matter of the transaction with the Parikh Brothers or the advances made to him upon the lease of the Andheri premises. These were dealings between the complainant on the one hand and the Khand Bazar branch on the other. If in a supervisory capacity, accused Nos. 5 and 6 did append their signatures to the grant of advances to complainant that was because of their supervisory office vis-a-vis the bank's branches in the Metropolitan Zone of Bombay. Refusing the complainant's claim or about his hemp liable for the loss flowing from the last consignment of Parikh Brothers falling through cannot be evidence of any crime. Complainant claimed that the bank was seeking to make him liable for the loss on the basis of forged documents. This allegation was being contradicted by accused No. 1 to 6 who were asserting that the document viz. OD174 and the four appropriation letters were genuine, and, that what was false, was, the complainant's labellings them to be forgeries. Taking the complaint at its best, all that can be said against accused Nos. 1 to 6, is, that despite good material to support the complainant's stand they persisted in over-looking the same and holding him liable to reimburse the bank.
18. In so far as accused No. 7 is concerned, complainant's case as against him is that he was a successor to accused No. 8 as Manager of the Khand Bazar branch, Accused No. 7 took over from accused No. 8 from 7-8-1982 and continued to function in that capacity till May 1983. Accused No. 7. It is alleged was a signatory to letter dated 6-8-1982 which informed complainant of the loan for Rs. 1,50,000/- having been sanctioned. A follow up letter dated 24-8-1932 was sent by accused No. 7 in which complainant was asked to refund the amount. This is because the usual case of the complainant against all the accused—they must have been parties to the fabrication of OD174 and the appropriation letters. This does not carry the complainant's case any further, and certainly, not against accused No. 7. Taking all these recitals together. It does not follow that any crime is made out against accused No. 7.
19. In relation to accused No. 8, the complainant stands on a stronger footing. It was argued that the material as against accused No. 8 was not credible and did not constitute legal evidence to justify the issue of process against him. It is not possible to agree with this submission. Para 6 of the complaint shows that accused No. 8 was responsible for introducing the Parikh Brothers to the complainant. He did not stop at an introduction. It was accused No. 8 who invited complainant to participate in the furnishing of a Counter Performance Guarantee, which at a minimum risk, would ensure a lucrative return of lacs. Then there is the alleged assurance given by accused No. 8 of complainant being called upon to participate in a venture which was 100% safe. Complainant made it clear that he could not comprehend the true nature of the transaction but would go headlong into it provided it had the recommendation of accused No. 8. Parikh Brothers, it subsequently transpired, had a poor reputation for credit-worthiness. They had been placed on the “prior clearance list”. In other words, unless cleared by specific authorisation of certain higher-ups, no advances could be made to the party on the basis of their own security. Accused No. 8 was supposed to know of the straitened financial condition of the Parikh Brothers. This was not made known by him to the complainant. The suppression of a vital detail when inviting another to stand guarantee for a person may be evidence of dishonesty and/or fraud. The deal between the Khand Bazar branch on the one hand and complainant on the other, was negotiated on papers drawn up during the tenure of accused No. 8 as the Manager of the Khand Bazar branch. If so, the advances were made to Parikh Brothers from out of funds released for complainant during the tenure of accused No. 8. The complainant speaks of unusual interest shown by accused No. 8 in obliging Parikh Brothers. Complainant's penchant for exaggeration and vituperation notwithstanding. It must be said that a satisfactory case for the issue of process against accused No. 8 has been established. To that extent the Magistrate's order cannot be faulted.
20. It was contended that even if the record at present does not make out a prima facie case against accused Nos. 1 to 7, complainant should not be excluded from the opportunity to establish such a case against them at a ??? I am concerned only with the material on the basis of which the Magistrate has taken cognizance. What material comes subsequently, and what effect bah be given thereto is a question that has not yet arisen. At the appropriate stage that will have to be resolved by the Magistrate upon a proper application being made to him. On 19-11-1983, there was no material before the Magistrate to warrant the issue of process against accused Nos. 1 to 7.
21. Petitioners contend that the complaint launched against them is not maintainable inasmuch as the same was not preceded by sanction from the appropriate Government. In support of this contention reliance is placed upon section 197 of the Code of 1973. That section in so far as it is relevant far our purposes reads thus:—
“When any person who is or was……a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanctior—
(a) in the case of a person who is employed or, as the case may be was at the time of commission of the alleged offence employed. In connection with the affairs of the Union of the Central Government.”
22. Though the petition pleads the bar of section 197, Cr. P.C in relation to all the petitioners, Mr. Desai fairly conceded that the plea could betaken advantage of only by accused Nos. 1 and 2. Mr. Desai submits that accused Nos. 1 and 2 were public servants as contemplated by clause 12 of section 21 of the Indian Penal Code. This clause reads:—
“The words “public servant” denote a person falling under………. Every person—
(a) ……
(b) In the service of pay of…a corporation established by or under a Central, Provincial or State Act or a Government Company as defined in section 617 of the Companies Act, 1956 (1 of 1956)”.
23. It was further argued that the acts allegedly amounting to an offence ascribed to accused Nos. 1 and 2 would attract the words “acting or purporting to act in the discharge of official duty” occurring in section 197 of the Code of 1973. To this the complainant's reply is that accused Nos. 1 and 2 are not public servants vis-a-vis section 21 of the Penal Code. This is deduced from the relevant provisions of the Banking Regulations Act, 1949, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (See sections 46A and 14 respectively of the three Acts). The submission is that accused Nos. 1 and 2 according to the above provisions are “public servants” for the limited purpose of Chapter IX of the Penal Code. This Chapter covers sections 161 to 171 of the said Code. For all other purposes, they are excluded from the description of “public servant”. Having regard to the specific words used by the Banking Acts afore-mentioned, reliance cannot be placed upon clause 12 of section 21 of the Penal Code. At any rate, it cannot be said that what is ascribed to accused Nos. 1 and 2 viz. commission of forgery dishonest use of a forged document and criminal breech of trust constitute note done “in the discharge or purported discharge of official duty”. A third alternative put forth on behalf of the complainant is that further evidence is necessary to rule upon the submission for that alone would show whether accused Nos. 1 and 2 merely used their office to commit the offences ascribed to them or whether the discharge of their duties was so inter-women with the acts constituting the offence, that it became impossible to server the two. A very interesting and the argument has been advanced by Counsel or both the sides. In view of my finding on the first paint. It is not really necessary to give a considered finding on the tenability or otherwise of the special defence raised on behalf of accused Nos. 1 and 2. But it is necessary that I take note of some of the submissions made by Counsel.
24. Section 46A of the Banking Regulations Act, 1948 lays down that a chairman, director, manager and other employees of a banking company shall be deemed to be a public servant for the purposes of Chapter IX of the Indian Penal Code”. In the Acquisition and Transfer under takings Act of 1970 section 14 prescribes that every custodian of a corresponding new bank viz. a nationalised bank, shall be deemed to be a public servant, again, “for the purposes of Chapter IX of the Indian Penal Code”, Act No. 40 of 1980 in section 14, reports the deeming being restricted to Chapter IX of the Penal Code. The reply given on behalf of accused Nos. 1 and 2 to the very arresting reply of complainant is that the same was introduced by way of abundant caution. It did not exclude the operation of clause 12 of section 21 of the Penal Code Bank employees are “public servants” for the purpose of section 21 clause 12(b) of the Penal Code, is the ratio of the decision reported in 1979 Allahabad Law Journal page 922 5(S.C Agrawal v. The State of U.P) 6(Kurlan v. State of Kerala), 1982 Cri. L.J page 538 and 7(Kundan Lal Sharma v. State of Punjab), 1985 Cri. L.J page 1411. None of these decisions refers to section 46A of the Banking Regulations Act of 1948 or section 14 of the 1970 or 1980. Acquisition and Transfer of Undertakings Act. To my mind, where the banking statute show a limitation, it will not be permissible to over come those limits by recourse to the general words used in clause 12(b) of section 21 I.P.C If the legislature wanted certain specific bank employees to be considered public servants' for a limited purpose, the contrary cannot be held by taking recourse to the wide ??? of section 21 I.P.C
25. This brings me to the ??? albeit vexed problem as to whether the offences ??? to accused Nos. 1 and 2 can be said to have been committed by them “while acting or purporting to act in the discharge of their official duties”. The ??? of these words is not free from doubt. The difficulty is in no way surmounted by the principles enunciated from time to time. This is because the difficulty really ??? in the actual application of the principles enunciated rather than ??? of the principles. There has therefore be an continued contract of decision so to the ??? to be placed upon the words extracted about. At least three different views have been expressed.
26. The first view is that the section applies only where the offence is such that it can be committed only by a public servant and not by any-body else. This view has been a rely expressed and subsequently declared to be wrong. The section makes it clear that the test is not whether the offence is capable of being committed only by a public servant and not by anyone else but whether it is committed in the circumstances specified in the section. In other words the question as to whether the particular offence comes under section 197 depends not on the nature of the offence, but on the circumstances under which it is committed. The second view is that the section applies only if the act complained of is itself done by the public servant in pursuance of his public office although it may be in excess of the duty or in the absence of such duty. The third view is that the section refers to cases where the act constituting the offence is committed in the curse of the some transaction in which the official duty is performed or purports to be performed. Differently put and to use the words of 1955 Cri. L.J 885—
“If act complained of has been done by virtue of the office, sanction would be necessary irrespective of whether it was in fact a proper discharge of his duties by the public servant, because that would really be a matter of defence on the merits.”
27. In the same volume in a different case at page 857 it was observed—
“It is not the duty we have to examine so much as the act, because an official act can be performed in the discharge of official duty as well as in dereliction of it. The section has content and its language must be given meaning.”
28. But the mere fact that an offence is committed while the public servant is engaged in the performance of an official duty does not automatically require Governmental sanction for the offender to be prosecuted. This is because the offence may have been committed purely on private account. The section does not imply that every act which constituted offence, must be the official duty of the public servant concerned. If that were not the case the section would have no operation at all as it would be a contradiction in terms inasmuch as an official act cannot at the same time be an official duty. To clarify, the section contemplates an act which is done by a public officer in his official capacity but which at the same time is neither his duty nor his right as such public office to do as in that case be would not be committing an offence at all and there would be no question of prosecuting him or obtaining sanction for such prosecution. The other facts of the question have been the subject of a number of decisions by the Supreme Court of which I need only mention the cases reported in 1958 Cri. L.J 150 : 1960 Cri. L.J 179 and 1987 Cri. L.J 660. It would be difficult to scrutinize the applicability or exclusion of the requirement of sanction on the basis of the recitals appearing in the present complaint. The complaint recites material facts and the question of sanction is not entirely independent of supplementary details which can come only through further evidence. Mr. Desai submits that section 197 Cr. P.C 12 attracted because of the complainant's admission that accused Nos. 1 and 2 sought to render him liable in the discharge of bank duties. This contention has to be weighted along with the allegation that this instance was to cover a loss sustained by the bank by the dishonest release of funds to aid the Parikh Brothers. Translated into evidence this allegation could not sustain the defence of sanction being required. In that event accused Nos. 1 and 2 would have used their office to commit an offence. Performance of an official duty could not be pleaded as a defence to the commission of that offence. I have already held that accused Nos. 1 and 2 are not public servants within the ??? of section 21 vis-a-vis the offences attributed to them. Therefore, the secondary question of whether the offence were committed in the discharge of official duties does not survive. But if it does, it will have to be held that the same cannot be ruled upon in the ??? of fuller evidence.
29. The result is that the petition succeeds in respect of accused Nos. 1 to 7. In so far as accused No. 8 is concerned the process directed to be issued against him is correct. Hence the order.
30. Process issued against petitioners Nos. 1 to 7 vis-a-vis offences punishable under sections 468, 471 and 406 read with 109 quashed and set aside. The complaint as against petitioners Nos. 1 to 7 is dismissed. The complaint in so far as it pertains to accused No. 8 shall proceed. Rule in the above terms made absolute.
31. Rule made absolute.
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