Hari Krishan vs State of Haryana

K.S. Kumaran, J.

F.I.R. No. 20 dated 3.3.1999 has been registered at Police Station Sadhaura, under Sections 406, 420 and 120B of the Indian Penal Code on the complaint lodged by Darshan Singh, Branch Manager, State Bank of Patiala, Industrial Area Yamunanagar, wherein the following material allegations are found :

(1) Hari Kishan (2) Meenakshi Gupta and (3) Neeraj Gupta, were allowed cash credit limit of Rs. 35 Lacs for running business of Rice Sheller in the name and style of M/s Parkash Rice and General Mills Sadhaura. They were legally bound to keep sufficient stock and deposit the sale proceeds with the complainantbank. All the times these persons assured that they are keeping sufficient stocks with them purchased with the money lent by the bank. But these persons are not keeping any stock purchased by them and they have failed to deposit the sale proceeds into the complainantbank. It is established that they have closed down the business, sold the stock and misappropriated the sale proceeds by playing fraud with the bank. The complainant visited the spot on 22.1.1999, but there was no stock. Accused have closed down their business without intimation to the complainant.

PetitionerHari Kishan approached the Additional Sessions Judge, at Yamunanagar (Jagdhari) for bail in anticipation of arrest but this petition has been dismissed by the learned Additional Sessions Judge. Therefore, the petitioner has approached this Court under Section 438 Cr.P.C. for the said relief.

I have heard the learned counsel for both the sides and have perused the records on file.

Learned counsel for the petitioner contends that the Rice Mills was running profitably but 3.1.1996 three of its Directors died in an accident and their untimely death had brought the Rice Mills into crisis. He contends that no offence under Sections 406, 420 and 120B of the Indian Penal Code has been made since the dispute is purely of a civil nature and the complainantbank has to file a suit for recovery. The learned counsel for the petitioner contends that there was no dishonest intention on the part of the petitioner when the bank extended the cash credit facility. The learned counsel for the petitioner also contends that the even before the F.I.R. was registered on 3.3.1999, the bank has taken into custody the entire plant, machinery and 24 kanals of land on 22.1.1999. The further contention of the learned counsel for the petitioner is that no recovery is to be made and all the documents are in the custody of the police.

A reading of the F.I.R. does not show that the petitioner had any dishonest intention either to misappropriate the goods, the value of the goods or to cheat the bank of its dues. Whatever stock purchased by its funds advanced by the bank has naturally to be sold by the debtor, because it is only for the purposes of business for which the loan was borrowed with which the stock was purchased. Therefore, from the mere fact that the stock was sold and that no stock was found on the date when the Manager of the bank visited the premises, it cannot mean that the petitioner had either committed criminal breach of trust or he had cheated the bank. The decisions Dilbagh Rai v. State of Haryana, 1999(2) RCR 596 , Sunita Bajaj v. Punjab and Sind Bank, 1998(1) RCR(Criminal) 129 Pardeep Kumar v. State of Haryana, 1996(2) RCR 791, and C.B.I. New Delhi v. Duncans Agro Industries Ltd., Calcutta, 1996(3) RCR 60 (SC) support the contention of the learned counsel for the petitioner in this regard. The decision in Director of Enforcement v. P.V. Prabhakar Rao, 1997(4) RCR(Criminal) 3 has no application to the facts of this case. That case related to the Foreign Exchange Regulation Act, 1973 and the fertilizer scam involving crores of rupees. Similarly, the decision of Man Mohan Singh v. State of Punjab, 1998(2) RCR(Criminal) 460 also will not apply to the facts of this case, because in that case, the accused had issued cheques against goods supplied to him but no cheque could be enchashed. F.I.R. was lodged under Sections 420 I.P.C. and 506 I.P.C. Therefore, the facts of that case are different from the facts of the present case on hand.

The learned counsel for the State of course conceded that the petitioner has joined the investigation but contended that he has not produced the records. He also contended that sale proceeds have not been deposited with the bank and have been used for other purposes and that the petitioner has embezzled public money. The learned counsel for the complainant pointed out clause 3 of the order sanctioning the cash credit facility and contends that the borrower ought to uprooted their sale proceeds with the cash credit account with the bank which means that the borrower should have deposited all the sale proceed into the bank which the borrower has not done and, therefore, the petitioner is not entitled to be released on bail. But the learned counsel for the petitioner contends that even this alleged failure is only a violation of a condition for which the loan was advanced for which a suit can be filed for recovery. He contended that it is only a civil dispute involving no criminal liability.

In these circumstances, taking into consideration the rival contentions put forward but at the same time without meaning to express any opinion on the merits of the main case, I am of the view that the petitioner is entitled to be released on bail in anticipation of arrest.

In the result, the petition is allowed.

In the event of arrest of the petitioner on the allegations found in the FIR mentioned in this petition the petitioner is ordered to be released on bail on his furnishing sufficient surety to the satisfaction of the arresting officer.

However, if further association of the petitioner is necessary for the purpose of investigation, the concerned investigating officer shall issue notice giving sufficient time to the petitioner to join investigation and on such notice, petitioner shall join investigation.

However, the petitioner shall abide by the provisions of Section 438(2) Cr.P.C.