Indiabulls Housing Finance Limited and Others vs Chemcrown Exports Limited and Others

Sudip Ahluwalia, J.—1. This Revisional application has been filed with a prayer for quashing the proceedings of Complaint Case No. C 413786 of 2014 pending in the Court of the Ld. Metropolitan Magistrate, 18th Court, Calcutta.

The petitioners in the two matters are the present and past Office Bearers of the Company "M/s. Indiabulls Housing Finance Limited". The Opposite Party No. 2/complainant had originally filed the complaint alleging commission of offences under Sections 420/406/465/468/471/477A of the Indian Penal Code.

The Ld. Court below, after recording the statements of the witnesses examined on behalf of the complainant U/S. 200 Cr.P.C., was pleased to direct issuance of summons upon the petitioners.

The substance of the allegations made out in the complaint was that the Petitioner Company had firstly imposed arbitrary and uncalled for charges in respect of the complainant''s loan agreement, and had gone to the extent of making interpolations in the relevant Sanction Letter by way of inserting ''Foreclosure charges'' therein, which, according to the complainant were non-existent when the agreement was entered into, and were subsequently inserted with the intention to defraud it.

The contention of the petitioners on the other hand is that there was no illegal insertion as alleged in the Loan related documents, and that the complainant had also suppressed the fact that prior to filing of the complaint all its outstanding dues in terms of the letter of intimation dated 25th of February, 2014 had already been paid up to the Petitioner Company. This Court is now to consider whether the order for issuance of summons passed by the learned Court below was on the basis of sufficient material indicating any act in the nature of forgery as imputed to the petitioner.

The specific allegations relating to the "Forgery" alleged to have been committed on behalf of the petitioners are contained in Paras 7, 9,14 and 15 of the petition of complaint, and which are reproduced as follows -

"7. That on 29.04.2012 a loan of Rs. 3,00,88,625/- (Rupees Three Crores Eighty Eight Thousand Six Hundred Twenty Five Only) was sanctioned in favour of the complainant company for a term of 120 months with a repayment schedule of EMI of Rs. 4,62,664/- per month calculated @ 13.75% per annum. The accused persons issued a Sanction Letter dated 29.04.2012 contained in two pages specifying the terms and conditions of repayment. The said original Sanction Letter was signed by the authorised representative of the accused company bearing the seal of the accused company and is still in the possession of the complainant company. Under covering letter dated 07.05.2012 the accused persons also forwarded a copy of the loan agreement, which however did neither carry any date nor bear any seal of the accused company nor even any signature of the accused persons.

That considering such unauthorised, illegal and arbitrary slapping of unwarranted charges which were not at all mentioned in the original loan sanction letter issued by the accused company, the complainant company decided to foreclose the loan account and accordingly issued letter dated 27.01.2014 addressing the accused No. 6 asking him to provide the foreclosure statements which was duly received by him. In reply the accused company vide letter dated 28.01.2014 followed by letter dated 25.02.2014 intimated the complainant company that the total repayable amount as on 25.02.2014 was Rs. 2,98,69,015.59 which very surprisingly included Rs. 26,134/- towards payment Penalty Charges, Rs. 5,901/- towards Cheque Bouncing Charges, Rs. 15,70,187.39 towards foreclosure charges [calculated @ 5.62% at principal amount] and Rs. 48,123/- towards pending installment. The complainant with all emphasis states that all these charges were slapped by the accused persons arbitrarily to extort money from the complainant as those charges were not at all mentioned either in the loan agreement or in the original sanction letter.

That suddenly like a bolt from the blue the accused persons forwarded a purported copy of the sanction letter dated 29.04.2012 to the complainant company, on perusal of which the complainant company was dumbfounded to witness as follows:--

a) The copy of the sanction letter dated 29.04.2012 which was subsequently forwarded to the complainant company is a forged, fake, fabricated and manufactured document purposefully created by the accused persons to slap illegal charges upon the complainant company to extort money from them.

b) Although in the original sanction letter dated 29.04.2012 which is lying in the custody of the complainant company there are only eleven clauses but in the purported sanction letter subsequently manufactured by the accused persons there is an additional handwritten clause, i.e., clause (12) which specifies that "F.C. 5% for 1st 2 yrs, 3% for 3rd yr onwards".

The complainant states that a bare perusal of the said purported sanction letter palpably reveals that the accused persons have subsequently forged and manufactured the original sanction letter beyond any knowledge and/or intimation to the management of the complainant company to slap unauthorized and illegal charges upon the complainant company on foreclosure of the loan account and extort money from it in utter breach of the trust, faith and confidence reposed upon the accused persons and in gross violation of the Rules and Regulations framed by the Reserve Bank of India and the other laws of land in force."

Regarding the allegations of including unjustified charges such as penalty charges, cheque bouncing charges etc., it may be observed that these are undoubtedly disputes of a civil nature. This Court is only concerned with the allegation of petitioners having falsely inserted the "Foreclosure Charges" illegally by way of interpolation in the loan related document/Sanction Letter behind the back of the complainant. In this light it would be appropriate to take note of the statements of both the witnesses examined from the complainant''s side, on the basis of which the summoning Order was passed by the Ld. Court below. The statements are as follows:

"PW-1 Akhilesh Singh Chowhan -

"I am representing M/s. Chemcrown Export. But I have filed a copy of power of attorney. We filed the case against M/s. Indiabulls Housing Finance Ltd. Gagan Banga, Ashwini Omprakash, Ajit Mitta, Sameer Gehlaut, Pinaki Gupta, Debdutta Basu. Mintu Roy, Abhijit Basu. They are financing Company. They approached us to take loan in March, 2012. We took 3 Crores 88 thousand as loan in April, 2012. They assured us transparency E.M.I. of loan was 4 lakh 62 Thousand. and Tenu (??) was ten years. In Feb. 2014 when we asked for statements regarding outstanding amount in which they mentioned cheque bouncing of Rs. 5900 + repayment penalty Rs. 26000/- and pending instalments charged which was unjustified and illegal. We had talked with them in which they completely denied. If we had known this fact then we would not take the loan."

PW-2 Mithun Paul -

"I am an accountant of said Company. This case was filed against Indiabulls Housing Finance Ltd. Gagan Banga, Sameer Gehlaut, Ajit Kumar Mittal, Ashwini Omprakash, Pinaki Gupta, Abhijit Basu, Debdutta Basu, Mintu Roy. Accd. came to our office in 2012 and gave proposal for loan. They sanctioned loan of Rs. 3,00,88, cr. In Jan, 14 when we asked for statements, they had added several charges. They showed a sanctioned letter, which was fully manipulated. We had sent several letters. They made no reply. So we filed this case. We would have never taken a loan, had we known about the terms and conditions earlier, we have all relevant documents."

It is noteworthy that while copies of certain documents were filed along with the complaint, no allegedly forged document was at all tendered before the Ld. Magistrate during the evidence under Section 200 of the Cr.P.C. The approach of the Ld. Magistrate in thus ordering issuance of process for offences of "Forgery in Documents" and/or "making of false documents" would appear to be mechanical, since it was done without even referring cursorily looking at the alleged ''forged or false documents.'' It is also seen from the allegations in Paras- 14 and 15 of the complaint petition reproduced above that the entire emphasis in relation to the alleged offences is on the alleged ''subsequent insertion'' made in the Sanction Letter manually on behalf of the petitioner. From their side the petitioners have contended that the same was done at the insistence of the complainant''s side, who wanted specific mention of the "Foreclosure Charges" which originally did not figure in sanction letter.

The complainant''s side has however emphasised that for the purpose of quashing criminal proceedings under Section 482, the High Court is not to look into the defence being raised on behalf of the accused, that the power U/S. 482 must be sparingly used only in exceptional cases, and that for issuing process in a complaint, that it is not necessary to make out a watertight case for ultimate ''conviction'' of the accused at the initial stage itself. Certain decisions in this regard have been placed before this Court.

In "Ajay Kumar Das v. State of Jharkhand and Anr." reported in , (2011) 12 SCC 319 it was observed -

"12. The Counsel appearing for the appellant also drew our attention to the same decision which is relied upon in the impugned judgment by the High Court, i.e. the case of State of Haryana v. Bhajan Lal and others reported in , 1992 suppl. 1 SCC 335. In the said decision, this Court Crl. Appeal No. 1735 of 2011 @ SLP(Crl) 10005/2009 REPORTABLE held that it may not be possible to lay down any specific guidelines or water tight compartment as to when the power under Section 482 Cr.P.C. could be or is to be exercised. This Court, however, gave an exhaustive list of various kinds of cases wherein such power could be exercised. In paragraph 103 of the said judgment, this Court, however, hastened to add that as a note of caution it must be stated that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases for the Court would not be justified in embarking upon an inquiry as to the reliability or genuineness or otherwise of the allegations made in the First Information Report or in the complaint that the extraordinary or the inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice.

14.....The aforesaid document is in the nature of a defence and could be looked into by the appropriate Court at the appropriate stage and not now. What we are required to look at this stage is the allegations made in the complaint and in the First Information Report....

We are, however, of the considered opinion that on a reading of the First Information Report and the materials that are available in the case file of the appellant that no case is made out so as to quash the entire proceeding..."

16..... All these allegations will have to be dealt with by the court at different stages for which liberty would be available to the appellant. In our considered opinion, this is not the stage when the court would make an inquiry into the factual position to find out as to whether or not the appellant is guilty of the charges or not. The appellant, in our considered opinion, will have sufficient opportunity to place his entire case before the court at the time of framing of the charge..."

In "Ravindra Kumar Madhanlal Goenka and Anr. v. Rugmini Ram Raghav Spinners Private Limited" reported in , (2009)11 SCC 529 the relevant observations were -

"The appellant has placed reliance on a decision of this Court in the case of Uma Shankar Gopalika v. State of Bihar [, 2005 (10) SCC 336], at page 338, wherein this Court has observed as follows:

"18. While entertaining a petition under Section 482 Cr.P.C, the materials furnished by the defence cannot be looked into and the defence materials can be entertained only at the time of trial. It is well settled position of law that when there are prima facie materials available, a petition for quashing the criminal proceedings cannot be entertained. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases.

While considering the facts of the present case, we are of the considered opinion that the present case is not one of those extreme cases where criminal prosecution can be quashed by the court at the very threshold. A defence case is pleaded but such defence is required to be considered at a later stage and not at this stage. The appellants would have ample opportunity to raise all the issues urged in this appeal at an appropriate later stage, where such pleas would be and could be properly analysed and scrutinized."

In "Rajesh Bajaj v. State NCT of Delhi and Ors." reported in ", (1999)3 SCC 259 it was held -

"It is not necessary that a complainant should verbatim reproduce in the body of his complaint all the ingredients of the offence he is alleging. Nor is it necessary that the complainant should state in so many words that the intention of the accused was dishonest or fraudulent. Splitting up of the definition into different components of the offence to make a meticulous scrutiny, whether all the ingredients have been precisely spelled out in the complaint, is not the need at this stage. If factual foundation for the offence has been laid in the complaint the court should not hasten to quash criminal proceedings during investigation stage merely on the premise that one or two ingredients have not been stated with details. For quashing an FIR (a step which is permitted only in extremely rare cases) the information in the complaint must be so bereft of even the basic facts which are absolutely necessary for making out the offence. In State of Haryana v. Bhajan Lal (supra) this Court laid down the premise on which the FIR can be quashed in rare cases. The following observations made in the aforesaid decisions are a sound reminder:

"103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.

The High Court seems to have adopted a strictly hyper-technical approach and sieved the complaint through a cullendar of finest gauzes for testing the ingredients under Section 415 IPC. Such an endeavour may be justified during trial, but certainly not during the stage of investigation. At any rate, it is too premature a stage for the High Court to step in and stall the investigation by declaring that it is a commercial transaction simplicitor wherein no semblance of criminal offence is involved."

In "Trisuns Chemical Industry v. Rajesh Agarwal and Ors." reported in , (1999)8 SCC 686 the Supreme Court observed -

"7. Time and again this Court has been pointing out that quashment of FIR or a complaint in exercise of inherent powers of the High Court should be limited to very extreme exceptions [vide State of Haryana v. Bhajan Lal (1992 suppl.(1) SCC 335) and Rajesh Bajaj v. State NCT of Delhi (, 1999(3) SCC 259)].

9.....The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as indicated in State of Haryana v. Bhajan Lal (Supra)."

In "Chandra Deo Singh v. Prokash Chandra Bose" reported in , AIR 1963 SC 1430 the relevant observations were -

"8. Coming to the second ground, we have no hesitation in holding that the test propounded by the learned single judge of the High Court is wholly wrong. For determining the question whether any process is to be issued or not, what the Magistrate has to be satisfied is whether there is "sufficient ground for proceeding" and not whether there is sufficient ground for the conviction. Whether the evidence is adequate for supporting the conviction can be determined only at the trial and not at the stage of enquiry. A number of decisions were cited at the bar in which the question of the scope of the enquiry under s. 202 has been considered. Amongst those decisions are : Parmanand Brahmachari v. Emperor (2); Radha Kishun Sao v. S.K. Misra (3); Ramkisto Sahu v. The State of Bihar(4); Emperor v. J.A. Finan(5) and Baidya Nath Singh v. Muspratt(6). In all these cases, it has been held that the object of the provisions of s. 202 is to enable the Magistrate to form an opinion as to whether process should be issued or not and to remove from his mind any hesitation that be may have felt upon the mere perusal of the complaint and the consideration of the complainant''s evidence on oath. The courts have also pointed out in these cases that what the Magistrate has to see is whether there is evidence in support of the allegations, of the complainant and not whether the evidence is sufficient to warrant a conviction. The learned judges in some of these cases have been at pains to observe that an enquiry under s. 202 is not to be likened to a trial which can only take place after process is issued, and that there can be only one trial. No doubt, as stated in sub-s. (1) of s. 202 itself, the object of the enquiry is to ascertain the truth or falsehood of the complaint, but the Magistrate making the enquiry has to do this only with reference to the intrinsic quality, of the statements made before him at the enquiry which would naturally mean the complaint itself, the statement on oath made by the complainant and the statements made before him by persons examined at the instance of the complainant."

In "Sonu Gupta v. Deepak Gupta And Others" reported in , (2015)3 SCC 424 it was held -

"8. Having considered the details of allegations made in the complaint petition, the statement of the complainant on solemn affirmation as well as materials on which the appellant placed reliance which were called for by the learned Magistrate, the learned Magistrate, in our considered opinion, committed no error in summoning the accused persons. At the stage of cognizance and summoning the Magistrate is required to apply his judicial mind only with a view to take cognizance of the offence, or, in other words, to find out whether prima facie case has been made out for summoning the accused persons. At this stage, the learned Magistrate is not required to consider the defence version or materials or arguments nor he is required to evaluate the merits of the materials or evidence of the complainant, because the Magistrate must not undertake the exercise to find out at this stage whether the materials will lead to conviction or not.

In our considered view, the High Court fell into error of evaluating the merits of the defence case and other submissions advanced on behalf of the accused which were not appropriate for consideration at the stage of taking cognizance and issuing summons."

It has however also been held by the Supreme Court in "Rajiv Thapar and Others v. Madanlal Kapoor", or , (2013) 3 Supreme Court Cases (Cri) 158/(2013) 3 Supreme Court Cases 330/-

"29. The issue being examined in the instant case is the jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure, if it chooses to quash the initiation of the prosecution against an accused, at the stage of issuing process, or at the stage of committal, or even at the stage of framing of charges. These are all stages before the commencement of the actual trial. The same parameters would naturally be available for later stages as well. The power vested in the High Court under Section 482 of the Code of Criminal Procedure, at the stages referred to hereinabove, would have far reaching consequences, inasmuch as, it would negate the prosecution''s/complainant''s case without allowing the prosecution/complainant to lead evidence. Such a determination must always be rendered with caution, care and circumspection. To invoke its inherent jurisdiction under Section 482 of the Code of Criminal Procedure the High Court has to be fully satisfied, that the material produced by the accused is such, that would lead to the conclusion, that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such, as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such, as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/complainant, without the necessity of recording any evidence. For this the material relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such, as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 of the Code of Criminal Procedure to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice.

Based on the factors canvassed in the foregoing paragraphs, we would delineate the following steps to determine the veracity of a prayer for quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of the Code of Criminal Procedure:

30.1 Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality?

30.2 Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false.

30.3 Step three, whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant?

30.4 Step four, whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?

30.5 If the answer to all the steps is in the affirmative, judicial conscience of the High Court should persuade it to quash such criminal-proceedings, in exercise of power vested in it under Section 482 of the Code of Criminal Procedure. Such exercise of power, besides doing justice to the accused, would save precious court time, which would otherwise be wasted in holding such a trial (as well as, proceedings arising therefrom) specially when, it is clear that the same would not conclude in the conviction of the accused."

The above decision makes it clear that there is no blanket bar upon the High Court to consider the soundness of the defence material even under Section 482, provided the same meets up to the standards laid down by the Supreme Court in the four steps contained in Paras 30.1 to 30.4 in the aforesaid judgment.

Now irrespective of the actual truth in the petitioners'' explanation regarding insertion of "Foreclosure Charges" in the Sanction Letter, it undeniable that such insertion even if assumed to have been made subsequently, would not have been wrong or illegal in case the contents of the same had already been included in the original loan agreement, which undisputedly was the basis of the Sanction Letter to be issued. As already noted earlier, neither the Loan Agreement nor the Sanction Letter were looked into by the Ld. Magistrate before ordering issuance of the process. However copies of the loan agreement dated 28-4-2012 in possession of both sides were produced before this Court during the course of hearing.

The original loan agreement relied upon by the petitioners goes to show that the relevant entry in relation to the "Foreclosure Charges" clearly exists in the relevant column wherein the charges have been noted as "5 per cent for 2 years and 3 per cent onwards", and the signatures of the complainant''s authorised representative/Director also exists alongside such entry, as in respect of all other columns on various pages of the agreement.

On the other hand, the copy of the agreement placed on behalf of the Complainant is not made out of the same mechanical process. It is a printed form in thin paper. Its contents correspond exactly to the original loan agreement, and in both cases the relevant figures and dates have been filled in manually. However, the printed part in the Customer/complainant''s copy is in very small font. It is seen that printed matter covered in almost two pages in the original agreement has been compressed into each single page of the Customer/complainant''s copy. The contention raised on behalf of the complainant in this regard is that the hand written portion of the entry to the extent "3 years onwards" cuts through the signature of the complainant''s representative, which shows that the same was inserted subsequently. This contention however, does not sound convincing in view of the fact that pages of the complainant''s copy are smaller in comparison to the original/Banker''s copy prepared on pages which are larger in size. Consequently the blank space available in the complainant''s copy is comparatively restricted in relation to the Banker''s copy in which there is absolutely no overwriting on the representative''s signature. Here the further submission made on the behalf of the complainant is that the signatures of its representatives were taken on blank spaces in the agreement form. But this submission is altogether beyond the averments made in the petition of complaint particularly in relation to the original loan agreement. Even the witnesses examined under Section 200 had refrained from at all mentioning about the original loan agreement. For this purpose a reference to the following averments made in para 7 of the complaint petition, as already noted earlier is of significance -

"Under covering letter dated 07.05.2012 the accused persons also forwarded a copy of the loan agreement, which however did neither carry any date nor bear any seal of the accused company nor even any signature of the accused persons."

The above averment clearly goes to show that a copy of the loan agreement was forwarded to the complainant as far back as in the month of May, 2012 which is more than 2 1/2 years before filing of the complaint. It was alleged in the complaint that the copy forwarded to the complainant did not carry any date or seal or signature of the accused persons. However such original copy or the covering letter under which the same was forwarded were not placed before the Court. The complainant has also failed to explain as to how the copy produced by it in Court had reached its hands, if it was not actually delivered in the year 2012 as alleged in the complaint. It is noted that the said copy of the loan agreement contains the original signatures of its representative, as well as the Director''s seal and also the complainant Company''s own water-mark/embossed seals on each page,. The inescapable conclusion therefore is that the same was actually its own/original customer copy, which duly contained the entries in respect of the disputed foreclosure charges. Also from a careful reading of the entire petition of complaint, and particularly Paras- 7, 9, 14 and 15 already reproduced above, it becomes clear that entire emphasis was on the alleged "Insertion/Forgery" in the Sanction Letter alone, while any reference to the original loan agreement on the basis of which such Letter was issued, had been carefully avoided except in a very evasive manner in Para - 7. These facts have virtually let the cat out of the bag, and go to show that the complainant was all along in possession of its (customer''s) copy of the loan agreement, which duly contained the disputed contents including the foreclosure charges.

As noted earlier, Banker''s copy of the original loan agreement placed on behalf of the petitioners duly bears the original signatures of the complainant''s representatives, its Director''s seals and water-mark/embossed Company seals on each page. This undoubtedly has the effect of negating the allegations of the complainant, who is in no position to refute its contents with the assertions that there was ''manipulation in the (separate) sanction letter''. In the given circumstances continuation of the criminal proceedings against the petitioners would clearly be an abuse of the process of Court.

In view of the facts and circumstances summarized in the foregoing paras, all the steps delineated in "Rajiv Thapar" (supra) stand satisfied. For these reasons the Revisional Applications are allowed and further proceedings in Complaint Case No. 413786 of 2014 C 165 of 2013 pending in the Court of the Ld. Metropolitan Magistrate, 18th Court, Calcutta are quashed.

Later

After passing of the above order, Ld. Counsel appearing for the petitioners prays for returning the original agreement filed from their sides.

Let the same be returned subject to placing of photostat copy of the same on the record.