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Judgment
Susanta Chatterji, J.—This matter has been assigned to this Bench. Parties have completed their affidavits. Matter is taken up for final disposal. Having heard Mr. Bholanath Sen with Mr. Bhaskar Sen appearing for the petitioner and the learned Counsel for the respondents, it appears that the writ petitioner Poddar Dewki Ltd., a company incorporated under the Companies Act, has filed the present writ petition, praying, inter alia;
(a) A writ of and/or an order and/or a direction in the nature of Mandamus commanding the respondents to forthwith draw, cancel, recall and rescind the impugned Case No. RC41/90 dated 24th July, 1991 under Sections. 120B, 420, I.P.C. and Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 and to forbear from giving any effect thereto in any manner whatsoever by themselves or by their servants or agents;
(b) A writ of and/or an order and/or a direction in the nature of Certiorari calling upon the respondents to certify and send up to this Hon''ble Court forthwith the entire records of the proceeding culminating the impugned decision for initiation of the aforesaid CBI Case No. RC 41/90 dated 24th January, 1991 and search conducted in connection therewith so that the entire matter may be quashed and conscionable justice may be one;
(c) A writ of and/or and order and/or a direction in the nature of Prohibition prohibiting and restraining the respondents and each one of them by themselves or by their servants or agents from in any way taking any action or further action in connection with the aforesaid CBI Case No. RC 41/90 dated 24th January, 1991 or taking any step thereunder or concerning the same;
(d) Rule NISI in terms of prayers (a), (b) and (c) above.
(e) Injunction restraining the respondents by themselves or by their agents from in any way taking any action whatsoever in connection with the aforesaid CBI Case No. RC 41/90 dated 24th January, 1991 or in connection with the impugned search conducted at the office premises of the petitioner at No. 4, Fairlie Place, Calcutta on 25th January, 1991 or in accordance therewith in any manner whatsoever, or concerning the same or conducting any investigation in connection therewith in any manner at all.
(f) Ad interim order in terms of prayer (e) above;
(g) Such other or further order or orders and/ or Rules and/ or orders be passed as this Hon''ble Court may seem fit and proper for the purpose of granting complete and efficacious relief to the petitioner.
The writ petitioner has mainly challenged the proceedings at the instance of the CBI authorities on the basis of the First Information Report that a reliable information was received in the office of the S.P.: CBI: SPE: ACB, Calcutta alleging that during 1987-88, Shri T. Jyothiapandian, Zonal Manager, Indian Bank, Zonal Office, Calcutta; K. Mohan Chandran, Chief Manager, Indian Bank, Calcutta Main Branch, Calcutta-1, while posted and functioning as above entered into a criminal conspiracy with M/s. Poddar Dewki Ltd. of 4, Fairlie Place, Calcutta-1 and others unknown in order to cheat Indian Bank and in pursuance of the said criminal conspiracy the accused Bank Officers (A-1 and A-2) knowing fully well that M/s. Poddar Dewki Limited were not the rightful owner of the 1st and 2nd floors of the premises ''Mukherjee House'' at 17, Brabourne Road, Calcutta-1 dishonestly and fraudulently managed to pay an advance rent of Rs. 97 lakhs, out of 1,33,80,000/- since sanctioned towards premises term advance which was disbursed on 30-12-1987 as advance rent of 60 months to M/s. Poddar Dewki Ltd. (A-3) who dishonestly and fraudulently received the aforesaid amount knowing fully well that they were not the owners of the 1st and 2nd floors of the premises No. 17, Brabourne Road, Calcutta-1, or authorised to receive such payment and thereby he caused undue pecuniary benefit to M/ s. Poddar Dewki Ltd. (A-3) and corresponding wrongful loss to the said Bank.
The aforesaid facts disclose the commission of offence punishable u/s 120B/ 420, I.P.C. and 13(1)(d), 13(2) of P.C. Act, 1988 read with 5(1)(d) and 5(2) of the P.C. Act, 1947.
Being aggrieved the petitioner has filed the writ petition seeking reliefs as indicated above on the ground that no element of cheating or inducting anyone to deliver any property by deceit could be traced from the conduct of the petitioner and as such the allegations that the petitioner had committed an offence u/s 420, I.P.C. is entirely without any basis and that the petitioner had obtained the said loan from the Bank in consideration of the petitioner''s agreeing to give tenancy right to the Bank for a period often years and in fact, the petitioner had given the tenancy right for a period often years and the Bank is enjoying the same and hence there is no question of the Bank being induced to make payment to the petitioner any amount by cheating or by any dishonest method on the part of the petitioner company.
The writ petition was filed upon an affidavit sworn on 29-1-1991. The petition was entertained by an appropriate Bench of this Court on 30-1-1991 and an interim order was made as prayed restraining the respondents from in any way taking any action whatsoever in connection with the aforesaid Case No. RC 41/90 dated 24th January, 1991 or in connection with the impugned search conducted at the office premises of the petitioner at 4, Fairlie Place, Calcutta on 25th January, 1991 or in accordance therewith in any manner whatsoever.
The writ petition is opposed by the respondent authorities by filing a comprehensive affidavit-in-opposition, by controverting the allegations. The petitioner has also filed an affidavit-in-reply reiterating the main points in the writ petition and also denying the facts stated in the affidavit-in-opposition.
Mr. B. N. Sen, learned Senior Counsel appearing for the writ petitioner, has raised certain salient points of law as to the maintainability of the criminal case so far as the petitioner-company is concerned. He has drawn the attention of the Court to the provision of Section 420, which runs as follows:
Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security or anything which is signed or sealed and which is capable of being converted into a valuable security, shall be punishable with imprisonment of other description for a term which may extend to seven years, and shall also be liable to fine.
He has also drawn the attention of the Court to provisions of Section 120B(1) that in case of such offence, as detailed therein there is provision for imprisonment. Equally he has taken this Court to the provisions of Section 13 of Prevention of Corruption Act, 1988. Section 13 refers to criminal misconduct of a public servant. Section 13(1)(d) relates to that if a public servant,--
(i) by corrupt or illegal means obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains for any persons any valuable thing or pecuniary advantage without any public interest; ....
Mr. Sen has strongly emphasise that all these provisions, as referred to in the FIR, relate to the consequence of the alleged offence by way of imprisonment. His main contention is that a company cannot be subjected to imprisonment. He has drawn inspiration by referring to the decision reported in 1980 (2) Calcutta High Court Notes 326, a Division Bench of this Court in the case of M/s. Kusum Products Ltd. v. S. K. Sinha, I.T.P., Central Circle-X, Calcutta, found that the petitioner-company was being prosecuted on the allegation that the company filed under the signature of its accountant and constituted attorney, a return of its income for the assessment year 1974-75 wherein a false verification was made knowing or believing it to be false or not believing it to be true. It was found the mens rea is an essential ingredient for an offence u/s 277 of the Act and the juristic person that included the company in the definition of persons "cannot suffer any imprisonment inasmuch as the petitioner cannot be attributed with the requisite mens rea. Its further prosecution for an offence u/s 277 of the Act would tantamount to an abuse of the process of the Court." Mr. Sen has also referred to a later decision reported in 1992(1) Cal HCN 299 (M/s. Hanuman Sugar and Industries Ltd. v. Nirmalendu Banerjee, Income Tax Officer, Central Circle, Calcutta), There is a reference "to the quashing of proceedings as to compulsory imprisonment provided for in Section 276B of the Act and such punishment cannot be imposed on company and the company being a juristic person cannot be subjected to imprisonment on conviction and, as such, initiation and continuation of the instant proceedings against the company amount to an abuse of the process of the Court and the proceeding should be quashed." Mr. Sen has also referred to a decision reported in A.K. Khosla and Others Vs. T.S. Venkatesan and Others, It has been found by this Court that "the inherent powers were invoked in this case for quashing a proceeding u/s 420/ 467/471/477A read with Section 120B and/or Section 109/114 of the Indian Penal Code. The principal contention raised in this on behalf of the petitioners were that the allegations in the petition were patently absurd and inherently improbable and the basic ingredients of the offences alleged are not prima facie made out by the allegations in the complaint and initial evidence given before the Magistrate were not substantiated." It was held that "mens rea'''' is one of the essential ingredients of the offences under the aforesaid provisions of the Indian Penal Code and except the offence u/s 477A all other offences alleged in the complaint are punishable with mandatory imprisonment. By definition, Section 477A is not applicable to a company as it applies only to a natural person like clerk, officer or servant. The impugned prosecution against the two companies was found to be not maintainable. Relying upon the said decisions and referring to the provisions of law as indicated thereto and regard being and to materials on record Mr. Sen has strongly highlighted that the proceedings against the petitioner-company at the instance of the C.B.I, would amount to an abuse of the process of the Court and without entering into the merit of the allegation in the F.I.R. on the face of the F.I.R. itself, the same is not maintainable against the petitioner-company and the proceeding, so far as the petitioner-company is concerned, may be quashed and necessary reliefs may be granted accordingly.
The learned counsel, appearing for the contesting respondents, however, has submitted, inter alia, that the provisions as envisaged u/s 420 of I.P.C. and 120B(1) refer to mandatory punishment. Other provisions of the Prevention of Corruption Act also refer to misconduct on the part of the public servant and there is scope for mandatory punishment. He has drawn attention of the Court to Section 120B(2) which indicates, inter alia, that ''whoever is a party to a criminal conspiracy other than the criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding 6 months or with fine or with both''. According to him Section 120B(2) does not provide mandatory punishment and the company being a juristic person can certainly face trial where allegations may constitute ingredients of Section 120B(2) and it will be premature to come to any conclusion at this stage. Investigation has not been started as due to the interim order. Everything has been stopped sine die. Neither the investigation has been permitted nor there is any charge-sheet. When there are allegations against the officers of the Bank and in view of the conspiracy by the bank officials and the petitioner-company, it would not be right for the writ Court to interfere at this stage and to quash the proceedings. He has referred to a decision reported in State of Maharashtra Vs. Syndicate Transport Co. (P) Ltd. and Others, Ltd. It is indicated therein (at page 197 of AIR):--
It would, therefore, have to be held that despite the generality of the definition of a ''person'' given in Section 11 of the Penal Code, a corporate body or a company shall not be indictable for offences which can be committed only by a human individual or for offences which must be punished with imprisonment. The offence of cheating u/s 420 of Penal Code shall be punished with imprisonment and a company cannot be prosecuted for that offence, mandatorily involving a punishment of imprisonment.
Barring these exceptions, a corporate body ought to be indictable for criminal acts of omissions of its directors, or authorised agents or servants, whether they involve mens rea or not, provided they have acted or have purported to act under authority of the corporate body or in pursuance of the aims or objects of the corporate body. The question whether a corporate body should or should not be liable for criminal action resulting from the acts of some individuals must depend on the nature of the offence disclosed by the allegations in the complaint or in the charge-sheet, the relative position of the officer or agent vis-a-vis the corporate body and the other relevant facts and circumstances which could show that the corporate body, as such, meant or intended to commit that act. Each case will have necessarily to depend on its facts which will have to be considered by the Magistrate or Judge before deciding whether to proceed against a corporate body or not.
In paragraph 75 the matter has been discussed in depth and in details.
With great anxiety this Court has heard the lengthy submissions made by the learned Counsel on behalf of the respective parties. Upon consideration of the materials on record this Court is of the view that certainly the company is not indictable for a mandatory punishment of imprisonment. In the instant case there are certain peculiar features inasmuch as the accused Nos. 1 and 2 are bank officials and they have been named. There is an allegation that the bank officials entered into a conspiracy with the corporate body like the accused No. 3, which is the petitioner-company before this Court. There is mention of several provisions as to the alleged offences including Section 120. It is found that Section 120B(1) refers to mandatory punishment whereas Section 120B(2) does not indicate mandatory punishment. There is an alternative for fine or for imprisonment and fine both. Admittedly it does not indicate about any mandatory punishment. The F.I.R. has been lodged. Investigation is being awaited. No charge-sheet has yet been filed and no details of the evidence have come to surface. At this stage it will be absolutely premature for the writ Court to find that the case is not maintainable so far as the petitioner-company is concerned. If the Magistrate finds that it is not mandatory so far as Section 420 or Section 12(2) and/or 120B(1) of the Prevention of Corruption Act is concerned, no charge-sheet can be sustained against the petitioner-company at the time of trial. But if there are other offences and if such offences are within the scope of Section 120B(2), it will be absolutely premature for the writ Court to quash the proceeding and to get the matter nipped in the bud.
Considering this aspect of the matter this Court is of the view that the writ petition has no merit and the writ Court is not inclined to interfere in the matter. The petition is dismissed with sufficient indication as to the contention of the parties as indicated above. There will be no order as to costs.
All interim orders are vacated.
All parties to act on the operative part of the judgment on the usual undertaking.