Prem Bihari Lal & Anr. vs State Of U.P. Thru. Prin. Secy. Home Lko & Anr.

Heard learned counsel for the revisionist, learned A.G.A. for the State and perused the record.

The present criminal revision is delayed by 27 days and the same is accompanied with an application for condonation of delay duly supported with an affidavit.

Reasons in detail have been spelt out for condonation of delay.

Learned A.G.A does not have any objection if the delay in filing the revision is condoned.

Cause shown is sufficient.

Application for condonation of delay is allowed and the delay is condoned.

Now, the Court proceeds to hear the revisions on merits.

This criminal revision has been preferred challenging the order dated 03.01.2026 passed by the Chief Judicial Magistrate, Barabanki in Criminal Misc. case no. 2619 of 2016 arising out of in:re case crime no. 223 of 2015 under Section 419,420,467,468,471 and 120B of IPC, Police Station Fatehpur, District Barabanki, whereby the discharge application preferred by the revisionist under Section 239 Criminal Procedure Code, 1973 (in short Cr.P.C) has been rejected.

The prosecution case, in brief, is that on 12.06.2012, accused namely Dheeraj Kumar and Neeraj Kumar, approached the State Bank of India, Branch Fatehpur, representing themselves as partners of M/s Shiv Coal Traders and applied for a cash credit facility. In support of the loan application, they furnished documents showing namely Balram Singh and Ram Vilas Singh as guarantors and offered immovable property situated at House no. 530/142, Shekhupura, Bada Chandganj, P.S. Aliganj, District Lucknow as collateral security. During processing of the loan, the bank obtained copies relevant documents. The title documents relating to the mortgaged property were also verified through the bank's advocate, who, by report dated 14.06.2012, certified that the property belonged to the guarantors and that the title was marketable. The Field Officer also recommended sanction of the loan after physical verification. Acting upon the said reports and recommendations, the bank sanctioned a cash credit limit of ₹16,50,000/- in favour of the borrowers on 13.07.2012. The guarantors deposited the original title deeds with the bank and executed the necessary guarantee agreement, whereafter the loan amount was disbursed. Subsequently, the guarantors stopped making payments to the bank loan account became irregular and was classified as non-performing asset (in short ‘NPA’). During recovery proceedings, the bank caused a fresh verification of the mortgaged property through its panel advocate and by report dated 30.07.2014, it was revealed that the property documents deposited with the bank were forged and fabricated, the sale deed was not genuine, and false signatures had been affixed in the registration records. Alleging that the accused persons had, by using forged documents, dishonestly induced the bank to sanction and disburse the loan, thereby causing wrongful loss to the bank, the informant, bank manager, got the present FIR registered through proceedings under Section 156(3) Cr.P.C.

During the course of the investigation, statements of the informant and applicants/revisionists were recorded under Section 161 CrPC. Upon completion of the initial investigation, a charge-sheet was submitted against the principal accused. Thereafter, on 15.03.2016, the Investigating Officer recorded mazeed bayan of the informant, wherein it was alleged that, upon making confidential enquiries from certain bank officials, he had come to know that the present applicants/revisionists had also played a prominent role in the commission of the alleged offences. Relying primarily upon the said mazeed bayan and the material collected during further investigation, the Investigating Officer submitted a supplementary charge-sheet against the applicants/revisionists for offences punishable under Sections 419, 420, 467, 468, 471 and 120-B IPC.

Aggrieved thereby, the applicants/revisionists approached this Court by filing Application under Section 482 Cr.P.C. No. 3974 of 2016 (Prem Bihari Lal v. State of U.P. and another) and Application under Section 482 Cr.P.C. No. 3332 of 2016 (Jagmohan v. State of U.P. and another). This Court, without examining the merits of the controversy, granted liberty to the applicants/revisionists to appear before the trial court and seek discharge by filing an appropriate application in accordance with law. Pursuant thereto, the applicants/revisionists filed an application for discharge under Section 239 Cr.P.C. before the learned Chief Judicial Magistrate, Barabanki. The learned Magistrate, by the impugned order dated 03.01.2026, rejected the discharge application, observing that the Investigating Officer had submitted the supplementary charge-sheet after considering the material collected during investigation and that sufficient grounds existed to proceed against the applicants/revisionists. Aggrieved by the said order, the present criminal revision has been preferred.

Learned counsel appearing for the applicants/revisionists submitted that applicant/revisionist no. 1 was serving as the Branch Manager of the concerned bank, whereas applicant/revisionist no. 2 was posted as the Field Officer at the relevant point of time. He further submitted that the loan in question had been sanctioned only after the property offered as collateral security was verified by the bank's empanelled advocate, who furnished a title verification report certifying the property to be genuine and marketable. He further submitted that if the title report was subsequently found to be false, the applicants/revisionists cannot be held criminally liable merely because they processed the loan on the basis of such professional opinion. He further submitted that the applicants/revisionists were neither named in the FIR nor implicated in the statements of the informant recorded under Section 161 Cr.P.C. during the initial investigation. Their own statements were also recorded under Section 161 Cr.P.C., wherein they explained the procedure adopted in sanctioning the loan and asserted that all formalities had been duly complied with. He further submitted that the loan account continued to remain operational for nearly one year after its sanction and was due for renewal after mandatory verification, which is stated to be done by another Field Officer who had taken charge after the transfer of applicant/revisionist no. 2. He further submitted that the supplementary charge-sheet against the applicants/revisionists came to be filed solely on the basis of the mazeed bayan of the informant recorded on 15.03.2016. He further submitted that such a statement, founded only upon suspicion and without any supporting oral or documentary evidence, could not legally constitute sufficient material for prosecuting the applicants/revisionists. He further submitted that there is no allegation that either of the applicants/revisionists forged any document, impersonated any person, or knowingly used any forged document as genuine. No overt act constituting the offences punishable under Sections 419, 467, 468 or 471 IPC has been attributed to them. At the highest, the allegations may give rise to an inference of conspiracy under Section 120-B IPC, but even that allegation is unsupported by any material establishing any meeting of minds or agreement between the applicants/revisionists and the principal accused.

Per contra, learned counsel appearing for the complainant, supported by the learned A.G.A., opposed the revision and submitted that the informant came to know about the fraudulent transaction only after assuming charge as the Branch Manager of the concerned branch, whereupon he caused an enquiry into the matter and initiated criminal proceedings. He further submitted that the applicants/revisionists, being the Branch Manager and the Field Officer respectively, were the officers primarily responsible for processing and recommending the loan proposal and ensuring due compliance with the bank's lending norms before sanction of the credit facility. He further submitted that the investigation revealed that the loan had been sanctioned on the strength of forged title documents and fabricated records, and that the applicants/revisionists must have acted in connivance with the principal accused in facilitating the fraudulent transaction. It was, therefore, contended that the learned Chief Judicial Magistrate rightly found sufficient grounds to proceed against the applicants/revisionists and rejected the discharge application. At the stage of consideration of discharge under Section 239 Cr.P.C., the Court is only required to examine whether a prima facie case exists and is not expected to meticulously appreciate the evidence as if conducting a trial. Hence, no interference with the impugned order is called for.

Having heard the learned counsel for the parties, the issue which arises for consideration before this court is that, whether, on the basis of the material collected during investigation, the learned Chief Judicial Magistrate was justified in rejecting the discharge application of the applicants/revisionists under Section 239 Cr.P.C..

Before examining the rival submissions, it would be apposite to notice the scope of consideration at the stage of discharge under Section 239 Cr.P.C. and the corresponding jurisdiction of the Magistrate while deciding whether the accused deserves to be discharged or whether charge is liable to be framed under Section 240 Cr.P.C.

The law governing the exercise of jurisdiction under Sections 239 and 240 Cr.P.C. is no longer res integra. In State of Tamil Nadu v. R. Soundirarasu, (2023) 6 SCC 768, the Hon’ble Supreme Court held that, at the stage of discharge, the Court is required to consider the police report and the accompanying material only to ascertain whether the facts emerging therefrom, if accepted at their face value, disclose the existence of the ingredients constituting the alleged offence. The Court is neither expected to undertake a meticulous appreciation of the evidence nor to conduct a mini trial. Questions relating to the reliability, admissibility or probative value of the prosecution evidence fall within the domain of the trial. It was further held that if the material placed by the prosecution gives rise to a prima facie case or even a grave suspicion regarding the involvement of the accused, the Court would be justified in framing the charge. Conversely, where the material fails to disclose the essential ingredients of the alleged offences and the charge appears to be groundless, the Magistrate is under a statutory obligation to discharge the accused. The exercise contemplated under Section 239 Cr.P.C. is, therefore, neither an empty formality nor a mechanical exercise but requires an objective application of judicial mind to the material collected during investigation. 17.Equally settled is the principle that, while exercising revisional jurisdiction against an order refusing discharge, High Court is not expected to re-appreciate the evidence as if sitting in appeal. Interference is warranted only where the impugned order suffers from patent illegality, material irregularity or manifests a clear failure to exercise the jurisdiction vested in the Court below. Where the order rejecting discharge discloses due application of mind to the material available on record and the reasons which persuaded the Court to proceed against the accused, revisional interference would ordinarily be unwarranted. At the same time, if the order reflects no consideration of the principal submissions advanced by the accused or fails to independently examine whether the charge is “groundless” within the meaning of Section 239 Cr.P.C., High Court would be justified in exercising its revisional jurisdiction.

A perusal of the impugned order shows that the learned Chief Judicial Magistrate has rejected the discharge application primarily by observing that the Investigating Officer, after considering the material collected during investigation, submitted the supplementary charge-sheet against the applicants/revisionists. Beyond recording the said conclusion, however, the learned Magistrate has not adverted to the specific contentions raised by the applicants/revisionists nor examined whether the material collected during investigation, taken at its face value, disclosed the ingredients of the offences alleged. The impugned order also does not indicate that the learned Magistrate independently applied his judicial mind to the question whether the charge against the applicants/revisionists was “groundless” within the meaning of Section 239 Cr.P.C..

For the reasons recorded hereinabove, the present criminal revision is allowed.

The impugned order dated 03.01.2026 passed by the learned Chief Judicial Magistrate, Barabanki in Criminal Misc. Case No. 2619 of 2016 is hereby set aside.

The matter is remanded to the learned Chief Judicial Magistrate, Barabanki for fresh consideration of the discharge application preferred by the applicants/revisionists under Section 239 Cr.P.C. The learned Magistrate shall consider the entire material available on record as well as the submissions advanced on behalf of the parties and thereafter pass a fresh, reasoned and speaking order.

It is clarified that this Court has not expressed any opinion on the merits of the rival contentions. All questions of fact and law are left open to be urged before and decided by the learned Chief Judicial Magistrate independently and uninfluenced by any observation made in this judgment.