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Judgment
V. Kanagaraj, J.—The above Criminal Original Petition has been filed u/s 482 of Cr.P.C. to call for the records pertaining to C.C. No. 219
of 2003 pending on the file of the Judicial Magistrate, Tiruttani and quash the same.
The petitioner has stated in his petition above that he started a weaving business as a small scale industry at Kelambakkam Village,
Thiruvalangadu, Tiruttani Taluk in the year 1996 borrowing a sum of Rs. 98, 000/- from the respondent bank on 11.6.1996 for purchasing two
power looms and executed necessary security documents apart from creating an equitable mortgage over his house at Kavarai Street,
Kelambakkam, Tiruttani Taluk; that apart from that the petitioner also created a hypothecation deed hypothecating the two power looms referred
to above for repayment of the said amount to the bank; that the petitioner was paying the instalments regularly and due to slump in business, the
petitioner was not in a position to repay the loan; that in fact, the petitioner incurred heavy loss in the business, which was also intimated to the
bank; that with the knowledge and consent of the bank official, the petitioner was forced to sell his two power looms in question and deposited the
sale proceeds of Rs. 30, 000/- on 7.3.2000 in order to prevent further deterioration of the two power looms in question; that the petitioner paid a
sum of Rs. 15, 000/- on 15.4.2002 and subsequently during the time when the petitioner has been paying the instalments, the petitioner received a
lawyer''s notice dated 24.2.2003 from the respondent bank and the said lawyer''s notice was duly replied on 14.3.2003 through his lawyer; that in
fact even after the reply to the said notice, the petitioner has been paying amounts to the respondent bank and while so the petitioner received
summons from the Judicial Magistrate at Tiruttani along with a complaint copy filed by the respondent bank charging the petitioner under Sec.158
of the Tamil Nadu Co-Operative Societies Act and also u/s 417 of IPC for having sold the hypothecated power looms without written consent of
the bank and hence the petitioner has come forward to file the above Criminal Original Petition for the relief extracted supra.
It is an admitted case on the part of the petitioner that he borrowed a sum of Rs. 97, 800/- as a loan under NFSL No. 27 for the purchase of
two power looms not only mortgaging his immovable properties but also hypothecating the two power looms to the Primary Co-Operative
Agricultural and Rural Development Bank, the respondent herein.
It is further an admitted case on the part of the petitioner that the two power looms he purchased on loan supplied by the respondent Co-
Operative Bank hypothecating the same with the respondent, has been sold for a sum of Rs. 30, 000/- to a third party.
However, the case of the respondent/complainant is that the sale of the hypothecated power looms by the petitioner was without prior
permission from them as laid down u/s 124-A of the Tamil Nadu Co-Operative Societies Act and without their knowledge. On the other hand, the
petitioner would state that only with prior permission and with the knowledge of the respondent officials, the sale of the power looms was done
and also the sale proceeds of Rs. 30, 000/- had been paid only as part payment of the loan with the respondent on 7.3.2000 and therefore, no
offence has been committed on his part much less u/s 158 of the Tamil Nadu Co-Operative Societies Act and Section 417 of the IPC and hence
would pray to quash the said case registered on the file of the Judicial Magistrate, Tiruttani in CC No. 219 of 2003.
During the arguments, the learned counsel appearing on behalf of the petitioner would submit a judgment of the Hon''ble Apex Court reported in
Central Bureau of Investigation, SPE, SIU (X), New Delhi Vs. Duncans Agro Industries Ltd., Calcutta, wherein also the allegation of the
complainant was that the goods in respect of which floating charge was created in favour of the banks and the same were disposed of by the
debtor Company on which an offence of criminal breach of trust was registered in which on criminal revision filed by the debtor company before
the High court, the same came to be allowed testifying the validity on which the criminal appeals have been filed before the Hon''ble Apex Court in
which the Hon''ble Apex Court has held in the following manner:
In the facts of the case, it appears to us that there is enough justification for the High Court to hold that the case was basically a matter of civil
dispute. The Banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits have been
compromised on receiving the payments from the concerned Companies. Even if an offence of cheating is prima facie constituted, such offence is a
compoundable offence and compromise decrees passed in the suits instituted by the Banks, for all intents and purposes, amount to compounding
of the offence of cheating. It is also to be noted that long time has elapsed since the complaint was filed in 1987. It may also be indicated that
although such FIRs were filed in 1987 and 1989, the Banks have not chosen to institute any case against the alleged erring officials despite
allegations made against them in the FIRs. Considering that the investigations had not been completed till 1991 even though there was no
impediment to complete the investigations and further investigations are still pending and also considering the fact that the claims of the Banks have
been satisfied and the suits instituted by the Banks have been compromised on receiving payments, we do not think that the said complaints should
be pursued any further. In our view, proceeding further with the complaints will not be expedient. In the special facts of the case, it appears to us
that the decision of the High Court in quashing the complaints does not warrant any interference under Article 136 of the Constitution. We,
therefore, dismiss these appeals.
On the other hand, learned Government Advocate would argue to the effect that the case decided by the above judgment was a case u/s 406 of
the IPC, but here, a specific offence has been committed under the Tamil Nadu Co-Operative Societies Act in violation of Section 124-A of the
Act, for which the petitioner becomes liable to be prosecuted and punished u/s 158 of the Tamil Nadu Co-Operative Societies Act and u/s 417 of
the IPC and therefore, would seek to dismiss the above petition.
It is relevant to point out that any specific offence committed under a special Act such as Tamil Nadu Co-Operative Societies Act, 1983, could
be prosecuted and punished under the relevant penal provisions of the said Act whereas Section 417 of the IPC has also been conjoined in the
charge sheet for which also, a case has been registered and taken on file by the trial Court.
It could be fairly stated that IPC section is very well covered by the judgment cited supra and therefore, it has become relevant to consider
whether the case could be entertained and taken on file for being convicted and sentenced u/s 158 of the Tamil Nadu Co-Operative Societies Act,
1983, which is the only point for consideration to the context of the case in hand.
The definite case of the respondent/complainant is that the offence has been committed u/s 124-A of the Tamil Nadu Co-Operative Societies
Act and the same is punishable u/s 158 of the Act whereas u/s 124-A any portion hypothecated to the Co-Operative Society cannot be sold
without prior permission from the bank in writing"". Though the petitioner comes forward to allege that he has sold the power looms only with prior
consent of the bank further paying the said amount as part payment of the loan amount as on 7.3.2000, still nothing in writing seems to have been
obtained nor produced before this Court as it is warranted u/s 124-A of the Tamil Nadu Co-Operative Societies Act, 1983. Therefore, the
prosecution launched u/s 158 of the Act in the above circumstances could only be held by this Court as just and proper and legal. Therefore, at
this score, this Court cannot cause its interference to quash the proceedings and even if what the petitioner says is true, it is upto the trial Court to
take a decision based on the materials made available therein and therefore, in the circumstances, this Court is left with no choice but to dismiss the
above Criminal OP and hence the following order:
In result,
(i) the above Criminal OP is without merit and the same is dismissed.
(ii) personal attendance of the petitioner before the trial Court on all future dates of hearing is dispensed with and he is permitted to appear by
pleader barring on those occasions of supply of copies, preliminary questioning, final questioning u/s 313 Cr.P.C., delivery of the judgment etc., .
When his personal attendance would become indispensable on such occasions alone, the trial Court will be at liberty to summon the petitioner to
cause his personal attendance in the manner required u/s 205 of the Cr.P.C.