1989 JTR(SC) 409
1989 AIR(SC) 2222 ; 1989 AllLJ 62 ; 1990 AllLJ 62 ; 1990 1 APLJ 18 ; 1989 BankJ 652 ; 1990 2 BC 148 ; 1989 CriLR 747 ; 1989 3 Crimes(SC) 109 ; 1989 CrLJ 2301 ; 1990 ISJ(Banking) 46 ; 1989 3 JT 347 ; 1989 2 OLR 387 ; 1989 2 RCR(Cri) 479 ; 1989 2 Scale 262 ; 1989 4 SCC 59 ; 1989 SCC(Cri) 713 ; 1989 3 SCR 834
SUPREME COURT OF INDIA
M.M. DUTT, S.R. PANDIAN AND T.K. THOMMEN, JJ.
State of U.P. through C.B.I. S.P.E., Lucknow and another, Appellants
Versus
R.K. Srivastava and others, Respondents. 2223
Criminal Appeal Nos. 380 of 1989 and 323 of 1988
Decided on 11-8-1989.
Advocates appeared
Mr. G. Ramaswamy, Addl. Solicitor General and Mr. Anil Dev Singh, Sr. Advocate, Miss. A. Subhashhini and Mr. R. P. Kapur, with them, for Appellants; Mr. R. L. Kohli, Sr. Advocate, Mr. Manoj Saxena and Mr. R. D. Upadhyay, Advocates with him, for Respondents.
Act
Referred
:CRIMINAL PROCEDURE CODE : S.154, S.482
INDIAN PENAL CODE : S.420, S.468, S.471, S.120(b)
PREVENTION OF CORRUPTION ACT : S.5(1)(d), S.5(2)
(A) The provisions of Sections 120-B, 420, 468, 471, and 482 of the Indian Penal Code, read with Sections 5(1)(d) and 5(2) of the Prevention of Corruption Act, 1947, are attracted where allegations involve criminal conspiracy, cheating by personation, and the making of false entries in accounts to facilitate wrongful gain or loss. Section 120-B IPC penalizes criminal conspiracy, Section 420 IPC addresses cheating and dishonestly inducing delivery of property, Sections 468 and 471 IPC relate to forgery and using forged documents for cheating, and Section 5(1)(d) of the Prevention of Corruption Act targets public servants dishonestly misusing their position. Section 5(2) of the same Act presumes the possession of property disproportionate to known sources of income as evidence of corruption. Section 482, Cr.P.C., grants High Courts inherent powers to quash proceedings that are an abuse of process or lack legal foundation. In this case, the acts alleged do not satisfy the essential ingredients of these offences, as there is no evidence of dishonest intention or wrongful gain, rendering the criminal proceedings unsustainable under these provisions.
(B) Key legal principles include that criminal proceedings must be quashed if the allegations in the FIR, when accepted in their entirety, fail to constitute any cognisable offence; mere allegations of false entries are insufficient without proof of dishonest intent; and if the same allegations apply to multiple accused persons, all proceedings must be quashed where no prima facie case is made out against any one of them.
Facts of the case:
A First Information Report alleged that certain public servants and other individuals entered into a criminal conspiracy to cheat a bank by making false credit entries and inducing the bank to accept cheques, enabling withdrawal of a substantial sum, and further alleged violations of the Prevention of Corruption Act.
Findings of Court:
The court found that the allegations did not demonstrate any dishonest intention or wrongful gain or loss, the entries made were not shown to be false, and the allegations did not attract the offences of cheating, forgery, or criminal conspiracy under the applicable provisions.
Issues:
Whether the allegations in the FIR constituted offences under Sections 120-B, 420, 468, 471, I.P.C., and Sections 5(1)(d) and 5(2) of the Prevention of Corruption Act; whether the proceedings were an abuse of the courts process; and whether the quashing of proceedings should extend to all accused persons.
Ratio Decidendi:
Criminal proceedings must be quashed where the allegations, even when taken at their face value, do not disclose any offence, there is no evidence of dishonest intention or wrongful gain, and the courts inherent powers under Section 482, Cr.P.C., are invoked to prevent abuse of process.
Result:
The appeals are allowed, the criminal proceedings are wholly quashed, and the order of the High Court is affirmed with the quashing of proceedings as against all accused persons.
(A) The provisions of Sections 120-B, 420, 468, 471, and 482 of the Indian Penal Code, read with Sections 5(1)(d) and 5(2) of the Prevention of Corruption Act, 1947, are attracted where allegations involve criminal conspiracy, cheating by personation, and the making of false entries in accounts to facilitate wrongful gain or loss. Section 120-B IPC penalizes criminal conspiracy, Section 420 IPC addresses cheating and dishonestly inducing delivery of property, Sections 468 and 471 IPC relate to forgery and using forged documents for cheating, and Section 5(1)(d) of the Prevention of Corruption Act targets public servants dishonestly misusing their position. Section 5(2) of the same Act presumes the possession of property disproportionate to known sources of income as evidence of corruption. Section 482, Cr.P.C., grants High Courts inherent powers to quash proceedings that are an abuse of process or lack legal foundation. In this case, the acts alleged do not satisfy the essential ingredients of these offences, as there is no evidence of dishonest intention or wrongful gain, rendering the criminal proceedings unsustainable under these provisions.
(B) Key legal principles include that criminal proceedings must be quashed if the allegations in the FIR, when accepted in their entirety, fail to constitute any cognisable offence; mere allegations of false entries are insufficient without proof of dishonest intent; and if the same allegations apply to multiple accused persons, all proceedings must be quashed where no prima facie case is made out against any one of them.
Facts of the case:
A First Information Report alleged that certain public servants and other individuals entered into a criminal conspiracy to cheat a bank by making false credit entries and inducing the bank to accept cheques, enabling withdrawal of a substantial sum, and further alleged violations of the Prevention of Corruption Act.
Findings of Court:
The court found that the allegations did not demonstrate any dishonest intention or wrongful gain or loss, the entries made were not shown to be false, and the allegations did not attract the offences of cheating, forgery, or criminal conspiracy under the applicable provisions.
Issues:
Whether the allegations in the FIR constituted offences under Sections 120-B, 420, 468, 471, I.P.C., and Sections 5(1)(d) and 5(2) of the Prevention of Corruption Act; whether the proceedings were an abuse of the courts process; and whether the quashing of proceedings should extend to all accused persons.
Ratio Decidendi:
Criminal proceedings must be quashed where the allegations, even when taken at their face value, do not disclose any offence, there is no evidence of dishonest intention or wrongful gain, and the courts inherent powers under Section 482, Cr.P.C., are invoked to prevent abuse of process.
Result:
The appeals are allowed, the criminal proceedings are wholly quashed, and the order of the High Court is affirmed with the quashing of proceedings as against all accused persons.
A.Subhashini, ANIL DEV SINGH, G.RAMASVAMY, MANOJ SAXENA, R.D.UPADHYAY, R.L.Kohli, R.P.KAPUR
JUDGMENT
DUTT, J.:— These two appeals by special leave, one preferred by the State of U.P. and the other by the State Bank of India, are directed against the judgment of the Allahabad High Court whereby the High Court has quashed the criminal proceedings being Crime Case No. 40 of 1983 in the Court of Special Judge, Anti-Corruption, only as against the respondent R.K. Srivastava. In quashing the proceedings in the exercise of its jurisdiction under S. 482, Cr.P.C., the High Court took the view that allegations made in the First Information Report (FIR) did not constitute any offence. In order to appreciate the view of the High Court, it is necessary to refer to the FIR which reads as follows : -
"An information has been received that Shri P.C. Saxena and Shri Ram Kumar Srivastava while posted and functioning as Accountant and Clerk-cum-Godown Keeper in the State Bank of India, Agriculture Development Branch, Budaun, respectively entered into a criminal conspiracy with Shri Sarwant Singh and his wife Smt. Rajwant Kaur, Props. of M/s. National Mill Store, Budaun, during the month of June, 1982 to cheat the State Bank of India, Budaun, and in pursuance of the said criminal conspiracy an amount of Rs. 54,600/- was withdrawn on the basis of false credit entry made in the books of accounts of the Bank and connected credit and debit vouchers were also prepared and passed by the accused employees of the Bank and payments were made to the accused persons, namely, Shri Sarwant Singh and Smt. Rajwant Kaur who tendered cheque No. 348459 dated 2-5-1982 for Rs. 18,600/- cheque No. 348482 for Rs. 19,200/- (dt. 2-6-1982) and cheque No. 502206 dated 2-6-82 for Rs. 16,800/- = Rs. 54,600/-
The above facts constitute offence punishable under Ss. 120-B, 420, 468, 471, I.P.C. and 5(2) r/w 5(1)(d) of PC Act, 1947.
A regular case is therefore registered and its investigation is entrusted to Shri V.P. Arya, Inspector of this establishment."
According to the FIR, as against three cheques of the aggregate amount of Rs. 54,600/-, presumably of three different Banks, a credit entry was made in the accounts of M/s. National Mill Stores Co. Budaun, and M/s. New Manufacturing Co., Budaun, and their partners, Sardar Sarwant Singh and his wife Smt. Rajwant Kaur, in the State Bank of India and the said sum of Rs. 54,600/- was allowed to be withdrawn by them by the respondent and the accused P.C. Saxena.
2. The allegations in the FIR appear to be vague and although it is alleged that the respondent and the accused P.C. Saxena made false credit entries in the books of accounts of the Bank and connected credit and debit vouchers were also prepared and passed by them, no particulars of the same have been given. It appears from the charge-sheet that the said Shri Sarwant Singh and his wife Smt. Rajwant Kaur and their firms, namely, M/s. National Mill Stores Co., Budaun, and M/s. New Manufacturing Co., Budaun, have current accounts in the State Bank of India, Budaun. After the said three cheques amounting to Rs. 54,600/- were tendered, the respondent and the accused P.C. Saxena sent the said cheques for clearance and allowed the said Shri Sarwant Singh and his wife Smt. Rajwant Kaur to withdraw the sum of Rs. 51,600/- from their current account.
3. It is a well settled principle of law that if the allegations made in the FIR are taken at their face value and accepted in their entirety do not constitute an offence, the criminal proceedings instituted on the basis of such FIR should be quashed. In the instant case, on the basis of the said FIR the respondent and the said P.C. Saxena and Shri Sarwant Singh were charged under Ss. 120-B, 420,468 and 471, I.P. C. and S. 5(2) read with S. 5(1)(d) of the Prevention of Courruption Act, 1947. According to the appellant, as no prima facie case was made out against Smt. Rajwant Kaur, wife of Shri Sarwant Singh, she has been dropped from the array of the accused persons.
4. The question is whether the facts disclosed in the FIR constitute the offences with which the accused have been charged. It is manifestly clear from the allegations in the FIR that the respondent or the other accused had no intention whatsoever to make any wrongful gain or to make any wrongful loss to the Bank. They had accepted the said three cheques amounting to Rs. 54,600/- and sent the same for clearance after debiting the LOC account. The said cheques have been encashed and the money was received by the State Bank of India. It may be that there was some delay in crediting the LOC account or that the money against the three cheques were credited in the accounts of the said Shri Sarwant Singh and his wife, but the allegations made either in the FIR or in the charge-sheet do not show that the respondent and the said P.C. Saxena had acted dishonestly, that is to say, acted with a deliberate intention to cause wrongful gain or wrongful loss. In our opinion, the High Court has rightly held that the allegations made in the FIR do not constitute any offence of cheating, nor do they constitute any offence of forgery. It is true that it has been alleged that the said sum of Rs. 54,600/- was withdrawn on the basis of false credit entries made in the books of accounts of the Bank and connected credit and debit vouchers were also prepared and passed by the respondent and the other accused. When the said sum of Rs. 54,600/- had been allowed to be withdrawn by the said Shri Sarwant Singh and his wife, necessary entries had to be made in the books of accounts, but it is not understandable how these entries can be characterised as false entries. No document has been referred to in the FIR as the outcome of forgery.
5. The High Court has rightly held that as the criminal proceedings have been started against the respondent on the basis of a FIR which does not contain any definite accusation, it amounts to an abuse of process of the Court and, as such, is liable to be quashed. We entirely agree with the view expressed by the High Court.
6. The High Court has quashed the proceedings only as against the respondent No. 1, R.K. Srivastava. In our opinion, when the allegations in the FIR are the same against all the accused persons, the entire proceedings as against all the accused persons including the said P.C. Saxena and the said Shri Sarwant Singh should be quashed.
7. Accordingly, while we uphold the judgment of the High Court, we quash the entire criminal proceedings being Crime Case No. 40 of 1983 also as against the accused P.C. Saxena and Shri Sarwant Singh. The appeals are disposed of as above.
Order accordingly.
For Citation : AIR 1989 SC 2222