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Pinnacle Leasing and Finance Ltd v/s State of West Bengal

    C.R.R. No. 621 of 2009

    Decided On, 30 July 2009

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE PARTHA SAKHA DATTA

    For the Appearing Parties: Biplab Mitra, Saurav Bhagat, Jharna Bisvas, Advocates.



Judgment Text

(1.) Heard the learned Counsel for the parties.


(2.) This application has been filed under Section 482, Cr.P.C. praying for quashing of a proceeding being Case No.C-27678/08 under Section 403/ 406/409/420/120B of the I.P.C. now pending before the learned Metropolitan Magistrate, 14th Court, Calcutta.


(3.) The prosecution case as it appears from the petition of complaint lodged by the Senior Manager of the Rajasthan Bank Ltd. against the petitioners is that accused No. 1 to 4 approached the bank by representation that they are engaged in the business of hire purchase and lease financing and requested for credit facilities to finance the business. Allegedly accused persons fraudulently and dishonestly represented to the bank that the credit facilities if extended to them would be utilized for financing vehicles and hire purchase instalments whenever they would be received from the purchasers of the vehicles would be credited in the loan account of the accused persons with the bank as payment of the loan facility.


(4.) A sum of Rs. 20 lakhs was advanced to the petitioner and an agreement of hypothecation was executed by and between the bank and the accused persons. The accused persons failed to repay the loan and balance confirmation came to Rs. 18,33,454.07. The bank has instituted two money suits being money suit No. 1136/07 and money suit No. 1137/07 before the City Civil Court for realisation of Rs. 5,78,652.31 and Rs. 5,85,708.79 respectively. After filing of the civil cases, the bank came to know that the customers of the accused persons regularly repaid, their instalments to the accused persons but the accused persons on their turn did not deposit the amount with the bank in terms of the agreement. Accordingly, prosecution has been launched under Section 403/406/409/420 of the I.P.C.


(5.) Mr. Mitra, leaned Counsel for the petitioner submitted that the dispute is purely a dispute of civil in nature, it is a classical civil dispute as it would be evident that for realisation of the amount of loan the bank has instituted two money suits as aforesaid before the civil Court. It is submitted that the agreement was entered into in 1983 and for 21 years the petitioners have regularly paid instalments but default was committed in 2006 which followed suit and cases. It is submitted that breach of contract in making repayment of loan does not constitute any offence of cheating or criminal breach of trust. Mr. Mitra drew my attention to the decision in Harshad Himmatlal Rupani v. State of West Bengal and Anr. reported in (2008)1 C Cr LR (Cal) 523 ; All Cargo Movers (India) (P) Ltd. and Ors. v. Dhanesh Badarmal Jain reported in (2009)1 SCC (Cr) 947 ; Gopesh Chandra v. Nirmal Kumar reported in AIR (37) 1950 Calcutta 57; M/s. Indian Oil Corporation v. M/s. NEPC India Ltd. and Ors. reported in (2007)1 C Cr LR (SC) 52 ; Gouri Shankar Rajgarhia v. State of West Bengal and Anr. reported in (2009)1 C Cr LR (Cal) 810, Central Bureau of Investigation, SPE, SIU(X), New Delhi v. Duncans Agro Industries Ltd. Calcutta reported in 1996 SCC (Cr) 1045 : 1996 C Cr LR (SC) 320.


(6.) Mr. Bhagat learned Advocate for the Bank of Rajasthan Limited submitted that this is simply not a case that the relationship between the bank and the petitioners is one of debtor and creditor for according to him, it has been the allegation in the petition of complaint that the accused persons fraudulently and dishonestly represently to the bank that the credit facilities if extended would be scrupulously utilised for financing vehicles and hire instalments whenever received from the vehicle purchasers would be credited in the loan account of the accused persons with the bank as repayment of the loan facility and as has been alleged in Para 10 of the petition of complaint the customers of the accused persons are understood to have deposited their monthly instalments to the accused persons who in turn did not make those deposits with the bank.


(7.) Therefore, according to Mr. Bhagat, a clear case of cheating and criminal misappropriation has been made out. I have gone through the petition of complaint and copy of the plaint of the money suit as has been annexed to the revisional application. Since the plaints of the money suits are admitted documents as they have been referred to have been in the petition of complaint I have been looked at them. It appears to me that the agreement was between the bank and the accused persons. The accused persons were engaged in hire purchase and lease financing. They used to provide vehicles to the intending customers and the customers are to pay their EMIs to the accused persons-company.


(8.) It is the accused persons who are under the terms of agreement liable to pay the instalments amount to the Bank of Rajasthan. So the agreement was between the accused persons and the bank. The customers of the accused persons were not the confirming party in the agreement between the bank and the accused persons. Clearly there was no privity of contract between the bank and the customers of the accused persons. Therefore, even if the accused persons have not deposited the EMIs which were said to have been deposited with them by their customers that is a matter between the customers and the accused persons. That does not change the colour of the transaction. In essence, the bank has already instituted two suits and I am told one matter has gone to the Debt Recovery Tribunal for resolution of the dispute.


(9.) In such circumstances, it is difficult to hold that the accused persons had since the commencement of the commercial transaction intended from the very beginning to cheat the complainant. The decisions in G. Sagar Sun v. State of U.P. reported in (2000)2 SCC 636: 2000 C Cr LR (SC) 136 is relevant. In an old decision in Gopesh Chandra (Supra) it has been held that where the relationship is between the bank and the customers the relationship is that of debtor

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and creditor a criminal charge under Section 403 has no manner of application. (10) Accordingly, I do not find that the case has been made out of cheating and criminal breach of trust. (11.) Accordingly, the application is allowed. The proceeding being Case No.C-27678/08 under Section 403/406/409/420/120B of the I.P.C. now pending before the learned Metropolitan Magistrate, 14th Court, Calcutta is quashed. The accused persons shall be deemed to be discharged from bail-bond, if they are on bail. Urgent xerox certified copy of the order shall be given to the learned Counsel for the parties, if applied for, as expeditiously as possible.
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