Allowed

Bhag Chand Jain v. State of Hp and Ors.

Himachal Pradesh HC10 Sept 2024CRMMO/436/2022

Case brief

AI extract

What is this about?

Petitioner challenged FIR and proceedings alleging cheating and corruption. Court held that second prosecution for same facts/offences post-acquittal barred under double jeopardy principles. FIR and proceedings quashed as abuse of process.

What did the court decide?

FIR No.05/2011 and criminal proceedings against the petitioner before Special Judge Solan are ordered to be quashed.

Bhag Chand Jain Vs State of Hp and Ors. — Corruption | Himachal Pradesh HC (2024)

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2024:HHC:8260

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr. MMO No. 436 of 2022 Reserved on: 13.08.2024 Date of Decision: 10.09.2024.

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Bhag Chand Jain ...Petitioner Versus State of Himachal Pradesh & Ors. ...Respondents

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Coram

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Hon’ble Mr Justice Rakesh Kainthla , Judge. Whether approved for reporting?¹ Yes

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For the Petitioner : Mr P.P. Chauhan, Advocate through Video Conference and Ms Tara Devi and Ms Aditi Rana Advocates, in person.
For the Respondents : Mr. Prashant Sen, Deputy Advocate General for respondents No.1 and 3/State.
Mr Naresh Kumar Sharma, Advocate, for respondent No.4.

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Rakesh Kainthla, Judge

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The petitioner has filed the present petition for quashing

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the proceedings pending before the learned Special Judge Solan, District Solan, H.P. (learned Trial Court) in Case No. 2-S/7 of 2020,

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titled State vs Vidya Sagar & ors. and also for quashing of F.I.R. No.

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1 Whether reporters of Local Papers may be allowed to see the judgment? Yes.

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05/2011 dated, 30.08.2011, registered for the commission of offences punishable under Sections 420 and 120-B of IPC read with Section 13(i)(d), 13(2) of Prevention of Corruption Act registered at Police Station SV & ACB (SIU) Solan, District Solan, H.P. qua him.

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2 It has been asserted that F.I.R. No. 5 of 2011 was registered against the petitioner and other persons alleging that the petitioner along with his late father Shri CD Jain was Director in M/S Himachal Aluminum Company, Baddi, District Solan, H.P. The Company applied for and availed a composite loan of ₹90,00,000/- i.e. 25,00,000/- CC Limit, ₹15,00,000/- as loan against bills and ₹50,00,000/- as loan against bank guarantee. The loan was approved by the Board of Directors of the Bank on 19.12.1994 and the Company was informed of this fact vide letter dated 20.12.1994. The petitioner and his brother Sunil Jain mortgaged 11% and 8% of their share in the property known as Rajasthan Bhawan, situated at The Mall Road, Solan, Himachal Pradesh. The Mortgage Deed dated 28.03.1995 was executed by the petitioner in favour of the Bank. The name of the Company was mentioned as M/S Himachal Conductors whereas the loan was taken by M/S Himachal Aluminum Company. The share of the petitioner and his brother was worth ₹97,500/- only. The valuation report prepared by the Architect showed the value of the property as 2.15

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Crores. After adding the value of the land as ₹10,64,930/-the total value of the share of the petitioner and his brother was ₹11,62,500/-. No Objection Certificate from other co-sharers was not attached to the loan file. The Company purchased five flats from Himachal Pradesh Housing and Urban Development Authority (HIMUDA) at Parwannoo. These were wrongly hypothecated to the bank because the Company could not have transferred these flats as per the agreement between HIMUDA and M/S Himachal Aluminum Company. The petitioner failed to comply with the terms and conditions of the sanction of the loan. The loan was sanctioned and disbursed in connivance with the bank officials. The charge sheet mentions that the petitioner being the Director of the Company and being the son of the Managing Director was responsible for availing the loan facility. The petitioner was not managing the affairs of the Company. Late CD Jain, father of the petitioner, was the Managing Director of the Company. Jogindera Central Cooperative Bank, Himachal Pradesh had filed a criminal complaint against the petitioner and other Directors in the year 1998, titled Jogindera Central Cooperative Bank Vs. Himachal Aluminum and others. The petitioner was acquitted in the complaint by the learned Judicial Magistrate First Class, Solan, District Solan, H.P. An appeal was preferred against the acquittal but the same was

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withdrawn. An appeal is pending before this Court bearing Cr.MP(M) No. 3665 of 2019. The petitioner has no connection with the Company and the offences alleged in the F.I.R. The petitioner was merely a Director and the prosecution has been launched without arraying the Company as an accused. The petitioner is facing double jeopardy as he was tried and acquitted by the competent Court for the commission of offences mentioned in the F.I.R. The petitioner was a guarantor of M/s Himachal Conductors Ltd. and had executed a Mortgage Deed for a term loan of ₹ 15,00,000/-, which is an entirely different loan. A civil dispute has been converted into a criminal case to pressurize the petitioner to pay money. The learned Trial Court erred in summoning the petitioner. Therefore, it was prayed that the present petition be allowed and the proceedings pending before learned Trial Court and F.I.R. registered against the petitioner be quashed.

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The petition is opposed by filing a reply by respondents No. 1 to 3, making preliminary submission regarding the lack of maintainability. The contents of the petition were denied on merits. It was asserted that K.S. Chaudhary filed a complaint alleging that the bank officials of Jogindera Central Cooperative Bank, Solan, H.P. had intentionally caused a wrongful loss of about two crores and

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corresponding gain to M/S Himachal Aluminum Company Baddi, District Solan, H.P. by abusing their official position. The State Vigilance and Anti-Corruption Bureau registered an F.I.R. after conducting a preliminary inquiry. It was found after investigation that M/S Himachal Aluminum Company, Baddi, District Solan, H.P. had applied to the Chairman, Jogindera Central Cooperative Bank for sanctioning credit facilities of ₹90,00,000/- to the Company. CD Jain, petitioner and Shanti Lal were the Directors of M/S Himachal Aluminum Company, Baddi, District Solan, H.P. who had applied for the credit facility/CCL on behalf of the Company. The Board of Directors in its meeting approved the credit facilities/CCL on 11.12.1994 subject to the fulfillment of 15 conditions before disbursing the loan. The General Manager of Jogindera Central Cooperative Bank, Solan, District Solan, H.P. approved the CCL transaction on 28.12.1994. The petitioner opened the CCL hypothecation account in Jogindera Central Cooperative Bank, Branch Solan, H.P. The Branch Manager allowed the operation of the loan account without obtaining sufficient collateral security. Two properties were mortgaged but their value was insufficient and the mortgaged property was not free from encumbrances. M/S Himachal Aluminum Company executed a Guarantee Bond on 28.03.1995 in favour of the bank. The mortgage

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Deed was wrongly taken on record knowing fully well that it was executed by M/S Himachal Conductors Ltd. which had no connection with the CCL sanctioned in the name of M/S Himachal Aluminum Company. The petitioner was authorized by the Company to execute the documents and sign promissory notes, cheques and other documents. The petitioner concealed material facts from the Court. As per the assessment made by the Revenue Department, the value of Rajasthan Bhawan was assessed at ₹40,85,000/- in which the petitioner B.C. Jain owned an 8% share and Sunil Jain owned an 11 % share. Officers/officials of the bank never inspected the stock hypothecated to the bank. The machinery/goods hypothecated to Jogindera Central Cooperative Bank, Branch, Solan, District Solan, H.P. were removed by the Company from the spot. A charge sheet was filed against the bank official and petitioner. Earlier a complaint was filed by Jogindera Central Cooperative Bank, Branch Solan, District Solan, alleging that the accused had misappropriated the hypothecated goods. It was not alleged in the complaint that the accused Company had cheated the Bank by producing fake documents of valuation and without furnishing any collateral security. The loan was sanctioned without approval of the Branch Manager and various documents were not placed on record. The loan was sanctioned

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against the norms in favour of the petitioner and there is no double jeopardy. Hence, it was prayed that the present petition be dismissed.

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Respondent No. 4 also opposed the petition by filing a separate reply taking preliminary objections regarding lack of maintainability and the concealment of material facts. The contents of the petition were denied on merits. It was asserted that as per the Articles of Association of Himachal Aluminum Company Private Limited, the petitioner is the first Director of the Company. He was authorized to enter into an agreement with the bank and to execute the various documents. The police conducted the investigation and found sufficient material against the petitioner to submit the charge sheet against him. Therefore, it was prayed the present petition be dismissed.

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The police also filed a status report outlining various steps of the investigation.

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Separate rejoinders denying the contents of the replies and affirming those of the petition were filed.

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I have heard Mr P.P. Chauhan, through video conferencing, Ms Tara Devi and Ms Aditi Rana, learned counsel for the petitioner, Mr Prashant Sen, learned Deputy Advocate General for respondents No.1

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and 3/State and Mr Naresh Kumar Sharma, learned counsel for respondent No.4.

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Mr P.P. Chauhan, learned counsel for the petitioner/accused (through V.C.) submitted that the F.I.R. was lodged based on false facts. The petitioner was prosecuted by the Bank by filing a complaint and was acquitted by the competent court. The FIR cannot be registered on the same allegations. Hence, he prayed that the present petition be allowed and the proceedings pending before the learned Trial Court and the F.I.R. be quashed. He relied upon the judgment of Hon’ble Supreme in T.P. Gopalakrishnan vs. State of Kerala, 2022 (14) SCC 323 in support of his submission.

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Mr. Prashant Sen, learned Deputy Advocate General for respondents No. 1 to 3 submitted that the plea of the petitioner regarding double jeopardy is not correct. The FIR has been filed against the bank officials and the petitioner for disbursing and availing the loan without furnishing the necessary documents and fulfilling the terms and conditions imposed by the Board of Directors while sanctioning the loan. The previous complaint did not deal with such a dispute. Therefore, he prayed that the present petition be dismissed.

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Mr Naresh Kumar Sharma, learned counsel for respondent

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No.4 adopted the submissions of the learned Deputy Advocate General and submitted that the complaint and the F.I.R. pertain to different aspects of the transactions and there is a bar to proceed further in the matter. Therefore, he prayed that the present petition be dismissed.

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I have given considerable thought to the submissions made at the bar and have gone through the record carefully.

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The law regarding the exercise of jurisdiction under Section 482 of Cr.P.C. was considered by the Hon’ble Supreme Court in A.M. Mohan v. State, 2024 SCC OnLine SC 339, wherein it was observed: -

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“9. The law with regard to the exercise of jurisdiction under Section 482 of Cr. P.C. to quash complaints and criminal proceedings has been succinctly summarized by this Court in the case of Indian Oil Corporation v. NEPC India Limited (2006) 6 SCC 736: 2006 INSC 452¹ after considering the earlier precedents. It will be apposite to refer to the following observations of this Court in the said case, which read thus:

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“ 12. The principles relating to the exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few— Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCC 692: 1988 SCC (Cri) 234], State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335: 1992 SCC (Cri) 426], Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194: 1995 SCC (Cri) 1059], Central Bureau of Investigation v. Duncans Agro Industries Ltd. [(1996) 5 SCC

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591: 1996 SCC (Cri) 1045], State of Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164: 1996 SCC (Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC 259: 1999 SCC (Cri) 401], Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269: 2000 SCC (Cri) 615], Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC 168: 2000 SCC (Cri) 786], M. Krishnan v. Vijay Singh [(2001) 8 SCC 645: 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283]. The principles, relevant to our purpose are:

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( i ) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.

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For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint is warranted while examining prayer for quashing a complaint.

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( ii ) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides /malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.

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( iii ) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.

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( iv ) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted

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only where the complaint is so bereft of even the basic facts which are necessary for making out the offence.

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( v. ) A given set of facts may make out: ( a ) purely a civil wrong; or ( b ) purely a criminal offence; or ( c ) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not.”

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13. Similar is the judgment in Maneesha Yadav v. State of U.P.,

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2024 SCC OnLine SC 643 , wherein it was held: -

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“12. We may gainfully refer to the following observations of this Court in the case of State of Haryana v. Bhajan Lal1992 Supp (1) SCC 335: 1990 INSC 363 :

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“ 102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

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(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

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(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

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(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

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(4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

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(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

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(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

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(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding

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is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and to spite him due to private and personal grudge.

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103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.”

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The present petition has to be considered as per the parameters laid down by the Hon’ble Supreme Court.

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15 It was laid down by Hon’ble Supreme Court in Prem Chand Singh v. State of U.P., (2020) 3 SCC 54 that where the subject matter of the two F.I.R. was the same and the accused was acquitted in the first FIR, he cannot be prosecuted by adding some sections in the second F.I.R. It was observed: -

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“8. FIR No. 160 of 1989 alleges that the respondent on account of his job invariably stayed outside. The appellant had created a forged general power of attorney from the respondent in his name with regard to his lands bearing Gata No. 77/0.87 decimal and sold it on the basis of the forged general power of attorney which the respondent became aware of on 25-7-1989. The respondent denied having ever executed any general power of attorney in favour of the appellant. The respondent does not dispute that the appellant was acquitted of the charge by judgment dated 7-8-1998. The fact that the judgment may not have been made available is therefore inconsequential.

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10. The respondent then filed an application under Section 156(3) CrPC which was forwarded by the Magistrate to the police leading to the registration of FIR dated 9-10-2008. The allegations are similar in that the appellant put up an imposter in place of the respondent and along with one Sushil Kumar Singh and Arvind on the basis of a general power of attorney, which the respondent had never executed, sold his lands. The FIR itself recites that earlier the appellant had sold the lands of the respondent on the basis of the same general power of attorney, but conceals the order of acquittal dated 7-8-1998, and also the institution of Civil Suit No. 353 of 2007 for annulment of the same.

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11. It is, therefore, apparent that the subject matter of both the FIRs is the same general power of attorney dated 2-5-1985 and the sales made by the appellant in pursuance of the same. If the substratum of the two FIRs is common, the mere addition of Sections 467, 468 and 471 in the subsequent FIR cannot be considered as different ingredients to justify the latter FIR as being based on different materials, allegations and grounds . 12. Section 300 CrPC provides as follows:

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“ 300. A person once convicted or acquitted not to be tried for the same offence .—(1) A person who has once been tried by a court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, while such conviction or acquittal remains in force, not be liable to be tried again for the same offence, nor on the same facts for any other offence for which a different charge from the one made against him might have been made under sub-section (1) of Section 221, or for which he might have been convicted under sub-section (2) thereof.”

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13. In view of the conclusion that the substratum of the two FIRs is the same and that the appellant has already stood acquitted on 7-8-1998 of the charge with regard to forging any general power of attorney of the respondent, we are of the considered opinion that the subsequent prosecution of the appellant in FIR No. 114 of 2008 dated 9-10-2008 is completely unsustainable.

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In the result, the FIR dated 9-10-2008, the orders dated 18-122015, 31-5-2016 and the impugned order dated 1-3-2017 [ Prem Chand Singh v. State of U.P. , 2017 SCC OnLine All 1264] are set aside. The appeal is allowed.” (Emphasis supplied)

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16 It was held in T.P. Gopalakrishnan’s case (supra) that where

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previous proceedings were taken in which the accused was convicted or acquitted, the second proceeding in relation to the same set of facts is not permissible. It was observed:-

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“29. There are three conditions for the application of the clause. Firstly , there must have been previous proceeding before a court of law or a judicial tribunal of competent jurisdiction in which the person must have been prosecuted. The said prosecution must be valid and not null and void or abortive. Secondly , the conviction or acquittal in the previous proceeding must be in force at the time of the second proceeding in relation to the same offence and same set of facts, for which he was prosecuted and punished in the first proceeding. Thirdly , the subsequent proceeding must be a fresh proceeding, where he is, for the second time, seeking to be prosecuted and punished for the same offence and the same set of facts. In other words, the clause has no application when the subsequent proceeding is a mere continuation of the previous proceeding, for example, where an appeal arises out of such acquittal or conviction. In order to sustain a plea of double jeopardy, it must be shown that all the aforesaid conditions of this clause are satisfied, vide S.A. Venkataraman [S.A. Venkataraman v. Union of India, 1954 SCC OnLine SC 26: AIR 1954 SC 375 ].

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The term same offence was defined as an offence whose

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ingredients are the same. It was observed:-

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31. Before dealing with the issue at hand, it is necessary to understand what the term “same offence” means and includes.

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The term “same offence” in simple language means, where the offences are not distinct and the ingredients of the offences are identical. Where there are two distinct offences made up of different ingredients, the embargo under Article 20 of the Constitution of India, has no application, though the offences may have some overlapping features. The crucial requirement of Article 20 is that the offences are the same and identical in all respects, vide State (NCT of Delhi) v. Navjot Sandhu [State (NCT of Delhi) v. Navjot Sandhu, (2005) 11 SCC 600: 2005 SCC (Cri) 1715 ].

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It was held that where a person was tried for the commission of offences punishable under Section 13(i)(c) and 13(2) of Prevention of Corruption Act and Sections 409 and 477 of IPC, he cannot be tried again for the commission of offences punishable under Sections 13(i)(c) and 13(2) of Prevention of Corruption Act and Section 409 of IPC. It was observed:-

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“45. Applying the said provision to the present case, it is noted that earlier the petitioner was tried in CCs Nos. 12, 13 and 14 of 1999 for the offences under Section 13(1)( c ) read with Section 13(2) of the Act as well as under Sections 409 and 477-AIPC. In CCs Nos. 24 and 25 of 2003, the appellant is being tried once again for the offences under Section 13(1)( c ) read with Section 13(2) of the Act and Section 409 IPC for the same period. There is no material on record to demonstrate that CCs Nos. 24 and 25 of 2003 have been initiated pursuant to the consent of the State Government. It is also not brought on record that CCs Nos. 24 and 25 of 2003 are for any distinct offence for which a separate charge had been made against the appellant and the earlier trials.”

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This position was reiterated in Amandeep Singh Saran v.

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State of Chhattisgarh , (2024) 6 SCC 541, w herein it was observed: -

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11. A reference to Section 300(1) CrPC, which lays down that a person once convicted or acquitted cannot be tried for the same offence, will not be inappropriate in the matter of such a formative analysis, as mentioned above. This law based on the maxim “ nemo debet bis vexari ” is founded on the condition that the initial trial must be by a court of competent jurisdiction for the offences concerned. We are afraid, in the scenario now obtained if this Court is not passing appropriate directions, the appellant-accused may have to face fresh trial or prolonged proceedings even after the conclusion of proceedings before the court where the matter is presently pending. To know the raison d'étre for our remark, one may have to refer to various provisions of law, including the provisions referred to infra.

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The copy of the earlier complaint (Annexure P-3) shows

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that the Bank had filed a complaint against the Company, C.D. Jain, B.C. Jain and S.L. Mehta for the commission of offences punishable under Sections 409, 417, 418 etc. of IPC. It was asserted that the Company contacted the Bank to get the loan/credit. The bank demanded various documents from the Company. The accused submitted the documents and mortgaged the property with the Bank. The Bank sanctioned cash credit limit of ₹90,00,000/(hypothecation of ₹25,00,000/- Cash Credit Limit of ₹15,00,000/against the bills and ₹50,00,000/- against the bank guarantee). The accused executed a Demand Promissory Note, Hypothecation Deed, and the Bank Guarantee of ₹50,00,000/- in favour of NSIC Ltd. The hypothecated goods were to be held as exclusive property of the bank. The Company was not to create any charge or mortgage. The accused

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also submitted a stock statement to the bank vide letter dated 20.01.1995 showing that stock worth ₹ 15.55 lakhs was in the custody of the accused as Trustee. The accused also submitted a letter dated 20.12.1994 showing that the value of the mortgaged property was assessed at ₹2.15 crores. The Company subsequently sold the hypothecated goods without proper permission from the bank and misappropriated the sale proceeds. The Company failed to pay ₹33,82,000/- to the NSIC. The NSIC invoked the bank guarantee and the bank was compelled to pay ₹33,82,000/- to the NSIC. The Bank demanded the outstanding amount from the accused but the accused failed to pay the amount. Hence, the complaint was made against the accused.

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F.I.R. No. 5 of 2011 reads that the Company applied to the bank for sanctioning of Credit facilities of ₹1.25 Crores on 15.11.1994. The Credit Facility of ₹ 55 Lakhs was recommended by the General Manager of the Bank. The Credit Facility of ₹90,00,000/- was extended. The Branch Manager allowed the operation of the loan account on 28.12.1994 without obtaining any collateral security. Two properties were mortgaged as collateral security but the security was insufficient. A Mortgage Deed of the houses located at Parwanoo was executed but the bank had the first charge on the property. The Bank

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Manager allowed the payment of the amount to the Company even though the bank was entitled to the same. The police registered the F.I.R. and filed a Charge Sheet against CD Jain, Vidyasagar Sharma, Ishwari Dutt, Jeet Ram and Bhag Chand Jain. It was asserted against the petitioner that he had mortgaged his share to the Bank. The value of the shares of B.C. Jain and Sunil Jain was ₹97,500/- and it was wrongly shown as ₹2.15 crores. As per the report of the Revenue department, the total value of the mortgaged property was ₹10,64,930/- No Objection Certificate was not taken from the other co-sharers. The documents submitted by the Company were not verified by any person. The petitioner and his father had shown the value of the property more than the market value. Hence, offences punishable under Sections 420 and 120-B of IPC were established against the petitioner.

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A perusal of the allegations made in the F.I.R. and the complaint show that they pertain to taking the loan by furnishing inadequate security and misappropriation of the hypothecated goods. One of the offences alleged against the petitioner was 420 of IPC in the charge sheet whereas the petitioner was shown to have committed offences punishable under Sections 409, 417 and 418 of IPC in the earlier complaint. A copy of the judgment passed by the learned

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Judicial Magistrate First Class, Solan, H.P. shows that the accused were acquitted for the commission of offences punishable under Sections 406 and 418 of IPC.

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Section 418 of IPC, punishes a person who cheats another with the knowledge that he is likely thereby to cause wrongful loss to a person whose interest he was bound to protect.

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Section 420 of IPC, punishes a person who cheats another person by dishonestly inducing him to deliver the property.

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Thus, it is apparent that both these Sections require cheating by the accused. Cheating has been defined under Section 415 of IPC and this definition is common for the offences punishable under Sections 418 and 420 of IPC. Since the petitioner was prosecuted for the commission of offences punishable under Sections 417 and 418 of IPC in the previous complaint regarding the transaction of taking the loan and is being prosecuted for the commission of an offence punishable under Section 420 of IPC in the present FIR; hence, the requirement that a person should have been prosecuted for the commission of the same offence is satisfied.

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F.I.R. and the complaint arose of the transaction related to

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the taking the loan from Jogindra Central Co-operative Bank, execution of various documents and misappropriation of the

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hypothecated goods; hence, the same set of facts is involved in the complaint and the F.I.R.

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The police have also added Section 120-B of IPC, namely the conspiracy to commit an offence stating that the loan was disbursed wrongly in connivance with the bank officials. This Section was not invoked in the earlier complaint but the same will not make any difference. Hon’ble Supreme Court has categorically held in T.P. Gopalakrishnan’s case (supra) that where the several acts were connected, these cannot be split and separate proceedings cannot be taken in respect of them.

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In the present case, the transaction was pertaining to taking a loan and the same could not have been split by saying that the criminal conspiracy was not involved in the first complaint. Hence, the submission that the F.I.R. is based on the same set of facts and involves the same offences for which the petitioner was tried earlier has to be accepted as correct and a mere addition of Section 120-B of IPC will not make any difference.

¶131

Consequently, the prosecution cannot proceed with the F.I.R. and the proceedings arising out of the same as the same would

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be an abuse of the process of the Court. Thus, the present petition is

¶133

¶134

2024:HHC:8260

¶135

allowed and F.I.R. No.05/2011, dated 30.08.2011, for the commission of offences punishable under Sections 420 and 120-B of IPC read with Sections 13(i)(d) & 13(2) of Prevention of Corruption Act, registered at Police Station SV& ACB(SIU) Solan, District Solan, H.P.is ordered to be quashed qua the petitioner. Consequent upon the quashing of FIR, criminal proceedings pending/initiated against the petitioneraccused in pursuance thereto before the learned Special Judge, Solan, District Solan, H.P. are also ordered to be quashed qua the petitioner.

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The observations made hereinunder shall remain confined

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to the disposal of the petition and will have no bearing, whatsoever, on the criminal case pending before the learned Trial court.

¶138

Petition stands disposed of in the above terms, so also pending applications, if any.

¶139

( Rakesh Kainthla) Judge

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10^th September, 2024 (ravinder)

Bhag Chand Jain v. State of Hp and Ors.

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Bhag Chand Jain v. State of Hp and Ors.

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