Criminal Writ Petition No. 3 of 2005

13th March, 2013

Petitioner Counsel: Mr. P.M. SHAH, Mr. N.B. SURYAWANSHI
Respondent Counsel: Mr. D.R. KORDE, Mr. V.D. SAPKAL

Cases Cited:
Vinoshkumar Ramchandran Valluvar Vs. State of Maharashtra and anr., 2011 ALL MR (Cri) 1025=2011(2)Bom.C.R.(Cri.) 179 [Para 13]
Sudhir Vasant Karnataki Vs. State of Maharashtra and ors., 2011 ALL MR (Cri) 96 (F.B.)=2011(1)Bom.C.R.(Cri.) 326 [Para 14]
Narmada Bachav Andolan Vs. State of Madhya Pradesh, 2011 ALL SCR 1866 =AIR 2011 SC 1989 [Para 15]
K.D.Sharma Vs. Steel Authority of India Limited and ors., AIR 2009 SC (Supp) 1309 [Para 16]

JUDGMENT

JUDGMENT :- Heard. Rule was issued on 23rd March, 2005 with interim stay to the order of learned Chief Judicial Magistrate, Osmanabad dated 9th December, 2004.

2. In Crime No.106 of 2002 of Police Station, Osmanabad, the Investigation Officer, on 28th August, 2002, issued notice to the petitioner under Section 102 of Code of Criminal Procedure to freeze the amount of Rs.29,99,34,591/- (hereinafter referred as "said amount") lying with it. Same was communicated to the learned Chief Judicial Magistrate (C.J.M.) below Exhibit 105 on 11th November, 2002. A compliance report Exhibit 131 in the said crime was also forwarded, upon which, C.J.M. directed notices to the two banks and the accused.

3. The petitioner - Nagpur District Central Co-Operative Bank Ltd (for short "N.D.C.C. Bank") claimed to have purchased Government Securities bearing No.9.81 worth Rs.20 crores and bearing No. 10.03 worth Rs.15 Crores through M/s.Home Trade. The contract notes and confirmation was received in that behalf on 8th September, 2001 along with adjustment letter. Thereafter, notice under Section 102 of Cr.P.C. dated 28th August, 2002 was received by the petitioner to freeze the said amount as the said amount was of respondent no.2 Osmanabad District Central Co-operative Bank Ltd. (for short "O.D.C.C. Bank"). N.D.C.C. Bank informed the investigator that it's amount of Rs.30 crores is lying with O.D.C.C. Bank matured on 30th July, 2002 and also an amount of Rs.20 crores is lying in fixed deposit receipt having maturity dated 5th January, 2003. Said amount is not cleared by O.D.C.C. Bank. N.D.C.C. Bank has no concern with the alleged misappropriation. O.D.C.C. Bank had directly transacted with M/s.Home Trade. N.D.C.C. Bank claimed, "said amount" was in fact, the amount from sale proceeds from government securities and consequently, it could not be said to be involved in the offence. In Crime No.106 of 2002, after investigation, Charge Sheet vide R.C.C.No.398 of 2002 is filed.

4. Applications below Exhibit 131 and 205 were moved in the said case and learned Chief Judicial Magistrate on 9th December, 2004 recorded following order :-

" Order

1. The application is allowed.

2. The O.D.C.C. bank is entitled to recover Rs.29,99,34,590-27 ps. being the case property from N.D.C.C. Bank and to retain the same subject to final disposal of this case.

3. N.D.C.C. bank is hereby directed to repay the amount of Rs. 29,99,34,590-27 ps to O.D.C.C. Bank within one month from the date of this order, failing which the O.D.C.C. bank is entitled to recover it with due process of law as per procedure provided for the recovery of fine.

4. O.D.C.C. bank is hereby directed not to invest the same for unproductive purpose. The same must be invested in such a way that it could be recovered at any stage or at any time.

5. O.D.C.C. bank is also directed to execute bank guarantee in favour of this court of Rs.40 crores on executing the said guarantee, issue letter to N.D.C.C. bank directing it to pay the amount of Rs. 29,99,34,590-27 ps forthwith."

5. Mr.Suryawanshi says, the amount received by N.D.C.C. Bank is part of sale proceeds. It has nothing to do of mishap of O.D.C.C. Bank. N.D.C.C. Bank's huge amount is already blocked. No harm would be caused to retain the amount with it.

6. Mr.Sapkal, learned counsel for O.D.C.C. Bank asserts that the petitioner N. D.C.C. Bank has used forge documents to stake claim. It has played fraud with the Court by making incorrect statement. There is no vital defect in compliance of Section 102 of Cr.P.C. Even if it is, no prejudice is caused to the petitioner for mistake.

7. O.D.C.C. bank canvassed that it's Ex-Chairman (accused no.1), Sanjay Chairman of M/s.Home Trade (accused no.7), Ex-Chairman of N.D.C.C. Bank (accused no.10) had in criminal conspiracy, defrauded O.D.C.C. bank in a scam of about Rs.30 crores. There was no genuine transaction of sale or purchase of government securities done for O.D.C.C. Bank by M/s.Home Trade Ltd., but document like contract notes were forged.

8. The contract notes, though are said to be of Rs.6 crores, shows figure of Rs.15 crores. N.D.C.C. Bank has not submitted on record any document in the nature of said notes pertaining to the alleged sale of government securities.

9. In the petition, in paragraph 3, the petitioner N.D.C.C. bank has repeated that it is copy of contract notes issued about the transaction of sale of government securities. The amount which was credited by M/s.Home Trade in the account of N.D.C.C. bank was received from sale of government securities and the same was received in normal banking business of N.D.C.C. Bank. The contract notes are annexed as Annexures "B", "C" and "D" of the petition.

10. It is pointed and not now in dispute that these contract notes are not genuine, they are fabrications, that too, to the knowledge of N.D.C.C. Bank as its reference is seen in Crime Nos.97 of 2002 and 101 of 2002 wherein, its bank officials are accused. It was expected of the petitioner - N.D.C.C. Bank, while filing the petition, to have apprised the Court that the contract notes of sale or purchase of government securities itself was a fraud perpetuated by accused Directors of M/s.Home Trade and Chairman and other officials of N.D.C.C. Bank. Thus, there was no document, primarily, with N.D.C.C. Bank to establish that it was a transaction of sale of government securities and sale proceeds of said amount, is genuine transaction.

11. On the other hand, primarily, O.D.C.C. Bank has proved that it had released an amount of Rs.30 crores to M/s.Home Trade, Washi, deposited in its account No.3A/17031 for which, contract notes were released by Home Trade and balance amount of Rs. 65,409/- was paid by a cheque. This amount of O.D.C.C. Bank was credited on the said day i.e. 1st February, 2002 to N.D.C.C. Bank in its account No. 101/5751. This has been confirmed during investigation and interrogation of Directors of M/s.Home Trade and officials relating to Maharashtra State Co-operative Bank. The copies of advise are placed by O.D.C.C. Bank on record before learned C.J.M.

12. N.D.C.C. Bank did not produce any evidence or any document called by M/s.Home Trade to show that said amount was received by M/s.Home Trade Ltd., Washi after sale of securities of N.D.C.C. Bank. The evidence, otherwise, illustrates that the amount of O.D.C.C. Bank was transferred in the name of M/s.Home Trade, Washi and out of it, "said amount" was transferred in the name of N.D.C.C. Bank.

13. By now, there is no controversy that seizure of bank account is property within the meaning of Section 102 of Cr.P.C. Basically, freezing of an account is a part of investigation. It normally behove secrecy to preserve the evidence. It has not deprived of its liberty or property. It was a temporary arrangement. Minimum compliance thereof was carried by moving learned C.J.M., who has, in turn, issued notices to N.D.C.C. Bank and all concerned. Thus, purport of Section 102 of Cr.P.C. illustrates, it does not require issuance of notice to a person before or simultaneously with the action of attaching bank account. Full Bench of this Court in the matter of Vinoshkumar Ramchandran Valluvar Vs. State of Maharashtra and anr., 2011(2)Bom.C.R.(Cri.) 179 : [2011 ALL MR (Cri) 1025] has endorsed the legal position.

14. The full Bench of this Court in the case of Sudhir Vasant Karnataki Vs. State of Maharashtra and ors, 2011(1)Bom.C.R.(Cri.) 326 : [2011 ALL MR (Cri) 96 (F.B.)] has also discussed the term "any property" used in sub-section (1) of Section 102 of Cr.P.C. to mean property restricted to seizure of bank account also.

15. Mr.Sapkal has placed reliance to the judgment of Hon'ble Supreme Court in the matter of Narmada Bachav Andolan Vs. State of Madhya Pradesh., AIR 2011 SC 1989 : [2011 ALL SCR 1866]. Paragraphs 140 and 141 thereof read as under :-

140. Whenever the Court comes to the conclusion that the process of the Court is being abused, the Court would be justified in refusing to proceed further with the matter. This rule has been evolved out of need of the Courts to deter a litigant from abusing the process of the Court by deceiving it. However, the concealed fact must be material one in the sense that had it not been suppressed, it would have an effect on the merit of the case/order. The legal maxim "Juri Ex Injuria Non Oritur" means that a right cannot arise out of wrong doing, and it becomes applicable in a case like this.

141. It is a settled proposition of law that a false statement made in the Court or in the pleadings, intentionally to mislead the Court and obtain a favourable order, amounts to criminal contempt, as it tends to impede the administration of justice. It adversely affects the interest of the public in the administration of justice. Every party is under a legal obligation to make truthful statements before the Court, for the reason that causing an obstruction in the due course of justice "undermines and obstructs the very flow of the unsoiled stream of justice, which has to be kept clear and pure, and no one can be permitted to take liberties with it by soiling its purity".

16. Hon'ble Supreme Court in K.D.Sharma Vs. Steel Authority of India Limited and ors., AIR 2009 SC (Supp) 1309 held, prerogative writs are issued for doing substantial justice. It is, therefore, of utmost necessity that the petitioner approaching the writ Court must come with clean hands, put forward all the facts before the court without concealing or suppressing anything and seek an appropriate relief. If there is no candid disclosure of relevant and material facts or the petitioner is guilty of misleading the court, his petition may be dismissed at the threshold without considering the merits of the claim.

17. O.D.C.C. Bank has filed affidavit reply of its Deputy Chief Officer Mr.C.N.Bhawar dated 22nd March, 2005. In the said affidavit, a categorical statement was made that the document at Exhibits "B" and "C" are disputed. The letters do not bear outward number. M/s.Home Trade is accused for preparing false and fabricated records in the nature of contract notes purportedly issued in favour of O.D.C.C. Bank. The claim of N.D.C.C. Bank pertaining to proceeds of sale of their government securities, is false. Discrepancies in annexures "A", "B" and "C" were pointed. These documents are dated 8th September, 2001 while, settlement date is shown as 7th September, 2001 which, on the face of record, illustrates that N.D.C.C. Bank has manipulated the alleged transactions.

18. There were specific accusations of N.D.C.C. Bank against M/s.Home Trade as under FIR No.106 of 2002, in collusion with authorities of N.D.C.C. Bank and O.D.C.C. Bank, M/s. Home Trade has misappropriated the subject amount. There was no evidence placed on record that government securities purchased by N.D.C.C. Bank on 8th September, 2001 came to be sold on 31st January, 2002. Inspite of specific denial from O.D.C.C. Bank, there was no clarification from N.D.C.C. Bank as to truthfulness of its assertion of sale of government securities and receiving "said amount" as price thereof.

19. The Charge Sheet in Crime Nos.97 of 2002 and 101 of 2002 being charge sheet No.705 of 2002 presented before learned Judicial Magistrate F.C., Nagpur dated 21st November, 2002, sufficiently demonstrates that Shri.Sunil Kedar, the then Chairman of N.D.C.C. Bank and Directors of M/s.Home Trade Ltd. are the accused, total eleven in numbers. The charge sheet also discloses that at no point of time, M/s.Home Trade has purchased or sold government securities for petitioner N.D.C.C. Bank and therefore, the documents placed on record at Exhibits "B", "C" and "D" are not genuine.

20. In the additional affidavit by N.D.C.C. Bank dated 18th February, 2013, it is stated by way of clarity that the documents at Exhibits "B", "C" and "D" are photo copies of contract notes received from M/s.Home Trade on that point of time. N.D.C.C. Bank has denied that, forged and fabricated documents have been placed on record of this Court. The photo copies tendered are received from M/s.Home Trade Company.

21. This clarification is after thought. It was expected of N.D.C.C. Bank to have clarified in it's petition, about the scenario giving rise to Crime nos.97 of 2002, 101 of 2002 and involvement of its officials, Chairman in preparing forged documents and those forged documents are tendered at Exhibits "B", "C" and "D". An impression was generated while reading the petition at the time of interim relief that, the photostat copies of Exhibits "B", "C" and "D" of the contract notes were of genuine transaction. I subscribe to the canvass projected by O.D.C.C. Bank of petitioner playing with the Court.

22. Taking survey of above facts, primarily, it illustrates that the "said amount" belongs to O.D.C.C. Bank which has been illegally transferred to the account of N.D.C.C. Bank arising out Crime No.106 of 2002 of Osmanabad Police Station and hence, the order of learned Chief Judicial Magistrate for its temporary custody referred to above, with safeguards provided therein, does not call for interference.

23. Criminal Writ Petition is dismissed. Rule discharged.

24. At this stage, Mr.Suryawanshi has requested to stay the order. Mr.Sapkal has opposed on the ground that O.D.C.C. Bank is facing acute financial difficulties, even, slapping of notice by Reserve Bank of India for deficiencies.

25. Considering the situation, order in Writ Petition is stayed upto 15th April, 2013. Fourty Eight hours' notice to be served upon Mr.Sapkal in respect of further action, if any, initiated by N.D.C.C. Bank.

Petition dismissed.