RAJIV Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The petitioners are before this Court calling in question proceedings in C.C.No.3095 of 2021. Criminal Petition No.6481 of 2022 is preferred by accused Nos. 3, 4 and 6 and Criminal Petition No. 7203 of 2022 is preferred by accused Nos. 1, 2 and 5. Therefore, both these petitions cover a challenge by accused Nos. 1 to 6. The challenge is to the proceedings instituted for offences punishable under Sec. 138 of the Negotiable Instruments Act 1881 ('the Act' for short).

(2.) Facts adumbrated are as follows:- The 1st petitioner in Criminal Petition No.7203 of 2022 is M/s Jamkhandi Sugars Limited (hereinafter referred to as 'the Company' for short). The other accused - accused Nos. 2 to 6 are Directors/office bearers of the Company. The Company in the year 2013 approaches the respondent/State Bank of India (hereinafter referred to as 'the Bank' for short) seeking assistance/finance for harvesting and transportation of the products of the Company and seek credit facility. The credit facility so sought was granted to the Company by the Bank. The business goes on. On 6/1/2018 an application is made by the Company to the Bank for approval of renewal of harvesting and transportation of credit facility for a tie up with JSL for an amount of Rs.65.00 crores. On 25/1/2018 the application filed by the Company was processed and credit facility was resolved to be granted against security. A cheque was issued by the Chairman on behalf of the Company for an amount of Rs.90.00 crores as security amount to the finance/credit facility of Rs.65.00 crores. The Chairman then was Siddappa B.Nyamagouda/Siddu Nyamagouda. The cheque was signed by the Chairman. After issuance of the said cheque, the Chairman dies on 28/3/2018.

(3.) On the death of the Chairman, accused No.2 becomes the Chairman of the Company pursuant to the resolution of the Board of Directors. After accused No.2 takes over as Chairman renewal and execution of loan related documents then existed between the Bank and the Company were executed. The execution of loan documents is by accused Nos. 2 to 6. Business goes on. Necessary installments towards the loan are not paid. It becomes sticky and the account is declared as non-performing asset. On the account being declared a non-performing asset, the cheque that was in possession of the Bank was presented for its realization on 24/3/2021. The cheque gets dishonoured for want of sufficient funds. The dishonouring of the cheque leads the Bank to cause a legal notice upon the accused including the Company on 27/3/2021.