NOVA STEELS INDIA LIMITED Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) By this petition under Section 482 of the Code of Criminal Procedure, thepetitioner seeks quashing of the criminal proceedings emanating from the complaintfiled by the respondent Punjab National Bank under Sections 206/403/406/421 IPCread with Section 120-B IPC.

(2.) Briefly stated, the facts giving rise to this petition are: The respondent bank fileda complaint under Sections 206/403/406/421 Indian Penal Code read with Section 120-B IPCagainst the petitioner and others on the allegations that the petitioner company hadbeen enjoying cash credit facilities against hypothecation of stock from the respondentbank. Pursuant to the decision of the Supreme Court in the case of M.C. Mehta Vs.Union of India and others (1996) 4 SCC 750, the petitioner had to dose down itsindustrial unit at Shahdara (Delhi). It is alleged that the officials of the petitionercompany hatched a criminal conspiracy to defraud the respondent bank and nullifythe assurance given to the bank for repayment of loan and in pursuance of the saidconspiracy they dishonestly sold the stock hypothecated with the bank andmisappropriated the sale proceeds thereof. It is alleged that the petitioner companyand its official and dishonestly sold the hypothecated stock without adequateconsideration intending thereby to prevent or knowing it to be likely that they willthereby prevent distribution of the hypothecated stock according to law among thepetitioner's creditors including the respondent bank. On the complaint being filed, thelearned Metropolitan magistrate took cognizance of the offences under Sections206/403/406/421 Indian Penal Code read with Section 120-B Indian Penal Code and issued process against thepetitioner and the remaining accused persons. Aggrieved thereby, the petitioner hascome up before this Court under Section 482 Cr.P.C.

(3.) Learned counsel for the petitioner has strenuously urged that the allegationsmade in the complaint do not constitute any offence against the petitioner. Accordingto the learned counsel, the case was basically a matter of civil dispute and the bankwas already moved the Debt Recovery Tribunal for recovery of the dues of the bankan account of the credit facility and hence no prosecution should have been permittedin respect of the said dispute. Reliance has been placed on the decision of theSupreme Court in G. Sagar Suri and another Vs. State of U.P. and others (2000)2 SCC 636 in support of the said contention.