CHIRAYUSH BABUBHAI PATEL Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Present application has been filed under Section 482 of the Criminal Procedure Code for quashing the proceedings of Criminal Case No. 1251 of 2005 pending in the Court of Chief Judicial Magistrate, Vadodara against the petitioner for the offences punishable under Sections 406, 420 read with Section 34 of the Indian Penal Code (for short SIPC ).

(2.) Both the petitioners original accused Nos. 2 and 3 are charge-sheeted by the J.P.Road Police Station, Vadodara for the offences punishable under Sections 406, 420, 409 and 34 of the IPC in C.R. No. I-44 / 2004. That one FIR was filed by respondent No.2 herein Manager of Cooperative Bank of Baroda Ltd. at J.P.Road Police Station, Vadodara on 24.01.2004 against Shree Lamitex Pvt. Ltd. and four others. Original complainant was working as Manager of Cooperative Bank of Baroda Ltd, Vadodara (for short Sthe Bank ) and original accused Nos. 2 and 3 were Directors of the original accused No.1 Shree Lamitex Pvt. Ltd. and original Accused Nos. 4 and 5 were the guarantors in the loan facility granted to original accused No.1 Shree Lamitex Pvt. Ltd.

(3.) It was the case on behalf of the prosecution that accused No.1 Shree Lamitex and its Directors applied for loan facilities for the purpose of their business and the Bank sanctioned loan facility to the tune of Rs.70 lacs on or about 31st July, 2000. The said loan facility was granted against the hypothecation of Book of Debts of Shree Ram Fertilizers & Chemicals Kota, G.N.F.C., Reliance Industries Ltd., Gujarat Ambuja Cement, NFL Gas Authority. It was the case of the prosecution that the Bank also sanctioned loan to the tune of Rs.30 lacs against the loan facility of hypothecation of stocks and the accused had to maintain regularly hypothecation account (Cash Credit Facility). As per the prosecution under the said hypothecation facility, the accused Company was required to deposit the amount realized from book debts recovery and sale proceeds of the stock and the accused company was also required to submit statement as per the terms and conditions of hypothecation agreement. That the accused executed necessary documents such as Promissory Note, Karaj Khat, Kabulatnama, Agreement of Hypothecation of Book Debts, Agreement of Hypothecation of Stocks, Guarantee Deed etc in favour of the Bank. It is the case on behalf of the prosecution that thus the Bank had advanced Rs.1.00 Crore to the accused and inspite of the fact that though the accused had agreed to maintain and continue the operation of hypothecation limit account (cash credit account), have failed to operate the said account since June, 2002. That the accused Company through its Directors had disposed of the entire stock and did not deposit the said amount in hypothecation limit account. Similarly, the recovery amount of Book Debts having been realized was not deposited in the said account, the total outstanding amount of Rs.1,29,56,931/- is due and it was alleged that the petitioner and others have committed the offences punishable under Sections 406, 420 read with Section 34 of the IPC. That the Investigating Officer submitted the charge-sheet in the month of April, 2005 against the petitioner accused and during the course of investigation, the Investigating Officer recorded the statements of witnesses and collected documentary evidence in respect to the loan facility granted by the Bank to the Company. It appears from the record that in between, the petitioners preferred Special Criminal Application No. 162 of 2004 before this Court for quashing the FIR. However, in view of submission of charge-sheet before the learned Chief Judicial Magistrate, Vadodara, the petitioners withdrew the Special Criminal Application with a view to approach the learned Magistrate for submitting discharge application. The accused preferred application for discharge and the learned Chief Judicial Magistrate, Vadodara rejected the said application by order dated 22.01.2007 by holding that prima facie offences under sections 406, 420, 409 of the Indian Penal Code have been made out. Being aggrieved and dissatisfied with the same, the petitioners- original accused Nos. 2 and 3 have preferred the present petition under Section 482 of the Criminal Procedure Code to quash and set aside the criminal proceedings and the charge-sheet.