VADDARSE PRABHAKARA SHETTY Vs. ASOCHEM SYNTHETICS

JUDGEMENT

(1.) THE petitioner at the material point of time was the Chairman and the Managing Director, Industrial Development Bank of India Ltd. having his office in Mumbai. He is one of the accused persons being accused no. 2 in the complaint case No. 1870/06 for having allegedly committed an offence u/s 409, 420/120B of the IPC for alleged mis- appropriation for a sum of Rs. 1,36,102/-. The facts are these :

(2.) THE complainant who is the opposite party No. 1 herein is a company registered under the Companies Act, 1956. In connection with supply of materials to the office of the Director General of Ordnance Services, an organ of the Ministry of Defence, New Delhi (for short DGOS) the complainant was required to submit a bank guarantee of Rs. 1,21,577/. The accused No. 5 is the branch manager of the IDBI Bank Ltd. of the Calcutta Office, while accused No. 3 and 4 are said to be the officers of the said Calcutta Branch of the IDBI Ltd. The complainant requested these accused persons 3, 4 and 5 for a bank guarantee of the aforesaid amount of Rs. 1,21,577/-. The bank sometime in the month of May, 2003 agreed to sanction the credit facility up to the limit of Rs. 1,28,033/- to the complainant and the bank initially passed letter dated 3rd May 2003 executed a bond bearing No. 20030121 BOB 0002 dated 3rd May 2005 in favour of the DGOS towards furnishing of bank guarantee of the said amount of Rs. 1,21,577/-. Initially the guarantee was valid up to 15th January, 2004. One of the conditions was that the bank was liable to pay the guaranteed amount only if the DGOS serves upon the bank a written demand on or before 5th January, 2004. The clause 4 of the bond was that if no demand or claim under the guarantee was made on the bank in writing on or before 15th of January, 2004 the bank shall be discharged from all liability under the guarantee thereafter. The bank guarantee was subsequently renewed till 30th June, 2005. Meanwhile, by way of security towards the bank's furnishing a guarantee the complainant made with the bank a fixed deposit of Rs. 1,28,033/-. As the DGOS did not claim or demand for payment of the money either against the complainant or against the bank the complainant wrote a letter to the Branch Manager on 8th July, 2005 to pay the fixed deposit amount which was initially at Rs. 1,28,033/- with interest by crediting the same to the current account of the complainant and the original fixed deposit certificate was enclosed with the letter. Then allegedly on 11th July, 2005 a bank's official wrote a letter to the DGOS that as no claim appears to have been received the bank guarantee was being treated as cancelled. But the letter of demand dated 8th July, 2005 was not responded by the bank and then the complainant by a letter dated 22nd July, 2005 asked the branch manager to return the original fixed deposit certificate. Then an advocate's letter was issued by the complainant asking for payment of the amount on 25th July, 2005 but no compliance was made by the Branch Manager to that letter. Then suddenly on 8th August, 2005 the bank wrote a letter to the advocate of the complainant on 18th August, 2005 refusing the refund of the money saying as follows :

(3.) AS already stated above accused No. 3, 4 and 5 are the officers of the Calcutta Branch of the IDBI Ltd. with whom the complainant had transactions. Accused no. 1 is the IDBI Ltd. while accused No. 2 is the Chairman and Managing Director of the bank having his office at Indore. The petitioner is the accused No. 2, then the Chairman and the Managing Director of the bank who prays for quashing of the proceeding on the ground that the petitioner as a Chairman-cum-Managing Director was posted at Bombay and at no point of time had dealt with the complainant's company personally and is not expected to be aware of every single operation that takes place in every branch throughout the country and as such he cannot be fastened with criminal liability.