K P MODI Vs. BASANT KUMAR SINHA

JUDGEMENT

(1.) This application in revision is directed against an order of the learned Sub-divisional Judicial Magistrate, Dinapur, dated the 15th July, 1977 by which he took cognizance of offences under sections 420 and 120-B of the Indian Penal Code and issued processes against the petitioners.

(2.) Petitioner Nos. 1 and 2 were the Chairman-cum-Managing Director and Assistant General Manager respectively of National Insurance Company Limited with headquarters at Calcutta. Petitioner No. 3 is the Senior Divisional Manager of the same Company at Patna and petitioner No. 4 was the Branch Manager, at the relevant time at Patna. Petitioner No. 5, R. K. prasad is the Inspector of the said Company. They were all summoned by the learned Sub-Divisional Judicial Magistrate, Dinapur to answer the charge under section 420/120-B of the Indian Penal Code levelled against them by the complainant opposite-party.

(3.) The facts out of which the present application arises are that the opposite parly was the Managing Partner of Golden Enterprises, a Small Scale Industries firm. The firm had timber business and manufactured wooden cable drums, crates, furnitures, packing boxes etc. besides being general orders suppliers of electrical and mechanical goods. The firm had stocks of wooden logs which were hypothecated with the State Bank of India at Dinipur on the security of which it had been granted financial accommodation by the Bank. The goods hypothecated were insured with National Insurance Company Limited of which the petitioners were office bearers. This insurance used to be effected at the initiative of the State Bank of India. Up till 1975 the goods were insured for a sum of Rs. 30 000 with the Insurance Company. In June, 1975 goods of the value of Rupees two lack were hypothecated with the Bank for which the firm had already been extended an advance of Rs. 1,50,000. As the value of the goods hypothecated had increased, the complainant wrote to the Bank for getting fresh insurance in respect of the goods and machineries hypothecated with the Bank. Accused No. 5, R.K.Prasad (petitioner No. 5 represented himself as Agent of the Company and offered to insure the goods on behalf of the Insurance Company against fire, riot, strike, flood, house breaking, theft etc. On or about the 24th of June, 1975 petitioner No. 5 brought the Insurance Company's cover note-cum-bill No. A-1353 (450-B) dated 16-6-1975 which related to the earlier insurance of the goods. He prepared at draft for the proposal and gave it to the Manager, State Bank of India. The Manager of the Bank Mr. C. Prasad copied out that draft on a letterhead of the Bank and handed it over to petitioner No. 5 on the very same day. The letter of the Bank addressed to the insurance company dated 24-6-1975 was annexed to the complaint as annexure "1". It shows a request by the Bank to the Insurance Company to (i) increase the limit of Insurance cover from Rs. 30,000 to Rs. 1,50,000 ; and (ii the Policy to cover damage against fire, riot strike, flood, burglary, house-breaking and theft. The Insurance Company issued Cover Note dated 5-7-1976 in response to the letter of 24-6-1975. That letter was annexed as annexure "2" to the complaint. According to the complainant, annexure "2" represented a completed insurance contract whereby the Insurance Company undertook to insure the goods of the complainant against damage by flood, besides other causes. The firm of the complainant paid Rs. 2,862 as premium for the enhanced risk coyer. According to the complainant, in terms of annexure "2" to the complaint, a policy for Rs. 1,50,000 should have been prepared by the insurance Company immediately, but that was not done fraudulently. On 23-8-1975 Dinapur was visited by serious devastating flood causing loss to the hypothecated goods to the tune of Rs. 1,70,000. On 29-8-1975 M.C.Prasad, Manager of the Bank wrote to the Insurance Company that the complainant's firm had sustained heayy loss on account of the floods. This letter was a claim for compensation. Thereafter, according to the complainant, the claim, approved by the Company officials was formally submitted to accused No. 4, J.N.Das, who was the Branch Manager at Patna. Surveyors were deputed by the insurance Company to assess the amount of loss to the complainant's firm caused by the flood. On 12-9 1975, it is alleged, Mr. Fatakia, accredited Surveyor of the insurance Company visited the complainants firm along with petitioners 4 and 5 in presence of the Bank Manager, M. G. Prasad According to the complainant the Divisional Manager, petitioner No. 3, the Investigating Officer of the Company R. K. Prasad, petitioner No, 5 and M. K. Fatakia, Surveyor of M/s. Mehta Pademsey (P.) Ltd. were fully convinced about the damages of loss to the complainant's firm by Ilood, but the. Surveyor did not prepare any report on 12-9-1975. He asked the complainant lo see him at Republic Hotel, Paha. When the complainant met accused M. K. Fatakia in the hotel he demanded a sum of Rs. 10,000 as illegal gratification for gelling the claim passed. To cut matter short, the complainant refused to comply. The complainant alleged that Mr. Fatakia told him that the sum being asked for by him was not for him alone, but that it was to be shared by Divisional Manager and petitioner No. 2, Manager, Regional Officer of the Insurance Company. On the complainant's expressing helplessness to pay the sum demanded, accused Fatakia also expressed helplessness to oblige the complainant. Thereafter, series of letters followed, written by the complainant, but all the accused kept completely silent. The complainant met petitioners 1 and 2 and one S. K. Mukherjee but instead of assisting the complainant, they asked him to pay what Fatakia was asking as without his report the claim could not be passed. Subsequently one A. R. Mukherjee (accused No. 7) Investigator of the Insurance Company also visited the complainant's firm. Mr. Mukherjee while conseding the claim unofficially demanded a sum of Rs. 20,000. On the complainant's declining to oblige A. R. Mukherjee, the latter declined to oblige the complainant. Mr. Mukherjee aiso threatened the complainant to put the matter in the hands of Central Bureau of Investigation (hereinafter referred to as 'the C. B.1.') for the complainant's prosecution. The matter was, in fact, placed in the hands of the C.B.I, who investigated the comn- plainant's claim. In course of investigation by the C.B.I, the Insurance Compay took up the attitude that the Insurance Policy did not cover risk against damages on account of flood. According to the complainant, this was a false defence which showed that the accused had a dishonest intention not to pay the claim on account of damages by flood from the very inception of the acceptance of the proposal. On 22-4-1977 the complainant was informed by the State Bank of India, Dinapur that the former's claim had been turned down by the Insurance Company. On the basis of the above facts a complaint was filed on 3-6-1977 by the opposite party Basant Kumar Sinha in the capacity of Managing Partner of Golden Enterprises. It was prayed in the complaint that the accused (petitioners) be summoned and put on trial for having committed offences under sections 420/ 406/465/162/384/511 and 120-B of the Indian Penal Code. It is relevant here to state that besides the petitioners M K. Fatakia, Surveyor, M/s. Mehta Pademsey (P.) Ltd., Calcutta and A.R. Mukherjee, M/s. Commercial Intelligence and Investigation Company, Calcutta were made accused Nos. 6 and 7 in the complaint.