IN THE HIGH COURT OF KERALA AT ERNAKULAM
Crl.MC.No. 1420 of 2008()
1. G.GOPALAKRISHNA PILLAI, AGED 58 YEARS,
... Petitioner
Vs
1. CENTRAL BUREAU OF INVESTIGATION,
... Respondent
2. THE BANK OF BARODA REPRESENTED BY IT'S
For Petitioner :SRI.GEORGE JACOB (JOSE)
For Respondent :SRI.M.V.S.NAMBOOTHIRY,SC, C.B.I.
The Hon'ble MR. Justice V.K.MOHANAN
Dated :22/09/2008
O R D E R
V.K.MOHANAN, J.
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CRL.M.C. No.1420 OF 2008
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Dated this the 22nd September, 2008.
O R D E R
The petitioner herein is the sole accused in C.C.292/2002 on
the file of the Chief Judicial Magistrate’s Court, Ernakulam for an
offence punishable under Section 406 of the Indian Penal Code.
Now his prayer in this Crl. M.C. Is to call for the records relating to
Annexures A to G and quash Annexure G charge sheet and all the
proceedings in C.C.No:292/2002 pending before the Chief Judicial
Magistrate’s Court, Ernakulam.
2. The allegations against the petitioner are that the second
respondent herein had entrusted 6510 bags of raw cashew nuts
imported by the petitioner for his own purposes under trust receipt
with a direction to process and export the same and to submit
export bills to the bank upon shipment of the consignment or in the
case of no export, to pay the value in cash or to re-pledge it and the
further allegation is that a part of the same had been
misappropriated or converted for his own use by the petitioner in
violation of the terms of entrustment. It is also the allegation that
Crl.M.C.1420/2008 2
the petitioner had dishonestly misappropriated/converted into his
own use the cashew nuts worth Rs,2,48,91,500/- during March to
October 1998 which was entrusted with him under cash credit
hypothication agreement for processing and exporting and making
payments after shipment. Thus according to the first respondent
the petitioner had committed the offences punishable under Section
406 IPC. On the basis of the said allegation the CBI had suo motu
initiated enquiry and an FIR was registered.
3. It is also the case of the petitioner that he had approached
this Court in an earlier occasion by filing Crl. M.C.1946/2006 which
was disposed of by this Court by Annexure A judgment dated
27/7/2006 directing the court below to defer trial for two months to
enable the parties to work out a settlement after considering the
factum of settlement talks which were going on between the parties
and that the offence itself was compoundable. After completion of
the investigation, the first respondent has filed a final report in
which all the bank officials had been exonerated and the petitioner
alone was charge sheeted for the offence under Section 406 of IPC.
It is the case of the petitioner that though initially the first
respondent had registered case for several persons including bank
Crl.M.C.1420/2008 3
officials in the official charge sheet the bank officials have been
deleted from the party array and the CBI is now proceeding only
against the petitioner. It is the further case of the petitioner that
on considering the dispute it can be seen that there is only civil
dispute which arose out of a commercial contract and if so, the civil
loss if any can be realised by other means and for that purpose the
criminal case need not be continued and the same can be
compounded. Therefore it is prayed that the Annexure G charge
against the petitioner and all proceedings in C.C.292/2002 of the
Court of Chief Judicial Magistrate, Ernakulam may be quashed.
4. I have heard counsel for the petitioner as well as the
standing counsel for the first respondent and also counsel for the
second respondent.
5. During the course of argument, the learned counsel for the
petitioner invited my attention to Annexure D petition and the terms
and conditions of the same and it is pointed out that on the basis of
Annexure D settlement the Debts Recovery Tribunal, Ernakulam
decreed the suit and from Annexure F order it can be seen that the
Tribunal has granted time till 11.9.2008 under Section 27(1) of the
RDDBI Act to pay the liability under the Recovery Certificate and I.A
Crl.M.C.1420/2008 4
is disposed of accordingly. The learned counsel for the second
respondent submitted that balance amount is still due to bank and
the entire amount has paid off. No doubt, they can proceed the
matter before the Tribunaland the amount can be realized.
6. The learned counsel for the petitioner on the strength of
the Apex Court decision in Nikhil Merchant v. Central Bureau of
Investigation {2008(3)KLT 769 (SC)} submitted that as the civil
dispute has already been settled in terms of compromise between
the rival parties, criminal proceedings can be quashed under Section
482 on the basis of compromise. In paragraphs 23 and 24 of the
above decision the Apex Court has held as follows:-
“23. In the instant case, the disputes between
the Company and the Bank have been set at rest on
the basis of the compromise arrived at by them
whereunder the dues of the Bank have been cleared
and the Bank does not appear to have any further
claim against the Company. What, however, remains
is the fact that certain documents were alleged to
have been created by the appellant herein in order
to avail of credit facilities beyond the limit to which
the Company was entitled.
herein has overtones of a civilThe dispute involved
dispute with certain
criminal facets. The question which is required to
be answered in this case is whether the power which
independently lies with this Court to quash the
criminal proceedings pursuant to the compromise
arrived at, should at all be exercised?
24. On an overall view of the facts as
Crl.M.C.1420/2008 5
indicated hereinabove and keeping in mind the
decision of this Court in B.S.Joshi’s case (supra) and
the compromise arrived at between the Company
and the Bank as also clause 11 of the consent terms
filed in the suit filed by the Bank, we are satisfied
that this is a fit case where technicality should not
be allowed to stand in the way in the quashing of
the criminal proceedings, since, in our view, the
continuance of the same after the compromise
arrived at between the parties would be a futile
exercise.”
7. The standing counsel for the CBI fairly conceded that he
has no objection applying the principle laid down by the Apex
Court in the present case.
8. In the light of the above finding and the dictum laid down
by the Apex Court, I am of the view that the benefit of the above
decision can be extended in favour of the petitioner in the present
case. It is beyond dispute that the matter has been amicably settled
between the rival parties and the Debt Recovery Tribunal and has
passed a decree and the execution proceedings is pending and
substantial amount of Rs.68.75 lakhs has already been paid in
favour of the second respondent and the second respondent can
proceed further in the Tribunal for the realisation of the remaining
balance amount. However, disposal of this Crl.M.C., quashing of
proceedings pending against the petitioner will not adversely affect
Crl.M.C.1420/2008 6
the second respondent from realising remaining amount and the
second respondent can continue the proceedings pending before
the Chief Judicial Magistrate for the realisation of the balance
amount.
In the result this Crl. M.C. Is allowed quashing Annexure G
charge sheet and all proceedings in C.C.292/02 of the Court of Chief
Judicial Magistrate, Ernakulam. There will be no order as to costs.
V.K.MOHANAN
JUDGE
jj