JUDGMENT
Sailendra Prasad Talukdar, J.
1. The petitioner, Kaml Parekh, by filing the instant application under Section 482 of the Cr.PC sought for quashing of the charge-sheet dated 8.6.06 arising out the Hare Street P.S. Case No. G/DD No. 476 dated 24.9.02 under Sections 1260B/420/409/468/471/477A IPC as against him.
2. The backdrop of the present case may briefly be stated as follows:
On the basis of police enquiry an FIR was registered under Sections 120B/420/409/468/471/477A IPC on 24th September, 2002 against the Indus Ind Bank and 15 other brokers. In 2001 the petitioner was Honorary President of the Calcutta Stock Exchange and had resigned on 30.3.01. The Finance Ministry action taken report (ATR) 2004 tabled in Parliament in December 2004, debunks SHCIL- Biyani nexus in the rolling settlement transactions. On 10th January, 2003 the respondent under mala fide intention arrested the petitioner who was bailed out on 15th July, 2003. There was no allegation against the petitioner either in the complaint or in, the FIR. On 8.6.06 the respondent just filed the charge-sheet in the Court of learned CMM, Calcutta. No document, not even the statements recorded tinder Section 161 of the Cr. PC was filed along with the charge sheet Bank correspondence and records so far as the same relate to the dishonour of the cheques were not even included in the list of documents in the charge-sheet and the alleged prime accused Indus Ind bank had been rescued due to unknown reasons. The present petitioner was falsely implicated on the allegation that the petitioner withheld information about the dishonour of the margin money cheques so CSE could not terminate trading terminal of brokers in time. It was further alleged that on 7th March, 2001 the petitioner released 2.40 crores from Biyani Securities Pvt. Ltd. margin money account to release Rs. 34.80 crores on due date of pay-out obligation to SHCIL in settlement. No. 2001516 dated 7.3.01. The respondent police authority did not mention a single word about any reason, fact or evidence in support of the charges in the entire charge-sheet as well as any documentary evidence in the list of documents filed with it.
3. Respondent No. 2 is a Stock Holding Corporation of India Ltd., referred to as SHCIL. It is a Government Organization and a ‘State’ within the meaning of Article 12 of the Constitution of India. The respondent No. 3, Calcutta Stock Exchange, referred to as, CSE, is a limited company registered under the Company Act and is recognized to function as Stock Exchange under the Securities Contract Act 1956. It has been working under the strict control and direction of SEBI (Securities Exchange Board of India Ltd.) since 1992. The Surveillance Committee control daily margin position of each broker everyday throughout the market time. If there is shortage, the manager takes margin money cheque and gets it cleared from the bank and thereafter allow a broker to do further trading through CSE trading terminal. For immediate clearing there is Indus Ind bank branch in CSE compound having account of all brokers and CSE. The committee is headed and controlled by E.D. and SEBI only. The Settlement Committee control trading transactions pay-in pay-out obligation, auctions and entire trading of the Exchange. It is also headed and controlled by E.D. and SEBI only. The entire function of the CSE i.e. the stock transactions, settlement of pay-in, pay-out and auctions of transaction, cancellation of the transaction, collection of margin money from member brokers, daily regular dealing with the bank is managed and handled only by the Executive Director, Management Committee, Settlement Committee and Surveillance officers under the strict control and direction of the SEBI.
4. In March 2001, 16 CSE brokers could not pay their due pay-in obligation of settlement No. 2001448 49 and 50 on due time. The CSE Settlement Committee being legally duty bound paid Rs. 120 crores from the Exchange’s security guarantee fund. It was the biggest loss to CSE. On 9.9.02 after thorough investigation by SEBI, a detailed complaint was filed with the respondent, No 1 against the Indus Ind bank and 15 brokers. It was alleged therein that the margin money cheques by Harish Chandra Biyani group (9.22 crores), Ashok Poddar (3.90 crores) and Prema Poddar (1.38 crores) and Dinesh Singhania group (38.68 crores) deposited as on 5th and 7th March 2001 withheld by the bank and were returned on 10th March 2001 as dishonoured due to insufficient fund while at the time of presentation there were sufficient balance in their accounts and the bank had cleared the other cheques of Harish Chandra Biyani group Rs. 24 crores, Ashok Poddar Rs. 10 crores and Dinesh Singhania group Rs 35 crores. In the meanwhile those brokers built up heavy buying position at CSE and defaulted to pay it. On due pay-out day CSE had to pay out of SGF fund which caused total financial loss to the CSE to the tune of 120 crores i.e. Rs. 106.95 crores belonging to the three groups of brokers and Rs. 13 crores to 13 other brokers. On 7.3.01 CSE paid Rs. 34.S0 crores to SHCIL as rolling settlement pay-out liabilities out of total due of Rs. 7034 crores and expunged remaining transactions of Harish Chandra Biyani with SHCIL. Buyers H.C. Biyanigroup paid Rs. 34,80 crores. After proper enquiry an FIR was registered on 24.9.02 against the Indus Ind bank and 15 other brokers.
5. As per CSE and SEBI bye-laws on due date and time payment was to be done either from buyer broker’s margin money accounts or from SGF fund of the CSE. At the last moment of pay-out CSE could not expunge the trade due to any reason. Settlement period was already over on 5th March, 2001.
6. The petitioner was legally bound to follow Settlement Committee and to sign the release letter in physical absence of the Executive Director in town on 7.3.2001. Settlement and its pay-out of rolling settlement No. 2001516 were already declared and accepted as valid by the SEBI and CSE itself in the complaint dated 9.9.02. The power, duty and regular function of clearing margin money cheque and to get it deposited and cleared in bank belonged to the surveillance office (manager margin) and Executive Directors and SEBI only. It is not within the domain of the President. The petitioner river had any authority or power even to interfere or ask any question in that regard. Bank is also duty bound to inform Only manager (margin) surveillance office with whom they had regular dealing everyday since last several years. It is the major allegation against the bank which informed the CSE after 3-5 days about the dishonour of the cheques while there were enough balance at the time of presentation and bank had cleared other cheques of the present brokers and did not clear margin money cheques deposited by the CSE.
7. The petitioner in such circumstances sought for quashing of the proceedings as against him as there is no material implicating the present petitioner with the alleged offences under Sections 120B/420/409/468/471/477A IPC.
8. Mr. Sharma as learned Counsel for the petitioner submitted that the name of the petitioner from the array of the accused persons in the charge-sheet deserves to be dropped in order to secure the ends of justice.
9. He submitted that the allegations made in the FIR even if taken at their face value and accepted in their entirety do not disclose any prima facie case so far as the present petitioner is concerned. He mentioned that an action taken under a legal duty is no offence. In the absence of E.D. signing of a release letter according to pre-settled decision of the exchange is no offence. The petitioner was duty bound to sign it under the rules and regulations of CSE and SEBI. Banking correspondence and transactions were matter for consideration of the surveillance office and the same were out of reach of the petitioner.
10. Mr. Sharma, as learned Counsel for the petitioner, drew attention of the Court to the fact that the State did not file any Affidavit-in-Opposition. According to him, the only objection raised on behalf of the Opposite Party/State is that, is with reference to the paragraph 19 of the revisional application.
11. Mr. Sharma categorically submitted that the petitioner, Kamal Parekh, had been unnecessarily implicated whereas the actual offenders, like bank officials, had been unduly protected and this, according to Mr. Sharma, for reasons not for to seek.
12. It was then submitted that there was sufficient amount in the bank, but even then if the bank had dishonoured, how could the petitioner be held responsible?
13. According to Mr. Sharma, summpoining of an accused in a criminal trial is a serious matter and it cannot be done in a casual or mechanical manner. 14. Referring to the decision in the case of Pepsi Food case as reported in AIR 1998 SC 128, it was submitted that criminal law cannot be set into motion as a matter of course. 15. Inviting attention of the Court to the materials allegedly implicating the present petitioner, it was, submitted that there is no specific date, time and place about the conduct of the petitioner nor any evidence in support of the allegations.
16. On behalf of the petitioner, it was then submitted (that the first allegation, against the present petitioner relates to banking transactions but no document could be filed as an evidence or proof of delivery of the returned dishonoured cheque to the petitioner. There was no material also so as to prove that an amount of Rs 2.40 crores was transferred from BSPL’s account to HCB’s account in the CSEA’s books of account as per direction of the petitioner. It was categorically mentioned that the second allegation is also a manipulated, false and vague allegation without any supporting evidence.
17. Mr. Sharma submitted that since no prima facie case could be made out against the petitioner, his name deserves to be dropped from the array of the accused persons.
18. Reference was made to the decision in the case of State of Haryana v. Bhajan Lal in support of the contention that where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused, the criminal proceeding against him is liable to be quashed.
19. In support of the contention that the learned Court did not have any justification to take cognizance and direct issuance of process on the basis of the materials before it, reliance was placed upon the decision in the case of Kamla Devi Agarwal v. State of West Bengal and Ors. .
20. Mr. Sharma further referred to the decision in the case of State of West Bengal and Anr. v. Mohammed Khalid and Ors. in support of his contention that this Court in exercise of its power under Section 482 of Cr.PC can quash a proceeding.
(i) When there is a legal bar to prosecution.
(ii) The FIR and the complaint do not make out the offence.
(iii) When there is no legal evidence.
21. It is also the settled position of law that if the version of the complainant is self-contradictory and therefore, no prima facie case is made out against the petitioner involving him in the commission of the alleged offences, this Court can very well intervene and quash a proceeding in exercise of its inherent power under Section 482 of Cr. PC.
22. Mr. Sharma invited attention of the Court to the allegations made in the charge sheet which, according to him, suffer from inherent contradictions and ambiguity. It was his emphatic assertion that the materials sought to have been relied upon by the prosecution suffer from inherent hollowness and antagonistic contradictions.
23. Question, however, arises as to how for this Court can really go into all those aspects. After all documents and the materials sought to have been relied upon by the petitioner approaching this Court with a prayer for quashing of the proceeding cannot be relied upon at this stage as evidentiary value of the same can only be effectively adjudicated upon at the time of trial.
24. In the case of State of U.P. through CBI and Anr. v. R.K. Shrivastava , the Apex Court observed that if the allegations made in the FIR are taken at, their face value and accepted in their entirety do not constitute an offence, the criminal proceedings instituted on the basis of such FIR should be quashed.
25. In the case of Ashok Chaturvedi and Ors. as , it was held that bold allegations in complaint may not be sufficient so as to hold that there is any prima facie material.
26. It is the settled principle of law that judicial process must not be an instrument of oppression or needless harassment. (Ref.: S.N. Palanitkar and Ors. v. State of Bihar and Anr. ).
27. When a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima facie establish the offence. (Ref.: Madhaurao Jiwajirao Scindia v. Sambhajirao Chandrqjirao Angre reported in 1988 SCC (Cri) 234).
28. On behalf of the petitioner, it was emphatically submitted that the petitioner had been falsely implicated” as the investigating authority wanted to shield the bank people who were responsible for not realizing the money despite having money to the credit. Mr. Sharma, on behalf of the petitioner, then mentioned that the allegations made by the investigating officer are contradictory and mutually, destructive. According to him, in such a situation, this Court is not helpless and can very well quash the criminal proceeding in order to prevent abuse of the process of Court and to secure the ends of Justice.
29. Inviting attention of the Court to Section 58 of the Indian Evidence Act, it was submitted that no evidence is required where matters are formally admitted. Facts not in dispute need not be proved. It, however may be mentioned that even where a fact is admitted the Court has a discretion to require proof of that fact.
30. Mr. Bikash Ranjan Bhattacharjee as learned Counsel for the Opposite Party/State, submitted that much of what had been urged on behalf of the petitioner is beyond the scope of scrutiny in response to the instant application under Section 482 of Cr. PC Mr. Bhattacharjee, in this context, referred to paragraph 19 of the instant application, which is set out as follows:
19. The petitioner was legally duty bound to follow settlement committee decision and to sign the release letter in physical absence of the Executive Director in town on 7.3.2001. Settlement and its pay-out of rolling settlement No. 2001516 were already declared and accepted as valid by the SEBI & CSE itself in their above complaint dated 09.09.2002.
31. Mr. Bhattacharjee then submitted that the same virtually is an admission and clearly reflects that the petitioner is in the chain, if not as kingpin. He further submitted that how for the petitioner was legally bound, can only be properly appreciated, at the time of trial.
32. Mr. Biplab Mitra, as learned Counsel for the O.P. No. 3, in response to the challenge thrown by the petitioner submitted that the anxiety of the petitioner, as ventilated; is premature. Mr. Mitra categorically reminded the Court that this is not the stage to evaluate the evidence or to measure the same in coffee spoon. He submitted that it is the settled principle of law that a criminal proceeding can only be quashed in exercise of this Court’s inherent jurisdiction under Section 482 of Cr. P.C, when the allegations made in the FIR and the materials relied upon by the prosecution do not prima facie disclose a cognizable offence. Mr. Mitra submitted that it cannot be said by any stretch of imagination that the allegations implicating the present petitioner suffer from any such antagonistic contradiction that the same cannot at all be relied upon. He again echoed the submission of Mr. Bhattacharjee, while mentioning that the stand of the present petitioner, as Ventilated in the instant application, can be only tested at the stage of the trial
33. On behalf of the Opposite Parties, it was also, contended that there is nothing inherently wrong, nor, any latent weakness which can even remotely suggest that continuation of the proceeding will be an abuse of the process of Court.
34. Apart from serious allegations made in the present case, a relevant paragraph from the charge sheet which again reflects the materials disclosed in course of investigation may be reproduced as follows:
Investigation revealed that for non-payments of margin deposit trading terminal of these offending entities were supposed to be deactivated. But accused Kamal Parekh and Krishna Kumar Daga being-the then President and Vice-President of Calcutta Stock Exchange pursuant to a criminal conspiracy with the offending entities dishonestly withhold the information of dishonour of cheques and allowed them to continue their trading causing wrongful loss to the Exchange.
35. After careful consideration of the materials, available on record, this Court finds it difficult to accept the contention made on behalf of the petitioner. It cannot be said that there is nothing against the present petitioner, which even disclose prima facie involvement in the commission of the alleged crime.
36. In the considered opinion of this Court, the FIR and other materials sought to have been relied upon by the prosecution clearly indicate involvement of the present petitioner who, thus, cannot be permitted to wash his hands of right at this stage.
37. As indicated earlier, this Court cannot really, embark upon an enquiry as to the genuineness of the materials implicating the petitioner and others. It is also beyond the scope of this Court to refer to the various documents and materials as sought to have been relied upon by and on behalf of the petitioner.
38. All these aspects can only, be looked into at the appropriate stage. It is needless to mention that the petitioner will always of the liberty to raise all such grievances at the appropriate stage. The right to raise all such points at the time of consideration; of charge is certainly not taken away by disposal of the present application. It is for the learned Court to proceed in accordance with law if any such point legally acceptable is at all raised. But certainly, it will be open for the petitioner to refer to all such documents and materials at the time of trial, if any.
39. Considering all such facts and circumstances and having regard to the aforesaid discussion, this Court does not find much merit in the grievance as ventilated in the instant application.
40. The petitioner having failed to inspire the confidence of the Court there remains no rational justification for responding favourably to the prayer of the petitioner. There is no such material to the satisfaction of the judicial conscience of the Court so as to Justify quashing of the proceeding as against the present petitioner. Accordingly, the present application being C.R.R. No. 2860 of 2006 falls and be dismissed.:
41. Interim order, if any, stands vacated.
42. Send copy of this order to the learned Trial Court for information and necessary action. ‘
43. Criminal department is directed to supply xerox certified copy of this order, if applied for, to the learned Counsel for both parties in compliance with due formalities as expeditiously as possible.