1. The State is aggrieved against an order passed by the High Court
of Madhya Pradesh on 2nd May, 2016 whereby the proceedings
against the respondents, both sons of late Manohar Singh Jadon,
for an offence under Sections 420, 120-B of the Indian Penal Code,
18601 were quashed.
2. A charge sheet for the offences under Sections 420, 406, 409,
120B IPC and 13(1)(d) and 13(2) of the Prevention of Corruption
Act, 19882 was filed on 9th July, 2008 consequent to registration of
FIR No. 3 of 2007 on 23 rd June, 2007. The allegation was that
Manohar Singh Jadon, deceased father of the respondents in
connivance with other employees of District Cooperative Kendriya
Bank Maryadit, Shajapur3 committed financial irregularities on the
1 for short, ‘IPC’ 2 for short, ‘Act’ 3 for short, ‘Bank’
1 basis of forged documents by misusing his post and by providing
fake loan to the relatives. Manohar Singh Jadon was President of
the Bank from 5th February, 1997 to 26th March, 2002 and from 27 th
March, 2002 to 7th May, 2004. Harshvardhan Singh Jadon
(accused-respondent No. 2) is the proprietor of M/s. Harshvardhan
& Brothers whereas Yogendra Singh (accused-respondent No. 1) is
the proprietor of M/s. Sarohar Trading Company. Ghanshyam
Sharma, General Manager, Ramanlal Acharya, Manager, Ram Singh
Yadav, General Manager were also arrayed as accused. It was
alleged that accused Harshvardhan Singh Jadon submitted an
application on 2nd November, 2000 for grant of cash credit limit of
Rs.25 lakhs and that the cash credit limit was sanctioned without
following the due procedure. It was also alleged that mortgage
deed was not registered nor signature of original loanee was found
on the mortgage paper. It is also pointed out that an amount of
Rs.59,88,327/- was balance on 1st December, 2001 even after
depositing Rs.25 lakhs and that the President has done the renewal
of cash credit limit at his own level and its confirmation was got
done later on from the loan Sub-Committee, while the case was of
the son of the President alone. In respect of Yogendra Singh, again
the allegation is that cash credit limit of Rs.25 lakhs was
sanctioned on the basis of his application dated 30 th July, 2001
without completing any of the procedural requirements and
without mortgage of any of the property. Smt. Saroj Singh
mortgaged the land but without any valuation. The surety of
2 Ishwar Singh was taken. The same person mortgaged land as in
the case of Harshvardhan. Similar is the assertion in respect of
registration of mortgage. It was also alleged that a sum of
Rs.25,65,894/- is the balance as on 31st March, 2002 even after
withdrawal beyond the approved credit limit of Rs.25 lakhs.
3. The Special Judge passed an order of framing of charges against
Harshvardhan Singh Jadon and Yogendra Singh Jadon apart from
other accused on 24th February, 2014. Such order was challenged
by the respondents by way of a criminal revision.
4. The High Court in the Revision Petition found that the offences
under Sections 420 and 120-B IPC are not made out against the
respondents. The Court held that there is no assertion that the
cash credit facility obtained with a knowledge that they will not
repay the loan amount. The Court held as under:
“12. It may be that the Officers of the Bank, because of
the fact that father of the applicants was President of the Bank, had acted in disregard of the relevant rules and regulations in that behalf of confer benefit upon the applicants, but that will give rise to liability against the officers of the bank who failed to discharge their duties in accordance with prescribed norms and regulations. However, that may not be a ground to proceed against a person who has been granted cash credit facility. xx xx xx
14. In the instant case, the uncontroverted allegations
taken in their entirety do not prima facie establish that the applicants deceived the Bank Authorities or fraudulently or dishonestly induced them to sanction cash credit facility. Thus, the basic ingredient to constitute the offence of 420 of IPC is totally missing in the chargesheet.”
3 5. We find that the High Court has examined the entire issue as to
whether the offence under Sections 420 and 120-B is made out or
not at pre trial stage. The respondents are beneficiary of the grant
of cash credit limit when their father was the President of the Bank.
The power under Section 482 of the Code of Criminal Procedure,
1973 cannot be exercised where the allegations are required to be
proved in court of law. The manner in which loan was advanced
without any proper documents and the fact that the respondents
are beneficiary of benevolence of their father prima facie disclose
an offence under Sections 420 and 120-B IPC. It may be stated
that other officials of the Bank have been charge sheeted for an
offence under Sections 13(1)(d) and 13(2) of the Act. The charge
under Section 420 IPC is not an isolated offence but it has to be
read along with the offences under the Act to which the
respondents may be liable with the aid of Section 120-B of IPC.
6. Consequently, we find that the order of the High Court quashing
the charges against the respondents is not sustainable in law and
the same is set aside. The appeal is allowed. It shall be open to
the respondents to take such other action as may be available to
