TMI Blog2020 (8) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... - petition dismissed. - Writ Petition Nos. 244 and 8031 of 2020 (GM-RES) - - - Dated:- 13-8-2020 - Dixit Krishna Shripad, J. For Appellant: Shashi Kiran Shetty, Senior Counsel for Kiran J., Advocate For Respondents: P. Prasanna Kumar, B.N. Tulsi Kumar, Ganesh Bhat and H. Jayakar Shetty, Advocates ORDER Dixit Krishna Shripad, J. 1. In W.P. No. 244/2020, petitioners being second third accused in the registered crime in question, are knocking at the doors of writ court seeking the quashment of criminal proceedings initiated pursuant to FIR No. CBI/ACB/BLR 2019 RC 18(A)/2019 that is now pending on the file of learned XXI Addl. City Civil Sessions Judge cum Spl. Judge for CBI cases, Bangalore City, for the offences punishable under sections 420, 468 471 r/w section 120B of IPC, 1860 section 13(1)(d) r/w section 13(2) of Prevention of Corruption Act, 1988; the respondent-CBI after service of notice, having entered appearance through its Sr. Panel Counsel, has filed a Statement of Objections resisting the writ petition. 2. In connected W.P. No. 8031/2020, the petitioner Mr. Vinod Ramnani who happens to be the first petitioner in the aforesaid writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RFAESI Act, 2002; the Bank having filed O.A. No. 1497/2015, has obtained the Recovery Certificate dated 10.10.2016 at the hands of DRT. (ii) The petitioners vide letter dated 12.03.2018 has given a One Time Settlement proposal of ₹ 66 crore payable in 18 months; the Bank has replied vide letter dated 21.03.2018 asking the petitioners to submit a revised proposal cutting short repayment term to 12 months, with a suggestion for the payment of 20% of the offer amount as upfront money for showing bona fide of the offer. (iii) The Company vide letter dated 10.4.2018 requested the Bank to consider the initial OTS offer itself since it has already deposited a sum of ₹ 3.5 crore as upfront money; the Bank vide reply dated 11.06.2018 declined the offer on the ground that the outstanding amount was huge and the OTS offer was inadequate; the Company vide proposal dated 20.12.2018 escalated the amount in OTS offer to ₹ 83 crore, however seeking relaxation as to the quantum of upfront money. (iv) The Bank vide letter dated 18.1.2019 asked the Company to pay 15% of the upfront money as a precondition for considering the latest OTS offer; the Company vide letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ameters laid down in State of Haryana Vs. Bhajan Lal, 1992 Supp (1) SCC 335; learned CGC appearing for the respondents in the connected writ petition, also makes submission placing reliance upon certain decisions. 6. Having heard the learned counsel for the parties and having perused the Petition Papers and also having adverted only to the relevant Rulings cited at the Bar, this court declines to grant indulgence in the matter for the following discussion: (a) Admittedly, petitioners were running affairs of management of accused Company when it had entered into loan transactions with the complainant Bank during the relevant period between 1.4.2010 and 31.3.2016; the outstanding loan amount as per the Book Entries itself is quantified at ₹ 155.44 crore as on 30.6.2019 and the total loss is stated to be ₹ 354.32 crore; all this is a public money, is not in dispute; there is no merit in the argument of the petitioners that the loan transaction in question from the stage of applying for the loan to the stage of offering of final OTS, has only elements of civil dispute and therefore, initiation of criminal proceedings is unsustainable; it need not be stated that a same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our may in appropriate situations fall for quashing where parties have settled the dispute; 16.9. In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and 16.10. There is yet an exception to the principle set out in propositions 16.8 and 16.9 above. Economic offences involving the financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance. (underlining is mine) Learned Sr. Counsel Mr. Shetty, appearing for the petitioners is not right in selectively banking upon only two paragraphs i.e., 16.8 16.9 that broadly lay down the general principle; para 16.10 is carved out as an exception to the said principle; case of the petitioners squarely f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find out as to whether the allegations made in the complaint prima facie make out the offences or not. Instead the High Court gave importance to the fact that since there was a dispute pending between the parties in the Civil Court in relation to a shop it is essentially a civil dispute... It is on this ground, the High Court proceeded to quash the complaint. This approach of the High Court, in our view, is faulty. Though the High Court referred to the law laid down by this Court in the case of State of Haryana Ors. vs. Ch. Bhajan Lal Ors. (AIR 1992 SC 604) but failed to apply the principle laid down therein to the facts of this case... The High Court failed to see that mere pendency of a civil suit is not an answer to the question as to whether a case u/ss. 323, 379 r/w Section 34 IPC is made out against respondent or not... The High Court should have seen that when a specific grievance of the appellant in his complaint was that respondents have committed the offences punishable under Sections 323, 379 read with Section 34 IPC, then the question to be examined is as to whether there are allegations of commission of these two offences in the complaint or not. In other words, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all securities guarantees; even it had withdrawn the recovery proceedings then pending before the DRT stating that the lis had been finally settled; further, the application filed u/s. 320(2) of Cr.P.C. seeking leave to compound the offence came to be favoured by the High Court for giving a decent burial to the dispute; these essential facts which are militantly lacking in the present petitions, resulted into relieving the parties therein from the criminal action; here is a case involving the allegations of fraud, fabrication duplicity; the outstanding is hugely quantified at ₹ 354.32 crore as on 30.6.2019; the petitioners are only dillydallying with submission and resubmission of OTS proposals that are apparently structured on frugal monetary values and the claim for long repayment tenures; the OTS proposal has not resulted into any settlement and that the entire amount is outstanding due till date, payment of some frugal sum, notwithstanding; thus, case of the petitioners stands in bitter contrast with the one cited at the Bar. (g) The submission of learned Sr. Advocate Mr. Shetty that a mere failure to repay the debts does not justify initiation of criminal procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds three year imprisonment; this apart, section 473 of the Code vests discretion in the court to take cognizance of an offence even after the lapse of limitation period if delay has been properly explained or that it is necessary to take cognizance in the interests of justice; added to this, section 472 mentions of continuing offences that shun the contention of limitation; that being the legal position, the submission of the petitioners as to delay latches do not merit consideration, at the stage of investigation; even otherwise, whether there is delay/latches per se is not a sufficient ground for quashing the criminal proceedings which allegedly involve swindling of a huge sum of ₹ 354.32 crore of public funds. (i) The submission of Mr. Shashikiran Shetty that, the second petitioner herein was no longer a director of the Company at the relevant period, again cannot be examined by this court in its restrictive jurisdiction since it is a fact to be probed into; the transactions as appearing from the records are allegedly spread over for a long period between 01.04.2010 and 31.03.2016; even going by the version of the counsel, the second petitioner who is none other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agencies; PML Act is a stand alone enactment which differentiates between scheduled offences and money laundering offences; if the investigation for the predicate offence is conducted by the authorities empowered under the enactments and if for any reason, the same is closed/dropped, the proceedings under the Act in other stream would not, thereby, automatically wither away, the offence of money laundering u/s. 3 of the Act being an independent offence; this fairly happens to be the unanimous view of several High Courts in the country vide: Bombay High Court in First Appeal No. 527/2010 between Radha Mohan Lakhotia Vs. Deputy Director, PMLA, decided on 5.8.2010; Delhi High Court in APRAJITA vs. JOINT DIRECTOR, ENFORCEMENT DIRECTORATE, Madras High Court in VGN DEVELOPERS P. LTD. Vs. DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT, Mr. Prasanna Kumar appearing for the CBI is justified in submitting that the decision in Sri. Sachin Narayan having been affirmed by the Division Bench of this Court in W.A. No. 3611/2019, disposed off on 17.9.2019, the judicial propriety discipline require the Co-ordinate Benches to follow the same. (c) Petitioner's argument that both the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able their competent authorities to confiscate property laundered, proceeds from, instrumentalities used in or intended for use in the commission of any money laundering offence, or property of corresponding value, without prejudicing the rights of bona fide third parties. Such measures should include the authority to: (1) identify, trace and evaluate property which is subject to confiscation; (2) carry out provisional measures, such as freezing and seizing, to prevent any dealing, transfer or disposal of such property; and (3) take any appropriate investigative measures. In addition to confiscation and criminal sanctions, countries also should consider monetary and civil penalties, and/or proceedings including civil proceedings, to void contracts entered into by parties, where parties knew or should have known that as a result of the contract, the State would be prejudiced in its ability to recover financial claims, e.g. through confiscation or collection of fines and penalties. (d) Under our constitutional scheme, the power to legislate in respect of matters concerning International Conventions/Conferences is exclusively vested with the Parliament vide Article 253 which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the conviction of the offender, as rightly contended by Mr. Prasanna Kumar Mr. Jayakar Shetty; if the Parliament intended it to be otherwise, the text of the provisions of sections 3 5, amongst others, would have been much different; thus, the contention to the contrary advanced on behalf of the petitioners cannot be countenanced without manhandling at least these two provisions, if not other as well. (e) Going by the text context of the provisions of PML Act and the construction placed thereon by the Coordinate Bench of this court coupled with a broad consensual view emerging from the aforesaid decisions of other High Courts in the country, some lone voices in variance notwithstanding, the legal position can be concised thus: the scheme of the Act envisages two parallel streams of action which are distinguishable by their nature, scope object; one stream is the criminal proceedings before the Special Courts for the trial of offences u/s. 3 r/w Sec. 4, that are governed by the provisions of Chapter VII, and the other stream is the departmental proceedings apparently civil in nature, instituted by the competent authorities, that are governed by the provisions of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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