2020 (1) TMI 1421 - SC - Indian Laws

Supreme Court reinstates charges against sons in financial irregularities case

State of Madhya Pradesh Versus Yogendra Singh Jadon & Anr.

The Supreme Court overturned the High Court of Madhya Pradesh's decision to quash charges against the respondents, sons of a deceased individual, under ... Financial irregularities on the basis of forged documents by misusing his post and by providing fake loan to the relatives - cash credit limit was sanctioned without following the due procedure and without mortgage of any of the property - offences under Sections 420 and 120-B IPC - HELD 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. The order of the High Court quashing the charges against the respondents is not sustainable in law and the same is set aside - Appeal allowed. Issues:1. Quashing of charges under Sections 420 and 120-B IPC against the respondents by the High Court of Madhya Pradesh.Analysis:The case involved an appeal by the State against an order passed by the High Court quashing the charges against the respondents, sons of a deceased individual, for offenses under Sections 420 and 120-B of the Indian Penal Code. The allegations revolved around financial irregularities committed by the deceased father in connivance with other bank employees, involving misuse of power to provide fake loans. The respondents were alleged beneficiaries of these actions. The High Court found that the essential ingredients to establish offenses under Sections 420 and 120-B were missing in the chargesheet. However, the Supreme Court disagreed, stating that the manner in which loans were advanced without proper documentation and the respondents benefiting from their father's actions did prima facie disclose offenses under the mentioned sections.The Special Judge had earlier framed charges against the respondents, which were challenged through a criminal revision. The High Court, in the revision petition, concluded that the offenses under Sections 420 and 120-B IPC were not made out against the respondents. The Court emphasized that the bank officers, due to the applicants' father's position, may have acted in disregard of rules to benefit the applicants, but this would hold the officers liable, not necessarily the applicants. The High Court's decision was based on the lack of evidence showing that the applicants deceived or induced the bank authorities fraudulently to sanction cash credit facilities.The Supreme Court held that the High Court erred in quashing the charges against the respondents, as the allegations required to be proven in a court of law. The Court highlighted that the charges under Section 420 IPC needed to be read along with offenses under the Prevention of Corruption Act, to which the respondents might be liable with the aid of Section 120-B of IPC. Therefore, the Supreme Court set aside the High Court's order and allowed the appeal, stating that the respondents could take further legal action available to them within the bounds of the law.