Professional due diligence reports do not create criminal liability without prima facie proof of knowledge of forgery or conspiracy.

Criminal prosecution against a chartered accountant was quashed because the record disclosed no prima facie material showing knowledge of forged documents, participation in any conspiracy, or a culpable intent to cheat the bank. The court noted that he had been engaged to verify the borrower's credentials and issued a due diligence certificate on the documents supplied, while the bank officials themselves proceeded on the basis of other material. In the absence of a demonstrable link with the alleged offenders, a professional verifier cannot be treated as criminally liable merely because the underlying documents later turn out to be forged.

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Issues: Whether the criminal prosecution against a chartered accountant for issuing a due diligence certificate could be quashed for want of prima facie material showing his knowledge of the forged documents or his participation in the alleged conspiracy.

Analysis: The prosecution material showed that the petitioner was engaged by the bank to verify the borrower's credentials and issued a due diligence certificate on the basis of the documents supplied by the bank. The record also showed that the bank officials had obtained a CIBIL report and still proceeded with sanction, while the documents forwarded to the petitioner did not include all relevant material. The Court found no tangible material to show that the petitioner knew of the fabrication, shared any conspiratorial intent, or had a culpable state of mind to cheat the bank. A professional engaged for verification cannot be treated as a detective or made liable for criminal prosecution merely because the documents later turn out to be forged, in the absence of a demonstrable link with the alleged offenders.

Conclusion: The prosecution against the petitioner was quashed for lack of prima facie material connecting him to the alleged offences.

Final Conclusion: The criminal case could not be sustained against the petitioner alone, and the proceedings were terminated as against him.

Ratio Decidendi: A professional who issues an opinion or verification report on the basis of documents supplied to him cannot be subjected to criminal prosecution for conspiracy or cheating unless the prosecution shows acceptable material establishing knowledge of forgery or a conscious link with the alleged conspirators.

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