# Sanjay Kumar Gupta @ Sanjay Gupta v. State of U.P. & Anr

- **Citation:** (2022) 11 ILRA 403
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-09-29
- **Case number:** Application U/S 482 No. 9643 of 2022
- **Bench:** Ajai Tyagi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sanjay-kumar-gupta-sanjay-gupta-v-state-of-u-p-anr-47832
- **Pages:** 11

## Headnote

(A) Criminal Law - Indian Penal Code,
1860 - Sections 120-B, 420, 467 & 471 -
The Code of Criminal Procedure, 1973 -
Sections 161 & 482 - Inherent power -
Criminal liability is not vicarious liability
- 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. (Para -
29,39)

Cognizance/Summoning order - quashing of -
sanctioning housing loan to opposite party no.2
and his wife - Tripartite agreement executed
among builder, borrower and Bank Manager -
recovery citation against company - fact
concealed by Branch Manager, applicant - false
revenue report showing property "free from all
encumbrances" prepared by applicant - no
evidence on record - applicant not involved in
the process of approval of project - no intention
of applicant to cheat opposite party no.2 and
his wife - Mens rea completely absent. (Para -
1 to 36)

HELD:-In the absence of any material on
record, even prima facie, in the F.I.R. or
statement of the informant, pointing out any
such circumstances, showing any such act or
intention that the applicants intended to cheat
the opposite party no.2 and his wife and
causing financial loss to them and in the
absence of any specific allegations and material
of definite nature, not imaginary or inferential
one, it would be travesty of justice to ask the
applicants
to
face
the
trial.
Impugned
summoning
order
and
entire
proceedings
quashed only against applicants. (Para -
40,41,43 )

Application u/s 482 Cr.P.C. allowed. (E7)

List of Cases cited:-

## Text

11 All. Sanjay Kumar Gupta @ Sanjay Gupta Vs. State of U.P. & Anr.
403
traceable to Section 156(3) read with Section
156(1), Section 2(h), and Section 173(8) of the
CrPC, as has been noticed hereinabove, and
would be available at all stages of the progress
of a criminal case before the trial actually
commences. It would also be in the interest of
justice that this power be exercised suo motu by
the Magistrate himself, depending on the facts
of each case. Whether further investigation
should or should not be ordered is within the
discretion of the learned Magistrate who will
exercise such discretion on the facts of each
case and in accordance with law. If, for
example, fresh facts come to light which would
lead to inculpating or exculpating certain
persons, arriving at the truth and doing
substantial justice in a criminal case are more
important than avoiding further delay being
caused in concluding the criminal proceeding,
as was held in Hasanbhai Valibhai Qureshi
(supra). Therefore, to the extent that the
judgments in Amrutbhai Shambubhai Patel
(supra), Athul Rao (supra) and Bikash Ranjan
Rout (supra) have held to the contrary, they
stand overruled. Needless to add, Randhir
Singh Rana v. State (Delhi Administration)
(1997) 1 SCC 361and Reeta Nag v. State of
West Bengal and Ors. (2009) 9 SCC 129 also
stand overruled.

7. In the instant case, the very basis of
lodging of the F.I.R. against the applicant was
the enquiry conducted by the concerned District
Inspector of Schools, wherein the applicant was
held guilty, later on, after submission of reply
by the applicant before the Joint Director of
Education Meerut Zone. Meerut, the applicant
was exonerated from the charges levelled
against him in the meantime, charge sheet was
filed against the applicant and trial commenced.
During the course of trial, the applicant moved
an application with a prayer for further
investigation, which has been rejected vide
order impugned, which order, in the opinion of
the Court, is not sustainable in view of the fact
that there may be further delay in concluding
the trial but that should not stand in the way of
further investigation if that would help the
Court in arriving at the truth and do real and
substantial as well as effective justice.

8. Considering the aforesaid observations
of Hon'ble Apex Court as well as the facts and
circumstances of the case, the impugned order
is set aside. The matter is remitted to the
concerned Court below to consider and decide
the matter afresh in accordance with law,
preferably within a period of one month from
the date of production of a certified copy of the
order before it.

9. Learned counsel for the applicant
undertakes that the applicant shall furnish a
certified copy of the order before the concerned
court below within 10 days from today.

10. It is made clear that this Court has not
expressed any opinion on the merits of the case.

11. The instant application is accordingly
disposed of.
----------
(2022) 11 ILRA 403
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 29.09.2022

BEFORE

THE HON'BLE AJAI TYAGI, J.

Application U/S 482 No. 9643 of 2022
And
Application U/S 482 No. 5158 of 2022

Sanjay Kumar Gupta @ Sanjay Gupta
 ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Sri Amrish Sahai
404 INDIAN LAW REPORTS ALLAHABAD SERIES
Counsel for the Opposite Parties:
G.A., Sri Aklank Kumar Jain, Sri Bhanu
Pratap Dhakrey

(A) Criminal Law - Indian Penal Code,
1860 - Sections 120-B, 420, 467 & 471 -
The Code of Criminal Procedure, 1973 -
Sections 161 & 482 - Inherent power -
Criminal liability is not vicarious liability
- 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. (Para -
29,39)

Cognizance/Summoning order - quashing of -
sanctioning housing loan to opposite party no.2
and his wife - Tripartite agreement executed
among builder, borrower and Bank Manager -
recovery citation against company - fact
concealed by Branch Manager, applicant - false
revenue report showing property "free from all
encumbrances" prepared by applicant - no
evidence on record - applicant not involved in
the process of approval of project - no intention
of applicant to cheat opposite party no.2 and
his wife - Mens rea completely absent. (Para -
1 to 36)

HELD:-In the absence of any material on
record, even prima facie, in the F.I.R. or
statement of the informant, pointing out any
such circumstances, showing any such act or
intention that the applicants intended to cheat
the opposite party no.2 and his wife and
causing financial loss to them and in the
absence of any specific allegations and material
of definite nature, not imaginary or inferential
one, it would be travesty of justice to ask the
applicants
to
face
the
trial.
Impugned
summoning
order
and
entire
proceedings
quashed only against applicants. (Para -
40,41,43 )

Application u/s 482 Cr.P.C. allowed. (E7)

List of Cases cited:-

1. Karn. Vs L. Muniswamy & ors., (1977) 2 SCC
699
2. M/s.Zandu Pharmaceutical Works Ltd. & ors.
Vs Mohd. Sharaful Haque & anr. , (2005) 1 SCC
122

3. Madhavrao Jiwajirao Scindia & anr. Vs
Sambhajirao Chandrojirao Angre & ors. , (1988)
1 SCC 692

(Delivered by Hon'ble Ajai Tyagi, J.)

1. Both these applications required to
be decided together.

2. These applications u/s 482 Cr.P.C.
have been filed seeking the quashing of
summoning order dated 16.03.2021 and the
entire proceedings of Misc. Case No.526 of
2020 (Abhishek Singh Vs. Prabhjeet Singh
and Others), arising out of Case Crime
No.501 of 2018, under Sections 120-B,
420, 467, and 471 I.P.C., Police Station
Sector-49 Noida, District Gautam Budh
Nagar, pending in the court of Additional
Chief Judicial Magistrate-II, Gautam Budh
Nagar.

3. In both the applications, applicants
have
challenged
the
cognizance/summoning
order
dated
16.03.2021 passed by Additional Chief
Judicial Magistrate-II, Gautambudh Nagar,
summoning the accused Prabhjeet Singh,
Hanshraj
Dinkar,
Arjun
Sharma,
Subhashish Chaudhary and Sanjay Gupta
for trial for the offences under Sections
120-B, 420, 467, 468, 471 I.P.C. after
rejecting the final report no.01 of 2020,
filed in pursuance of F.I.R. registered as
Case Crime No.501 of 2018, which was
lodged by opposite party no.2 against the
accused persons.

4. Brief facts of the case giving rise to
these
applications
are
that
a
First
Information Report was lodged by opposite
party no.2 against the accused persons on
11 All. Sanjay Kumar Gupta @ Sanjay Gupta Vs. State of U.P. & Anr.
405
12.05.2018
with
the
averments
that
opposite party no.2 and his wife Smt.
Laxmi Singh are allottee of Flat No. G 801
Tower-1 situated at plot no. GH-3 Sector
4C, Vasundhra, Ghaziabad. The aforesaid
flat was allotted in favour of opposite party
no.2 and his wife by builder M/S VXL
Realtors Pvt. Ltd. (hereinafter referred to as
''Company') having its office in New Delhi
by letter no. AGB 0302 dated 30.10.2012.
The owner of the company, Prabhjeet
Singh told the opposite party no.2 that cost
of flat is Rs.57,27,500/- for which loan
shall be sanctioned by Bank of Maharashtra
and there would be monthly installment of
Rs.41,000/- per month. It was also assured
by Prabhjeet Singh that this project is not
disputed, possession of flat shall be
delivered within one year and he took over
the responsibility for getting the loan
sanctioned by the Bank of Maharashtra,
Sector 51, Noida, which has apporved his
project.

5. Believing the statements made by
Prabhjeet Singh, opposite party no.2 agreed
and aforesaid plot was allotted to him on
30.10.2012. After that on this flat, bank
sanctioned the loan of Rs.40 lacs on
22.12.2012 out of which Rs.38,10,000/-
was transferred into the bank account of
company by the bank vide draft no.678255
dated 10.01.2013. Opposite party no.2 had
paid Rs.18 lacs as margin money and
started paying the monthly installment of
Rs.41,000/-. On 19.01.2018 U.P. Awas
Evam
Vikas
Parishad
and
District
Magistrate,
Ghaziabad
took-over
the
possession of building and sealed it, which
was being constructed by Prabhjeet Singh,
owner of the company, in which flat of
opposite party no.2 was also situated. On
03.02.2018 when opposite party no.2
enquired, the fact came in the knowledge of
opposite party no.2 that building which was
being constructed by Prabhjeet Singh, was
in dispute before allotment of flat.

6. U.P. Awas Evam Vikas Parishad was
undertaking the proceedings of recovery of
dues against Prabhjeet Singh, owner of the
company, hence, directors of the company
have cheated the opposite party no.2 in
criminal conspiracy with the Manager of the
Bank of Maharashtra. They have cheated the
opposite party no.2 for Rs.66,21,000/- by
way of fraud, forged documents and forged
legal report. It was doubted that directors of
the company in connivance with bank
officers have cheated him and his wife by
fabricating forged documents such as legal
search report, no dues certificate etc.

7. After investigation, I.O. has
submitted the final report alleging that
dispute between the parties is of civil nature
and no criminal liability is made out.
Opposite party no.2 filed protest petition
against the final report and learned Magistrate
after hearing the parties, rejected the final
report and summoned the accused persons
namely, Prabhjeet Singh, Hansraj Dinkar,
Arjun Sharma, Subhashish Chaudhary and
Sanjay Gupta to face the trial.

8.

Mainly
aggrieved
with
the
summoning order, both the applicants have
filed separate applications under Section 482
of Cr.P.C. for quashing the impugned order
and the entire proceedings of the case against
them.

9. Heard Mr. Amrish Sahai, learned
counsel for both the applicants, Mr. Bhanu
Pratap Dhakray, learned counsel for the
opposite party no.2 and learned A.G.A. for
the State. Perused the record.

10. First of all, learned counsel for the
applicant has submitted with regard to role
406 INDIAN LAW REPORTS ALLAHABAD SERIES
of applicant-Subhashish Chaudhary that
applicant, Subhashish Chaudhary has been
falsely implicated in the present case by
opposite party no.2 and he was not
involved in sanctioning the housing loan in
question nor it was his job to sanction the
housing loan. Housing loan has been
sanctioned by Maha Retail Credit Hub,
New Delhi (hereinafter referred to as
''M.R.C.H.') and not by the branch of Bank
of Maharashtra situated at Sector 51 Noida.
Copy of sanction letter is annexed as
Annexure No.3 to the application, which
shows that there was no role of branch head
in the process of sanctioning the housing
loan. Loan file is forwarded by brach to
M.R.C.H., New Delhi. After that, branch
officer has no say in the process of
sanctioning of loan.

11. It is also submitted that project of
company, in which, opposite party no.2 and
his wife booked the flat was already
approved by the Bank of Maharashtra,
therefore, there was no reason for appliantSubhashish
Chaudhary
to
verify
the
encumbrances
on
the
project.
It
is
mentioned in sanction letter that project is
approved by the Bank. Apart from it, flat
was allotted to opposite party no.2 by the
builder on 30.10.2012, which is evident
from the letter of allotment. After two
months of allotment of flat, opposite party
no.2 approached the bank for providing the
housing
loan.
Opposite
party
no.2
approached the bank in the month of
December, 2012, loan of Rs.40 lacs was
sanctioned to him on 22.12.2012 by
M.R.C.H. and not by the applicant, the then
the manager of Bank of Maharashtra,
Branch Sector 51, Noida. Opposite party
no.2 himself informed the bank on
10.01.2013 the date of disbursal of loan
that he had taken all the responsibility that
may arise now or in future.

12. Opposite party no.2 started
repaying the loan amount by monthly
installment of Rs.41,000/- in terms of
sanction letter. But later on, opposite party
no.2 stopped the repayment of loan amount
and he was issued legal notice on
05.01.2018, after that on 12.05.2018 the
First Information Report was lodged by
opposite party no.2 involving both the
applicants, who had nothing to do with the
sanctioning of housing loan.

13. It is further submitted by learned
counsel for the applicant that in the
meantime before lodgement of F.I.R., loan
provided to opposite party no.2, became
NPA and Branch Head filed recovery
proceedings before the Debts Recovery
Tribunal, Lucknow (in short "D.R.T.,
Lucknow") being Original Application
No.222 of 2018 on 16.02.2018. The
original application is still pending there. It
is evident from Annexure No.11 that
application was filed in D.R.T., Lucknow
on 16.02.2018 and F.I.R. was lodged by
opposite party no.2 on 12.05.2018 i.e. after
three months of moving the debts recovery
with the intention to stall the proceedings
of recovery. It is also contended that
Investigating Officer found no criminal
liability during the course of investigation
and found that dispute is of civil nature,
hence, final report was submitted by I.O.
on which protest petition was filed by
opposite party no.2 and learned Magistrate
rejected the final report and summoned the
present applicants along with other coaccused persons for facing the trial.

14. Contention of applicant is that
learned Magistrate did not apply judicial
mind while summoning the applicants
because applicant-Subhashish Chaudhary
had no role in sanctioning the housing loan
to opposite party no.2 and his wife. As far
11 All. Sanjay Kumar Gupta @ Sanjay Gupta Vs. State of U.P. & Anr.
407
as this fact is concerned that false legal
search report was prepared by Subhashish
Chaudhary, no such report was prepared
nor it is on record. Learned Magistrate has
wrongly summoned and concluded that
Subhashish Chaudhary had cheated the
opposite party no.2 and he was in any
conspiracy with the builder and directors of
the company. There is no such evidence
against
the
applicant-Subhashish
Chaudhary and he has been implicated to
exert pressure for stalling the recovery of
housing loan, which is public money.

15. So far as applicant-Sanjay Kumar
Gupta @ Sanjay Gupta, it is submitted by
learned counsel for the applicant that it is
very surprising that he is made accused in
F.I.R. by opposite party no.2 and more
surprising that learned Magistrate also
summoned him for facing the trial because
the entire process of sanctioning the loan to
opposite party no.2 and his wife had taken
place in the month of December, 2012 and
January, 2013 while the applicant-Sanjay
Gupta joined in the branch of Sector 51
Noida in the year 2017. He was posted in
Meerut in the year 2012 and on 24.05.2012
he was transferred by the bank to Bhopal
Region. Transfer order is annexed as
Annexure No.2 to the application and on
18.06.2012 he joined the office in Bhopal,
joining letter is also annexed as Annexure
No.2 to the application.

16. Learned counsel for the applicant
has drawn the attention of this Court to the
deputation
order
dated
09.06.2017
(Annexure No.3) by which the applicantSanjay Gupta was deputed as Chief
Manager in branch of Sector 51, Noida
with immediate effect, hence, it is amply
clear that he came in the aforesaid branch
on deputation on 09.06.2017 and after that
permanently posted there as Chief Manager
on 28.08.2017. It is also submitted that how
an officer, who has joined the branch after
more than four years of sanction of loan,
can be held guilty. In fact, the recovery
proceedings before the D.R.T., Lucknow
were filed by applicant-Sanjay Gupta,
therefore, to pressurise him for stalling the
recovery proceedings, he was also made an
accused in F.I.R. and learned Magistrate
also without application of judicial mind
and ignoring the aforesaid fact of his
joining the branch in the year 2017,
summoned him also for trial. Hence,
summoning
order
against
both
the
applicants is abuse of process of law and if
the criminal proceedings against them are
allowed to be continued will create great
hardship to the applicants without their
fault and without any evidence against
them,
therefore,
criminal
proceedings
against them be quashed.

17. At the very outset, learned counsel
for the opposite party no.2 has submitted
that true facts of the matter are not argued
by learned counsel for the applicant, in fact,
applicant-Subhashish Chaudhary was Bank
Manager when the housing loan was
sanctioned to opposite party no.2 and being
the Branch Manager he was actively
involved in the process of sanctioning the
loan. It is also submitted that builder was in
nexus with the bank, the plot on which
project of company was going on, was
allotted to builder by U.P. Awas Evam
Vikas Parishad on 19.11.2005. Builder did
not pay the entire amount to U.P. Awas
Evam Vikas Parishad and dispute between
them had taken place in the year 2006.
Builder made default in payment, several
letters were issued to him by U.P. Awas
Evam Vikas Parishad for demanding the
amount, which was not paid by him and
ultimately, on 31.12.2012 recovery citation
was issued by U.P. Awas Evam Vikas
408 INDIAN LAW REPORTS ALLAHABAD SERIES
Parishad. Copy of recovery citation is
annexed as Annexure CA-1.

18. It is also submitted by learned
counsel for the opposite party no.2 that
applicant-Subhashish Chaudhary was Bank
Manager at the time of sanction of loan to
opposite party no.2 and fact of recovery
proceedings against the company was very
well within the knowledge of Subhashish
Chaudhary but he concealed this fact from
opposite
party
no.2
and
loan
was
sanctioned on disputed project. Tripartite
agreement was executed among the builder,
borrower and Bank Manager-Subhashish
Chaudhary on behalf of bank. In this
tripartite agreement, there is clause no.16
which says that "flat is free from all
encumbrances, charges, liens, lis pendence,
attachments,
trusts,
prior
agreements,
whatsoever or howsoever". In clause 17 it
is also mentioned that there is no order of
attachment by the Income Tax Authorities
or any other authority under any law for the
time being in force nor any notice of
acquisition or requisition has been received
in respect of the said property.

19. The tripartite agreement was
executed among the parties on 10.01.2013
while the recovery citation against the
company was already issued on 31.12.2012
but this fact was concealed by Branch
Manager, applicant-Subhashish Chaudhary.
A false revenue report showing the
property "free from all encumbrances" was
prepared
by
applicant
Subhashish
Chaudhary and loan was sanctioned to
opposite party no.2 for grabbing his loan
amount and for having wrongful gains.

20. It is further submitted by learned
counsel for the opposite party no.2 that
opposite party no.2 and his wife have
challenged
the
aforesaid
recovery
proceedings in D.R.T., Lucknow by way of
filing counter claim being Counter Claim
No.02 of 2018, which is still pending for
adjudication and compensation is also
demanded because applicant Subhashish
Chaudhary
concealed
important
and
substantial information from opposite party
no.2.

21. Applicant-Subhashish Chaudhary
has put his signature on agreement, hence,
he cannot withdrawn himself from the
terms and conditions of the aforesaid
agreement. Demand draft of loan amount
was directly transferred by applicant-
Subhashish Chaudhary in the account of
the company without handing over the
possession or sale deed of flat on which
loan was sanctioned. On 31.12.2012
recovery
was
standing
against
the
builder/company,
hence,
applicantSubhashish Chaudhary being the signatory
on agreement, is fully responsible towards
the loss and hard-earned money of opposite
party no.2 because agreement was forged,
fabricated and it was prepared so with the
conspiracy between the bank and the
builder.

22. Applicant-Sanjay Gupta was
manager when false recovery proceedings
were initiated by the bank in D.R.T.,
Lucknow and no action was initiated by
him against erring employees of the bank.

23. In this way, both the applicants
were in criminal conspiracy with the
builder and they have also cheated the
opposite party no.2 with the help of false
and
forged
documents.
Investigating
Officer has submitted final report, which
was result of wrong and poor investigation.
The dispute between the parties is not of
civil nature and learned Magistrate has
rightly rejected the final report and
11 All. Sanjay Kumar Gupta @ Sanjay Gupta Vs. State of U.P. & Anr.
409
summoned both the applicants for trial
along with other co-accused persons on the
basis of protest petition.

24. Learned A.G.A. has submitted
that there is no illegality, impropriety and
incorrectness in the impugned order under
challenge and also there seem to be no
abuse of court's process.

25. The allegations against the
applicant-Subhashish Chaudhary is that
project of the company was not clear and
free from all encumbrances at the time of
sanction of housing loan to opposite party
no.2 and this fact was well within the
knowledge
of
applicant-Subhashish
Chaudhary but this fact was not disclosed
by him to opposite party no.2 and all the
information regarding this fact pertaining to
the recovery proceedings by U.P. Awas
Evam Vikas Parishad were withheld by
him. Applicant-Subhashish Chaudhary was
actively involved in this crime for his
personal gain and causing wrongful loss to
opposite party no.2 and his wife. These
allegations
are
levelled
against
the
applicant-Subhashish Chaudhary on the
basis of tripartite agreement among the
builder, borrower and bank manager
because applicant-Subhashish Chaudhary is
signatory on this agreement.

26. First of all, it is to be examined by
this Court whether applicant-Subhashish
Chaudhary had any role in sanctioning the
housing loan to opposite party no.2 and his
wife. It is the case of applicant-Subhashish
Chaudhary that branch manager is not
sanctioning authority of housing loan and
loan was sanctioned by Zonal Office of
Bank of Maharashtra called as M.R.C.H.,
New Delhi through central processing
mechanism, hence, loan in question to
opposite party no.2 was also sanctioned by
M.R.C.H., which is crystal clear from
Annexure No.3 to the application, which is
sanction letter for housing loan. This
sanction letter is signed by Assistant
General Manager, Assest Branch, New
Delhi on behalf of M.R.C.H., meaning
thereby
that
the
applicant-Subhashish
Chaudhary did not sanction the loan.

27. Now, question remains of dispute
and recovery proceedings against company
by U.P. Awas Evam Vikas Parishad. This
is the allegation by the opposite party no.2,
being the Branch Manager, applicantSubhashish
Chaudhary
was
having
knowledge of this fact but this fact was
concealed by him and agreement was
executed by him with false clauses,
demonstrating the project free from all
encumbrances. In this regard, perusal of
sanction letter goes to show that on its
second page, there is column "legal search
charges" in which it is mentioned N.A.
(Not
Applicable)
and
further
it
is
mentioned "Project is approved by bank". It
means that the project of the company, in
which opposite party no.2 was allotted a
flat, was approved by the bank, hence,
when the project was already approved by
the
bank,
the
applicant-Subhashish
Chaudhary was not supposed to prepare the
revenue report as alleged by opposite party
no.2, which is also not on the record of this
Court.

28. It is alleged in para no.5 of
counter affidavit that applicant-Subhashish
Chaudhary, Bank Manager has prepared
the false revenue report showing the
property free from all encumbrances. No
report is place on record, hence, it cannot
be
opined
that
applicant-Subhashish
Chaudhary prepared any false revenue
report, more so, it was not required on his
part because the sanction letter shows that
410 INDIAN LAW REPORTS ALLAHABAD SERIES
project was approved by the bank. If the
project was wrongly approved by the bank
then the employees/officers who were
responsible for approving the project may
be held responsible but not the applicantSubhashish Chaudhary because project was
already approved when he signed the
tripartite agreement on behalf of the bank
on the instructions of sanction letter by
M.R.C.H. because documentation was
directed in the aforesaid sanction letter vide
condition no.7. In this way, applicant -
Subhashish Chaudhary became signatory
on agreement on behalf of bank because he
was only executant of documents.

29. Since the project was already
approved by the bank and if it was wrongly
approved then also applicant-Subhashish
Chaudhary cannot be held liable because
there is no such evidence on record that he
was in any way involved in the process of
approval of the project. Criminal liability is
not vicarious liability and Subhashish
chaudhary cannot be held vicariously liable
if some other bank officers/employees have
approved the housing project wrongfully or
illegally. Learned Magistrate held him
liable and summoned on the basis of
tripartite agreement but learned Magistrate
lost sight from the fact that he was only
executant of the documents on behalf of the
bank under instructions of M.R.C.H.,
which is a central processing unit of loan.

30. Learned Magistrate also lost sight
from the fact that loan was sanctioned by
the aforesaid M.R.C.H. and project was
already approved by the bank as per the
sanction
letter.
Moreover,
learned
Magistrate has committed grave error in
impugned order by holding that the
recovery proceedings at the behest of U.P
Awas Evam Vikas Parishad against the
project was in the knowledge of bank
manager and it seems that fraud has been
played upon opposite party no.2 with the
conspiracy.
This
finding
of
learned
Magistrate is without any evidence on
record.

31. As discussed above, when the
project was already approved by the bank,
bank manager was not supposed to make
due diligence. In the conclusion of
impugned order also, learned Magistrate
has opined that all the accused persons
have cheated the opposite party no.2 i.e.
complainant of F.I.R, deliberately in
connivance and conspiracy with bank
employees but role of bank officers is not
assessed by learned Magistrate in right
perspective because he did not take into
consideration, the fact that loan was
sanctioned by M.R.C.H. and project was
already approved by the bank.

32. At the same time, the argument of
opposite party no.2 is unsustainable that
loan amount was directly transferred by the
bank in the account of the company without
giving possession of the flat to opposite
party no.2 or execution of sale deed
because the amount of loan is transferred
by
the
bank
in
the
account
of
agency/authority from which the goods or
property is being purchased by the
borrower. Opposite party no.2 and his wife
have signed the receipt for amount of loan
(Annexure No.5), in which it is clearly
mentioned that draft is prepared in favour
of the company. There is absolutely no
evidence
against
the
applicant-Sanjay
Kumar Gupta, the loan was disbursed to
opposite party no.2 by the bank in the
month of
January,
2013,
when
the
applicant-Sanjay Kumar Gupta was posted
in Bhopal and he has joined in the
concerned branch of the bank i.e .Sector
51, Noida in the year 2017 after more than
11 All. Sanjay Kumar Gupta @ Sanjay Gupta Vs. State of U.P. & Anr.
411
four and half years of sanctioning of the
loan. Office order of the bank dated
24.05.2012 (Annexure No.2) is the order of
transferring him from Meerut to Bhopal
and there is another office order of Bank of
Maharashtra, Zonal Office Bhopal, which
shows that applicant-Sanjay Kumar Gupta
had reported at Zonal Office, Bhopal on
18.06.2012. Annexure No.3 goes to show
that applicant-Sanjay Kumar Gupta was
deputed as Chief Manager of the branch
situated at Sector 51, Noida on 09.06.2017,
meaning thereby, before 09.06.2017 the
applicant-Sanjay Kumar Gupta was not
posted in the aforesaid branch and at the
time of entire process of disbursal of loan,
the applicant-Sanjay Kumar Gupta was
posted in Bhopal. Hence, he was not having
any role in disbursal/sanction of loan
amount to opposite party no.2. Learned
Magistrate very strongly lost sight of this
fact also.

33.

Learned
Magistrate
has
considered the statement of informant
Abhishek Singh, recorded under section
161 of Cr.P.C in the impugned order but
did not consider it with judicial mind. It is
stated by informant in the statement
recorded under Section 161 Cr.P.C that
when the project was sealed due to default
in payment by the builder to U.P. Awas
Evam Vikas Parishad then he (opposite
party no.2) demanded loan amount back
from applicant-Sanjay Kumar Gupta and
applicant threatened to deposit the amount
of installments. This is the only allegation
made by informant against applicantSanjay Kumar Gupta. Applicant could not
return the money as it was wrongfully
demanded
by
opposite
party
no.2.
According to his statement, given to I.O.,
bank had already transferred the loan
amount in the account of the company. In
such a situation, how a bank manager could
return the money to the borrower, it is
beyond understanding, which is highly
deplorable.

34. Learned Magistrate could not
even think how the applicant-Sanjay
Kumar Gupta could return the money to
opposite party no.2 and an officer who had
joined the branch of the bank after four and
half years of disbursal of loan, can be held
liable for criminal prosecution. There is no
iota of evidence against applicant-Sanjay
Kumar Gupta also.

35. In the backdrop of facts and
circumstances and evidence on record at
this stage, this Court finds no mens rea on
the part of both the applicants. If the
tripartite agreement is signed by applicantSubhashish Chaudhary as discussed above,
it was only part of the documentation and
there was no guilty intention of mind
because loan was sanctioned by M.R.C.H.
and project was already approved by the
bank. Hence, it cannot be transpired from
the record that there was any intention of
applicant-Subhashish Chaudhary to cheat
the opposite party no.2 and his wife. Mens
rea is completely absent.

36. There is no question of mens rea
against the applicant-Sanjay Kumar Gupta
also because he was not posted in that
branch at the time of disbursal of loan
amount to opposite party no.2 and he was
transferred/deputed in that branch after four
and half years of disbursal of loan amount.
If he has filed recovery proceedings against
the
opposite
party
no.2
in
D.R.T.,
Lucknow, he cannot be held liable for
criminal prosecution because he did it as
part of his duty and the statement recorded
under Section 161 Cr.P.C given to I.O. by
opposite party no.2 that he demanded his
money back from applicat-Sanjay Kumar
412 INDIAN LAW REPORTS ALLAHABAD SERIES
Gupta was absolutely unfair demand which
could not be met by the applicant as per the
rules & regulations and procedure of the
bank.

37. The following observations made
by Hon'ble Apex Court in the case of State
of Karnataka Vs. L. Muniswamy & Ors.,
(1977) 2 SCC 699, may be relevant to note
at this stage:-

"The whole some power under
Section 482 CrPC entitles the High Court
to quash a proceeding when it comes to the
conclusion that allowing the proceeding to
continue would be an abuse of the process
of the Court or that the ends of justice
require that the proceeding ought to be
quashed. The High Courts have been
invested with inherent power, both in civil
and criminal matters, to achieve a salutary
public purposes. A Court proceeding ought
not to be permitted to degenerate into a
weapon of harassment or persecution. The
Court observed in this case that ends of
justice are higher than the ends of mere
law though justice must be administered
according to laws made by the legislature."

38. In the case of M/s.Zandu
Pharmaceutical Works Ltd. & Ors. Vs.
Mohd. Sharaful Haque & Anr. (2005) 1
SCC 122, Hon'ble Apex Court observed as
under :-

"It would be an abuse of process
of the court to allow any action which
would result in injustice and prevent
promotion of justice. In exercise of the
powers court would be justified to quash
any
proceeding
if
it
finds
that
initiation/continuance of it amounts to
abuse of the process of court or quashing
of these proceedings would otherwise serve
the ends of justice. When no offence is
disclosed by the complaint, the court may
examine the question of fact. When a
complaint is sought to be quashed, it is
permissible to look into the materials to
assess what the complainant has alleged
and whether any offence is made out even if
the allegations are accepted in toto."

39. Again in Madhavrao Jiwajirao
Scindia
&
Anr.
Vs.
Sambhajirao
Chandrojirao Angre & Ors., (1988) 1 SCC
692, Hon'ble Apex Court observed in
paragraph 7 as under :-

"7. The legal position is wellsettled that 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. It is also
for the court to take into consideration any
special features which appear in a
particular case to consider whether it is
expedient and in the interest of justice to
permit a prosecution to continue. This is so
on the basis that the court cannot be
utilised for any oblique purpose and where
in the opinion of the court chances of an
ultimate conviction is bleak and, therefore,
no useful purpose is likely to be served by
allowing
a
criminal
prosecution
to
continue, the court may while taking into
consideration the special facts of a case
also quash the proceeding even though it
may be at a preliminary stage."

40. In the absence of any material on
record, even prima facie, in the F.I.R. or
statement of the informant, pointing out
any such circumstances, showing any such
act or intention that the applicants intended
to cheat the opposite party no.2 and his
wife and causing financial loss to them and
in the absence of any specific allegations
and material of definite nature, not
11 All. Irfan & Anr. Vs. State of U.P. & Anr.
413
imaginary or inferential one, it would be
travesty of justice to ask the applicants to
face the trial. Bearing in mind, the factual
aspect of the case delineated herein above
and the legal principles enunciated by
Hon'ble Apex Court cited above and on the
basis of aforesaid discussion, this Court is
of the considered opinion that the learned
Magistrate was not justified in summoning
the
applicants
namely,
Shubhashish
Chaudhary and Sanjay Kumar Gupta to
face the trial for the aforesaid offences
because no such offence is made out
against them and to put them on trial and
permitting the trial to continue against both
the applicants would be an abuse of process
of law. Even uncontroverted allegations of
the prosecution do not constitute any
offence against the applicants, who were
bank officers, in which Sanjay Kumar
Gupta had joined the particular branch of
the bank after four and half years of the
disbursal of loan amount to opposite party
no.2 and his wife. Applicant-Subhashish
Chaudhary had no role in sanctioning of
loan and it was not required or supposed to
verify the liability, if any, on the project
because that project was already approved
by the bank. There is nothing on record to
show that applicant-Subhashish Chaudhary
was in any way played any role in approval
of the said project.

41. In the aforesaid circumstances of
the case, it is deemed proper that in order to
meet the ends of justice and avert the abuse
of
court's
process
the
impugned
summoning order dated 16.03.2021 cannot
be sustained against the applicants and the
proceedings of the aforesaid case be
quashed
forthwith
against
both
the
applicants and are hereby quashed.

42. Both the applications u/s 482
Cr.P.C. are allowed.

43. It is made clear that impugned
summoning order dated 16.03.2021 and the
entire proceedings of the aforesaid case
thereof are quashed only against the
applicants namely, Subhashish Chaudhary
and Sanjay Kumar Gupta @ Sanjay Gupta.
The observations made in this order are
strictly
confined
to
the disposal
of
applications u/s 482 Cr.P.C. with regard to
above applicants only. Rest of the accused
persons cannot take recourse of the
observations made in this order in any
proceedings.

44. A copy of this order be certified to
the lower court forthwith.
----------
(2022) 11 ILRA 413
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 14.09.2022

BEFORE

THE HON'BLE SAURABH SHYAM
SHAMSHERY, J.

Application U/S 482 No. 10328 of 2022

Irfan & Anr. ...Applicants
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicants:
Sri Amit Daga, Sri Krishna Kant Yadav

Counsel for the Opposite Parties:
A.G.A., Sri Paritosh Malviya
(अ) फौजदारी कानून - दण्ड प्रक्रिया संहिता, १९७३ -
धारा १५४, ४८२ - अन्तर्निहित शक्ततयां - भारतीय
दंड संहिता, १८६० - धारा ३७६ डी /५०६,३५४ - उत्तर
प्रदेश गिरोिबन्द और समाज विरोधी क्रियाकलाप
(र्निारण) अगधर्नयम, १९८६ - धारा 3(१) -
अन्तर्निहित शक्ततयों का उपयोि दुलिभ प्रकरणों में
िी क्रकया जाना चाहिये, िो भी जब अभभयुतत के