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PETITIONER: STATE OF U.P. THROUGH C.B.I. S.P.E. LUCKNOW

       Vs.

RESPONDENT: R.K. SRIVASTAVA AND ANOTHER.

DATE OF JUDGMENT11/08/1989

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) PANDIAN, S.R. (J) THOMMEN, T.K. (J)

CITATION:  1989 AIR 2222            1989 SCR  (3) 834  1989 SCC  (4)  59        JT 1989 (3)   347  1989 SCALE  (2)262  CITATOR INFO :  RF         1992 SC 604  (107)  D          1992 SC1930  (3,5)

ACT:     Criminal      Procedure     Code,     1973:      Section 154---F.l.R.--Allegations  contained  in FIR taken  on  face value   and   accepted  in  entirety  do   not    constitute offence--Whether  criminal proceedings  could  be quashed.

HEADNOTE:     The  respondents, two employees of a  nationalised  Bank and two account-holders, were charged with offences punisha- ble under Sections 120B, 420, 468, 471 I.P.C. and 5(2)  read with  Section 5(1)(d) of the Prevention of  Corruption  Act, 1947. The F.I.R. alleged that the two Bank employees entered into  a criminal conspiracy with the two account-holders  to cheat  the  Bank  and, in pursuance  thereof  an  amount  of Rs.54,600  was allowed to be withdrawn by the  account-hold- ers,   who  had  tendered  three  cheques   aggregating   to Rs.54,600,  on the basis of the false credit entries in  the books  of  accounts of the Bank, and  connected  credit  and debit-vouchers  were also prepared. The case against one  of the account-holders was later dropped.     The  High  Court quashed the  proceedings  only  against Respondent No. 1 on the ground that the allegations made  in the  F.I.R.  did not constitute any offence of  cheating  or forgery.  Against  this decision, the State as well  as  the Bank filed appeals in this Court. Quashing the proceedings against all the respondents,     HELD:  1.  If the allegations made in the FIR  taken  at their  face  value  and accepted in their  entirety  do  not constitute  an offence, the criminal proceedings  instituted on the basis of such FIR should be quashed. [837C]     In the instant case, the Respondent No. 1 and the  other accused had accepted the three cheques in question and  sent the  same for clearance after debiting the LOC account.  The cheques  were  encashed and the money was  received  by  the Bank.  It may be that there was some delay in crediting  the LOC account or that the money against the three 835

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cheques  were credited in the accounts of the  account-hold- ers,  but the allegations made either in the FIR or  in  the charge-sheet do not show that they had acted dishonestly, or with deliberate intention to cause wrongful gain or wrongful loss  to the Bank. When the amount was allowed to  be  with- drawn  by the account-holders, necessary entries had  to  be made in the accounts of the Bank and these entries cannot be characterised as false. No document has been referred to  in the FIR as the outcome of forgery. [837E-F, 838A]     The High Court was, therefore, right in holding that the allegations  made in the FIR did not constitute any  offence of cheating or forgery and that as the criminal  proceedings had been started on the basis of a FIR which did not contain any  definite  accusation  and it amounted to  an  abuse  of process of the Court, they were liable to be quashed. [837G, 838B]     Since  the allegations in the FIR are the  same  against all  the accused persons, the entire proceedings as  against all the accused persons should be quashed. Accordingly,  the entire criminal proceedings are quashed. [838C]

JUDGMENT:     CRIMINAL  APPELLATE JURISDICTION: Criminal  Appeal  Nos. 380 of 1989 and 323 of 1988.     From  the  Judgment  and Order dated  28.1.1988  of  the Allahabad High Court in Crl. Misc. Appln. No. 995 of 1987.     G.  Ramaswamy,  Additional Solicitor General,  Anil  Dev Singh, Miss A. Subhashini and R.P. Kapur for the Appellants.     R.L.  Kohli,  Manoj  Saxena and R.D.  Upadhyay  for  the Respondents. The Judgment of the Court was delivered by     DUTT,  J. These two appeals by special leave,  one  pre- ferred by the State of U .P. and the other by the State Bank of India, are directed against the judgment of the Allahabad High  Court whereby the High Court has quashed the  criminal proceedings being Crime Case No. 40 of 1983 in the Court  of Special Judge, Anti-Corruption, only as against the respond- ent  R.K.  Srivastava. In quashing the  proceedings  in  the exercise of its jurisdiction under section 482 Cr. P.C., the High Court took the view that allegations made in the  First Information Report 836 (FIR) did not constitute any offence. In order to appreciate the view of the High Court, it is necessary to refer to  the FIR which reads as follows:               "An  information has been received  that  Shri               P.C.  Saxena  and Shri  Ram  Kumar  Srivastava               while posted and functioning as Accountant and               Clerk-cum-Godown  Keeper in the State Bank  of               India, Agriculture Development Branch, Budaun,               respectively entered into a criminal conspira-               cy  with Shri Sarwant Singh and his wife  Smt.               Rajwant  Kaur,  Props. of M/s.  National  Mill               Store, Budaun, during the month of June,  1982               to cheat the State Bank of India, Budaun,  and               in  pursuance of the said criminal  conspiracy               an.amount  of Rs.54,600’ was withdrawn on  the               basis of false credit entry made in the  books               of  accounts of the Bank and connected  credit               and  debit  vouchers were  also  prepared  and               passed  by the accused employees of  the  Bank               and payment were made to the accused  persons,               namely,  Shri Sarwant Singh and  Smt.  Rajwant

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             Kaur who tendered cheque No. 348459 dated 2.5.               1982  for Rs.18,600 cheque No. 348482 for  Rs.               19,200,  date 2.6. 1982 and cheque No.  502206               dated 2.6.82 for Rs. 16,800 = 54,600.                         The  above facts constitute  offence               punishable u/s 120-B, 420, 468,471 I.P.C.  and               5(2) r/w 5(1)(d) of PC Act, 1947.                         A  regular case is therefore  regis-               tered  and its investigation is  entrusted  to               Shri  V.P. Arya, Inspector of this  establish-               ment." According to the FIR, as against three cheques of the aggre- gate  amount  of Rs.54,600, presumably  of  three  different Banks,  a  credit  entry was made in the  accounts  of  M/s. National Mill Stores Co., Budaun, and M/s. New Manufacturing Co.,  Budaun, and their partners, Sardar Sarwant  Singh  and his  wife Smt. Rajwant Kaur, in the State Bank of India  and the  said  sum of Rs.54,600 was allowed to be  withdrawn  by them by the respondent and the accused P.C. Saxena.     The  allegations in the FIR appear to be vague  and  al- though  it  is alleged that the respondent and  the  accused P.C.  Saxena made false credit entries in the books  of  ac- counts  of the Bank and connected credit and debit  vouchers were also prepared and passed by them, no 837 particulars of the same have been given. It appears from the chargesheet  that the said Shri Sarwant Singh and  his  wife Smt.  Rajwant  Kaur and their firms, namely,  M/s.  National Mill  Stores  Co., Budaun, and M/s. New  ManufaCturing  Co., Budaun,  have current accounts in the State Bank  of  India, Budaun. After the said three cheques amounting to  Rs.54,600 were  tendered, the respondent and the accused  P.C.  Saxena sent  the  said cheques for clearance and allowed  the  said Shri  Sarwant Singh and his wife Smt. Rajwant Kaur to  with- draw the sum of Rs. 54,600 from their current account.     It  is now a well settled principle of law that  if  the allegations  made in the FIR are taken at their  face  value and accepted in their entirety do not constitute an offence, the criminal proceedings instituted on the basis of such FIR should be quashed. In the instant case, on the basis of  the said  FIR the respondent and the said P.C. Saxena  and  Shri Sarwant  Singh were charged under sections 120-B,  420,  468 and 471 I.P.C. and section 5(2) read with section 5(1)(d) of the  Prevention  of Corruption Act, 1947. According  to  the appellant, as no prima facie case was made out against  Smt. Rajwant  Kaur,  wife  of Shri Sarwant Singh,  she  has  been dropped from the array of the accused persons.     The  question is whether the facts disclosed in the  FIR constitute  the  offences with which the accused  have  been charged. It is manifestly clear from the allegations in  the FIR  that the respondent or the other accused had no  inten- tion  whatsoever  to make any wrongful gain or to  make  any wrongful loss to the Bank. They had accepted the said  three cheques amounting to Rs.54,600 and sent the same for  clear- ance  after debiting the LOC account. The said cheques  have been  encashed and the money was received by the State  Bank of  India. It may be that there was some delay in  crediting the LOC account or that the money against the three  cheques were credited in the accounts of the said Shri Sarwant Singh and his wife, but the allegations made either in the FIR  or in the charge-sheet do not show that the respondent and  the said  P.C.  Saxena had acted dishonestly, that  is  to  say, acted with a deliberate intention to cause wrongful gain  or wrongful  loss. In our opinion, the High Court  has  rightly held that the allegations made in the FIR do not  constitute

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any offence of cheating, nor do they constitute any  offence of  forgery.  It is true that it has been alleged  that  the said  sum of Rs.54,600 was withdrawn on the basis  of  false credit entries made in the books of accounts of the Bank and connected  credit and debit vouchers were also prepared  and passed  by  the respondent and the other accused.  When  the said sum of Rs.54,600 838 had  been allowed to be withdrawn by the said  Shri  Sarwant Singh and his wife, necessary entries had to be made in  the books  of accounts, but it is not understandable  how  these entries  can be characterised as false entries. No  document has been referred to in the FIR as the outcome of forgery.     The  High  Court has rightly held that as  the  criminal proceedings have been started against the respondent on  the basis  of a FIR which does not contain any definite  accusa- tion, it amounts to an abuse of process of the court and, as such,  is liable to be quashed. We entirely agree  with  the view expressed by the High Court.     The  High  Court  has quashed the  proceedings  only  as against the respondent No. 1, R.K. Srivastava. In our  opin- ion,  when the allegations in the FIR are the  same  against all  the accused persons, the entire proceedings as  against all  the accused persons including the said P.C. Saxena  and the said Shri Satwant Singh should be quashed.     Accordingly,  while we uphold the judgment of  the  High Court, we quash the entire criminal proceedings being  Crime Case No. 40 of 1983 also as against the accused P.C.  Saxena and  Shri  Sarwant  Singh. The appeals are  disposed  of  as above. N.P.V.                               Appeals disposed of. 839