IN THE SUPREME COURT OF INDIA  

CRIMINAL APPELLATE JURISDICTION  

CRIMINAL APPEAL NO. 1582 OF 2009 (Arising out of SLP(crl.) No.  1875 of 2008)

M.N.Ojha & Ors. …Appellants   

Versus

Alok Kumar Srivastav & Anr. …Respondents

J U D G M E N T  

B.SUDERSHAN REDDY,J.

Leave granted.  

2. This appeal by grant of special leave is directed by the  

appellant, assailing the judgment and order dated 3.1.2007  

passed by the High Court of Judicature at Patna in Criminal  

Miscellaneous No. 18838 of 2004 by which the High Court  

dismissed the petition  for quashing the criminal proceedings

arising out of Complaint Case  No. 916 (c) of 2003 pending  

on the file of Sub-Divisional Judicial Magistrate, Patna.  

3. The brief factual matrix of the case is as under:  

On  21.12.1998;  Punjab  National  Bank,  Patna  City  

sanctioned a loan amount  of  Rs.  5 lakhs to M/s.  Nirmala  

Alankar House, Patna City, a proprietary concern owned by  

one  Jatinder  Mohan.  The  said  Jatinder  Mohan  furnished  

security  of  five  guarantors  including  the  respondent-  

complainant who in turn deposited Fixed Deposit  Receipts  

(FDRs) worth Rs. 50,000/-, each duly signed authorizing the  

bank to appropriate the proceeds of FDRs along with interest  

if the timely payments are not made by the borrower. Each  

one of  them had also  executed and signed Agreement of  

guarantee  jointly  and  severally  guaranteeing  to  pay  the  

bank after demand in writing all  principal,  interest,  costs,  

charges  and  expenses  due  and  which  may  at  any  time  

become due to the bank from the borrower,  on accounts  

opened in  respect  of  the  said  limits  down to  the date of

payment and also all loss or damages, costs, charges and  

expenses  occasioned  to  the  bank  by  reason  of  omission,  

failure or default temporary or otherwise in such payment by  

the borrower. The guarantors  further agreed that the bank  

may  enforce  the  guarantee  without  enforcing,  selling  or  

realizing any of the securities kept under lien, hypothecated,  

pledged or mortgaged with it, notwithstanding that any bills  

or  other   instruments  given  by  the  borrower  in  the  said  

account may be in circulation for collection and outstanding.  

4. The bank in the month of March, 2000 having realized  

that  the  loan  account  became  totally  irregular  since  the  

borrower  was  not  paying  any  amount  whatsoever  as  

undertaken in terms of the agreement. On 26.3.2002, the  

first  appellant  –  Senior  Manager  having  realized  that  the  

recovery  of  bank  loan  became  impossible  adjusted  some  

amounts  from  the  FDRs  furnished  by  the  guarantors  as  

security towards the dues of the borrower. The bank vide its  

notice dated 27.12.2002 informed the borrower as well as  

the guarantors that the loan account should be regularized

to which there was no response.  This was followed by an  

FIR lodged by the bank with the concerned police station  

against  the  borrower  and  guarantors  including  the  

respondent  for  cheating  and  for  misappropriation  of  

hypothecated goods.  The said case is pending trial.  

5. The guarantors addressed a legal notice dated nil to the  

Deputy  General  Manager,  Vigilance  Cell,  PNB,  New Delhi,  

Zonal  Manager,  PNB,  Patna  and  Regional  Manager  PNB,  

(Haridwar)  alleging therein that they were put to serious  

inconvenience  due  to  the  misconduct  on  the  part  of  

Appellant  no.  1.  It  was also alleged that  no proper steps  

were  taken  against  the  borrower  for  realization  of  loan  

amounts before proceedings against them and to encash the  

FDRs offered by them as sureties for recovery of loan.  

6. In the said legal notice it was further alleged that one  

Prakash Mohan while he was working in Patna City Branch  

as assistant had managed a cash credit facilities for a sum of  

Rs. 5 lakhs in the name of his own brother Jitender Mohan

and  that  both  Prakash  as  well  as  appellant  no.  1  have  

colluded with each other with a view to defraud the bank  

and “put the blame upon the innocent guarantors”.   

7. Thereafter,  the  complainant  Alok  Kumar  Shrivastava  

who  was  one  of  the  guarantors,  being  aggrieved  by  the  

action of the bank in appropriating the fixed deposit amount,  

filed a Complaint Case No. 916 of 2003 in the court of SDJM,  

Patna  City  under  Section  409,422,426  and  120B  IPC  in  

which the other three guarantors were shown as witnesses.  

The learned SDJM, Patna City, took cognizance of the case  

vide  order  dated  22.3.2004;  and  directed  non-bailable  

warrant  of  arrest  against  all  appellants  herein  who  were  

named as the accused persons in the complaint.  

8. In  the  meanwhile,  the  bank  initiated  proceedings  

under  the  Public  Demand  Recovery  Act  for  recovery  of  

balance amounts payable by the borrower after adjustment  

of the fixed deposit amounts.

9. The appellants being aggrieved by the order of SDJM,  

Patna City, Patna preferred a petition under Section 482 of  

the  Code  of  Criminal  Procedure  in  the  High  court  of  

Judicature  at  Patna  to  quash  the  criminal  proceedings  

initiated against them by the respondent-complainant. The  

High Court disposed of the said petition summarily without  

assigning any reasons whatsoever in the following manner:  

“Having  considered  the  materials  on  record and facts stated in the complaint  petition, I do not find any merit in this  application and so the impugned order  does not require any interference. The  facts  are  to  be  examined  and  duly  considered at the appropriate stage of  trial.”

Hence this appeal.

SUBMISSIONS:-

 10 Shri  Dhruv Mehta, learned counsel  for the appellants  

submitted that the High Court failed to appreciate that the  

complaint  has  been  lodged  with  a  completely  malicious  

intent  to  simply  harass  the  appellants  who  were  only

discharging their duties as public servants which is nothing  

but an abuse of the process of law. The averments made in  

the complaint are totally indefinite in their nature and none  

of  the  ingredients  of  the  offences  alleged  to  have  been  

committed are made out against the appellants.  It was also  

contended that the summoning order has been passed by  

the learned SDJM without application of mind and contrary  

to  the  law  laid  down  by  this  court  in  more  than  one  

judgment. It was submitted that the complaint was filed as a  

counter  blast  to  the  FIR  already  lodged  by  the  bank  on  

20.2.2003  for  cheating  and  misappropriation  of  

hypothecated goods against the borrower and as well as the  

guarantors.  

11. Though the respondent was served on 16.5.2007, he  

neither appeared in person nor through counsel.

 12.  The respondent-complainant is one of the guarantors  

who  guaranteed  repayment  of  the  loan  obtained  by  the  

borrower. There is no dispute that the loan account became

totally irregular and the bank has been left with no option  

but  to  appropriate  the  FDRs  along  with  interest  accrued  

thereon. The action initiated was in terms of the documents  

executed by the complainant along with other guarantors.  It  

is evident from the record that the bank had lodged FIR with  

the police on 20.2.2003, for cheating and misappropriation  

of hypothecated goods against the borrower as well as the  

guarantors.  The  police  initiated  action  against  the  

complainant and others based on the said FIR lodged by the  

first appellant on behalf of the bank. This fact is specifically  

admitted in the legal notice issued for and on behalf of the  

guarantors including the complainant.   We have no doubt  

whatsoever in our mind that the complaint dated 3.12.2003;  

filed by the complainant against the appellants almost after  

10 months of the FIR lodged by the first appellant on behalf  

of  the  bank  is  nothing  but  a  clear  abuse  of  the  judicial  

process to harass the appellants.   The complainant himself  

admitted in his complaint that the account in question was  

gradually becoming irregular and the Manager ought to have

taken  steps  for  sale  of  the  hypothecated  goods  and  

appropriated the sale proceeds towards the recovery of loan  

amounts. It is the case of the complainant in his complaint  

that  the  first  appellant  should  have  appropriated  the  

hypothecated  goods  first  and  only  thereafter  steps  could  

have been taken for recovery of the balance amount if any  

from  the  guarantors.   It  was  alleged  that  the  Branch  

Manager in conspiracy with the brother of the borrower who  

is  none other  than an employee of  the  bank allowed the  

operation  of  the  account  till  the  things  became  “bad  to  

worse”.   According to him, the Branch Manager conspired  

with the borrower and committed criminal breach of trust.  

Repeated assertions have been made in the complaint that  

all the accused persons in conspiracy with each other have  

diverted huge bank money in a fraudulent manner for their  

own benefit.  Surprisingly enough neither the borrower nor  

his brother with whom the bank officers are alleged to have  

colluded  is  arrayed  as  accused.   The  complainant  in  his  

complaint freely used choicest expressions such as “fraud,

collusion,  conspiracy and cheating etc.”  but did  not  make  

any concrete allegations against the appellants suggesting  

commission  of  any  offence.  That  a  plain  reading  of  the  

complaint and taking the allegations and averments made  

therein  to  be  true  on  their  face  value  do  not  reveal  the  

commission  of  any  offence  whatsoever  by  the  appellants  

who were only taking steps to realize the amount due to the  

bank from the borrower  and in the process encashed the  

FDRs offered by the guarantors as security for the discharge  

of the loan. What is the crime they have committed even if  

they did  not  proceed against  the  hypothecated properties  

before realizing the FDRs offered by guarantors?  Where is  

the misappropriation of money?  Whom did they cheat?  

13. In our considered view, criminal law has been set in  

motion  by  the  complainant  to  harass  the  bank  officers  

needlessly  and  to  wreak  personal  vengeance  in  order  to  

bring  them  under  pressure  not  to  further  prosecute  the  

proceedings already initiated by the appellants against the  

complainant on behalf of the bank.

14. In our  considered  opinion,  the learned SDJM set  the  

criminal law in motion against the appellants without even  

examining  the  allegations  and  averments  made  in  the  

complaint filed by the respondent-complainant.  The learned  

SDJM took cognizance of the case without considering the  

allegations on merits.  Had the learned SDJM perused the  

complaint  properly  he  would  have  realized  that  the  

complainant himself had made a mention about the lodging  

of  the FIR for criminal  breach of trust and other offences  

against  the  respondent-complainant  and  others.  Had  he  

looked into the complaint properly, he would have certainly  

asked the complainant to furnish the copy of the said FIR.  A  

copy of the legal notice issued on behalf of the respondent-

complainant  to  the  appellants  was  filed  along  with  the  

complaint  and  a  mention  is  made  about  it  in  the  order  

passed by the learned SDJM.  Had the learned SDJM perused  

the  said  legal  notice,  he  would  have  realized  that  the  

complainant  himself  admitted  about  his  execution  of  

agreement  of  guarantee  and  other  documents

unconditionally  agreeing  to  discharge  the  loan  amount  in  

case  of  failure  of  the  principal  borrower  to  pay  the  said  

amount to the bank.  Had the learned SDJM applied his mind  

to the facts and circumstances and sequence of events and  

as well as the documents filed by the complainant himself  

along with the complaint, surely he would have dismissed  

the complaint.  He would have realized that the complaint  

was  only  a  counter  blast  to  the  FIR lodged by  the  Bank  

against  the  complainant  and  others  with  regard  to  same  

transaction.  This Court in  Pepsi Foods Ltd. & Anr.   Vs.  

Special  Judicial  Magistrate  &  Ors. [(1998)5  SCC  749  

held:

“28. Summoning of an accused in a criminal  case is a serious matter. Criminal law cannot  be set into motion as a matter of course. It is  not  that  the  complainant  has to bring only  two  witnesses  to  support  his  allegations  in  the complaint  to  have  the  criminal  law set  into  motion.  The  order  of  the  Magistrate  summoning the accused must reflect that he  has applied his mind to the facts of the case  and  the  law  applicable  thereto.  He  has  to  examine  the  nature  of  allegations  made  in  the complaint and the evidence both oral and  documentary  in  support  thereof  and  would  that  be  sufficient  for  the  complainant  to  succeed  in  bringing  charge  home  to  the  accused.  It  is  not  that  the  Magistrate  is  a

silent  spectator  at  the time of  recording of  preliminary  evidence  before  summoning  of  the accused. The Magistrate has to carefully  scrutinise  the  evidence  brought  on  record  and may even himself  put questions to the  complainant  and  his  witnesses  to  elicit  answers  to find  out  the truthfulness  of  the  allegations or otherwise and then examine if  any offence is prima facie committed by all or  any of the accused.”

The case on hand is a classic illustration of non-application  

of mind by the learned Magistrate.  The learned Magistrate  

did not scrutinize even the contents of the complaint, leave  

aside  the  material  documents  available  on  record.  The  

learned Magistrate truly was a silent spectator at the time of  

recording  of  preliminary  evidence  before  summoning  the  

appellants.  

15. The High Court committed a manifest error in disposing  

of the petition filed by the appellants under Section 482 of  

the Code without  even adverting to the basic  facts  which  

were placed before it for its consideration. It is true that the  

court in exercise of its jurisdiction under Section 482 of the  

Code  of  Criminal  Procedure  cannot  go  into  the  truth  or

otherwise of the allegations and appreciate the evidence if  

any available on record.  Normally, the High Court would not  

intervene  in  the  criminal  proceedings  at  the  preliminary  

stage/when  the  investigation/enquiry  is  pending.  

Interference by the High Court in exercise of its jurisdiction  

under Section 482 of Code of Criminal Procedure can only be  

where  a  clear  case  for  such  interference  is  made  out.  

Frequent  and  uncalled  for  interference  even  at  the  

preliminary stage by the High Court may result in causing  

obstruction  in  progress  of  the  inquiry  in  a  criminal  case  

which may not be in the public interest.   But at the same  

time the High Court cannot refuse to exercise its jurisdiction  

if  the interest of justice so required where the allegations  

made in the FIR or complaint are so absurd and inherently  

improbable  on  the  basis  of  which  no  fair-minded  and  

informed  observer  can  ever  reach  a  just  and  proper  

conclusion  as  to  the  existence  of  sufficient  grounds  for  

proceeding.    In  such  cases  refusal  to  exercise  the  

jurisdiction  may equally result in injustice more particularly

in  cases  where  the  Complainant  sets  the  criminal  law  in  

motion with a view to exert pressure and harass the persons  

arrayed as accused in the complaint. It is well settled and  

needs no restatement that the saving of inherent power of  

the High Court in criminal matters is intended to achieve a  

salutary  public  purpose  “which  is  that  a  court  proceeding  

ought not to be permitted to degenerate into a weapon of  

harassment or persecution. If such power is not conceded, it  

may even lead to injustice”. [See: State of Karnataka Vs.  

L. Muniswamy (1977) 2 SCC 699). We are conscious that  

inherent powers do not confer  an arbitrary jurisdiction on  

the High Court to “act according to whim or caprice. That  

statutory  power  has  to  be  exercised  sparingly,  with  

circumspection  and  in  the  rarest  of  rare  cases”.  [See:  

Kurukshetra University Vs.  State of Haryana (1977) 4  

SCC 451].  

16. This is one case where the averments and allegations  

made in the complaint do not disclose the commission of any  

offence by the appellants or any one of them.  They were

merely discharging their  duties to realize and recover the  

amounts due to the bank from the borrower as well as the  

guarantors.  The  complaint  obviously  has  been  filed  as  

counter  blast  to  the  proceedings  already  initiated  by  the  

bank including the first information report lodged by the first  

appellant against the complainant and the borrower for the  

offences  of  cheating  and  misappropriation.   Sequence  of  

events undoubtedly suggests that the criminal proceedings  

have been maliciously instituted with an ulterior motive of  

wreaking vengeance on the appellants and with a view to  

spite them due to personal grudge. It was clearly intended  

to prevent the public servants from discharging their duties.  

The criminal law has been set in motion by the learned SDJM  

by mere asking to do so by the complainant.  The High Court  

almost  abdicated  its  duty  in  refusing  to  exercise  its  

jurisdiction  under  Section  482  of  the  Code  of  Criminal  

Procedure though the case on hand required its interference  

in  order  to  prevent  abuse  of  the  process  by  a  court  

subordinate to it.  A clear case is made out requiring our

interference to secure the ends of justice.  

17. For all the aforesaid reasons, the impugned order of the  

High Court is set aside and the criminal proceedings arising  

out of Complaint Case No. 916 (c) of 2003 are quashed. The  

appeal is, accordingly, allowed.  

……………………………………J.       ( R.V. Raveendran)

……………………………………J.      (B. Sudershan Reddy)

New Delhi;   August  21, 2009.  -