HDFC Bank Limited v. V. Premachandra Kamath and State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.HARIPRASAD** **FRIDAY, THE 3RD DAY OF JANUARY 2014/13TH POUSHA, 1935** ## **Crl.MC.No. 1255 of 2012 ()** **--------------------------CC. NO.305/2011 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT (ECONOMIC OFFENCES), ERNAKULAM. ........** ## **PETITIONERS/ACCUSED:** **------------------------------------** **1. HDFC BANK LIMITED, HDFC BANK HOUSE, CORPORATE OFFICE, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400 013, REPRESENTED BY ITS MANAGING DIRECTOR OF MR. ADITYA PURI.** **2. MR. ADITYA PURI, MANAGING DIRECTOR, HDFC BANK LIMITED, HDFC BANK HOUSE, CORPORATE OFFICE, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400 013.** **3. MR. AJITH AMBAJI KADAM,** - **S/O. AMBAJI KADAM, DEPUTY VICE PRESIDENT, HDFC BANK LIMITED, HDFC BANK HOUSE, CORPORATE OFFICE, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400 013.** **4. MR. P.R. PRADEEP, S/O. P.N. RAVI, DEPUTY VICE PRESIDENT, HUMAN RESOURCES, HDFC BANK, S.L. PLAZA, PALARIVATTOM, KOCHI-682 025.** **5. MR. SANJAY DONGRE,** - **EXECUTIVE VICE PRESIDENT (LEGAL) & COMPANY SECRETARY, HDFC BANK LIMITED, HDFC BANK HOUSE, CORPORATE OFFICE, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400 013.** **BY SRI.P.VIJAYA BHANU, SENIOR ADVOCATE. ADV. SRI.M.REVIKRISHNAN.** ## **RESPONDENTS/COMPLAINANT AND STATE:** **-----------------------------------------------------------------** **1. V. PREMACHANDRA KAMATH, AGED 61 YEARS, S/O. LATE VENKETESHWARA KAMATH, VENCHANDA HOUSE NO. 49/723A, KRISHNA LANE, ELAMAKKARA P.O., KOCHI-682 026.** ## **Crl.MC.No. 1255 of 2012** ## **2. STATE OF KERALA,** **REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **R1 BY ADVS. SRI.K.K.ASHKAR,** **SMT.ASHIRA MOHAMED ASHROF. R2 BY PUBLIC PROSECUTOR SMT.BINDU GOPINATH.** **THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 03-01-2014, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **rs.** ## **Crl.MC.No. 1255 of 2012** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:-** ## **ANNEXURE A** **CERTIFIED COPY OF THE PRIVATE COMPLAINT PREFERRED BY THE 1ST RESPONDENT BEFORE THE COURT OF THE ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCE), ERNAKULAM DATED 21/07/2011.** ## **ANNEXURE B** **COPY OF THE 'A' DAIRY PROCEEDINGS IN C.C. NO.305/2011 OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (ECONOMIC OFFENCE) COURT, ERNAKULAM.** ## **RESPONDENT'S ANNEXURES:-** **NIL.** ## **//TRUE COPY//** **P.A. TO JUDGE** **rs.** ## **A.HARIPRASAD, J.** ## **-----------------------------------------------Crl.M.C.No.1255 of 2012** ## **-----------------------------------------------Dated this the 3[rd] day of January, 2014.** ## **O R D E R** Petitioners are accused in C.C No.305/2011 on the file of the Additional Chief Judicial Magistrate Court (Economic Offences), Ernakulam. They are prosecuted for offences punishable under Sections 406, 197 and 120B r/w Section 34 I.P.C. Case in Annexure A complaint, stated briefly, are as follows :- Complainant/first respondent was an employee of Lord Krishna Bank Limited, which was merged in 2007 with Centurion Bank of Punjab Limited. Later, the first accused bank took over Centurion Bank. It is the admitted case that the complainant was terminated from the service of the accused bank. There was some dispute pending before the Labour Court, in connection with the amounts due to the complainant. That was finally disposed of on 30-05-2008. The bank quantified the amount due to the complainant as Rs.9 Lakhs as required under the provisions of the Income Tax Act. They deducted tax on this amount. The amount after deducting tax was disbursed to the complainant on 17-09-2008. Learned **Crl.M.C.No.1255 of 2012 2** counsel for the complainant submitted that the bank should have issued TDS on 30-04-2009, which is the last date of that financial year. According to the complainant, he made a request for TDS on 5-05-2009. On 7-05-2009 he received an e-mail stating that TDS will be issued soon by the bank. On 27-05-2009 the complainant received another e-mail from the bank asking for his PAN number. It is submitted that on 01-06-2009 the bank issued TDS dated 30-04-2009 and showing a wrong PAN number. Again the bank asked the complainant to send a scanned copy of the PAN on 8-06-2009. Thereafter, the complainant sent the information as required by the bank and on 16-06-2009 complainant received TDS certificate and that too was dated 30-04-2009. According to the learned counsel for the complainant, undue delay on the part of the bank authorities in issuing TDS resulted in monitory loss in terms of interest for the excess amount deducted as tax. It is also contended by the complainant that the TDS issued by the bank was a false certificate attracting to the offence punishable under Section 197 IPC. 2. Learned counsel for the petitioner submitted that the **Crl.M.C.No.1255 of 2012 3** officers of the bank have been arraigned in the complaint in individual names, which itself is illegal. Further, the officers acted _bonafide_ and they cannot be prosecuted for inadvertent mistakes, if at all any said to have occurred in TDS. It is also contended that none of the offences alleged against the petitioners is legally maintainable. 3. Heard the learned counsel for the petitioners, first respondent and the learned Public Prosecutor. 4. Learned counsel for the petitioners relying on _**R.Kalyani v. Janak V.Mehta and Others ( 2009(1) SCC 516)**_ contended that none of the petitioners can be roped in this case for the alleged offence, even if we assume that any offence has been committed by the bank. Relying on paragraph 30 of the decision, it is contended that vicarious liability can be fastened in a criminal case only by reason of a provision of the statute and not otherwise. It is also argued on the basis of the said decision that for fastening a vicarious liability, a legal fiction has to be created. In this case, even if the entire allegations in the complaint are taken as true, no criminal offence is attracted against the petitioners, contended by the learned **Crl.M.C.No.1255 of 2012 4** counsel for the petitioners. 5. Considering the averments in the petition and those borne out from the complaint, I am of the view that the petitioners 2 to 5 cannot be personally prosecuted for the alleged offence. The grievance of the complainant that there had been a criminal breach of trust and issuance of false certificate could be only attributed at any rate to the first accused bank, represented by its Managing Director. Therefore, the petition is liable to be quashed as against petitioners 2 to 5 (accused 2 to 5). 6. Learned counsel for the petitioners contended that Section 202 of the Code of Criminal Procedure 1973, (shortly stated 'Cr.P.C') underwent amendment by Act 25 of 2005 which came into force on 23-06-2006. After the amendment, any Magistrate on receipt of a complaint of an offence shall, in a case where the accused is residing at a place beyond the area in which he exercises jurisdiction, postpone the issue of process against the accused, and either inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit, for the purpose of deciding whether or not there is sufficient ground for **Crl.M.C.No.1255 of 2012 5** proceeding. According to the learned counsel for the petitioner, accused 2 to 5 are persons, admittedly residing outside the jurisdiction of the court and no offence can be taken cognizance of against them without following the procedure mentioned in Section 202 Cr.P.C. In the case of the first accused bank, it can be contended that since it does business at various parts of the State, the establishment of the Corporate office at Bombay need not be taken as the criterion for conferring jurisdiction on the court. However, I do not intend to make any finding regarding this aspect and it is left open to the trial court to consider this question. The learned Magistrate has not considered none of these matters and has taken cognizance of the case on the sworn statement of the complaint. It is therefore contended on behalf of the petitioners that since the allegations in the complaint are so elaborate in nature, the Magistrate should have gone in for an enquiry under Section 202 Cr.P.C. 7. Considering the submissions at the Bar and the materials on record, I am of the view that taking cognizance of the case by the Magistrate on the complaint is not legally sustainable. There is no reason for taking cognizance against accused 2 to 5 and therefore **Crl.M.C.No.1255 of 2012 6** that has to be set aside. Since the learned Magistrate committed violation of law in taking cognizance of the case, I find that the action of taking cognizance is liable to be set aside. In the result, the Crl.M.C is allowed. The action of the learned Magistrate in taking cognizance on the complaint is found to be not legal. Therefore, it is set aside. The learned Magistrate shall consider whether an enquiry under Section 202 Cr.P.C is to be conducted before taking cognizance against the first accused in this matter. The complainant shall appear before the court below on 03-02-2014. The court below shall dispose of the matter in accordance with law, untrammeled by observations contained in this order. All pending interlocutory applications will stand dismissed. **Sd/-** **A.HARIPRASAD, JUDGE.** //True Copy// P.A to Judge amk