Patna High Court
Ram Balak PrasadversusState Of Bihar and Anr
- Decided
- Disposal
- ALLOWED
- Bench
- SANDEEP KUMAR
Holding
The court held that no offence under the cited IPC provisions was made out against the petitioner and quashed the order taking cognizance.
Summary
The petitioner, a registered valuer, was charged under several IPC sections for allegedly participating in a bank fraud where forged title deeds were used as collateral. He contended that his role was limited to assessing market value of the properties and that verification of title documents was the bank’s and its legal counsel’s responsibility. The court examined the scope of a valuer’s duty, the elements of offences such as cheating, forgery, and criminal conspiracy, and found no evidence that the petitioner aided or abetted the fraud. Relying on prior judgments that held professionals not liable absent proof of negligence or participation, the court concluded that no offence was made out against the petitioner. Consequently, the order taking cognizance of the case was quashed as an abuse of process.
Issues considered
- Whether a registered valuer can be held liable under IPC sections 406, 409, 420, 467, 468, 471 and 120B for bank fraud involving forged title deeds.
- Whether the valuer had a statutory duty to verify the genuineness of title documents submitted by borrowers.
- Whether the petitioner participated in or abetted a criminal conspiracy as defined under Sections 107 and 120A of the IPC.
- Whether the prosecution against the petitioner constitutes an abuse of the judicial process.
Legislation cited
- Indian Penal Code — s. 107, 120, 120A, 406, 409, 420, 467, 468, 471
- Right to Information Act — s. 2005
Subjects
- valuer liability
- bank fraud
- forgery
- IPC sections
- criminal conspiracy
- abuse of process
- quashing of criminal proceedings
- professional duty
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
CRIMINAL MISCELLANEOUS No.43160 of 2016
Arising Out of PS. Case No.-366 Year-2008 Thana- GANDHIMAIDAN District- Patna
======================================================
Ram Balak Prasad S/o late Baiju Mahto Resident of 104, R P Tower , Near
Jagat Trade Centre, Fraser Road, P.S. Kotwali , District Patna.
... ... Petitioner/s
Versus
1. State Of Bihar
2. Chief Manager, UCO Bank, Exhibition Road, Patna, District Patna PIN-
800001.
... ... Opposite Party/s
======================================================
Appearance :
For the Petitioner/s : Mr.Siddhartha Prasad, Advocate
For the Opposite Party/s : Mr.Mitwesh Kumar Khare, APP
======================================================
CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
ORAL ORDER
6 13-01-2026 Heard learned for the petitioner and learned A.P.P. for
the State.
2. The petitioner has prayed for quashing of the order
dated 21.01.2016 passed by the Learned A.C.J.M., Patna in
connection with Gandhi Maidan P.S. Case No. 366/2008
whereby and whereunder the Learned Magistrate has taken
cognizance against the petitioner for the offences punishable
under section 406, 409, 420, 467, 468, 471 and 120 (B) of the
Indian Penal Code.
3. The present F.I.R bearing Gandhi Maidan P.S Case
No. 366/2008 dated 03.12.2008 , under section 406, 409, 420,
467, 468, 471, 474 and 120 (B) of the Indian Penal Code has
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been lodged on the basis of written report contained in letter
dated 28.11.2008 submitted by the then Chief Manager, U.C.O
Bank, Exhibition Road, Patna who was authorized to lodge this
complaint alleging therein that the then two Chief Managers of
Exhibition Road, Patna Branch, the then Sr. Manager of the
same Branch and the two Managers of the above said Branch of
the Bank entered into a criminal conspiracy in connivance with
the borrower & guarantors named in the F.I.R and abused their
official positions to provide undue advantage to the borrowers
and guarantors for getting Cash Credit Limit of Rs 10 Lakhs for
M/s Jai Mata Di, Rs 5 Lakhs for M/s Tyre Emporium, Rs 10
Lakhs for New Adarsh Medical Hall &Rs 4.5 Lakhs for M/s
India Motors. The said borrower & guarantors had offered their
properties as Collateral Securities for their loan accounts and the
same were fraudulent in nature as the Title Deeds of the
properties were fake as opined by the Empanelled
Solicitors/Lawyers of the Bank, due to which the bank suffered
a loss of Rs.29.54 Lakhs and these accounts have been classified
as Non-Performing Assets.
4. It is the case of the petitioner that he is an Engineer
by profession and has been granted License of a Registered
Valuer by Ministry of Finance, Government of India and he is
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just a Registered Valuer and does valuation of the property as
assigned by various Banks & other Financial Institutions. He
was just assigned the job of valuation of property by the Bank
which the petitioner did on the basis of documents provided to
him and the calculation were done by the petitioner on the basis
of market price of the land in the said locations and the
estimated cost of development over the land, to obtain the final
valuation of the property. The petitioner often had to visit the
location of the property for the same and he had submitted his
valuation report on 13.02.2004 wherein no misconduct
anywhere in the valuation of property was made out.
5. The learned counsel for the petitioner submits that
the petitioner was assigned the job to valuate one of the four
properties mentioned in the FIR and the same was done by him
and the report of the same was on the basis of the photocopy of
the Registered Sale Deed handed over to the petitioner by the
Bank which was submitted to the bank by the Borrower as
Collateral Security and therefore for this it is the Borrower's and
the Bank's responsibility to check the genuineness of the
Sale/Title Deed. He next submits that it is not the duty of the of
petitioner to check the authenticity of the Sale/Title Deed and
that the services of lawyer/advocate is sometimes taken by the
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bank to find out the genuineness of Sale/Title Deed and in the
present case also Legal Opinion of Mr. Narendra Saran
(Advocate) dated 05.03.2004 was taken, who had certified the
genuineness of right, title, interest or sale deed of the borrower.
6. The learned counsel for the petitioner further
submits that from the information received by one Chandra
Shekhar Tilak under the Right to Information Act, 2005 from
three leading nationalised banks at different dates, it is crystal
clear that that the role of the Valuer is limited only to the extent
of ascertaining the market value of the value offered as security
and nothing beyond that and it is the bank officials and the panel
advocate of the bank who are responsible for finding out the
genuineness of Sale/Title Deed offered by the borrower as
security.
7. He further submits that whenever any proposal for
loan is made to the bank by any borrower it is the Bank
Authorities including the Manager and the Field Officer who
processes the proposal and ask him about the properties which
can be furnished by the borrower as collateral security, and
thereafter the branch manager does the physical survey of the
collateral security and after being satisfied the Branch Manager
gets the Title verified by an Advocate, therefore it is not the duty
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of the valuer to find out the genuineness of the title of the
property.
8. Lastly, he submits that in the entire investigation
there is not even a whisper as to whether the valuation done by
the petitioner is bad or undervalued or overvalued. It is
categorically submitted that the Branch Manager gets the Title
verified by an Advocate, therefore it is not the duty of the
valuer-petitioner to find out the genuineness of the title of the
property. He further submits that in the entire investigation there
is not even a whisper as to whether the valuation done by the
petitioner is bad or undervalued or overvalued.
9. It is the submission of the learned counsel for the
petitioner that the entire allegation in the written report it is
apparent that borrower/Guarantor has submitted forged sale
deed in the bank as collateral security meant for equitable
mortgage. The petitioner has merely assessed the value of the
property which was mortgaged by the borrowers on the basis of
aforesaid sale deed. The petitioner has clearly mentioned in the
aforesaid report which was submitted in the Bank (Annexure-3)
that he is not responsible to the genuineness of the Title Deed or
the document as furnished by the borrowers.
10. The learned APP for the state has opposed the
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present application.
11. From the perusal of the present F.I.R it appears
that the Bank was defrauded to the tune of Rs. 29,54,000/- on
account of forged title deed of the collateral deed submitted to
the bank.
12. A Coordinate bench of this Court in the case of
Vijay Kumar Singh vs The State Of Bihar passed in Criminal
Miscellaneous No.27162 of 2011 order dated 10.12.2013 had
held as under -
“Considering the rival submission of the parties, it
is clear that the bank was defrauded basically by the loanee
Manoj Kumar, who pledged a fraudulent deed as a
collateral security and the petitioner being valuer was not
supposed to certify the genuineness and otherwise of the
title of the loanee over the land which was given to the bank
as collateral security.
This is not the case of the bank that any entrustment
was made to the petitioner, hence, no case under Section
406 IPC is made out against the petitioner nor there is any
evidence that the petitioner deceived the Bank, by
fraudulently or dishonestly inducing the Bank to deliver any
property or deceived the Bank to do or omit to do anything,
as the quantum of valuation of the land as assessed by the
petitioner is not in dispute. Hence, the petitioner cannot be
held liable for dishonestly inducing the Bank to deliver the
loan amount. Hence, no case under Section 420 IPC is
made out against the petitioner. Offence under Section 467
IPC is also not made out against the petitioner as the
alleged sale deed which was purported to be the valuable
security, is alleged to be pledged or given by way of
security by the loanee Manoj Kumar. Offence under Section
468 IPC is made out as the offence under this Section gets
constituted only when some one commits forgery by using a
document or electronic record for the purpose of cheating.
Hence, forgery, if any, has been done by the loanee. Offence
under Section 471 IPC is made out against the loanee who
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has knowingly submitted a forged sale deed by way of
collateral security.
The offence of abetment has been defined in Section
107 of the Indian Penal Code which reads as follows:
“107. Abetment of a thing.--A person abets
the doing of a thing, whoFirst.-Instigates any
person to do that thing; or Secondly.-
Engages with one or more other person or
persons in any conspiracy for the doing of
that thing, if an act or illegal omission takes
place in pursuance of that conspiracy, and in
order to the doing of that thing; or Thirdly.-
Intentionally aids, by any act or illegal
omission, the doing of that thing.”
Section 107 of the IPC clearly suggests that a
person abets the doing of a thing if he instigates any person
to do that thing or engages with one or more other person
or persons in any conspiracy for the doing of that thing or
intentionally aids, by any act or illegal omission, the doing
of that thing but the prosecution case does not reflect that
the petitioner in any way abetted or assisted the loanee.
Section 120A of the IPC defines the offence of
criminal conspiracy which reads as under :
“120A. Definition of criminal conspiracy.--
When two or more persons agree to do, or
cause to be done,- (1) an illegal act, or (2)
an act which is not illegal by illegal means,
such an agreement is designated a criminal
conspiracy: Provided that no agreement
except an agreement to commit an offence
shall amount to a criminal conspiracy unless
some act besides the agreement is done by
one or more parties to such agreement in
pursuance thereof.”
There is nothing on record to suggest that the
petitioner indulged in conspiracy with the loanee. The
petitioner claims that he visited the site of the land in
question along with Chartered Accountant, Neel Kanth, the
then Manager, Canara Bank and Arunjay Kumar, Advocate
and then valuated the land shown by the bank authorities
and the petitioner was not supposed to verify the title of the
land in question and the petitioner can only be charged with
the accusation of criminal conspiracy, once the conspiracy
to commit an illegal act is proved, where the act of one
conspirator becomes the act of the other.
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In the present case, there is neither any direct nor
circumstantial evidence to suggest that the petitioner was
part of the conspiracy. Similar view was taken in the case
of CBI, Hyderabad Vs. K. Narayana Rao (supra) where
the bank was defrauded after sanctioning of the housing
loan to 22 borrowers where the thrust of accusation was
against an advocate of the bank where it has been held in
paragraph nos. 27 to 31, in the following words:
“27……. A lawyer does not tell his client
that he shall win the case in all
circumstances. Likewise a physician would
not assure the patient of full recovery in
every case. A surgeon can not and does not
guarantee that the result of surgery would
invariably be beneficial, much less to the
extent of 100% for the person operated on.
The only assurance which such a
professional can give or can be given by
implication is that he is possessed of the
requisite skill in that branch of profession
which he is practicing and while
undertaking the performance of the task
entrusted to him, he would be exercising his
skill with reasonable competence. This is
what the person approaching the
professional can expect. Judged by this
standard, a professional may be held liable
for negligence on one of the two findings,
viz., either he was not possessed of the
requisite skill which he professed to have
possessed, or, he did not exercise, with
reasonable competence in the given case,
the skill which he did possess.
28. In Jacob Mathew vs. State of Punjab &
Anr. (2005) 6 SCC 1 this court laid down the
standard to be applied for judging. To
determine whether the person charged has
been negligent or not, he has to be judged
like an ordinary competent person exercising
ordinary skill in that profession. It is not
necessary for every professional to possess
the highest level of expertise in that branch
which he practices.
30. Therefore, the liability against an
opining advocate arises only when the
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lawyer was an active participant in a plan
to defraud the Bank. In the given case,
there is no evidence to prove that A-6 was
abetting or aiding the original conspirators.
31. However, it is beyond doubt that a
lawyer owes an “unremitting loyalty” to the
interests of the client and it is the lawyer’s
responsibility to act in a manner that would
best advance the interest of the client.
Merely because his opinion may not be
acceptable, he cannot be mulcted with the
criminal prosecution, particularly, in the
absence of tangible evidence that he
associated with other conspirators. At the
most, he may be liable for gross negligence
or professional misconduct if it is established
by acceptable evidence and cannot be
charged for the offence under Sections 420
and 109 of IPC along with other
conspirators without proper and acceptable
link between them. It is further made clear
that if there is a link of evidence to connect
him with the other conspirators for causing
loss to the institution, undoubtedly, the
prosecuting authorities are entitled to
proceed under criminal prosecution. Such
tangible materials are lacking in the case of
the respondent herein.”
In the light of the above discussion and considering
the materials on record, this court is of the view that no
offence, as charged, is made out against the petitioner.
Hence, allowing the present prosecution to continue will be
an abuse of the process of the court. Accordingly, to secure
the ends of justice, the order issuing processes dated
5.1.2011 after taking cognizance passed by the learned
Chief Judicial Magistrate, Patna in Patna Kotwali P.S.
Case no. 393 of 2008 including the entire prosecution is
hereby quashed.”
13. A coordinate Bench of this Court while dealing
with the allegation against a valuer in the case of Navin
Chandra Jha vs The State of Bihar passed in Criminal
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Miscellaneous No.4127 of 2015 had held as under -
3. Learned counsel for the petitioner has submitted
that petitioner is merely valuer of the property. He
has no concern to check the genuineness of the
document which has been produced by the borrower
with respect to property in question. Counsel for the
petitioner pointed out valuation report submitted by
the petitioner in the Bank which has been enclosed
as Annexure-3 wherein it is clearly mentioned that
valuer is not responsible for the genuinity of any
Title Deed or document related to the property
under valuation as furnished by the
borrower/banker. This valuation work is undertaken
by the valuer based upon the request from Sr.
Manager, Canara Bank. It has further been
submitted that there is no any allegation that
valuation done by this petitioner was incorrect. The
alleged Title Deed which was submitted by the
borrower in the Bank was found to be forged.
4. In the instant case there is allegation that Mr. Kakoli
Banerjee and Nav Kumar Banerjee were
partners/borrowers of the Canara Bank. They were
running a partnership firm in the name and style G.
Pharmaceuticals for the purpose of business of
medicine. They were sanctioned loan facilities of
cash credit limit of Rs.15,00,000/-. One Jai Raj
Prasad Gupta became the personal guarantee of the
aforesaid property. The borrowers have executed
equitable mortgage by means of sale deed No. 7090
of land and building situated in Mauza Mirchai
Bari, Thana No. 328, Tauzi No. 1239, Ward No. 09
(old) 33 (new) Plot No. 1168 (old) 274 (new),
appertaining to Khata No.27, Plot No. 1168. The
valuation of said property was assessed which
comes to Rs.16,00,000/- as per the report of the
Bank’s approved valuer, NavinChandra Jha,
(Chartered Engineer).
5. The informant has alleged that the aforesaid loan
became NPA. The Bank has tried his level best to
contact all the borrowers, partners and guarantor,
but they were found absent. Afterwards, genuineness
of the so called original sale Deed No. 7090 kept in
the Bank meant for equitable mortgage, was verified
and the same was found fake, forged and fabricated.
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6. In this manner from the entire allegation in the
written report it is apparent that
borrower/Guarantor has submitted forged sale
deed in the bank as collateral security meant for
equitable mortgage. The petitioner has merely
assessed the value of the property which was
mortgaged by the borrowers on the basis of
aforesaid sale deed. The petitioner has clearly
mentioned in the aforesaid report which was
submitted in the Bank (Annexure-3) that he is not
responsible for any genuinity of the Title Deed or
the document as furnished by the borrowers.
7. In such circumstances, the impugned order dated
13.2.2014 passed by the learned Chief Judicial
Magistrate, Katihar, in Katihar P.S. Case No. 154 of
2010, G.R. No. 1133 of 2010 along with the entire
criminal proceeding against the petitioner is hereby
quashed.”
14. This Court in the case of Navin Chandra Jha
vs The State of Bihar passed in Criminal Miscellaneous
No.11619 of 2019, had also quashed the order taking
cognizance.
15. The Hon’ble Supreme Court in the case of
Pepsi Food Limited and Anr. vs. Special Judicial Magistrate
and Others reported in (1998) 5 SCC 749 it has been held as
under:-
"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 allegation 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 fact
of the case and the law applicable thereto. He
has to examine the nature of allegations made
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in the Complaint and 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 scrutinize 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 examined if any offence is prima
facie committed by all or any of the accused.”
16. The Hon’ble Supreme Court in the case of G.
Sagar Suri vs. State of Uttar Pradesh reported as (2000) 2 SCC
636 had held that before issuing process, a criminal court has to
exercise a great deal of caution.
17. From the aforesaid, it is abundantly clear that
the present petitioner who was merely a valuer, can not be
fastened with criminal liability since ascertaining the
genuineness and vetting the veracity of the forged document
was beyond his official duty. Therefore, the continuation of the
criminal prosecution against the petitioner would be an abuse of
the process of law. Furthermore, this Court has perused the
order taking cognizance dated 21.01.2016 and the same appears
to have been mechanically passed without application of mind
and is therefore unsustainable.
18. Considering the aforesaid discussions, the
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impugned order taking cognizance dated 21.01.2016 passed by
the Learned A.C.J.M., Patna in connection with Gandhi Maidan
P.S. Case No. 366/2008 is quashed and set aside.
19. This application is allowed.
(Sandeep Kumar, J)
tusharika/-
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