Supreme Court of India
HDFC BANK LTD.versusTHE STATE OF BIHAR & ORS.
- Citation
- 2024 INSC 807
- Decided
- 22 October 2024
- Disposal
- Appeal(s) allowed
Holding
The Supreme Court held that the FIR does not prima facie disclose any of the essential ingredients of the alleged offences, and therefore must be quashed under the inherent power of Section 482 CrPC.
Summary
The Income Tax Department ordered HDFC Bank to stop operation of certain lockers and accounts, but later revoked the order only for the accounts, leading bank officials to mistakenly allow a locker to be operated. The department filed a complaint and an FIR was registered against the bank and its officials for multiple IPC offences. HDFC Bank sought quashing of the FIR under Section 482 of the CrPC, arguing that the FIR did not disclose any mens rea or the essential ingredients of the alleged offences. The Supreme Court examined whether the FIR, on its face, made out a cognizable offence and held that it failed to disclose the requisite elements of Sections 420, 406, 409, 462 and others. Consequently, the Court found the FIR to be prima facie untenable and ordered its quashment, allowing the appeal. The decision underscores that courts must conduct a prima facie test of the FIR before exercising the inherent power to quash criminal proceedings.
Issues considered
- What is the nature of enquiry required under Section 482 CrPC when determining the quashability of an FIR?
- Does the FIR disclose the essential ingredients of offences under Sections 420, 406, 409, 462 and other IPC provisions alleged against HDFC Bank?
- Can the High Court quash an FIR when the allegations, taken at face value, do not prima facie constitute a cognizable offence?
Legislation cited
- Code of Criminal Procedure, 1973s. 482
- Income Tax Act, 1961s. 132(1), s. 132(2), s. 132(3), s. 275A
- Indian Penal Code, 1860s. 120B, s. 201, s. 206, s. 217, s. 34, s. 37, s. 406, s. 409, s. 420, s. 462
- Information Technology Act, 2000s. 275A
Headnote
Issue for Consideration What is the nature of enquiry while determining quashing of a First Information Report u/s.482 Cr.P.C., against a Bank and its Officials. Headnotes† Criminal law – Essential ingredients for offence under Section 420 of IPC – Question of mens rea does not must disclose the following ingredients to make out an offence u/s.420 : (i) That the Accused has induced anyone since inception; (ii) That the inducement was fraudulent or dishonest; (iii) That mens rea existed at the time of such inducement. The Accused/Bank is a jurisdiction person, and as
Subjects
Quashing of FIRSection 482 CrPCIngredients of offence under Section 420 IPCIngredients of offence under Sections 406 and 409 IPCMens reaCognizable offence
Judgment
[2024] 10 S.C.R. 1902 : 2024 INSC 807
HDFC Bank Ltd.
v.
The State of Bihar & Ors.
(Criminal Appeal No. 4324 of 2024)
22 October 2024
[B.R. Gavai* and K.V. Viswanathan, JJ.]
Issue for Consideration
What is the nature of enquiry while determining quashing of a First
Information Report u/s.482 Cr.P.C., against a Bank and its Officials.
Headnotes†
Criminal law – Essential ingredients for offence under Section
420 of IPC – Question of mens rea does not arise for a juristic
person:
Held: The FIR must disclose the following ingredients to make out
an offence u/s.420 : (i) That the Accused has induced anyone since
inception; (ii) That the inducement was fraudulent or dishonest;
(iii) That mens rea existed at the time of such inducement. The
Accused/Bank is a jurisdiction person, and as such, the question of
mens rea does not arise. However, on reading of the F.I.R., there
is nothing to show that the Accused/Bank or its staff members had
dishonestly induced someone to deceived to deliver any property
to any person, and that the mens rea existed at the time of such
inducement – Thus, the ingredients to attract the offence u/s.420
I.P.C. would not be available. [Paras 20 and 21]
Criminal law – Section 482 CrPC – Quashing of FIR – Prima
facie inquiry as to whether the ingredients of the offence in
the FIR are made out or not.
Criminal law – Essential ingredients for offence under Section
406, 409 and 462 of IPC:
Held: The following ingredients will have to be made out for the
offence u/s.409 I.P.C. – (a) That there has been any entrustment
with the property, or with any dominion over property on a person
in the capacity of a public servant or banker, etc.; (b) That the
said person commits criminal breach of trust in respect of that
property – For bringing out the case under criminal breach of
* Author
[2024] 10 S.C.R. 1903
HDFC Bank Ltd. v. The State of Bihar & Ors.
trust, it will have to be pointed out that a person, with whom
entrustment of a property is made, has dishonestly misappropriated
it, or converted it to his own use, or dishonestly used it, or
disposed of that property – In the present case, there is no
allegation of entrustment of property which the Accused/Bank has
misappropriated, and thus, the provisions of Section 406 and 409
I.P.C. are not applicable – Since there was no entrustment of any
property with the Accused/Bank, the ingredients of Section 462
I.P.C. are also not applicable. [Paras 22 to 25]
Criminal Law – Quashing of F.I.R.:
Held: Relied upon the Judgment in State of Haryana and others
v. Bhajan Lal and Others, [1990] Supp. 3 SCR 259 : 1990 INSC
363 : (1992) Supp. 1 SCC 335, wherein it was held that an F.I.R.
can be quashed where the allegations in the F.I.R. do not disclose
a cognizable offence, or where the uncontroverted allegations made
in the F.I.R. and the evidence collected in support of the same do
not disclose the commission of any offence. [Paras 28 and 29]
Case Law Cited
Arnab Manoranjan Goswami v. State of Maharashtra & Ors.
[2020] 11 SCR 896 : 2020 INSC 665 : (2021) 2 SCC 427 – relied
upon
State of Haryana and Others v. Bhajan Lal and Others [1990]
Supp. 3 SCR 259 : 1990 INSC 363 : (1992) Supp. 1 SCC 335 –
relied upon.
List of Acts
Code of Criminal Procedure, 1973; Penal Code, 1860.
List of Keywords
Quashing of F.I.R.; Ingredients of offence u/s.420 IPC; Ingredients
of offence u/ss.406 and 409 IPC.
Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
4324 of 2024
From the Judgment and Order dated 08.06.2022 of the High Court
of Judicature at Patna in CWJC No. 1375 of 2021
1904 [2024] 10 S.C.R.
Digital Supreme Court Reports
Appearances for Parties
Neeraj Kishan Kaul, Sr. Adv., Vikram B. Trivedi, Faisal Sayyed,
Nagarkatti Kartik Uday, Sanidhya Kumar, Ms. Pritha Suri,
Advs. for the Appellant.
Manish Kumar, Divyansh Mishra, Venkatraman Chandrashekhara
Bharathi, H R Rao, Ms. Priyanka Terdal, Udai Khanna, Shashank
Bajpai, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Judgment
B.R. Gavai, J.
1. Leave granted.
2. This appeal challenges the judgment and order dated 8th June, 2022
passed by the learned Single Bench of the High Court of Judicature
at Patna in Criminal Writ Jurisdiction Case No. 1375 of 2021 wherein
the learned Single Judge dismissed the Writ Petition preferred by
the present appellant, HDFC Bank1, to quash the First Information
Report2 being Case No. 549 of 2021 registered at Gandhi Maidan
Police Station, Patna on 22nd November, 2021, against certain officials
of the appellant-bank working at its Exhibition Road Branch, Patna
for the offences punishable under Sections 34, 37, 120B, 201, 206,
217, 406, 409, 420 and 462 of the Indian Penal Code, 18603.
3. The facts which give rise to the present appeal are as under:-
3.1 In October, 2021, Smt. Priyanka Sharma, Deputy Director of
Income Tax (Investigation), Unit-2(2), Respondent No. 5 in the
present proceedings, conducted a search and seizure operation
in the case of several income-tax assessees including Shri Sunil
Khemka (HUF), Smt. Sunita Khemka and Smt. Shivani Khemka
at the third floor of Khataruka Niwas, South Gandhi Maidan,
Patna. The said search and seizure operation was conducted
1 Hereinafter referred to as the ‘appellant-bank’.
2 ‘FIR’ for short.
3 ‘IPC’ for short.
[2024] 10 S.C.R. 1905
HDFC Bank Ltd. v. The State of Bihar & Ors.
on the basis of warrants of authorization issued under Section
132(1) of the Income Tax Act, 19614. During the course of the
search, it was found that Smt. Sunita Khemka held a bank
locker bearing No. 462 in the appellant-bank at its Exhibition
Road Branch, Patna.
3.2 On the basis of the said operation, on 5th October, 2021, an order
under Section 132(3) of the IT Act was served upon the Branch
Manager of the appellant-bank at its Exhibition Road Branch,
Patna by the concerned Authorized Officer, thereby directing
the said branch of the appellant-bank to stop the operation of
any bank lockers, bank accounts and fixed deposits standing in
the names of Shri Sunil Khemka (HUF), Smt. Sunita Khemka
and Smt. Shivani Khemka, among several other individuals
and entities, with immediate effect. It was further clarified that
contravention of the order would render the Branch Manager
liable under Section 275A of the IT Act and the same would
result in penal action.
3.3 In compliance of the aforesaid order, the appellant-bank
stopped the operation of the bank accounts, bank lockers and
fixed deposits of the individuals/entities mentioned in the order.
Further, on 7th October, 2021, the appellant-bank blocked the
bank accounts of the income-tax assesses named in the order
and also sealed the bank locker bearing No. 462 belonging to
Smt. Sunita Khemka.
3.4 Subsequently, on 1st November, 2021, Respondent No. 5 issued
an order to the Branch Manager of the appellant-bank at its
aforementioned branch thereby directing the appellant-bank to
revoke the restraint put on the bank accounts of Smt. Sunita
Khemka and three other persons, in view of the restraining
order dated 5th October, 2021 passed under Section 132(3) of
the IT Act. Accordingly, the said persons, including Smt. Sunita
Khemka, were to be allowed to operate their bank accounts. The
said order was received by the concerned Branch Manager of
the appellant-bank of 8th November, 2021 at 4:00 p.m. However,
4 ‘IT Act’ for short.
1906 [2024] 10 S.C.R.
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on 2nd November, 2021 at 11:24 a.m., an email was sent to the
Branch Manager which contained the same order.
3.5 Thereafter, on 9th November, 2021, the concerned branch of
the appellant-bank allowed Smt. Sunita Khemka to operate her
bank locker bearing No. 462 and proper entries recording the
operation of the said locker were made in the bank’s records.
3.6 Subsequently, on 20th November, 2021, Respondent No. 5
conducted a search and seizure operation at the aforementioned
bank locker in the concerned branch of the appellant-bank
wherein it was found that Smt. Sunita Khemka had operated
her bank locker with the assistance of the concerned officers of
the appellant-bank. This was validated by the entry made in the
bank’s records and the CCTV footage of the bank. Resultantly,
the concerned officials of the aforementioned branch of the
appellant-bank were found to have breached the restraining
order dated 5th October, 2021.
3.7 Accordingly, on 20th November, 2021, Respondent No. 5 issued
summons under Section 131(1A) of the IT Act to Abha Sinha-
Branch Manager, Abhishek Kumar-Branch Operation Manager
and Deepak Kumar-Teller Authoriser being the concerned
officials of the appellant-bank at its aforementioned branch.
3.8 The aforementioned officials attended the office of Respondent
No. 5 and their statements were recorded wherein Abha Sinha
and Abhishek Kumar stated that there had been an inadvertent
error on the part of the bank officials and they had misinterpreted
the order dated 1st November, 2021. Since the said order
pertained to the bank accounts of the concerned individuals
including Smt. Sunita Khemka, the bank officials had misread the
order to understand /assume that the revocation of the restraint
extended to the bank lockers as well. Having misunderstood
the order, the bank officials under a bona fide assumption that
bank locker had been released as well, allowed Smt. Sunita
Khemka to operate the same.
3.9 The statement of Smt. Sunita Khemka had also been recorded
wherein she stated that her accountant Surendra Prasad, after
speaking with Deepak Kumar, had informed her that the restraint
[2024] 10 S.C.R. 1907
HDFC Bank Ltd. v. The State of Bihar & Ors.
on the aforementioned bank locker had been revoked and she
could operate the said locker. This was specifically denied by
Deepak Kumar in his statement.
3.10 Dissatisfied with the said explanations, Respondent No. 5
submitted a written complaint to the SHO, Gandhi Maidan
Police Station seeking to register an FIR against Smt. Sunita
Khemka and the concerned bank officials on the ground that
the order dated 5th October, 2021 had been violated owing to
the unlawful operation of the aforementioned locker.
3.11 On the basis of the said complaint, on 22nd November, 2021,
an FIR being Case No. 549 of 2021 came to be registered
against Smt. Sunita Khemka and the staff of the appellant-bank
at its aforementioned branch for the offences punishable under
Sections 34, 37, 120B, 201, 207, 217, 406, 409, 420 and 462
of the IPC at the Gandhi Maidan Police Station, Patna.
3.12 Aggrieved by the registration of the FIR, the appellant-bank
preferred a Criminal Writ Jurisdiction Case thereby invoking
the inherent power of the High Court under Section 482 of
the Code of Criminal Procedure, 19735 for the quashing of the
FIR. The High Court vide the impugned order dismissed the
writ petition finding it to be devoid of merit.
3.13 Being aggrieved thereby, the present appeal.
4. We have heard Mr. Neeraj Kishan Kaul, learned Senior Counsel
appearing on behalf of the appellant and Mr. Manish Kumar, learned
Advocate-on-Record appearing for the respondent Nos. 1 to 4 and
Mr. Venkataraman Chandrashekhara Bharathi, learned counsel
appearing on behalf of the respondent No.5.
5. Shri Neeraj Kishan Kaul, learned Senior Counsel submits that
taking the FIR at its face value, it does not disclose any mens rea
of the officials of the appellant-bank and it also fails to disclose the
commission of any offence. He further submits that the complaint
also does not disclose any specific allegation with regard to collusion
5 Hereinafter referred to as ‘Cr.P.C.’
1908 [2024] 10 S.C.R.
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between the unnamed staff of the appellant-bank with Ms. Sunita
Khemka. The only allegation against the unnamed staff members
of the appellant-bank is that while the Prohibitory Order dated 5th
October 2021 was in force in relation to the bank locker No.462,
Ms. Sunita Khema, customer of the appellant-bank, was permitted
to operate the said bank locker.
6. The learned Senior Counsel submits that taking the allegations at
their face value, they do not disclose commission of the alleged
offences of Sections 420, 409, 406, 462, 206, 217, 201, 34, 120B
and 37 of the IPC. It is submitted that it is settled law that the High
Court while considering a petition under Section 482 of the Cr.P.C.
for quashing the FIR must examine as to whether prima facie the
ingredients of the offence have been made out in the FIR or not. In
this regard, a reference is placed on the judgment of this Court in
the case of Arnab Manoranjan Goswami v. State of Maharashtra
and others6 and in the case of Delhi Race Club (1940) Ltd. and
others v. State of Uttar Pradesh and another.7
7. Shri Kaul, relying on the judgments of this Court in the case of State
of Haryana and others v. Bhajan Lal and others,8 submits that
the continuation of the prosecution of the appellant-bank and/or its
staff under IPC would amount to undue hardship and miscarriage
of justice.
8. Shri Manish Kumar, learned counsel appearing on behalf of the
respondents Nos. 1 to 4, on the contrary, submits that the High
Court while exercising powers under Section 482 Cr.P.C. cannot
conduct a mini trial. It is submitted that this Court in the case of
R. Venkatkrishnan v. Central Bureau of Investigation 9 has held
that though a bank or a financial institution may not suffer ultimate
loss but if the money has been allowed to be used by another
person illegally for illegal purposes, the ingredients of Section 405
IPC would be attracted.
6 [2020] 11 SCR 896 : (2021) 2 SCC 427
7 [2024] 8 SCR 670 : 2024 SCC OnLine SC 2248
8 [1990] Supp. 3 SCR 259 : (1992) Supp. 1 SCC 335
9 [2009] 12 SCR 762 : (2009) 11 SCC 737
[2024] 10 S.C.R. 1909
HDFC Bank Ltd. v. The State of Bihar & Ors.
9. It is submitted that access of the bank locker given to Ms. Sunita
Khemka in violation of Section 132(2) of the IT Act would attract the
offence under Section 409 read with Section 405 of the IPC.
10. It is submitted that the High Court has rightly, relying on various
judgments of this Court including Neeharika Infrastructure Private
Limited v. State of Maharashtra and others,10 held that the High
Court cannot thwart any investigation into a cognizable offence,
which is the statutory right and duty of the Police under the relevant
provisions of the Cr.P.C.
11. He further submits that it is equally settled that the Court cannot
embark upon an enquiry as to the reliability or genuineness or
otherwise of the allegations made in the FIR/complaint.
12. With the assistance of the learned counsel for the parties, we have
scrutinized the record. It will be relevant to refer to the Prohibitory
Order issued by the Authorized Officer on 5th October 2021, which
reads thus:
“Sub: Order under 132(3) of the Income- Tax Act, 1961
in respect of bank Accounts, Lockers, Fixed Deposits
etc.- regarding,
Sir,
In connection with search operation conducted under
sub-section (1) of section 132 of the Income-Tax Act,
1961, in the office/residential/business premises of the
under noted
person, you are directed to STOP OPERATION,
immediately, of Bank Lockers, Bank Accounts and Fixed
Deposits, if any, standing in the below mentioned names(s)
either singly or jointly, in terms of provisions of sub section
(3) of section 132 of the Income-Tax Act, 1961.
10 [2021] 4 SCR 1044 : (2021) 19 SCC 401
1910 [2024] 10 S.C.R.
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Sl. Name & Address of the Detail
No. person of Bank
Lockers/
Accounts/
Deposits
1. Sunil Kumar Khemka
2. Sunil Kumar Khemka (HUF)
3. Sunita Khemka
4. Saloni Khemka
5. Shivani Khemka
6. Sharda Devi Khemka
7. Sharda Tradelinks Pvt. Ltd.
8. Gravity Sales Agency Pvt. Ltd.
9. Sparsh Tie Up Pvt. Ltd.
10. S.S. Biolife Pvt. Ltd.
11. NCL Synthetic Pvt. Ltd.
12. Green Engicon Pvt. Ltd.
13. Gulmohar Vyapaar Pvt. Ltd.
14. Lord Dealcom Pvt. Ltd.
15. Paramount Financial Management
16. Maa Jagdamba Seva Samiti Trust
2. The contravention of this order shall render you liable,
under section 275A of the Income-Tax Act, 1961, to
punishment of rigorous imprisonment which may extend
to two years and also render you liable to fine.
3. You are requested to intimate the balance standing
in these accounts IMMEDIATELY to the bearer of this
letter and send a statement of the said accounts since
the opening of the accounts along with copy of account
opening form to this office within 7 (seven) days of receipt
of this order.”
[2024] 10 S.C.R. 1911
HDFC Bank Ltd. v. The State of Bihar & Ors.
13. It will also be relevant to refer to the Revocation Order dated 1st
November 2021, issued by the Deputy Director of Income-Tax (Inv.)
Unit-2(2), Guwahati, which reads thus:
“Sub: Revocation of order under section 132(3) of the
Income Tax Act, 1961 in respect of Bank Accounts, Lockers,
Fixed Deposits, etc.-reg.
Ref:- This office’s letter No.DIN/AC/DDIT/U 2(2)/GHY/2021-
22, dated 05.10.2021.
In this connection this is to state that, restrain order
u/s.132(3) of the Income Tax Act, 1961, were put on the
following bank accounts of the persons as stated below.
The restrain order put on the following bank accounts
only may be revoked by your kind self and they may be
allowed to operate these accounts.
Sl. Name of Account Holder Account No.
No.
1. Sunil Kumar Khemka (HUF) 01861000049315
2. Sunil Kumar Khemka 01861530001080
3. Sunita Khemka 01861530001097
4. Shivani Khemka 01861460006152
14. It could thus be seen that though vide order dated 5th October
2021, a restraint order was imposed in respect of Bank Lockers,
Bank Accounts and Fixed Deposits, the Revocation Order dated 1st
November 2021 only refers to the Bank Accounts.
15. In the statements of the Officers of the appellant-bank, it is stated
that the bank locker was inadvertently permitted to be operated,
by misinterpreting the Revocation Order dated 1st November 2021.
16. In the present case, we are only considering the FIR registered for
the offences punishable under the different provisions of the IPC.
17. The FIR is registered on the basis of the complaint lodged by the
Deputy Director of Income-Tax (Inv.) Unit-2(2), Guwahati, respondent
No.5 herein. The only statement/allegation in the complaint with
regard to the bank and its officers is thus:
1912 [2024] 10 S.C.R.
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“However, it has come to the light, that the restraint order
imposed under section 132(3) dated 05.10.21 has been
breached and violated. During the course of execution of
search & seizure operation on the Bank Locker no 462
under warrant of authorization dated 20.11.21, it is found
that Smt Sunita Khemka has operated the bank Locker
no-462 on 09.11.21. The bank locker register maintained
at the HDFC bank states that the Smt Sunita Khemka has
operated the Bank Locker at 11.53 am. The CCTV footage
was has validated the fact that Smt Sunita Khemka aided
by the HDFC Bank Exhibition Branch, Patna has breached
the order under section 132(3) of the Income Tax Act, 1961
and has unlawfully operated her Bank locker no 462 in
the HDFC Bank.”
18. It will be relevant to refer to the following observations of this Court
in the case of Arnab Manoranjan Goswami (supra):
“62. Now in this backdrop, it becomes necessary to advert
briefly to the contents of the FIR in the present case. The
FIR recites that the spouse of the informant had a company
carrying on the business of architecture, interior design and
engineering consultancy. According to the informant, her
husband was over the previous two years “having pressure
as he did not receive the money of work carried out by
him”. The FIR recites that the deceased had called at the
office of the appellant and spoken to his accountant for the
payment of money. Apart from the above statements, it has
been stated that the deceased left behind a suicide note
stating that his “money is stuck and following owners of
respective companies are not paying our legitimate dues”.
Prima facie, on the application of the test which has been
laid down by this Court in a consistent line of authority
which has been noted above, it cannot be said that the
appellant was guilty of having abetted the suicide within
the meaning of Section 306 IPC. These observations, we
must note, are prima facie at this stage since the High
Court is still to take up the petition for quashing. Clearly
however, the High Court in failing to notice the contents
of the FIR and to make a prima facie evaluation abdicated
[2024] 10 S.C.R. 1913
HDFC Bank Ltd. v. The State of Bihar & Ors.
its role, functions and jurisdiction when seized of a petition
under Section 482 CrPC. The High Court recited the legal
position that the jurisdiction to quash under Section 482
has to be exercised sparingly. These words, however, are
not meaningless incantations, but have to be assessed
with reference to the contents of the particular FIR before
the High Court. If the High Court were to carry out a prima
facie evaluation, it would have been impossible for it not to
notice the disconnect between the FIR and the provisions
of Section 306 IPC. The failure of the High Court to do so
has led it to adopting a position where it left the appellant
to pursue his remedies for regular bail under Section 439.
The High Court was clearly in error in failing to perform
a duty which is entrusted to it while evaluating a petition
under Section 482 albeit at the interim stage.
63. The petition before the High Court was instituted under
Article 226 of the Constitution and Section 482 CrPC. While
dealing with the petition under Section 482 for quashing
the FIR, the High Court has not considered whether prima
facie the ingredients of the offence have been made out
in the FIR. If the High Court were to have carried out this
exercise, it would (as we have held in this judgment) have
been apparent that the ingredients of the offence have not
prima facie been established. As a consequence of its
failure to perform its function under Section 482, the High
Court has disabled itself from exercising its jurisdiction
under Article 226 to consider the appellant’s application
for bail. In considering such an application under Article
226, the High Court must be circumspect in exercising its
powers on the basis of the facts of each case. However,
the High Court should not foreclose itself from the exercise
of the power when a citizen has been arbitrarily deprived
of their personal liberty in an excess of State power.”
19. In the present case, the FIR does not show that the appellant-bank
had induced anyone since inception.
20. For bringing out the offence under the ambit of Section 420 IPC, the
FIR must disclose the following ingredients:
1914 [2024] 10 S.C.R.
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(a) That the appellant-bank had induced anyone since inception;
(b) That the said inducement was fraudulent or dishonest; and
(c) That mens rea existed at the time of such inducement.
21. The appellant-bank is a juristic person and as such, a question
of mens rea does not arise. However, even reading the FIR and
the complaint at their face value, there is nothing to show that the
appellant-bank or its staff members had dishonestly induced someone
deceived to deliver any property to any person, and that the mens
rea existed at the time of such inducement. As such, the ingredients
to attract the offence under Section 420 IPC would not be available.
22. Insofar as the provisions of Section 409 IPC is concerned, the
following ingredients will have to be made out:
(a) That there has been any entrustment with the property, or with
any dominion over property on a person in the capacity of a
public servant or banker, etc.;
(b) That the said person commits criminal breach of trust in respect
of that property.
23. For bringing out the case under criminal breach of trust, it will have
to be pointed out that a person, with whom entrustment of a property
is made, has dishonestly misappropriated it, or converted it to his
own use, or dishonestly used it, or disposed of that property.
24. In the present case, there is not even an allegation of entrustment
of the property which the appellant-bank has misappropriated or
converted for its own use to the detriment of the respondent No.5.
As such, the provisions of Section 406 and 409 IPC would also not
be applicable.
25. As already discussed hereinabove, since there was no entrustment
of any property with the appellant-bank, the ingredients of Section
462 IPC are also not applicable.
26. Likewise, since the offences under Section 206, 217 and 201 of the
IPC requires mens rea, the ingredients of the said Sections also
would not be available against the appellant-bank.
27. The FIR/complaint also does not show that the appellant-bank and its
officers acted with any common intention or intentionally cooperated
[2024] 10 S.C.R. 1915
HDFC Bank Ltd. v. The State of Bihar & Ors.
in the commission of any alleged offences. As such, the provisions
of section 34, 37 and 120B of the IPC would also not be applicable.
28. It will be relevant to refer to the following observations of this Court
in the case of Bhajan Lal and others (supra):
“102. In the backdrop of the interpretation of the various
relevant provisions of the Code under Chapter XIV and of
the principles of law enunciated by this Court in a series
of decisions relating to the exercise of the extraordinary
power under Article 226 or the inherent powers under
Section 482 of the Code which we have extracted and
reproduced above, we give the following categories of
cases by way of illustration wherein such power could
be exercised either to prevent abuse of the process of
any court or otherwise to secure the ends of justice,
though it may not be possible to lay down any precise,
clearly defined and sufficiently channelised and inflexible
guidelines or rigid formulae and to give an exhaustive list
of myriad kinds of cases wherein such power should be
exercised.
(1) Where the allegations made in the first information
report or the complaint, even if they are taken at their
face value and accepted in their entirety do not prima
facie constitute any offence or make out a case against
the accused.
(2) Where the allegations in the first information report
and other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation
by police officers under Section 156(1) of the Code except
under an order of a Magistrate within the purview of Section
155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR
or complaint and the evidence collected in support of the
same do not disclose the commission of any offence and
make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
1916 [2024] 10 S.C.R.
Digital Supreme Court Reports
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint
are so absurd and inherently improbable on the basis of
which no prudent person can ever reach a just conclusion
that there is sufficient ground for proceeding against the
accused.
(6) Where there is an express legal bar engrafted in any
of the provisions of the Code or the concerned Act (under
which a criminal proceeding is instituted) to the institution
and continuance of the proceedings and/or where there
is a specific provision in the Code or the concerned Act,
providing efficacious redress for the grievance of the
aggrieved party.
(7) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is maliciously
instituted with an ulterior motive for wreaking vengeance
on the accused and with a view to spite him due to private
and personal grudge.
103. We also give a note of caution to the effect that
the power of quashing a criminal proceeding should be
exercised very sparingly and with circumspection and that
too in the rarest of rare cases; that the court will not be
justified in embarking upon an enquiry as to the reliability
or genuineness or otherwise of the allegations made in the
FIR or the complaint and that the extraordinary or inherent
powers do not confer an arbitrary jurisdiction on the court
to act according to its whim or caprice.”
29. We find that the present case would squarely fall within categories (2)
and (3) of the law laid down by this Court in the case of Bhajan Lal
and others (supra).
30. We are of the considered view that the continuation of the criminal
proceedings against the appellant-bank would cause undue hardship
to the appellant-bank.
[2024] 10 S.C.R. 1917
HDFC Bank Ltd. v. The State of Bihar & Ors.
31. In the result, we pass the following order.
(i) The appeal is allowed.
(ii) The impugned judgment and order dated 8th June 2022 passed
by the learned Single Bench of the High Court of Judicature at
Patna in Criminal Writ Jurisdiction Case No. 1375 of 2021 is
quashed and set aside.
(iii) The First Information Report being Case No. 549 of 2021
registered at Gandhi Maidan Police Station, Patna on 22nd
November, 2021, against certain officials of the appellant-bank
working at its Exhibition Road Branch, Patna for the offences
punishable under Sections 34, 37, 120B, 201, 206, 217, 406,
409, 420 and 462 of the Indian Penal Code, 1860 is also
quashed and set aside qua the appellant-bank.
Result of the case: Appeal allowed.
†
Headnotes prepared by: Vidhi Thaker, Hony. Associate Editor
(Verified by: Kanu Agrawal, Adv.)
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