Investigation; Deutsche Bank Ag Vs. State [Karnataka High Court, 07-10-2016]

Criminal Procedure Code, 1973 – Section 173 (8) – Investigation – Insofar as the matter relating to the investigation to be conducted on a complaint, the Investigating Officer will have to carry out the investigation in all earnestness. He should neither exclude any relevant material nor should he be expected to create or fabricate material to bring to book the accused under any circumstance. It should be a fair investigation. On completion of the investigation and the report is laid before the jurisdictional Court, the learned Judge of such Court has the duty to examine the report and either accept the same or to order further or fresh investigation. In appropriate cases the learned Judge may also record evidence and proceed in terms of Section 202 of Cr PC.

Constitution of India – Article 226 – Investigation by another Agency –¬†the power to direct the investigation by another agency should not be done in a routine manner for the mere asking or based on apprehensions. It is only in exceptional cases which has serious ramifications such power should be exercised.


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 7TH DAY OF OCTOBER, 2016

BEFORE¬†THE HON’BLE MR. JUSTICE A S BOPANNA

W.P.Nos.32731-32732/2010 (GM-POLICE)

BETWEEN: M/S DEUTSCHE BANK AG A BANKING COMPANY REGISTERED UNDER THE LAWS OF INDIA, HAVING ITS OFFICE AT RAHEJA TOWERS, 26-27, M G ROAD, BANGALORE-560 001 REPRESENTED BY ITS ASSISTANT VICE-PRESIDENT MR.SUDARSAN SRIDHARAN & BY ITS ANALYST-TRADE SERVICES MR. USMAN SHARIFF … PETITIONER (BY SRI. VIJAY SHANKAR, SR. COUNSEL FOR SRI. VIKRAM TRIVEDI, ADV. FOR M/S. SHETTY & HEGDE ASSTS.) AND: 1. THE STATE OF KARNATAKA BY THE CENTRAL CRIME BRANCH (CCB) BANGALORE 2. THE DEPUTY DIRECTOR OF PROSECUTION BANGALORE DIVISION, NO.1, INFANTRY ROAD THE OFFICE OF THE COMMISSIONER OF POLICE BANGALORE- 01 2 THE RESPONDENT NO.1 & 2 BY STATE PUBLIC PROSECUTOR, HIGH COURT OF KARNATAKA, HIGH COURT PREMISES, BANGALORE-01 3. THE UNION OF INDIA BY THE CENTRAL BUREAU OF INVESTIFATION, BANGALORE BY THE CENTRAL GOVT. COUNSEL, HIGH COURT OF KARNATAKA, HIGH COURT OF PREMISES, BANGALORE-01. 4. V SATISH KUMAR S/O SRI V V RAMA RAO AT NO.16-11-19, SALEEM NAGAR, MALAKPET, HYDERABAD. 5. SRI UDAY BHASKAR MAJOR IN AGE WORKING AS INSPECTOR OF POLICE, CCB AT BRIAND SQUARE, CHAMARAJPET BANGALORE. … RESPONDENTS (BY SRI. A.S.PONNANNA, ADDL.AG. A/W SRI. E. S. INDIRESH, AGA. FOR R1 & 2 SRI. P. PRASANNA KUMAR, ADV. FOR R3 SRI. C.V. NAGESH, ADV. FOR R4 R5 IS SERVED & UNREPRESENTED)

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO ISSUE A WRIT OF MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION ENTRUSTING THE INVESTINGATION IN CRIME NO.213/2009 OF HALSOOR POLICE STATION, BANGALORE, NOW BEING INVESTIGATED BY CCB, BANGALORE, REGISTERED FOR THE OFFENCES UNDER SECTIONS 120-B, 420, 465, 467, 468, 471 R/W SECTION 3 34 IPC TO THE CENTRAL BUREAU OF INVESTIGATION, BANGALORE AND DECLARE THAT THE LEGAL OPINION AT ANNEXURE P3 HEREIN GIVEN BY THE RESPONDENT NO.2 IS ILLEGAL AND INVALID. THESE WRIT PETITIONS HAVING BEEN RESERVED FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING :

ORDER

The petitioner is before this Court in these petitions seeking that the investigation in Crime No.213/2009 of Halasuru Police Station, Bengaluru registered for the offences alleged under

Sections 120-B, 420, 465, 467, 468, 471 r/w Section 34 of the Indian Penal Code

(‘IPC’ for short) be entrusted to the Central Bureau of Investigation (‘CBI’ for short). In that regard the petitioner is contending that the legal opinion given by respondent No.2 at Annexure- P3 is illegal and not valid.

2. The petitioner is a Banking Company registered in accordance with law in India, having been incorporated in Germany with branches all over, including the one in Bengaluru. In the course of its banking business, the respondent No.4 along with the others named by the petitioner in their complaint, representing M/s. Prithvi Information Solutions Ltd., a company registered under theCompanies Act approached the petitioner – Bank during July 2007 seeking provision for multipurpose trade/cash facility to the tune of Rupees Thirty crores and also for Forex/Hedging facilities. The petitioner alleges that they made representations about the reputation of the Company and the services being provided by them to reputed International clients though it was false to their knowledge. Being mislead by such representation the petitioner – Bank agreed to provide the credit facilities to the extent of Rupees Twenty Five crores through the offer letter dated 20.11.2007.

3. The said Company thereafter submitted request letters relating to the transactions in all amounting to Rs.24,79,67,750/- which was credited to the current account No.2045839-00-0 maintained by the said company. The said amount was to be repaid before 16.09.2008 but there was default. The petitioner alleges that the said persons however represented that they have good relations with foreign purchasers such as M/s. T-Mobile USA, M/s. Johns Hopkins Hospital, USA and Star Point Solutions LLC, USA and that they have executed work for them and held out that they are entitled to receive amounts from them covering the amount and sought for Bill Discounting facility. In this regard, certain documents were also submitted. Accepting such representation, the petitioner – Bank agreed to provide the said facility to the tune of Rupees Thirty crores and credited the same to the account of the said Company.

4. The petitioner – Bank however did not receive the payments from the said foreign purchasers and when the same was brought to the notice of respondent No.4, they assured of following it up. But when the petitioner – Bank communicated with the said foreign companies, the petitioner – Bank received letters dated 24.04.2009 and 07.05.2009 from the respective foreign companies informing the petitioner – Bank that they did not have any transaction with M/s. Prithvi Information Solutions Ltd. The petitioner – Bank thus realising that the documents submitted were fabricated and forged which resulted in causing loss to the petitioner – Bank and amounted to cheating, filed a complaint dated 06.05.2009 to the jurisdictional Halasuru Police Station which was registered in Crime No.213/2009 on 07.05.2009 which was despatched to the X Addl. Chief Metropolitan Magistrate, Bengaluru, which is the jurisdictional Court. Apart from the same the petitioner- Bank also instituted recovery proceedings, winding up proceedings and initiated action before the Ministry of Corporate Affairs.

5. In so far as the criminal complaint, the petitioner – Bank alleges that a superfluous investigation was held and a ‘B’ report was filed on 22.07.2009 to which the petitioner – Bank filed the protest petition. When the matter was heard by the learned Magistrate and was posted for orders, the Investigating Officer filed a memo dated 24.05.2010 seeking leave for further investigation on taking note of the documents filed along with the protest petition. The learned Magistrate accordingly, through the order dated 26.05.2010 permitted him to re-investigate. However, since the method adopted by the Investigating Officer was not appropriate, the petitioner – Bank made a representation to the Commissioner of Police on 07.07.2010, who transferred the investigation to the Central Crime Branch (‘CCB’ for short), Bengaluru. Since the petitioner – Bank is not satisfied with the investigation by CCB also, they are before this Court seeking that the same be transferred to the CBI through the instant petition.

6. The respondents No.1 and 2 on behalf of the Investigation Agency has filed the objection statement and have sought to justify the action of the Investigating Officer. It is stated that the documents were secured and the investigation was carried out and it was found that a civil suit in O.S.No.4013/2009 was filed by the persons against whom the complaint was filed. In that view the entire documents were referred and as per the opinion, ‘B’ report was filed. On the protest petition being filed, the documents were obtained and as per the direction of the learned Magistrate to the Joint Police Commissioner, the investigation was referred to the CCB. On investigation by the CCB, ‘B’ report was filed. The petitioner – Bank has filed the protest petition. As such the learned Magistrate has directed the Commissioner of Police to re-investigate and accordingly the investigation was entrusted to the Assistant Commissioner of Police. The petitioner – Bank itself is not prompt in furnishing the required documents and it is prima facie found that some officials of the Bank are involved and therefore the documents are not submitted. When the Bank itself is not diligent, seeking transfer to the CBI is not justified is the contention. Further while filing the objections to the applications filed by the petitioner, the respondents have adverted more into the details of the investigation made and the steps taken to seek information through interpole and explore whether investigation can be conducted abroad. The relevant statements recorded have been referred. Further the status report has also been filed before this Court since during the course of the proceedings this Court had directed the investigation to be held and the report to be filed. The respondents No. 1 and 2 therefore seek to justify the investigation made and contend that the investigation by the CBI is not called for and hence sought for dismissal of the petition.

7. The respondent No.3- CBI has filed the objection statement contending that since the matter has been investigated by the CCB and since there is nothing to indicate that they have not investigated in the proper direction, the investigation by CBI is not required. In the instant case, it is a private transaction and does not involve any public servant so as to require an agency constituted under Delhi Special Police Establishment to investigate. It is further contended that they are already over burdened with heavy cases and such routine matters should not be entrusted to CBI. The very averments made in the petition indicates that there is no inter-state ramification. The alleged offences having taken place in Karnataka, the local police are competent. Hence they also seek dismissal of the petition.

8. The respondent No.4 against whom the allegation of committing the criminal offence is made, having got himself impleaded has filed the objection statement. It is contended that the writ petition is filed on false and unfounded contentions. The allegation that M/s.Prithvi Information Solutions Ltd., has defrauded the petitioner – Bank is denied. Though a complaint is filed in Crime No.213/2009, it is after due enquiry the ‘B’ report was filed on 22.07.2009 and thereafter a special investigation team attached to the CCB has also investigated into the matter and a ‘B’ report was filed. It is contended that there is no fraud committed or cheating involving public money and merely because of the false and unfounded allegations, the Directors of the Company cannot be subjected to repeated investigations. Insofar as the commercial transaction entered into between the parties, the petitioner – Bank has instituted proceedings before the Debt Recovery Tribunal.

9. In the objection statement the fourth respondent has also adverted in detail with regard to the nature of transaction between the petitioner – Bank and the company, the details of which need not be stated herein except for noticing the same as the scope of this petition is only with regard to the investigation that is sought by the petitioner – Bank through a different investigating agency. In that regard, it is their contention that when the investigation was handed over to the CCB, the petitioner – Bank expected the investigation to take place at their whims and fancies but when appropriate documents were sought by the Investigating Officer, the petitioner – Bank instead of providing the same, has been making baseless allegations. The allegation against the Company that they are habitual defaulters is denied. It is in that light contended that the mere allegations, being made by the petitioner – Bank cannot be the basis for directing investigation through the CBI when the two investigations already conducted has found that the grievance is civil in nature and third investigation is in progress. Hence, they have sought dismissal of the petition.

10. In the light of the above, I have heard Sri S. Vijayashankar, learned Senior Counsel, Sri C.V.Nagesh, learned Senior Counsel, Sri A.S.Ponnanna, learned Addl. Advocate General and Sri P.Prasanna Kumar, learned counsel for the respective parties and perused the petition papers.

11. Though the nature of the transaction between the petitioner – Bank and the Company which is represented by the fourth respondent is referred in detail, keeping in view the fact that the jurisdictional police as well as the CCB have already investigated into the matter and the ‘B’ report has been filed before the jurisdictional Magistrate and in that light since the petitioner being dissatisfied with the investigation is seeking that the re-investigation be entrusted to CBI which is the specialized Agency under the Delhi Special Police Establishment, the legal position relating to the power that is available to this Court and the manner in which it is to be exercised is to be noticed at the outset as large number of decisions are cited by the learned senior counsel and the counsel for the parties. Hence that aspect of the matter requires consideration before coming to the conclusion as to whether in the instant case re-investigation by a different agency is necessary or not.

12. Learned senior counsel for the petitioner has relied on the decision of the Hon’ble Supreme Court in the case of