Case Note & Summary
The petitioner, Manish Dosal Barot, was one of the accused in C.R.No.38 of 2003 registered by the Bank of India, Saki Naka Branch, for offences under sections 465, 467, 468, 471, 474, 420 read with 120B of the Indian Penal Code. The case arose from an alleged fraud where co-accused Tahir Ahmed Khan, claiming to be the proprietor of M/s Makhdoom Polymers, applied for a term loan of Rs.22.50 lakhs and a working capital limit of Rs.20 lakhs from the bank. The petitioner, a chartered accountant, had prepared audit reports for the loan applicant. The investigation resulted in a chargesheet against the petitioner and Tahir Ahmed Khan, who were the only two arrested. The petitioner filed an application for discharge under Section 239 of the Code of Criminal Procedure, 1973, before the Additional Chief Metropolitan Magistrate, which was rejected on 17th May 2012. He then filed a revision before the Sessions Court, which was also dismissed. Aggrieved, the petitioner approached the Bombay High Court under Article 227 of the Constitution and its inherent powers. The court examined the chargesheet and the counter affidavit filed by the Investigating Officer. The court found that the petitioner's role was limited to preparing audit reports based on documents provided by the loan applicant. There was no material to show that the petitioner had knowledge of the fraudulent intent of the co-accused or that he conspired with them. The court held that the accusation against the petitioner was groundless and that no prima facie case was made out against him. The court allowed the petition, set aside the orders of the lower courts, and discharged the petitioner from the case.
Headnote
A) Criminal Procedure - Discharge under Section 239 CrPC - Groundless Accusation - Section 239 Code of Criminal Procedure, 1973 - The court examined whether the accusation against the petitioner was groundless. The petitioner, a chartered accountant, had prepared audit reports for the loan applicant. The court found no material to show that the petitioner had knowledge of the fraudulent intent of the co-accused or that he conspired with them. Held that mere preparation of audit reports without evidence of conspiracy or knowledge does not constitute an offence. (Paras 7-12) B) Criminal Conspiracy - Section 120B IPC - Requirement of Agreement - Section 120B Indian Penal Code, 1860 - The court held that for an offence of criminal conspiracy, there must be an agreement between two or more persons to commit an illegal act. In the present case, there was no evidence of any agreement between the petitioner and the co-accused to defraud the bank. The petitioner's role was limited to professional work, and no inference of conspiracy could be drawn. (Paras 10-12) C) Evidence - Audit Reports - Professional Liability - The court considered the audit reports prepared by the petitioner. It noted that the reports were prepared based on documents provided by the loan applicant. There was no allegation that the petitioner fabricated documents or acted beyond his professional capacity. The court held that without evidence of knowledge or intent, a professional cannot be held liable for the actions of others. (Paras 9-12)
Issue of Consideration
Whether the petitioner, a chartered accountant who prepared audit reports for a loan applicant, can be discharged under Section 239 CrPC on the ground that there is no evidence to show his involvement in the alleged conspiracy to defraud the bank.
Final Decision
The petition is allowed. The impugned orders dated 17th May 2012 passed by the Additional Chief Metropolitan Magistrate and the order of the Additional Sessions Judge dismissing the revision are set aside. The petitioner is discharged from C.R.No.38 of 2003.
Law Points
- Discharge under Section 239 CrPC
- Groundless accusation
- Conspiracy
- Knowledge of fraud
- Chartered Accountant liability
