Summary
The Supreme Court quashed, as against HDFC Bank, an FIR under various IPC provisions registered on an Income Tax officer's complaint that bank staff let a customer operate a locker frozen by an order under Section 132(3) of the Income Tax Act. The later revocation order released only the bank accounts, and the staff said they misread it. Read at face value, the complaint disclosed no dishonest inducement, entrustment, misappropriation, mens rea or common intention, so the case fell within Bhajan Lal categories (2) and (3).
Issues
- Whether the FIR and complaint, taken at face value, disclosed offences under Sections 420, 406, 409 and 462 IPC against the bank.
- Whether the other offences alleged requiring mens rea, and the provisions on common intention, cooperation and conspiracy (Sections 34, 37 and 120B IPC), were attracted.
- Whether the High Court erred in declining to quash the FIR.
Provisions considered
- Section 420, Indian Penal Code, 1860Requires fraudulent or dishonest inducement with mens rea from the inception; nothing in the FIR showed the bank or its staff dishonestly induced anyone to deliver property. (¶¶ 19, 20, 21)
- Sections 405, 406 and 409, Indian Penal Code, 1860Criminal breach of trust requires entrustment of property and its dishonest misappropriation, conversion, use or disposal; there was no allegation of entrustment of any property that the bank misappropriated to the complainant's detriment. (¶¶ 22, 23, 24)
- Section 462, Indian Penal Code, 1860Not attracted, since no property was shown to have been entrusted to the bank. (¶ 25)
- Sections 201 and 217 (with the other offence alleged requiring mens rea), Indian Penal Code, 1860These offences require mens rea, which was not disclosed against the bank on the allegations. (¶ 26)
- Sections 34, 37 and 120B, Indian Penal Code, 1860The FIR did not show that the bank and its officers acted with common intention or intentionally cooperated in any offence, so these provisions did not apply. (¶ 27)
- Section 132(3), Income Tax Act, 1961The restraint order of 5 October 2021 covered lockers, accounts and fixed deposits, while the revocation of 1 November 2021 released only listed bank accounts; the bank officials stated they misread the revocation as extending to the locker. (¶¶ 12, 13, 14, 15)
- Section 482, Code of Criminal Procedure, 1973Applying Arnab Goswami and Bhajan Lal, the High Court should have examined whether the FIR prima facie disclosed the ingredients of the offences; the case fell within Bhajan Lal categories (2) and (3). (¶¶ 18, 28, 29)
Held
- On a petition to quash an FIR, the court must examine whether, taking the allegations at face value, the ingredients of the offences are prima facie made out. (¶ 18)
- The complaint's only allegation against the bank was that the customer operated the locker on 9 November 2021 'aided by' the branch in breach of the Section 132(3) order. This disclosed no dishonest inducement for cheating, and as a juristic person the bank could not have mens rea; nothing showed its staff acted dishonestly. (¶¶ 17, 19, 20, 21)
- Without any allegation of entrustment of property and its misappropriation or conversion, the offences of criminal breach of trust under Sections 406 and 409 and the offence under Section 462 IPC are not made out. (¶¶ 22, 23, 24, 25)
- Offences requiring mens rea, and liability through common intention, intentional cooperation or conspiracy, were not disclosed against the bank on the FIR and complaint. (¶¶ 26, 27)
- The case fell within categories (2) and (3) of Bhajan Lal, and continuing the criminal proceedings against the bank would cause it undue hardship. (¶¶ 29, 30)
Result
Appeal allowed; the Patna High Court's order of 8 June 2022 set aside and FIR No. 549 of 2021, Gandhi Maidan Police Station, Patna quashed qua the appellant bank.