Ker HC | Act of merely introducing a person to a bank for opening an account, when such person later cheats the bank, not an offence

Kerala High Court: The Bench of R. Narayana Pisharadi, J. quashed criminal proceedings against a person accused of cheating a bank holding that the case against him would be an abuse of process of the Court.

Petitioner herein was a customer of Bank of Baroda for many years. He introduced accused’s 1 to 3 to the said bank to enable them to open an account therein. Subsequently, the accused used credit/purchase facility given to them by the bank and obtained approximately Rs 1 crore from it. It was alleged that the accused had hatched a conspiracy to cheat the bank and cause loss to it. A case was registered against the accused and the petitioner under Section 120B, and Sections 420 and 406 read with Section 34 of the Penal Code, 1860. The instant petition was filed under Section 482 of the Code of Criminal Procedure, 1973 requesting quashing of proceedings against petitioner.

The Court noted that the only allegation against the petitioner was that he introduced accused to the bank to enable them to open an account. He did not falsely misrepresent the bank; there was no material indicating any transaction between the petitioner and other accused. No material was produced by the prosecution to prove that the introduction of accused to the bank, by the petitioner, was part of a conspiracy to cheat the bank. Therefore, no question of dishonest misappropriation of any amount by him arose.

It was held that it is a normal banking practice that a person who wants to open an account in a bank will have to get himself introduced by another account holder in the same bank. The mere act of introducing a person to a bank to enable such person to open an account in the bank, without anything more, does not attract the offence of cheating punishable under Section 420 IPC against the person who makes the introduction, even when the person introduced by him subsequently commits an act of cheating against the bank. Reliance in this regard was placed on Manoranjan Das v. State of Jharkhand, (2004) 12 SCC 90.

In view of the above, the petition was allowed. [K.J. Hubert v. Sub Inspector of Police, 2019 SCC OnLine Ker 1122, Order dated 04-04-2019]

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