Dr Rita Parasher v. State of Maharashtra
In the High Court of Bombay
Crl. W.P. 413/2018
Before Justice Z.A. Haq and Justice M.G. Giratkar
Decided on November 26, 2019

Relevancy of the Case: Quashing of an FIR in a criminal breach of trust case by a bank director

Statutes and Provisions Involved

• The Information Technology Act, 2000 (Section 65)
• The Indian Penal Code, 1860 (Section 406, 408, 409, 467, 468, 471, 420, 201, 120-B and 109)
• The Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (Section 3, 4)
• The Maharashtra Cooperative Societies Act, 1960 (Section 81(3)(b), 83)
• The Code of Criminal Procedure, 1973 (Section 482)

Relevant Facts of the Case

• The petitioner is the Director of a cooperative society running a banking business. Several loans in this bank were on default leading to huge losses to depositors.
• The police registered an FIR under the above-mentioned provisions.
• After the investigation, the Crime Investigation Department filed the charge sheet before the trial court.
• Thereafter, the petitioner has filed this petition praying that the court should quash the FIR, charge sheet, and the criminal case registered against her.

Prominent Arguments by the Advocates

• The petitioner’s counsel argued that the Enquiry Officer concluded that only CEO and Chainman approved the loans of large sums of money. The Authorised Officer of the Flying Squad Report also concluded that the petitioner had no involvement in the losses.
• The Additional Public Prosecutor countered that the Authorised Officer could not enquire under Section 88 of the Maharashtra Cooperative Societies Act, 1960 as the provision prohibits enquiry of acts done five years prior to the date of order for enquiry. He also concluded that surety was not secured before sanctioning the loans.
• Further, the petitioner’s counsel submitted that offence under Section 3 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 is not committed, as it requires a financial establishment to fraudulently default in repayment of deposit, which are not the facts of this case.

Opinion of the Bench

• Accordingly, mere grant of a loan in violation of guidelines issued by the RBI will not by itself amount to an offence under Section 3 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999.
• Further, there is no prima facie case against the petitioner based on the evidence available.

Final Decision

• Hence, the court quashed FIR and all the proceedings thereof.

Julia Anna Joseph, an undergraduate student at Christ (Deemed to be University), prepared this case summary during her internship with The Cyber Blog India in January/February 2022.