Delhi High Court rejects Punjab National Bank's quashing plea under Section 482 CrPc against RBI

The Delhi High Court on Friday dismissed the petitions filed by Punjab National Bank (PNB) and its late employee IP Singh seeking to quash the order of issuance of process under Section 482 of the Criminal Procedure Code [Punjab National Bank Vs. NCT of Delhi & Another].Justice Anu Malhotra of the Delhi High Court dismissed the two petitions filed by PNB and it's former employee under Section 482 of the CrPC.The petitions were filed seeking to set aside a Patiala House District Court order from March 11, 2019 that summoned the Punjab National Bank's CEO, MD and other employees with respect to commission of offences under Sections 46 and 47 of the Banking and Regulation Act, 1949 along with those under Section 120 B of the Indian Penal Code.The petitions also sought to quash the criminal complaint filed by Reserve Bank of India against it under Section 200 of the Criminal Procedure Code read with Section 47 of the Banking Regulation Act, 1949.The present petition was filed before the Delhi High Court in May 2019 by PNB.In it's plea, PNB had invoked the inherent powers of the Court under Section 482 of CrPc to quash the order on issuance of process..By way of a background, the Reserve Bank of India had issued a confidential circular to banks on 'Cyber Security Controls Frauds' dated November 25, 2016. The circular also advised banks to explore Straight Through Processing between CBS and SWIFT messaging systems.It also spoke on trade finance transactions and the misuse of SWIFT, a fund transferring interface and sent this information in a password protected form to Punjab National Bank.Around January 29, 2018, the PNB alleged that a fraud had been committed and filed Fraud Monitoring Reports (FMR) and update applications with the Reserve Bank of India, duly informing them that a fraud to the tune of Rs. 13,000 crore had been detected at Brady House Branch of PNB.Following this, a show cause notice was sent by the RBI to PNB on August 23, 2018 asking them to show cause in writing as to why penalty under 47 A(1) (C) read with Section 46(4) of the Banking Regulation Act 1949 should not be imposed on PNB. RBI then filed a criminal complaint under Section 200 of the CrPC,1973 read with section 47 of the Banking Regulation Act 1949 before Patiala House Metro Magistrate seeking prosecution of PNB and its officials for commission of offences under Section 46 of Banking Regulation Act 1949 read with Section 120 B of Indian Penal Code,1860.A hearing took place in relation to show cause notice on December 21, 2018 subsequent to which the Committee of Executive Directors of RBI passed an order under Section 47A of Banking Regulation Act, imposing a penalty of Rs. 2 crore on PNB.Finally on March 11, 2019 the Court of Metropolitan Magistrate of Patiala House Court, New Delhi passed an order wherein PNB and others named in criminal complaint by RBI were summoned to appear before the Court. The same was communicated to them along with a direction to pay the penalty of Rs 2 crores within 14 days of receiving the order.Disagreeing with the decision of the Patiala House District Court, Punjab National Bank moved the Delhi High Court in May 2019 for quashing of the criminal complaint registered against it by RBI and for setting aside of the order dated March 11, 2019.In it's petition filed through Shardul Amarchand Mangaldas & Co. ,the Punjab National Bank submitted before the Court that in it's allegations, the RBI had no where indicated which sub-section of Section 46 of the Banking Regulation Act, 1949 they were referring to while summoning the bank's officials and employees. It was also submitted that Section 46 of the Act has a wide ranging scope.For instance, if Section 46 (1) punishes any one who wilfully furnishes a statement which is false in any material particular, then Section 46(2) punishes whoever fails to furnish any statement under Section 35 (2) of the Act. Similarly Section 46(4) punishes any other violation of provisions of Banking Regulation Act 1949. The punishments in each case varies as well.Thus, it was PNB's contention that due to this lack of identification of a particular sub section of 46, great prejudice had been caused to it.It further contended that RBI's criminal complaint and order dated March 11, 2019 of the Patiala House court was ex facie illegal and ought to be set aside on account of one-sided averments.In it's petition, Punjab National Bank relied on various judgments of the Supreme Court including Sunil Bharti Mittal v CBI ( 2015) and Pepsi Foods Ltd. v Judicial Magistate (1998) to enunciate the principle that a summoning order should reflect due application of mind and the magistrate must provide a sufficient basis for proceeding against the accused.Senior Advocate Mahesh Jethmalani and advocate Mugdha Pande, representing RBI, opposed the plea. The Court proceeded to dismiss the plea by PNB.Punjab National Bank was represented by Senior Advocate Dayan Krishnan and Nishant Joshi of Shardul Amarchand Mangal Das..Section 482 power should be used only in ‘rarest of rare’ cases to quash conviction even if parties have settled dispute: Bombay High Court