Virender Singh, J. - All the petitioners of both these petitions have invoked inherent power of this Court conferred under Section 482 of the Cr.P.C. for quashing FIR No. 391/2019 registered under Sections 409, 420/34 of the IPC at Police Station Rajgarh Distt. Dhar, therefore, they are heard together and are being decided by this common order.

2. The petitioners of MCRC No. 41268/2019 are President (petitioner Suresh Tanted) and Members of Board of Directors of the Shri Rajendra Suri Sakh Sahkari Sanstha Maryadit, Rajgargh (hereinafter referred to as the Society), while the petitioners of MCRC No.41279/2019 are Managers/Branch Managers (BM) of the different branches of the Society.

3. Learned senior counsel for the petitioners argued that the petitioners of petition No. 41268/19 were elected President and Members of Board of Directors of the Society only on 17.3.2018. All the irregularities alleged by the prosecution have been committed prior to this period. After the election, the petitioners have made adroit efforts to recover the amount of the Society. Taking stern action, they have lodged total 93 cases involving Rs.55,00,00,000/- crores and have recovered total Rs.36,11,41,883/- from the defaulters.

4. The Report, which is the basis of the prosecution case is prepared by an unauthorized person and is against the provisions of the M.P. Cooperative Societies Act, 1960 (for short hereinafter referred to as "Act of 1960") as the complainant Rajesh Victor was authorized under Section 60 of theonly to inspect the record of the Society, while he has conducted full fledged inquiry. Such inquiry can be conducted under Section 59 of theof 1960 by the Registrar or the authorities mentioned therein.

5. The act of the department is malafide as record reflects that the report was submitted by auditor Rajesh Victor on 28.8.2019 and on the very next day on 29.8.2019, the department got the FIR registered. The action is being taken against the petitioners under pressure of highly influential persons with the ulterior motive to defame and to debar them from holding the office of the Society or to dismiss them from the service, so that their minion or favorite persons can be benefited.

6. Principles of natural justice and the law laid down in the of 1960 to take action against erring officials for committing irregularities or illegalities have not been followed. No notice before lodging FIR was issued and no opportunity of hearing was granted to them. As per section 76(2) of theof 1960, to lodge FIR; sanction from the Registrar, Co-operative Societies is necessary, but in this case, no such sanction has been obtained, therefore, FIR lodged by the Deputy Registrar, Co-operative Societies is contrary to the law.

7. There is no evidence to show that any amount was misappropriated or converted into their own use by the petitioners. No one has made complaint that any kind of cheating was committed by them. The members have invested their money in the schemes of the Society. They all were granted proper receipt/FDRs for their investment/deposits and they all have right to get it back as per their investment plan. In the FIR itself, not a single word is been alleged about fraudulent inducement or mensrea, which is essential ingredient to constitute the offence under Section 415 of IPC.

8. The petitioners have not committed any offence of cheating with the members of the Society nor was they ever entrusted with a single rupee from the account of the Society or from the account of any member of the Society, which is necessary to constitute the offence under Section 405 of the IPC. Only omnibus allegations regarding irregularities in disbursement, recovery of loans and non payment of FDRs on maturity have been made against them, but such allegations does not constitute offence under Section 409 or 420 of the IPC.

9. The allegation that an unsigned cheque dated 31.3.2014 was issued by one of the branch of the Society and was credited in the account of the petitioner Suresh is only illusory, as this cheque of Rs.1,77,64,651/- had been deposited in account No.190, which is Short Term Credit Loan (STCL) account of the petitioner Suresh and till 31.3.2016 Rs.1,19,75,000/- and later entire amount of the cheque has been deposited back by him. The Society has issued "No Dues Certificate" (NOC) dated 08.12.2017, which shows that nothing of the Society is due towards him.

10. The Act of 1960 is a complete Code. Chapter IX of this Act deals with the offences. All allegations made against the petitioner are related to the irregularities committed in the working of the Society for which action can only be taken under the Act, 1960. In this regard, reliance has been placed on the judgment of Awadesh Raghuvanshi Vs. State of M.P., (2013) 3 MPHT 116 : 2013 E-JURIS (MP) (3) 11. It is submitted that registration of FIR under Section 409 or 420 of the IPC is abuse of Authority of law, therefore, the FIR registered against the petitioners be quashed.

11. It is also argued by the petitioners of MCRC No. 41279/2019 that they are only employees of the Society and have performed their duties under the directions of the office bearer of the society, therefore, they cannot be held responsible for any misdeed of their employers.

12. In reply, at the outset, the learned public prosecutor has submitted that the date 18.3.2018 is only a date of re-election of the petitioners of petition No. 41268/2019, but prior to that also they were president and members of Board of Directors from 9.11.2012 to 4.12.2017 and all alleged irregularities/illegalities have been committed during this period.

13. In respect of claim of the petitioners that they have taken stern action against the defaulters of the Society, the truth is that all 93 cases have been lodged and Rs.36.11 Crores were recovered by the petitioners only when the irregularities committed by them were unveiled by the audit officer and looking to the magnitude of embezzlement, this is only a peanut to eyewash the Authority. Further, amount of Rs.36.11 Crores is not available in the account of the Society. It is not revealed by the petitioners as to where this amount is lying at present. No cash book is recovered showing deposit of this amount. Accounts of the Society have nil or negative balance, which shows that even this amount is embezzled by the petitioners.

14. The learned Public Prosecutor pointed out that The judgment of Awadesh Raghuvanshi Vs. State of M.P. (supra) is over ruled by the Division Bench of this Court vide judgment dated 13.9.2019 rendered in MCRC No.10483/2010 Dr.R.K.Rawat Vs. State of M.P.

15. Thus, it is averred, all 3 main contentions of the petitioners are contrary to the record, misleading, misconceived and pressed into service by concealing the true facts, which itself shows lack of bonafide of the petitioners.

16. It is contented by the learned Public Prosecutor that there are three main allegations against the petitioners:

(i) Several financial irregularities were committed in accepting investments.

(ii) The amount invested/deposited by the members of the Society was not refunded.

(iii) Loans were distributed illegally, which turned into bad loans and could not be recovered, resulting in great financial loss to the Society.

17. The Society was authorized to collect Rs. 80 lakhs as share capital, but it has collected Rs. 7.16 crores (7,16,41,689/-). No permission to collect such huge amount was taken from the department or from any competent authority. It was authorized to collect investment of Rs. 8.25 crores but has collected Rs. 83.38 crores (Rs.83,38,95,139/-). Against the laws/bylaws, the Society distributed loans of Rs.90.93 crores (Rs.90,93,78,317/-). The Society was not authorized to open branches, but it opened 9 branches and without any authority, without registration and without obtaining permission from the RBI, it started banking activities and floated several schemes of investment and allured the people to invest money by promising them attractive returns. Loans were distributed without any collateral securities, without assessing repayment capacity and without ascertaining their identity. Even the forms of the debtors are not filled completely. KYCs were not collected. Loans were distributed and disbursed even prior to sanction of the Board of Directors. The petitioners failed to produce records of loans distributed. No cash book is maintained. Petitioner Suresh Tanted himself withdrew Rs. 1.77 crores by self cheque with his own signatures and without any sanction of the Board of Directors and misappropriated this amount. Not only common man but institution like Nagar Parishad, Rajgargh was also cheated. Wife of the petitioner was Chairman of Nagar Parishad, Rajgargh. Against the by-laws, she deposited Rs. 17,56,374 in the Society, while she was only authorized to deposit this money with some nationalized bank. Even this amount is not being refunded by the Society. Liability of the Society is in crores while its accounts are nil or are in negative balance or have insignificant amount like Rs. 10 lakhs only against the receipt of crores of rupees. There is nothing to show as to where the money has gone. Thousands of people have been cheated by the Society. Most of the victims are poor labours or pensioners, who have deposited savings of their entire life in the hope of a better tomorrow or a better retired life. This is a scam of more than 150 crores of rupees. Magnitude of the crime is increasing day by day. 119 complainants have been received and many more are still coming. Several FIRs have been registered. The petitioners are not co-operating with the investigation. Most of the records are with them. Without the record, trail of money cannot be traced. Still the investigating agency is struggling to find out as to where the money has gone. Taking advantage of their abscondance from clutches of the law, they are not producing the record rather destroying them. They are not coming forward but are still absconding.

18. The learned Public Prosecutor demonstrated Audit Report running in more than 70 pages wherein all the alleged irregularities and the act attributed to the petitioners have been pointed out by the Audit Officer.

19. Reliance is placed by the learned Public Prosecutor on State of M.P. Vs. Rameshwar & others, (2009) 11 SCC 424 wherein Honble the Supreme Court has held that though the M.P. Cooperative Societies Act, 1960 is a complete code but it does not bar action under the general criminal law. Para 48 of this judgement is being reproduce here for ready reference:

"48. Mr. Tankhas submissions, which were echoed by Mr. Jain, that the M.P. Cooperative Societies Act, 1960 was a complete code in itself and the remedy of the prosecuting agency lay not under the criminal process but within the ambit of Sections 74 to 76 thereof, cannot also be accepted in view of the fact that there is no bar under the M.P. Cooperative Societies Act, 1960, to take resort to the provisions of the general criminal law, particularly when charges under the Prevention of Corruption Act, 1988, are involved."

20. Further reliance has been placed on Rameshwar Patel & others Vs. State of M.P.,2011 SCConlineMP wherein in identical circumstances the Division Bench of this Court has refused to quash the prosecution.

21. I have heard the parties at length and have perused the record.

22. Before appreciating the facts of the case in hand, it would be trite to have a look the legal proposition with regard to exercise of extraordinary jurisdiction by the High Court for quashing First Information Report and other consequential proceedings.

23. The Honble Supreme Court has time and again held that the power under Section 482 of Cr.P.C. is extra ordinary in nature and it is settled proposition of law that this power has to be exercised sparingly and only in the cases where attaining facts and circumstances satisfy that possibilities of miscarriage of justice will arise in case of non-use of power. The Court can interfere in the matters in such exceptional cases where it appears that if the proceedings are not quashed, it would cause great injustice to someone or where functioning of the investigating agency is capricious and arbitrary or the allegations are based on no evidence or material at all available on record or the FIR is registered or being investigated on the basis of such evidence or material, which is wholly irrelevant or arbitrary. At this stage sifting or weighing of the evidence is neither permitted nor expected.

24. A question as to whether quashing of the FIR filed against the respondent - Bhajan Lal for the offences under Sections 161 and 165, IPC and Section 5(2) of the Prevention of Corruption Act was proper and legal, came up for consideration before the Honble Supreme Court in State of Haryana v. Bhajan Lal, (1992) Supp1 SCC 335 (1992 AIR SCW 237 : AIR 1992 SC 604 ). Reversing the order passed by the High Court, the Apex Court explained the circumstances under which such power could be exercised. it was explained that such power could be exercised where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. It is observed in para 102 that:

"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formula and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.

(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."

25. This propositions of law has later been reiterated in Mahesh Chaudhary v. State of Rajasthan,2009 4 SCC 443, Shakson Belthissor v. State of Kerala and Anr, (2010) Supp AIR SC 864 and Mosiruddin Munshi v. Md. Siraj, (2014) AIR SC 3352 and in many other cases.

26. It is held in Krishnanan Vs. Krishnaveni, (1997) AIRSCW 950 : AIR 1997 SC 987 that when the High Court on examination of the record finds that there is grave miscarriage of justice or abuse of process of the Courts or the required statutory procedure has not been complied with or there is failure of justice or order passed or sentence imposed by the Magistrate requires correction, it is the duty of the High Court to have it corrected at the inception lest grave miscarriage of justice would ensue. It is, therefore, to meet the ends of justice or to prevent abuse of the process that the High Court is preserved with inherent power and would be justified, under such circumstances, to exercise the inherent power. It may be exercised sparingly so as to avoid needless multiplicity of procedure, unnecessary delay in trial and protraction of proceedings.

27. In Inder Mohan Goswami And Another Vs State of Uttaranchal and others, (2007) 12 SCC 1 : (2008) 1 SCC (Cri) 259 , at page 10 Honble the Apex Court observed:

23. This Court in a number of cases has laid down the scope and ambit of courts powers under Section 482 CrPC. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under Section 482 CrPC can be exercised:

(i) to give effect to an order under the Code;

(ii) to prevent abuse of the process of court, and

(iii) to otherwise secure the ends of justice.

24. Inherent powers under Section 482 CrPC though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the statute.

27. The powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. The court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court should normally refrain from giving a prima facie decision in a case where all the facts are incomplete and hazy; more so, when the evidence has not been collected and produced before the court and the issues involved, whether factual or legal, are of such magnitude that they cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceedings at any stage.

28. The Apex Court in case of Gian Singh v. State of Punjab, (2012) 10 SCC 303 has held that :

53. Section 482 of the Code, as its very language suggests, saves the inherent power of the High Court which it has by virtue of it being a superior court to prevent abuse of the process of any court or otherwise to secure the ends of justice. It begins with the words, "nothing in this Code" which means that the provision is an overriding provision. These words leave no manner of doubt that none of the provisions of the Code limits or restricts the inherent power. The guideline for exercise of such power is provided in Section 482 itself i.e. to prevent abuse of the process of any court or otherwise to secure the ends of justice. As has been repeatedly stated that Section 482 confers no new powers on the High Court; it merely safeguards existing inherent powers possessed by the High Court necessary to prevent abuse of the process of any court or to secure the ends of justice. It is equally well settled that the power is not to be resorted to if there is specific provision in the Code for the redress of the grievance of an aggrieved party. It should be exercised very sparingly and it should not be exercised as against the express bar of law engrafted in any other provision of the Code.

54. In different situations, the inherent power may be exercised in different ways to achieve its ultimate objective. Formation of opinion by the High Court before it exercises inherent power under Section 482 on either of the twin objectives, (i) to prevent abuse of the process of any court or (ii) to secure the ends of justice, is a sine qua non.

55. In the very nature of its constitution, it is the judicial obligation of the High Court to undo a wrong in course of administration of justice or to prevent continuation of unnecessary judicial process. This is founded on the legal maxim quando lex aliquid alicui concedit, conceditur et id sine qua res ipsa esse non potest. The full import of which is whenever anything is authorised, and especially if, as a matter of duty, required to be done by law, it is found impossible to do that thing unless something else not authorised in express terms be also done, may also be done, then that something else will be supplied by necessary intendment. Ex debito justitiae is inbuilt in such exercise; the whole idea is to do real, complete and substantial justice for which it exists. The power possessed by the High Court under Section 482 of the Code is of wide amplitude but requires exercise with great caution and circumspection.

56. It needs no emphasis that exercise of inherent power by the High Court would entirely depend on the facts and circumstances of each case. It is neither permissible nor proper for the court to provide a straitjacket formula regulating the exercise of inherent powers under Section 482. No precise and inflexible guidelines can also be provided."

29. Similar view has been taken in Paramjeet Batra Vs State of uttarakhand and others, (2013) 11 SCC 673. Relevant para of this judgement reads thus:

7. While exercising its jurisdiction under Section 482 of the Code the High Court has to be cautious. This power is to be used sparingly and only for the purpose of preventing abuse of the process of any court or otherwise to secure ends of justice. Whether a complaint discloses a criminal offence or not depends upon the nature of facts alleged therein. Whether essential ingredients of criminal offence are present or not has to be judged by the High Court. A complaint disclosing civil transactions may also have a criminal texture. But the High Court must see whether a dispute which is essentially of a civil nature is given a cloak of criminal offence. In such a situation, if a civil remedy is available and is, in fact, adopted as has happened in this case, the High Court should not hesitate to quash criminal proceedings to prevent abuse of process of court.

30. Judgements rendered in C.B.I Vs K.M Sharan, (2008) 4 SCC 471 & in Mahesh Choudhary Vs State of Rajasthan, (2009) 4 SCC 439 also talks about the principles and scope of the inherent power under Section 482 Cr.P.C. to quash charge-sheet and held that the High Court is not supposed to "embark upon the inquiry whether the allegations in FIR and the charge-sheet were reliable or not and thereupon to render definite finding about truthfulness or veracity of the allegations" High Court should have limited its considerations to "... Whether allegations made in the FIR and the charge-sheet taken on their face value and accepted in their entirely would prima facie constitute an offense for making out a case against the accused"

31. Judgement delivered in Vijayander Kumarb Vs State of Rajasthan, (2014) 3 SCC 389 also reiterates the same principles. Para 8 of the judgement is as follows

8. On behalf of the appellants reliance has been placed upon judgments of this Court in the case of Thermax Limited and Others Vs. K.M.Johny and Others[1] and in case of Dalip Kaur and Others vs. Jagnar Singh and another[2]. There can be no dispute with the legal proposition laid down in the case of Anil Mahajan vs. Bhor Industries Limited [3] which has been discussed in paragraph 31 in the case of Thermox Limited (supra) that if the complaint discloses only a simple case of civil dispute between the parties and there is an absolute absence of requisite averment to make out a case of cheating, the criminal proceeding can be quashed. Similar is the law noticed in the case of Dalip Kaur (supra). In this case the matter was remanded back to the High Court because of nonconsideration of relevant issues as noticed in paragraph 10, but the law was further clarified in paragraph 11 by placing reliance upon judgment of this Court in R.Kalyani vs. Janak C.Mehta[4]. It is relevant to extract paragraph 11 of the judgment which runs as follows:

"11.There cannot furthermore be any doubt that the High Court would exercise its inherent jurisdiction only when one or the other propositions of law, as laid down in R. Kalyani v. Janak C. Mehta is attracted, which are as under:

"(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be correct in their entirety, disclosed no cognizable offence.

(2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.

(3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.

(4) If the allegation discloses a civil dispute, the same by itself may not be ground to hold that the criminal proceedings should not be allowed to continue."

32. These guiding principles are reiterated in the judgement of Parbatbhai Aahir v. State of Gujarat, (2017) 9 SCC 641 at page 652, which can be observed as under :

16. The broad principles which emerge from the precedents on the subject, may be summarised in the following propositions:

16.1. Section 482 preserves the inherent powers of the High Court to prevent an abuse of the process of any court or to secure the ends of justice. The provision does not confer new powers. It only recognises and preserves powers which inhere in the High Court.

16.2. The invocation of the jurisdiction of the High Court to quash a first information report or a criminal proceeding on the ground that a settlement has been arrived at between the offender and the victim is not the same as the invocation of jurisdiction for the purpose of compounding an offence. While compounding an offence, the power of the court is governed by the provisions of Section 320 of the Code of Criminal Procedure, 1973. The power to quash under Section 482 is attracted even if the offence is noncompoundable.

16.3. In forming an opinion whether a criminal proceeding or complaint should be quashed in exercise of its jurisdiction under Section 482, the High Court must evaluate whether the ends of justice would justify the exercise of the inherent power.

16.4. While the inherent power of the High Court has a wide ambit and plenitude it has to be exercised (i) to secure the ends of justice, or (ii) to prevent an abuse of the process of any court.

16.5. The decision as to whether a complaint or first information report should be quashed on the ground that the offender and victim have settled the dispute, revolves ultimately on the facts and circumstances of each case and no exhaustive elaboration of principles can be formulated.

16.6. In the exercise of the power under Section 482 and while dealing with a plea that the dispute has been settled, the High Court must have due regard to the nature and gravity of the offence. Heinous and serious offences involving mental depravity or offences such as murder, rape and dacoity cannot appropriately be quashed though the victim or the family of the victim have settled the dispute. Such offences are, truly speaking, not private in nature but have a serious impact upon society. The decision to continue with the trial in such cases is founded on the overriding element of public interest in punishing persons for serious offences.

16.7. As distinguished from serious offences, there may be criminal cases which have an overwhelming or predominant element of a civil dispute. They stand on a distinct footing insofar as the exercise of the inherent power to quash is concerned.

16.8. Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations fall for quashing where parties have settled the dispute.

16.9. In such a case, the High Court may quash the criminal proceedings if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and

16.10. There is yet an exception to the principle set out in propositions 16.8. and 16.9. above. Economic offences involving the financial and economic well-being of the State have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance.

33. In Central Bureau of Investigation Vs. Arvind Khanna, (2019) 10 SCC 686 , the Honble Supreme Court has again discussed the principles and parameters to be kept in mind, while deciding a prayer of quashing FIR or the proceedings emanating thereto. Para 17 of the judgment reads thus:-

17. After perusing the impugned order and on hearing the submissions made by the learned senior counsels on both sides, we are of the view that the impugned order passed by the High Court is not sustainable. In a petition filed under Section 482 Cr.P.C., the High Court has recorded findings on several disputed facts and allowed the petition. Defence of the accused is to be tested after appreciating the evidence during trial. The very fact that the High Court, in this case, went into the most minute details, on the allegations made by the appellant C.B.I., and the defence put-forth by the respondent, led us to a conclusion that the High Court has exceeded its power, while exercising its inherent jurisdiction under Section 482 Cr.P.C.

34. In another recent judgment dated 31st January, 2020 rendered in Criminal Appeal No.175 of 2020 State of M.P. Vs. Yogendra Singh Jadon, in similar type of allegations, the Honble Supreme Court has dismissed the plea of quashing the FIR. Relevant paras 2 and 5 containing facts and conclusion of the Honble Apex Court are being reproduced here for ready reference:

2. A charge sheet for the offences under Sections 420, 406, 409, 120B PC and 13(1)(d) and 13(2) of the revention of Corruption Act, 19882 was filed on 9th July, 2008 consequent to registration of FIR No. 3 of 2007 on 23 rd June, 2007. The allegation was that Manohar Singh Jadon, deceased father of the respondents in connivance with other employees of District Cooperative Kendriya Bank Maryadit, Shajapur3 committed financial irregularities on the 1 for short, IPC 2 for short, Act 3 for short, Bankbasis of forged documents by misusing his post and by providing fake loan to the relatives. Manohar Singh Jadon was President of the Bank from 5th February, 1997 to 26th March, 2002 and from 27 th March, 2002 to 7th May, 2004. Harshvardhan Singh Jadon (accusedrespondent No. 2) is the proprietor of M/s. Harshvardhan & Brothers whereas Yogendra Singh (accused-respondent No. 1) is the proprietor of M/s. Sarohar Trading Company. Ghanshyam Sharma, General Manager, Ramanlal Acharya, Manager, Ram Singh Yadav, General Manager were also arrayed as accused. It was alleged that accused Harshvardhan Singh Jadon submitted an application on 2nd November, 2000 for grant of cash credit limit of Rs.25 lakhs and that the cash credit limit was sanctioned without following the due procedure. It was also alleged that mortgage deed was not registered nor signature of original loanee was found on the mortgage paper. It is also pointed out that an amount of Rs.59,88,327/- was balance on 1st December, 2001 even after depositing Rs.25 lakhs and that the President has done the renewal of cash credit limit at his own level and its confirmation was got done later on from the loan Sub-Committee, while the case was of the son of the President alone. In respect of Yogendra Singh, again the allegation is that cash credit limit of Rs.25 lakhs was sanctioned on the basis of his application dated 30 th July, 2001 without completing any of the procedural requirements and without mortgage of any of the property. Smt. Saroj Singh mortgaged the land but without any valuation. The surety of Ishwar Singh was taken. The same person mortgaged land as in the case of Harshvardhan. Similar is the assertion in respect of registration of mortgage. It was also alleged that a sum of Rs.25,65,894/- is the balance as on 31st March, 2002 even after withdrawal beyond the approved credit limit of Rs.25 lakhs.

5. We find that the High Court has examined the entire issue as to whether the offence under Sections 420 and 120-B is made out or not at pre trial stage. The respondents are beneficiary of the grant of cash credit limit when their father was the President of the Bank. The power under Section 482 of the Code of Criminal Procedure, 1973 cannot be exercised where the allegations are required to be proved in court of law. The manner in which loan was advanced without any proper documents and the fact that the respondents are beneficiary of benevolence of their father prima facie disclose an offence under Sections 420 and 120-B IPC. It may be stated that other officials of the Bank have been charge sheeted for an offence under Sections 13(1)(d) and 13(2) of the. The charge under Section 420 IPC is not an isolated offence but it has to be read along with the offences under the to which the respondents may be liable with the aid of Section 120-B of IPC.

35. Coming back to the case in hand, in the present matter two main allegations have been made by the prosecution. First; Cheating and Second; misappropriation of the funds entrusted to the petitioners as President/members of Board of Directors or as Managers of the Society.

36. Cheating punishable under Section 420 of the IPC is defined in Section 415 of IPC, which reads thus:-

415. Cheating.-Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".

Explanation.-A dishonest concealment of facts is a deception within the meaning of this section.

37. Criminal Breach of trust is defined in Section 405 of the IPC, which reads thus:

405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust". Explanation [1].-A person, being an employer 3[of an establishment whether exempted under section 17 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), or not] who deducts the employees contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.] Explanation 2. -A person, being an employer, who deducts the employees contribution from the wages payable to the employee for credit to the Employees State Insurance Fund held and administered by the Employees State Insurance Corporation established under the Employees State Insurance Act, 1948 (34 of 1948), shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid. Illustrations

(a) A, being executor to the will of a deceased person, dishonestly disobeys the law which directs him to divide the effects according to the will, and appropriate them to his own use. A has committed criminal breach of trust.

(b) A is a warehouse-keeper. Z going on a journey, entrusts his furniture to A, under a contract that it shall be returned on payment of a stipulated sum for warehouse room. A dishonestly sells the goods. A has committed criminal breach of trust.

(c) A, residing in Calcutta, is agent for Z, residing at Delhi. There is an express or implied contract between A and Z, that all sums remitted by Z to A shall be invested by A, according to Zs direction. Z remits a lakh of rupees to A, with directions to A to invest the same in Companys paper. A dishonestly disobeys the direction and employs the money in his own business. A has committed criminal breach of trust.

(d) But if A, in the last illustration, not dishonestly but in good faith, believing that it will be more for Zs advantage to hold shares in the Bank of Bengal, disobeys Zs directions, and buys shares in the Bank of Bengal, for Z, instead of buying Companys paper, here, though Z should suffer loss, and should be entitled to bring a civil action against A, on account of that loss, yet A, not having acted dishonestly, has not committed criminal breach of trust.

(e) A, a revenue-officer, is entrusted with public money and is either directed by law, or bound by a contract, express or implied, with the Government, to pay into a certain treasury all the public money which he holds. A dishonestly appropriates the money. A has committed criminal breach of trust.

(f) A, a carrier, is entrusted by Z with property to be carried by land or by water. A dishonestly misappropriates the property. A has committed criminal breach of trust.

38. In the present case allegations against the applicants are that in furtherance of conspiracy hatched by them, they started banking activities without any permission, floated several schemes and collected crores of rupees by alluring the people assuring them attractive returns and as office bearer or the officers of the Society, misappropriated the money entrusted to them by thousands of people. They sanctioned and advanced loans of crores of rupees without collateral securities and without even complete documentation. They were generous to their minion. Many of the debtors, who were benefited in such manner are still not traceable. The loans were sanctioned and disbursed against the policy of the Society. Even the president of the Society withdrew whopping amount of Rs.1.77 crores by his own signatures and used for himself. He did not even bother to get it sanctioned from the Board of Directors. All these allegations have been mentioned in para 15 above in the contentions of the State. The evidence and the act attributed to the petitioners are discussed in detail in the inquiry report submitted by the officer. The investigation is at initial stage. Several documents have to be collected and have to be analyzed to find out the specific act of the each of the person involved in the alleged offence. The evidence collected till date is prima facie sufficient to show that the elements necessary to constitute the offence as defined in Section 405 and 415 of IPC are well available on record. Therefore, keeping in view the principles laid down by the Honble Supreme Court, in the considered opinion of this Court, it would not be justified to abort the investigation at this preparatory stage. Keeping in view the allegations and the evidence available to support them, no case of quashing the FIR at this stage is made out. The petitions preferred by the petitioners are sans merits and are dismissed accordingly.