Case Background
The complainant (Opposite Party No. 2) was appointed as Branch Head, Patna Operations, in HDFC Bank’s Wholesale Banking Operations at Jamal Road, Patna. His appointment letter was issued under the signature of the Head, HR Operations, HDFC Bank Ltd., Mumbai, and he joined duty on 26.03.2012.
According to the complaint, his work was to properly re-check clearing cheques and trade-related documents before sending them to the Central Processing Units. While he was working in this post, an inquiry was initiated against him. He was put under suspension by order dated 25.02.2016 on charges of serious lapses. Later, he was terminated from service on 30.06.2016.
The complainant claimed that an RTI reply dated 02.12.2016 from the Reserve Bank of India informed him that HDFC Bank had reported a fraud, bearing reference number HDFC1601-0070 dated 11.03.2016. He was also informed that a police complaint had been lodged at Kotwali Police Station as Diary No. GD 1143 dated 29.07.2016.
To verify this, he applied to the Public Information Officer at Kotwali Police Station seeking details of the complaint. He received information vide letter dated 20.02.2017 stating that HDFC Bank had only lodged a sanha (general diary entry) on 29.07.2016, GD No. 1143, regarding loss of the diary of HDFC Bank.
The complainant then lodged a complaint before the National Stock Exchange of India, alleging non-reporting of the fraud to the stock exchange. In response, the accused officers of HDFC Bank reportedly wrote to the National Stock Exchange on 28.04.2017 stating that the complainant was an accused and ex-employee of HDFC Bank and involved in fraud.
The complainant further stated he came to know of another communication dated 22.05.2017 from the accused persons to the National Stock Exchange of India, wherein it was allegedly mentioned that he had committed fraud of Rs. 1.86 crores.
A criminal complaint with Kotwali Police Station was lodged against the complainant, which, according to the complaint, later revealed that information dated 03.07.2017 under GD No. 1143 had been registered on the basis of an application by R. Mani, State Head, HDFC Bank, Currency Chest, Jamal Road, Patna, regarding loss of the General Diary.
The complainant asserted that he had committed no wrong against HDFC Bank. He alleged that the accused officers knowingly and intentionally furnished wrong information to the Reserve Bank of India and to the National Stock Exchange, describing him as an accused in a criminal fraud case involving Rs. 1.86 crores. He also relied on information received from the Registrar, Central Information Commission, that a fraud was committed by certain employees, including him, of HDFC Bank at its Bhagalpur branch in connection with GD No. 1143 dated 29.07.2016. He asserted he was never posted at Bhagalpur and had always been posted in Patna.
On this basis, he alleged that the accused bank officers had deliberately given wrong information to tarnish his image and reputation, and to prevent him from getting a suitable job.
In his complaint case (Complaint Case No. 1077 (C) of 2018) filed before the Chief Judicial Magistrate, Patna, he was examined on solemn affirmation (S.A.). One witness, Rakesh Kumar Verma, was also examined under Section 202 of the Code of Criminal Procedure, who supported the complaint.
On 10.01.2019, the learned ACJM-III, Patna took cognizance of offences under Sections 199 and 200 of the Indian Penal Code and issued processes against 11 accused officers of HDFC Bank (the petitioners before the High Court).
Aggrieved by the summoning order, these officers filed multiple criminal miscellaneous petitions under Section 482 Cr.P.C. before the Patna High Court seeking quashing of the order dated 10.01.2019, as far as it related to them.
What the Court Examined and Decided
Before the Patna High Court, the petitioners’ senior counsel put forward a detailed defence. He first outlined the internal events in HDFC Bank which had led to the reporting of fraud.
During a regular branch audit of HDFC Bank’s Wholesale Banking Operations (WBO) branch at Bhagalpur, it was found that entries in the General Ledger account of outward clearing settlement showed an unreconciled debit outstanding of Rs. 186.84 lakhs. This amount had not been reconciled over a period of time, and the balance was later moved from WBO Bhagalpur branch to WBO Patna branch.
Internal investigation revealed that these balances had been fraudulently managed over a period. In some cases, payments had been made without checking funds realisation, and on customer follow-ups, the branch was booking new schedules for the same amount and granting credits without receiving the corresponding funds from drawee banks.
The investigation further showed that this process had several lacunae which were not identified at the levels of Branch Operations Manager, Cluster Head or State Head. The bank reported the incident to the Officer-in-Charge of Kotwali Police Station, Patna, where Station Diary No. 1143 dated 29.07.2016 was registered.
Thereafter, a follow-up was made with the police on 09.06.2017 on the GD lodged initially on 28.07.2016. It was confirmed by Kotwali Police Station that the matter was under investigation. Subsequently, HDFC Bank filed Complaint Case No. 3582 (C) of 2018, which was referred to Kotwali Police Station for investigation under Section 156(3) Cr.P.C. by order dated 23.08.2018. On that basis, Kotwali P.S. Case No. 583 of 2018 was registered on 03.09.2018 against the complainant and other accused persons.
The senior counsel also pointed out that, apart from the complainant, six other employees who had allegedly connived with him and caused loss to the bank had given written statements dated 16.03.2016, admitting their negligence. All of them, along with the complainant, were terminated for negligence.
It was further submitted that Kotwali Police had sent a report dated 19.12.2018 to the learned Magistrate (forming part of the complaint case record), stating that two FIRs had been lodged by terminated employee Pravin Kamal Kishore and by Rakesh Kumar Verma (the same person who appeared as witness in the complaint) concerning similar issues. These cases were under investigation, and one FIR had also been registered on HDFC Bank’s own complaint against the complainant and others. In this situation, according to the petitioners, the Magistrate ought not to have proceeded with the complaint case in the manner he did.
The petitioners also pointed out that the complainant had filed Title Suit No. 213 of 2017 before the Civil Court, Patna, challenging his termination by HDFC Bank. They argued that the dispute was primarily civil in nature, revolving around service termination, and did not amount to a criminal case. Even if all allegations in the complaint were accepted as true, they did not, in their view, disclose the essential ingredients of offences under Sections 199 and 200 IPC (relating to false statements made in declarations by persons bound by law).
A significant plank of their argument was that HDFC Bank is a company registered under the Companies Act, and the petitioners were its officers in various capacities such as Chief Compliance Officer, Head Legal and Secretarial, Vice Presidents, Regional Heads, State Heads and Branch Head. They emphasised that these officers were not involved in the day-to-day operations at the relevant branches and had no personal role in any alleged false reporting.
According to them, no specific, individual allegation was made in the complaint against any of the petitioners. The accusations were general and omnibus. They argued that they had been roped in solely to pressurise the bank and to settle the complainant’s employment-related dispute through criminal proceedings.
The petitioners relied on several Supreme Court judgments to contend that criminal liability cannot be fastened vicariously on company officers when the company itself is not made an accused, and when no specific role is attributed to them. The Patna High Court particularly referred to the decision in Thermax Ltd. v. K.M. Johny, where the Supreme Court held that senior officers who had no personal role in the alleged acts could not be prosecuted merely due to their positions. The Court also cited Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd., where it was held that being a Chairman, Managing Director or senior executive does not automatically make one criminally liable unless a specific role is clearly alleged.
On the other hand, counsel for the complainant argued that the complaint did disclose offences under Sections 199 and 200 IPC, and that the Magistrate had rightly taken cognizance based on the complaint, the complainant’s statement and the witness’s statement. They stressed that at the summoning stage the only question is whether a prima facie case exists; the High Court, while exercising jurisdiction under Section 482 Cr.P.C., should not undertake a detailed examination of the merits or consider the defence of the accused. They relied on earlier decisions of the Patna High Court and on Supreme Court decisions in Kamladevi Agarwal, Neeharika Infrastructure and State of Madhya Pradesh v. Kunwar Singh on the limits of interference at the investigation or summoning stage.
After hearing both sides and examining the complaint, the solemn affirmation and the statement of the sole witness, the Patna High Court reached a clear conclusion. It found that no allegations had been made that any of the petitioners had personally dealt with the matters in question in discharge of their official duties. The order of the Magistrate summoning the accused must show that he has applied his mind to the facts, the nature of allegations and the role of each person arrayed as an accused. The High Court noticed that this had not been done.
The Court further held that the Indian Penal Code, except where it expressly provides, does not recognise vicarious criminal liability. A person cannot be made criminally liable only because of his designation in a company if there are no direct allegations of his involvement. In the present case, the complaint petition and the material on record did not disclose commission of any offence against the petitioners. The necessary ingredients of offences under Sections 199 and 200 IPC were found to be completely lacking.
On this basis, the High Court held that the order dated 10.01.2019 passed by the ACJM-III, Patna in Complaint Case No. 1077 (C) of 2018, insofar as it related to the petitioners, was not sustainable in fact or in law. The summoning order was accordingly quashed, and all the criminal miscellaneous petitions were allowed.
Why This Judgment Matters
This judgment is important for employees of banks and companies who hold senior posts but are not directly involved in branch-level transactions. It reinforces that such officers cannot be dragged into criminal cases just because they hold high designations.
For dismissed employees who feel that false information has been circulated about them, the case shows that they must clearly spell out who did what, and how each person is personally responsible. Merely naming multiple senior officers without specific allegations will not sustain criminal proceedings.
For Magistrates and lawyers, the decision underlines that an order issuing summons must reflect judicial application of mind to the role of each accused. The Patna High Court has clearly said that where core ingredients of the alleged offences are missing, and vicarious liability is wrongly assumed, the High Court can step in under Section 482 Cr.P.C. to prevent misuse of criminal law.
Legal Issues and Answers
Issue: Whether senior officers of HDFC Bank, holding various managerial posts, could be summoned in a criminal complaint for alleged false reporting of fraud without specific allegations against them or against the bank itself.
Answer: No. The Patna High Court held that criminal liability cannot be fastened vicariously on company officers in the absence of specific allegations of their personal role, especially when the company is not made an accused.
Issue: Whether the complaint and supporting materials disclosed the basic ingredients of offences under Sections 199 and 200 IPC against the petitioners.
Answer: No. The Court found that the necessary ingredients of these offences were wanting in the complaint and that no offence was disclosed against the petitioners.
Issue: Whether the Magistrate’s order taking cognizance and issuing process satisfied the requirement of application of mind to the role of each accused.
Answer: No. The High Court noted that the summoning order did not reflect proper consideration of the facts, nature of allegations and individual roles, and therefore it was unsustainable.
Cases Cited by the Court
Thermax Ltd. & Ors v. K.M. Johny & Ors, (2013) 4 SCC 412
Ravindranatha Bajpe v. Mangalore Special Economic Zoned Ltd. & Ors, AIR 2021 SC 4587
Maksud Saiyed v. State of Gujarat, (2008) 5 SCC 668
S.K. Alagh v. State of Uttar Pradesh, (2008) 5 SCC 662
Indian Oil Corporation v. NEPC India Ltd. & Ors, (2006) 6 SCC 736
S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla & Anr, 2005 CriLJ 4140
Kamladevi Agarwal v. State of West Bengal & Ors, (2002) 1 SCC 555
M/s Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra & Ors, Criminal Appeal No. 330 of 2021
State of Madhya Pradesh v. Kunwar Singh, 2021 (3) RCR (Criminal) 734
Niro Devi v. State of Bihar, Criminal Miscellaneous No. 36523 of 2014 (Patna High Court)
Heera Verma & Ors v. State of Bihar, Criminal Miscellaneous No. 48696 of 2013 (Patna High Court)
Case Details
Case Numbers: Criminal Miscellaneous No. 37919 of 2019; Criminal Miscellaneous No. 32987 of 2019; Criminal Miscellaneous No. 33426 of 2019; Criminal Miscellaneous No. 33800 of 2019; Criminal Miscellaneous No. 34056 of 2019 (in Criminal Revision No. 525 of 2019); Criminal Miscellaneous No. 34553 of 2019 (in Criminal Revision No. 513 of 2019); Criminal Miscellaneous No. 34859 of 2019 (in Criminal Revision No. 530 of 2019); Criminal Miscellaneous No. 35364 of 2019 (in Criminal Revision No. 552 of 2019), all arising out of Complaint Case No. 1077 (C) of 2018.
Case Title: Various HDFC Bank officers (as petitioners) v. The State of Bihar & Priya Ranjan Srivastava (Opposite Parties).
Court: High Court of Judicature at Patna.
Coram: Hon’ble Mr. Justice S. Kumar.
Date of Judgment: 29.11.2021.
Citation: 2022 (1) PLJR 914.
Advocates for Petitioners: Mr. P.K. Shahi, Senior Advocate; Mr. Girijish Kumar, Advocate (in all mentioned petitions).
Advocates for Opposite Party No. 2 (Complainant): Mr. Nawal Kishore Prasad, Advocate; Ms. Jyoti Kumari, Advocate; Mr. Anil Kumar Singh No. 1, Advocate; Mr. Sanjay Kumar, Advocate (as recorded separately in different petitions).
Advocate for State of Bihar: Not specifically mentioned in the extracted text.
Nature of the Case: Petitions under Section 482 Cr.P.C. seeking quashing of the order of cognizance and issuance of process in a criminal complaint alleging offences under Sections 199 and 200 IPC.
Link to Judgment: Click here to read the full judgment of the Patna High Court
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