The Gujarat High Court on Wednesday quashed an FIR lodged by the CBI and consequential proceedings against Ahmedabad businessman Viral Shah, accused of depositing Rs 1.49 crore in demonetised currency notes of Rs 1,000 and Rs 500 in his firm’s dormant account, days after the announcement of demonetisation in 2016.
Although the FIR was registered with the CBI on April 7, 2017, Shah, the proprietor of Parshwanath Motors in the city, was arrested on October 17, 2017. Shah was booked under IPC sections 120 (B) (Punishment of criminal conspiracy), 417 (Punishment for cheating) and 420 (Cheating and dishonestly inducing delivery of property) and Section 13 (b), read with 13 (1) (d), of the Prevention of Corruption Act. However, all the charges have been quashed and set aside with the court noting that it did not amount to cheating.
The court in its order noted that for cheating to be defined, there should be fraudulent or dishonest inducement, which is not the case here. “Cheating is an essential ingredient for an act to constitute and offence under Section 420,” it said.
It was alleged Shah, in conspiracy with Bhaskar Soni, then manager of UCO Bank, St Xavier’s Branch, in Ahmedabad, and some other unidentified persons, had deposited old Rs 1,000 and Rs 500 notes in the current account of his firm. The deposits made between November 10 and December 30, 2016, were to an account that had been lying dormant for nearly three-and-a-half years. Thereafter, Soni allegedly made the account operative on November 22, 2016. The HC has, however, not quashed the proceedings against Soni.
Shah’s lawyer Chetan Pandya said Rs 1.49 crore was deposited in a KYC-compliant dormant account. “The RBI circular (after demonetisation) had two clauses, including any amount can be deposited in any account, and second, no restriction on operation of any account via non-cash method such as RTGS, NEFT.”
The court took note of Pandya’s arguments and said “mere deposit of huge amount in Shah’s dormant account cannot be termed as cheating or any offence under the IPC or Prevention of Corruption Act.”