In a landmark ruling, the Supreme Court of India quashed criminal proceedings against HDFC Bank, emphasizing that a bank, as a juristic entity, cannot possess "mens rea" or criminal intent, which is essential for proving offenses under the Indian Penal Code (IPC). The judgment was delivered by a bench comprising Justice B.R. Gavai and Justice K.V. Viswanathan.
The case began after an October 2021 search by the Income Tax Department at the premises of Smt. Sunita Khemka in Patna, leading to a prohibitory order on her bank locker at HDFC Bank. Despite a partial revocation of the order, bank officials allowed Khemka access to the locker, allegedly due to a misinterpretation. This prompted a complaint from the Income Tax Department and led to an FIR against the bank officials for cheating, criminal breach of trust, and conspiracy.
The Supreme Court clarified that a juristic entity like a bank cannot have "mens rea," a fundamental component of crimes under Sections 406, 409, and 420 of the IPC. It also found no evidence of dishonest misappropriation or criminal breach of trust by bank officials. The misinterpretation of the revocation order, the Court noted, was done in good faith and did not amount to criminal intent.
Senior Advocate Neeraj Kishan Kaul, representing HDFC Bank, argued that the FIR lacked elements of criminal liability, while Advocate Manish Kumar, for the State of Bihar, argued for further investigation. Ultimately, the Court quashed the FIR, concluding that continuing criminal proceedings would cause undue hardship, given the lack of intent or misappropriation.
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