The Supreme Court has officially quashed a criminal case against several HDFC Bank officials accused of allowing a woman to access her bank locker despite a restraining order issued by the Income Tax (IT) Department. This ruling came in the case *HDFC Bank Limited v. State of Bihar and Others*.
The Bench, consisting of Justice BR Gavai and Justice KV Viswanathan, found no evidence suggesting that the bank officials had acted with dishonest intent or induced anyone to deliver property. The Court emphasized that for a charge under Section 420 (cheating and dishonestly inducing delivery of property) of the Indian Penal Code (IPC) to be applicable, there must be clear evidence that the bank had engaged in fraudulent conduct from the outset and that mens rea (criminal intent) was present at the time of the alleged inducement.
The Court noted, “The appellant-bank is a juristic person, and therefore, the question of mens rea does not arise.” It also determined that the allegations of criminal breach of trust were unfounded and reached similar conclusions regarding other offences cited against the bank officials.
The justices pointed out that the FIR and complaint did not demonstrate that the bank and its officers had acted with a shared intention or had intentionally collaborated to commission any alleged offences. As a result, the provisions of sections 34, 37, and 120B of the IPC were deemed inapplicable.
The case originated from an order issued on October 5, 2021, by the IT Department, which imposed restrictions on the operations of bank lockers, accounts, and fixed deposits belonging to specific HDFC Bank customers under investigation for tax evasion. While the bank complied with this order, the IT Department later directed the bank on November 1, 2021, to revoke the freeze on these accounts, including that of one customer, Sunita Khemka.
Following this, customers were allowed to operate their bank accounts. However, HDFC Bank subsequently permitted Khemka to access her bank locker, leading to a search and seizure operation on November 20, 2021. During this operation, it was revealed that Khemka had accessed her locker with the assistance of bank officials, which was found to be a breach of the IT Department’s earlier restraining order.
In response, the IT Department summoned the Branch Manager, Branch Operation Manager, and Teller Authoriser for clarification. The bank officials claimed they had misinterpreted the November 1 order, believing it also extended to bank lockers. Unsatisfied with this explanation, the IT Department complained to the police, resulting in the officials being charged under various provisions of the IPC.
Initially, the Patna High Court in 2022 refused to quash the case, prompting HDFC Bank to appeal to the Supreme Court. The apex court ultimately ruled in favour of the bank officials, dismissing the charges against them. Senior Advocate Neeraj Kishan Kaul represented HDFC Bank in the proceedings, while Advocates Manish Kumar and Venkataraman Chandrashekhara Bharathi, including the Income Tax Department, appeared for the respondents.
This ruling underscores the legal protections afforded to bank operations and clarifies the boundaries of responsibility for bank officials about conflicting directives from government authorities. It reinforces the principle that banking personnel should not be penalized for misinterpretations of administrative orders while fulfilling their professional duties.
