2003 (3) TMI 552 - HC - Companies Law

High Court dismisses writ petitions lacking jurisdiction to quash FIRs in Kolkata

The High Court of Madras dismissed both writ petitions, as it lacked territorial jurisdiction to quash the FIRs filed in Kolkata. The court emphasized the ... Territorial jurisdiction - cause of action - quashing of FIR - extraordinary jurisdiction under Article 226 - section 156(3) of the Code of Criminal Procedure - interference with ongoing investigation - relevance of Joint Parliamentary Committee findingsTerritorial jurisdiction - cause of action - quashing of FIR - section 156(3) of the Code of Criminal Procedure - extraordinary jurisdiction under Article 226 - interference with ongoing investigation - relevance of Joint Parliamentary Committee findings - Whether the High Court of Madras has territorial jurisdiction to entertain writ petitions seeking quashing of FIRs Nos. 476 (dated 24-9-2002) and 300 (dated 23-9-2001) registered in Kolkata, and whether the Court should on merits quash or interfere with the ongoing investigations. - HELD THAT: - The Court held that on the materials before it - the complaints under section 156(3) CrPC, the FIRs and extracts of the Joint Parliamentary Committee report - the cause of action for the alleged offences had wholly arisen within the city limits of Kolkata where the complainants (Calcutta Stock Exchange Association and Stock Holding Corporation of India Limited, Calcutta) are situated. A mere communication to the registered office of the company in Chennai did not establish that part of the cause of action arose within the territorial jurisdiction of this Court. Reliance on Navinchandra N. Majithia and related authorities was considered but distinguished on the facts: those decisions turned on specific averments showing part of the cause of action arose within the forum or on alternative reliefs (such as transfer) which were not available here. The Court further noted the weight of the Joint Parliamentary Committee's findings and that a full investigation was pending; in such circumstances it would be improper to stall or interfere with the investigation by exercising extraordinary jurisdiction under Article 226 to quash the FIRs. The Court also observed antecedent interim orders directing the petitioner to surrender before the Court having jurisdiction, which supported the conclusion that this Court lacked territorial competence. Given lack of jurisdiction, the Court did not proceed to adjudicate the merits of the allegations. [Paras 8, 11, 16, 17, 18]The High Court of Madras has no territorial jurisdiction to quash the FIRs registered in Kolkata; the writ petitions are dismissed and no interference with the ongoing investigations is warranted.Final Conclusion: Both writ petitions seeking quashing of FIRs Nos. 476 and 300 registered in Kolkata are dismissed for want of territorial jurisdiction; the Court declined to entertain merits or to interfere with the ongoing investigations. Issues Involved:1. Territorial jurisdiction to quash FIRs.2. Maintainability of the writ petitions.3. Alleged involvement of the petitioner in the scam.4. Alternative remedies available to the petitioner.5. Interim orders and conditions imposed by the court.Detailed Analysis:1. Territorial Jurisdiction to Quash FIRs:The primary issue in this case is whether the High Court of Madras has the territorial jurisdiction to quash FIRs Nos. 476 and 300 filed by the Detective Department, Kolkata. The petitioner argued that since DSQ Software Limited is registered in Chennai and the SEBI's order of cancellation was communicated to Chennai, part of the cause of action arose in Chennai. However, the court found that the cause of action arose wholly within Kolkata, where the Calcutta Stock Exchange and the Stock Holding Corporation of India Limited are situated. The court concluded that merely receiving a communication in Chennai does not confer jurisdiction to the High Court of Madras.2. Maintainability of the Writ Petitions:The respondents contended that the writ petitions are not maintainable as the High Court of Madras lacks territorial jurisdiction. The court agreed, emphasizing that the main factor in determining jurisdiction for a criminal offence is the place where the alleged offence was committed. The court referred to the complaints filed under section 156(3) of the Criminal Procedure Code and the findings of the Joint Parliamentary Committee to conclude that no part of the cause of action arose in Chennai.3. Alleged Involvement of the Petitioner in the Scam:The petitioner argued that he had no involvement in the alleged scam and that the FIRs do not disclose any case against him. The respondents, however, presented evidence of a criminal conspiracy involving the petitioner and other accused to cheat the Calcutta Stock Exchange and its investors. The court noted the findings of the Joint Parliamentary Committee, which indicated the petitioner's involvement in a nationwide security scam affecting the economy. The court emphasized that these allegations need to be fully investigated by the concerned agency.4. Alternative Remedies Available to the Petitioner:The respondents argued that the petitioner should have sought relief from the High Court of Calcutta under section 482 of the Criminal Procedure Code. The court supported this view, noting that the petitioner had not exhausted the alternative remedies available under the statute. The court also referred to previous orders in criminal original petitions where the petitioner was directed to surrender before the court having jurisdiction.5. Interim Orders and Conditions Imposed by the Court:The court highlighted previous interim orders granting anticipatory bail to the petitioner with conditions, including the requirement to surrender before the court having jurisdiction. These conditions indicated the petitioner's awareness that the High Court of Madras lacked jurisdiction. The court also referred to an order by the Bombay High Court in a related case, which supported the respondents' claim that the appropriate court for seeking relief is in Kolkata.Conclusion:The High Court of Madras dismissed both writ petitions, concluding that it lacked territorial jurisdiction to quash the FIRs. The court emphasized the need for a thorough investigation into the allegations and found no grounds to interfere with the ongoing investigation. Consequently, all connected petitions were also dismissed.