Petitioners win stay against enforcement officers' summoning after jurisdictional challenge rejected by High Court

The Allahabad HC ruled in favor of petitioners seeking stay of summoning by enforcement officers. The court rejected respondent's jurisdictional challenge, finding the matter within territorial jurisdiction as the ECIR registration stemmed from an FIR filed in Greater Noida, UP. The court determined the dispute was civil in nature but given criminal color, noting YEIDA's failure to pursue civil proceedings and instead filing FIR appeared mala fide and unsustainable. Interim relief was granted to petitioners with case listed for August 28, 2023.

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Issues Involved:
1. Constitutionality of Section 420 IPC.
2. Interim relief for stay of proceedings.
3. Jurisdiction of the court.
4. Nature of the dispute (civil vs. criminal).
5. Previous Supreme Court orders and their implications.

Summary:

1. Constitutionality of Section 420 IPC:
The petitioners sought a declaration that Section 420 of the IPC is "manifestly arbitrary and ultra vires" to the Constitution of India, specifically violating Articles 14 and 21. They argued that there is no significant difference between Section 417 and Section 420 IPC regarding the offense of cheating concerning the delivery of property, yet Section 420 prescribes a higher punishment without any "intelligible differentia."

2. Interim Relief for Stay of Proceedings:
The petitioners requested interim relief to stay the summoning of their officers, representatives, and managers by Respondent Nos. 2 and 4, arising from the impugned FIR No. 197 of 2023 and ECIR/HIU-1/06/2023. The court considered the facts, including the financial transactions and defaults involving Indiabulls Housing Finance Ltd. and Shipra Group, leading to the sale of pledged shares and properties.

3. Jurisdiction of the Court:
Respondent No. 4 argued that the Delhi High Court should have jurisdiction over the matter since the ECIR was registered in Delhi. However, the court overruled this objection, stating that the FIR was registered in Greater Noida, which falls within its territorial jurisdiction.

4. Nature of the Dispute (Civil vs. Criminal):
The court found that the dispute was prima facie civil in nature, given a criminal color by YEIDA. The court noted that YEIDA had not attempted to institute civil proceedings against the petitioners, indicating possible mala fides. The court referenced the Supreme Court's observations in Indian Oil Corporation Ltd. vs. NEPC (India) Ltd., which discouraged settling civil disputes through criminal prosecution.

5. Previous Supreme Court Orders and Their Implications:
The court acknowledged the Supreme Court's orders in related cases, which had stayed criminal proceedings and protected the petitioners from coercive actions. The court cited the Supreme Court's directive allowing the petitioners to approach the High Court for relief and emphasized that the interim protection granted by the Supreme Court would continue.

Conclusion:
The court granted interim relief, staying further proceedings, including summoning of officers, related to FIR No. 197 of 2023 and ECIR/HIU-1/06/2023, as it pertains to the petitioners. The court directed the parties to exchange pleadings within six weeks and scheduled the next hearing for the week commencing 28 August 2023.

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