TaxTMI 
TaxTMI 
2021 (7) TMI 1282
X X X X Extracts X X X X
X X X X Extracts X X X X
.... de facto complainant, has come up with these Special Leave Petitions. 2. We have heard Shri Dil Jit Singh Ahluwalia, learned counsel for the petitioner and Mr. Siddharth Luthra and Mr. Niranjan Reddy, learned senior counsel appearing for the Respondent Nos. 1 to 3 herein. 3. The petitioner herein filed two complaints on the file of the III Additional Chief Metropolitan Magistrate at Hyderabad against the Respondents 1 to 3 herein on 19.02.2021. The learned Magistrate passed an order under Section 156(3) of the Code of Criminal Procedure, directing the police to register cases and take up investigation, pursuant to which, the Police registered two First Information Reports (FIR for short) in Crime Nos. 218 and 222 of 2021 respectively on 12.03.2021 and 13.03.2021. 4. The Respondents 1 to 3 herein who were the accused in those two complaints were described in those two complaints respectively as (i) Presently Chairman and erstwhile Senior Vice Chairman; (ii) Managing Director and CEO; and (iii) Presently Vice Chairman and erstwhile Chairman of A.P. Mahesh Cooperative Urban Bank. The offences complained of by the petitioner against the Respondents 1 to 3 herein were un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the FIRs in March, 2021 the police issued a notice under Section 91 Cr.PC to the Manager of the Bank asking him to preserve the CCTV footage of a particular period, which was clearly in violation of the mandate of law; and (vii) That the allegations of 'voter fraud' and 'loan fraud' are interrelated to the issues raised in the writ petitions and that therefore further proceedings in the criminal complaints are liable to be stayed. 9. Assailing the said order of the learned Judge, it was contended by Mr. Ahluwalia, learned counsel for petitioner: (i) That the High Court should not have stayed further proceedings, when on a plain reading of the complaints, cognizable offences are prima facie made out, especially in the teeth of the law laid down by this Court in Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra & Others (2021) SCC Online SC 315 and Skoda Auto Volkswagon India Pvt. Ltd. vs. State of U.P. (2020) SCC Online SC 988; (ii) That the impugned order is clearly contrary to the decisions of this Court in Mohd. Allauddin Khan vs. State of Bihar & Ors. (2019) 6 SCC 107 and K. Jagdish vs. Udaya Kumar GS (2020) 14 SCC 552 in as much as it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....election notification was issued on 18.03.2020 but it was withdrawn after COVID19 struck; (ii) A final voters list was issued on 17.11.2020 followed by a fresh election notification on 24.11.2020; (iii) The 1st respondent herein was the Senior Vice Chairman and the 3rd respondent herein was the Chairman in the erstwhile Board of Directors. The 2nd respondent was the Managing Director and CEO; (iv) Immediately after the election notification dated 24.11.2020 was issued, the petitioner herein filed a writ petition on 30.11.2020 in W.P. No. 21795 of 2020, praying for a declaration that the proposed conduct of elections based on a bogus voters list dated 17.11.2020 was illegal and contrary to the provisions of the MultiState Cooperative Societies Act, 2002, as well as certain provisions of the Banking Regulation Act, on account of the illegalities committed by the then Board of Directors. Pending their Writ Petition No. 21795 of 2020, the petitioner herein sought two interim reliefs in I.A. Nos. 1 and 2 of 2020, respectively for (i) the conduct of a thorough investigation with the help of police/investigation agencies and to bring the culprits before law; and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) I.A. No. 2 of 2020 in W.P. No. 23976 of 2020 is filed to direct the 4th respondent Bank to conduct reelection to the posts of Directors. Unless the Court holds that the election process undertaken by the Returning Officer is vitiated, Court cannot direct reelection. Therefore, prayer sought in this Interlocutory Application cannot be granted at this stage. I.A. No. 2 of 2020 in W.P. No. 21976 of 2020 is dismissed; vi) Until further orders, the newly elected Directors are directed not to take policy decisions affecting the affairs of the society and the bank, including dealing with the funds of the society except for attending to day to day needs of the Society and the Bank and payment of salaries and allowances of the staff." (viii) Challenging one portion of the common order dated 08.01.2021 forbidding the newly elected directors from taking any policy decisions, the Management of the Bank filed two writ appeals in W.A. No. 21 and 22 of 2021. Upon being informed that the writ petitions were listed for hearing on 09.02.2021, the Division bench disposed of the writ appeals by an order dated 21.01.2021, granting opportunity to the Management of the Bank to move an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt No. 3 to carry out a forensic audit of the bank as recommended vide letter No. 6392/CoopI/ A2/2020 dated 23.12.20 of Respondent No. 4 to Respondent No. 2, which has informedly been recommended onward by Respondent No. 2 to Respondent No. 3; (iii) Directing Respondent No. 3 for removal of Respondent No. 6 as the MD & CEO of Respondent No. 5 Bank in view of the serious allegations against him of inter alia largescale money siphoning, frauds, falsification of documents, forging of records of Respondent No. 5 Bank, done in conspiracy with Respondent Nos. 7 and 8; (iv) pass any other orders/directions deemed just and reasonable to protect the interests of thousands of small investors of the Bank in the facts and circumstances of the case. INTERIM PRAYERS: For the reasons stated hereinabove, pending disposal of the writ petition, the Petitioner herein prays that this Hon'ble Court, in light of the extraordinary facts and circumstances above, may graciously be pleased to: (i) ad interim suspend the Boards of Directors of Respondent No. 5 bank, appoint a Retired Supreme Court/High Court Judge as an administrator of Respondent No. 5, during the pendenc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edings pursuant to the charge memo; (xv) In the meantime, the petitioner lodged two complaints on the file of the III Additional Chief Metropolitan Magistrate on 19.02.2021, one of them revolving around allegations about the grant of loans and the other revolving around allegations relating to voter fraud. (xvi) The learned Magistrate passed an order under Section 156(3) of the Code, pursuant to which, the police registered an FIR bearing No.218 of 2021 on 12.03.2021 and an FIR bearing No.222 of 2021 on 13.03.2021; (xvii) Praying for quashing of these two complaints, the Respondents 1 to 3 herein filed Criminal Petition Nos. 2370 and 2371 of 2021. The Respondents 1 to 3 impleaded the petitioner herein as 2nd Respondent in those quash petitions. According to the petitioner, the learned Judge heard arguments in the petitions for interim stay pending the quash petitions and reserved orders on 23.03.2021. It is claimed by the petitioner that thereafter they filed counter affidavits to the criminal petitions on 01.04.2021. It is further claimed by the petitioner that thereafter they also filed a memo on 15.04.2021 enclosing a copy of the judgment of this Court....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... W.A.No.141 of 2020 in Para 3 of their writ petition in W.P.No.21795 of 2020. This, according to the petitioner Association related to the conferment of the title of Chairman Emeritus on the 1st Respondent herein. The background facts relating to this writ appeal, are not disclosed by the petitioner fully in their writ petition. 17. Therefore, it is obvious that the petitioner started a dispute first against the conferment of the title of Chairman Emeritus on the 1st Respondent and then they raised issues with regard to the proposed elections, first in a writ petition filed in February, 2020 and then in a writ petition filed in November, 2020. It is only thereafter that the allegations relating to loan fraud were raised by the petitioner Association. Apparently, the petitioner had the blessings of the powers that be, which is why a direction was issued on 22.01.2021 by the Hon'ble Minister, to the Commissioner of Police to register the complaints and report to the Government. 18. What is important to note, is the fact that in I.A.No.1 of 2020 in W.P.No.21975 of 2020 the petitioner had prayed for a direction to Respondents 1 to 4 therein (namely the State of Telangana, Central....
X X X X Extracts X X X X
X X X X Extracts X X X X
....counsel appearing for Respondents 1 to 3, Neeharika (supra) certainly allowed space for the High Court to pass an interim order of the nature impugned herein, "in exceptional cases with caution and circumspection, giving brief reasons". What is frowned upon in Neeharika (supra) is the tendency of the courts to pass blanket, cryptic, laconic, nonspeaking orders reading "no coercive steps shall be adopted". In Paragraph 60 of the Report in Neeharika (supra), this Court recognized that there may be allegations of abuse of process of law, converting a civil dispute into a criminal dispute, with a view to pressurize the accused. In the order impugned in these petitions, the High Court has given elaborate reasons as to how the allegations of bank fraud were developed during the proceedings concerning allegations of election fraud. Therefore, the impugned order cannot be said to be bad in the light of Neeharika principles. 23. In fact, Neeharika reiterates the parameters laid down in the celebrated decision in State of Haryana vs. Bhajan Lal 1992 Supp (1) SCC 335. One of the cardinal principles evolved in Bhajan Lal (supra) found in paragraph 102 (7) reads as follows: "where a....