TaxTMI 
TaxTMI 
2022 (5) TMI 1457
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....and Asso for Respondent No. 2 in both Writ Petition. Mr. Narayan Dnyanoba Saste, Dy.SP, State CID, Pune is present. JUDGMENT PER PRASANNA B. VARALE, J) 1. The present Petitions are filed under Article 226 of the Constitution of India & Section 482 of the Code of Criminal Procedure, 1973 seeking quashment of the order dated 07th April, 2021 passed by the Judicial Magistrate First Class, Wada in O.M.A. No. 105 of 2021 and first information report bearing Crime No. 0129 of 2021 dated 13th April, 2021 in Wada Police Station for the offences punishable under Sections 420, 465, 467, 468, 469, 470, 471 read with Section 120(B) of the Indian Penal Code, 1860 against the Petitioners. 2. Rule. Rule made returnable forthwith. With the consent of learned Counsel appearing for the respective parties, matters are taken up for hearing and disposal, at the admission stage itself. 3. Writ Petition No. 1805 of 2021 is treated as lead Petition so as to discuss the facts, submissions and merits of both the Petitions. 4. The challenge is raised on following grounds: i. Respondent No. 2 at whose instance the complaint was submitted to the JMFC, Wada is wholly untenable and ....
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....tion as such, it assumes importance. For ready reference, we may quote the relevant observations of the Division bench in the order dated April 27, 2021 as under: 2] Mr. Amit Desai, learned senior counsel appearing on behalf of the petitioners submitted that complaint lodged by respondent no. 2 (original complainant) leading to registration of aforesaid FIR was absolutely malafide and part of similar attempts made earlier against the petitioners by certain persons seeking to initiate criminal proceedings on the basis of false and frivolous allegations, so as to extract money from the petitioners. Attention of this Court was invited to certain complaints filed in the name of various persons at the behest of Ram Mani Panday and Kislay Panday who claimed to be lawyers running a law firm called 'Magnum Juris'. It was emphasized that petitioners initiated criminal proceedings against such persons seeking to extract money from them leading to registration of F.I.R. in the matter. Petitioner no. 1 company also filed a suit in the year 2019 against the said Ram Mani Panday and his associates and in the said suit, Delhi High Court had temporarily injuncted defendants from dissemina....
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....mplaint, which the Magistrate failed to appreciate in the proper perspective and that there was not even a prima facie case made out for registration of FIR. It was further submitted that the complaint in question did not satisfy the requirements of law as laid down by the Hon'ble Supreme Court in the case of Priyanka Srivastava Vs. State of U.P. (2015) 6 SCC 287 and the judgments passed by this Court in as much as there was no affidavit filed in support of the said complaint before the Magistrate. Learned senior counsel emphasized that there were false statements made in the complaint, verifiable from material on record, which the Magistrate failed to appreciate. Learned senior counsel relied upon the Judgment of the Hon'ble Supreme Court in the case of State of Haryana V. Bhajan Lal 1992 Supp (1) SCC 335 particularly category 7 laid down in paragraph 102 thereof. He also relied upon Judgments of the Hon'ble Supreme Court in the case of P. Chidambaram Vs. Directorate of Enforcement (2019) 9 SCC 24 and in Neeharika Infrastructure Pvt. Ltd. V. State of Maharashtra and others [2021 SCC OnLine SC 315] to contend that a clear case for grant of stay of investigation was made out by the ....
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....t he came to know about rigging of shares by promoters/ directors of the petitioner no. 1, as far as back as on 10/06/2019. Respondent no. 2 has also referred to number of litigations filed before the Hon'ble Supreme Court of India wherein allegations were made against the petitioners, which were subsequently withdrawn. A reference is made to alleged manner in which funds were diverted by the petitioners through companies in Mauritius and pumped back illegally. All this information, even according to respondent no. 2, was in the public domain since 2018- 2019 and he was aware about the same. Yet, admittedly he chose to purchase 500 shares of petitioner no. 1 company on 17/03/2021. He had no concern with the said company till he purchased shares on 17/03/2021 and that too allegedly knowing fully well from 2019 onwards about the manner in which petitioners were allegedly committing fraud and duping innocent investors. 11] Even as per the complaint, the respondent no. 2 within less than 10 days of purchasing the shares, found that he was cheated and approached the police station, Wada with his grievance. Respondent no. 2 did not wait for the police to examine the grievance ra....
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....rough De-mat account 1202990006916691 showing the address of respondent no. 2 at Dadar, Mumbai. Although, we are aware that such documents may need further confirmation and they would be subject to reply of respondent no. 2, nonetheless they prima facie indicate false statement made by respondent no. 2 in the complaint itself. 7. A ground was also raised before this Court that the complaint filed by Respondent No. 2 before the Judicial Magistrate was not supported by an affidavit which is a pre-requiste not only as per the provisions of law but as per the judgments of the Apex Court as well as this Court. The Division bench was pleased to make following observations on that point: 15] Apart from this, by referring to copy of the complaint filed by respondent no. 2 on record, it has been strenuously argued on behalf of the petitioner that complaint is not supported by an affidavit. We have perused copy of complaint on record and prima facie find that the statement appears to be correct. 16] In the case of Priyanka Shrivastava [cited supra] followed by judgments of this Court in the case of Sayed Anwar Ahmed V. State of Maharashtra [2017 SCC OnLine Bom 3972] and ....
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....by affidavit of Respondent No. 2 (original complainant) are concerned, Dr. Chandrachud, learned counsel appearing for the Petitioner has adopted the submissions made on behalf of the Petitioners in the said connected writ petition by Mr. Amit Desai, learned Senior Counsel. Additionally, it is submitted by Dr. Chandrachud appearing for the Petitioner herein that insofar as the said Petitioner is concerned, there is only one statement made against him in the entire complaint filed by the Respondent No. 2, which is at paragraph 84 of the complaint. 4. By inviting our attention to the said paragraph, the learned counsel submitted that even if the statement made therein is accepted as it is, only a noncognizable offence under Section 86 read with 439 of the Companies Act, 2013, can be alleged pertaining to no charge being filed with the Ministry of Corporate Affairs regarding loan advances. On this basis, it is submitted that the order passed by the Magistrate dated 7 th April, 2021 under Section 156(3) of Cr.P.C. shows total non application of mind, insofar as it directs registration of F.I.R. against the Petitioner. 5. In the order passed today in Writ Petition No. 1....
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....2 can be said to be the kingpin of such disgruntled elements who are behind the screen and these elements are the string puller. Mr. Rohatgi further submitted that Respondent No. 2 who is a permanent resident of Dadar chooses to hire a accommodation i.e., one room on leave and license basis for 11 months at Biloshi, Dist. Palgahr. Mr. Rohatgi further then led critical attack on the conduct of Respondent No. 2 to submit how the Respondent No. 2 made untrue statements in the complaint. By inviting our attention to the copy of the complaint placed on record and particularly, at page nos. 258 and 259, Mr. Rohatgi submitted that on one hand Respondent No. 2 submitted that he is doing regular share trading and this statement is falsified by another statement of Respondent No. 2 in the complaint itself and it is stated that Respondent No. 2 by opening a Demat account on 16.03.2021 at Dadar, for the first time purchased two lots of share i.e., 800 shares in each lot in the shares of Petitioner Company. Mr. Rohatgi then submitted that a statement is made in the complaint at page 260 of the Petition that the Petitioner lost substantial amount whereas the record is contrary that there was no ....
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....redressal of his grievance such as, SEBI or RBI. Mr. Rohatgi further submitted that it is not submitted in the reply filed by Ministry of Corporate Affairs and RBI before Delhi High Court that the Petitioner Company has played any mischief or conducted any misdeeds. In an Petition filed at Delhi High Court against the Petitioner, RBI filed its reply and it was submitted in the reply that the Petition may be dismissed. It is further submitted that even though in the present Petition the reply is filed by RBI and it is stated that the authority had conducted the scrutiny and found that the loans obtained by the Petitioner Company were repaid. 16. Mr. Rohatgi vehemently submitted that the lodgment of the report against the Petitioner Company and continuity of any proceedings arising out of said complaint would be nothing but an abuse of process law. Mr. Rohatgi vehemently submitted that the case of Petitioner squarely falls in the categories framed by the Apex Court in oftenly quoted judgment of State of Haryana and Others Vs. Bhajan Lal and Others [1992 Supp (1) SCC 335] and particularly in category 7. 17. In so far as the submission of selected jurisdiction by Respondent No. 2....
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....cific any material in so far as how much loan amount was obtained, how much amount was repaid, what was the collateral security against the loan and without there being any such specific material only the allegations were made that by illegal means the loan was obtained. Mr. Chandrachud further submitted that the Petitioner is a real estate developer and contrary to the allegations against the Petitioner there is a specific material to show that the Petitioner had obtained the loan by following due procedure. If the Petitioner had obtained the loan by illegal means and failed to repay it, he could have been certainly declared as defaulter and the financial institutions like Bank certainly would have initiated proceedings against the Petitioner by taking recourse to SARFEASI Act, but no such action is taken. Mr. Chandrachud then submitted that the Respondent No. 2 is not even purchaser of any property from the Petitioner and as such, there was absolutely no locus for Respondent No. 2 to lodge any report / complaint against the Petitioner. In support of his submissions, Mr. Chandrachud relied on following judgments: Babasaheb Narayan Naik and Others Vs. State of Maharashtra and Other....
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....d that there was diversion of funds by certain private persons. The funds were diverted and routed through Mauritius and in support of this submission, the Counsel referred to the material in the complaint placed on record at pages 271, 272, 283. It is then submitted that the Respondent No. 2 had placed on record all the relevant material and as observed by the various Courts the FIR is not an encyclopedia, the investigating agency is required to investigate into the complaint and collect the necessary material. Learned Counsel appearing for Respondent No. 2 submitted that even though Petitioner raises certain questions in so far as locus of Respondent No. 2 and even assuming that the malafides are against the Respondent No. 2, the Petitioner cannot absolve itself from the criminal liability. It is further submitted that any person set the criminal law in motion and the allegations of malafide against the Respondent No. 2 cannot be a reason for quashing the report. Learned Counsel for Respondent No. 2 vehemently submitted that the order of this Court granting stay to the investigation be vacated and investigation agency be permitted to continue with the investigation. Learned Couns....
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....e Limited advancing loans to the Petitioner company. Then there are allegations against one Mr. Harish Fabiani stating that Mr. Harish Fabiani by playing mischief and fraud diverted certain funds to other country. The Judicial Magistrate by referring to mere allegations in the complaint observed that as per offences as alleged in the complaint a huge amount is siphoned of. 27. It seems that Magistrate was influenced by the lengthy complaint placed before him and arrived at a conclusion that there was a diversion of huge monetary funds to the tune of Rs. 300 crores and the money was transferred to other country i.e., Mauritius. Admittedly, it was only allegations in the complaint and except bare words of the complainant there was no other material before the Magistrate to form such an opinion as such, there is merit in the submissions of learned Senior Counsel Mr. Rohatgi that the Magistrate without applying his mind passed mechanical order under Section 156(3) of Code of Criminal Procedure. 28. Learned Counsel appearing for Petitioners were justified in making submissions that the Respondent No. 2 who is a resident of Dadar with some designed motive shifted to Biloshi, Tq. Wa....
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....erated that the learned Magistrate has to remain vigilant with regard to the allegations made and the nature of allegations and not to issue directions without proper application of mind. He has also to bear in mind that sending the matter would be conducive to justice and then he may pass the requisite order. The present is a case where the accused persons are serving in high positions in the bank. We are absolutely conscious that the position does not matter, for nobody is above law. But, the learned Magistrate should take note of the allegations in entirety, the date of incident and whether any cognizable case is remotely made out. It is also to be noted that when a borrower of the financial institution covered under the SARFAESI Act, invokes the jurisdiction under Section 156 (3) Cr.P.C. and also there is a separate procedure under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, an attitude of more care, caution and circumspection has to be adhered to. 28. Issuing a direction stating "as per the application" to lodge an FIR creates a very unhealthy situation in the society and also reflects the erroneous approach of the learned Magistrate. It a....
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.... jurisdiction of the Magistrate. That apart, in an appropriate case, the learned Magistrate would be well advised to verify the truth and also can verify the veracity of the allegations. This affidavit can make the applicant more responsible. We are compelled to say so as such kind of applications are being filed in a routine manner without taking any responsibility whatsoever only to harass certain persons. That apart, it becomes more disturbing and alarming when one tries to pick up people who are passing orders under a statutory provision which can be challenged under the framework of said Act or under Article 226 of the Constitution of India. But it cannot be done to take undue advantage in a criminal court as if somebody is determined to settle the scores. We have already indicated that there has to be prior applications under Section 154 (1) and 154 (3) while filing a petition under Section 156 (3) . Both the aspects should be clearly spelt out in the application and necessary documents to that effect shall be filed. The warrant for giving a direction that an the application under Section 156 (3) be supported by an affidavit so that the person making the application should be....