TaxTMI 
TaxTMI 
2024 (11) TMI 373
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.... for offences under Sections 409/420/467/468/471/477A/120B IPC. 2. It is pertinent to mention that the said FIR was registered pursuant to the Order dated 16.04.2024, passed by the learned Chief Metropolitan Magistrate, in CT Case No. 2131/2024. 3. The Facts, leading to the present Petition, are as under: i. That the Respondent No. 2 herein, who is the daughter of one Late Sh. Kamal Jeet Singh Ahluwalia, gave a complaint against the Petitioners herein and other accused. Petitioners No. 1 to 5 are the Directors and former Directors of M/s KJS Cement (I) Ltd. (hereinafter referred to as "KJS") which is a public company limited by shares engaged in the manufacturing and supply of building materials, including cement, engineering, and construction, and Petitioner No.6 is the wife of Petitioner No. 1. ii. Material on record indicates that before filing of the present FIR, the Respondent No. 2 had earlier filed FIR No. 24/2024, dated 02.04.2024, which was registered at Police Station Economic Offences Wing, for offences under Sections 406/409/420/468/471/120B IPC, against the Petitioners herein and other accused. In the said FIR it is stated that KJS is a part of the KJS Group of Com....
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....one upon clear understanding that the shares held in individual names of Pawan Kumar Ahluwalia and his family shall always inure to the benefit of Late Shri KJS Ahluwalia and his immediate family. It is stated that Pawan Kumar Ahluwalia, i.e. the Petitioner No. 1 herein, did not make any financial contribution in the Company. It is alleged in the complaint that several deeds were forged and fabricated in the name of Late KJS Ahluwalia including a gift deed by which the shares of Late KJS Ahluwalia have been transferred to his sister-in-law, i.e. Petitioner No.6 herein. It is further alleged in the complaint that Petitioner No. 1 herein fabricated a forged resignation letter dated 08.06.2017, by faking the signatures of Late Sh. KJS Ahluwalia by virtue of which late KJS Ahluwalia was removed from the Directorship of KJS. In the said FIR, the allegation of the Complainant is that on the basis of these false and fabricated documents, the Petitioner No. 1 herein has converted 26,78,572 equity shares of KJS and got them issued in favour of his daughters - Medha Ahluwalia and Shivangi Ahluwalia, who have never worked for KJS and, thereby, diluting the share holding of Late KJS Ahluwalia ....
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....ite and PP bags indicating clandestine manufacture and supply of clinker and cement. It is further stated that the internal audit reports of the company indicates manipulation of SAP entries and backdating and access to SAP to unauthorized persons. vi. It is stated that the Complainant filed the complaint before the Police Station New Friends Colony by highlighting the loss caused to the Company by clandestine manufacture and supply of cement clinker and cement without issue of invoices and without accounting for the same in the books of accounts/records and using the sale proceeds for purchase of unaccounted raw material like lime stone, packing material (PP bags), jewellery, paintings and other articles and also used for meeting travel expenses etc.,. It is stated that since the FIR was not registered, an application under Section 156 (3) Cr.P.C was filed before the learned Metropolitan Magistrate. The learned Metropolitan Magistrate vide Order dated 16.04.2024 directed registration of FIR. Relevant portion of the Order dated 16.04.2024 reads as under: "16. The allegations made in the present complaint reveal that offence of criminal criminal breach of trust has been committed....
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....ther contends that a majority of the allegations in the present FIR are a repetition of an earlier FIR, being FIR No. 24/2024, and since both the FIRs are identical, a second FIR on the very same grounds could not have been registered. Learned Counsel for the Petitioner places reliance on the Judgment passed by the Apex Court in Amitbhai Anilchandra Shah v. CBI, (2013) 6 SCC 348, T.T. Antony v. State of Kerala, (2001) 6 SCC 181, to buttress his argument. 5. Per contra, learned Counsel for Respondent No. 2 states that even if there is an overlap of allegations in both the FIRs, the present FIR is primarily for manipulation of amounts and clandestine manufacture and supply of cement clinker and cement without issue of invoices and without accounting for the same in the books of accounts/records thereby causing wrongful loss to the company. He states that both the FIRs are entirely distinct. He states that the Complaint given by the Respondent No. 2 contains specific instances and transactions which have to be investigated separately and which do nor form a part of earlier FIR, being FIR No. 24/2024, and, therefore, the ratio of the Judgments of the Apex Court in Amitbhai Anilchandra....
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....mar Verma; 3. Sh. Abha Kushal Singh Singhvi; 4. Sh. Kushal Singh Singhvi; 5. Sh. Sanjeev Bhalla; 6. Sh. Manoj Kumar Chaudhary; 7. Sh. Sharad Mehta, 8. Sh. Sanjay Verma and 9. Smt. Indu Ahluwalia Sr. No. 1 to 8 are the Directors/former Directors of KJS Cement Limited (I) Limited and S. No. 9. Smt. Indu Ahluwalia is wife of Sh. Pawan Kumar Ahluwalia (Sr. No. 1). For commission of offences of misappropriation, criminal breach of trust, cheating, forgery, falsification of accounts, etc. Dear Sir, 1. I, Himangini Singh, daughter and Class-I legal heir of Late Shri KJS Ahluwalia, R/o: 75, Friends Colony West, New Delhi-110065 which place falls within the jurisdiction of New Friends Colony police station (South-East district). I am one of the aggrieved persons and the victim of the fraud perpetrated by the accused persons as I am a shareholder in the company namely M/s KJS Cement. I am fully familiar and conversant with the complete facts and circumstances of the present matter and fully competent to lodge the present complaint. 2. My father, Late Shri KJS Ahluwalia, unfortunately passed away on 15.10.2021 leaving behind the following three Class-I Legal Heirs: i. Mrs. Manjula Ahluwa....
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.... Director of KJS and Accused No. 1. The Accused Person Nos. 2 to 8 have acted at the behest and on the instructions of Pawan Kumar Ahluwalia, the Accused No. 1 by passing approving various illegal resolutions, forms, etc. on the basis of false documents as part of the conspiracy hatched by them to misappropriate shares and investment belonging to me to ensure unlawful gain for themselves. 3. The company, namely, M/s KJS Cement (I) Ltd. (herein after referred to as "KJS"), is a public company limited by shares and is engaged in the manufacturing and supply of building materials, including cement, engineering, and construction. The registered office of KJS is situated at B-57, Paschimi Marg, Vasant Vihar, South-West, New Delhi-110057, which falls within the jurisdiction of your police station. Copy of the Master Data of KJS as available on the official website of the Ministry of Corporate Affairs is annexed herewith and marked as Annexure-3. 4. The company, namely, M/s KJS Cement(I) Ltd. (herein after referred to as "KJS" or "KJS Cement"), is a public company limited by shares having its registered office in Delhi and is engaged in the manufacturing and supply of building materials....
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....f shares. After the sad demise of Late Shri k.JS Ahluwalia, the said shares were to be transmitted to me, and a letter dated 01.02.2022 to this effect was sent to KJS on 09.02.2022 along with email dated 09.02.2022. However, despite receipt of the said letter and various assurances given thereto, I was surprised and shocked to learn that the said shares have not been transmitted in my name till date and no reply was received by me to the said letter for transmission of shares in my name. 8. Late Shri KJS Ahluwalia was holding 26.52 % in KJS out of the total issued, legal and valid shareholding of KJS. But his shareholding has been reduced to 21 %% at the time of his death on 15.10.2021 due to various illegalities perpetrated and fraudulent acts committed by the accused persons by way of illegal & fraudulent allotment of shares. After the sad demise of Late Shri KJS Ahluwalia, the said shares were to be transmitted to me, and a letter dated 01.02.2022 to this effect was sent to KJS on 09.02.2022 along with email dated 09.02.2022. However, despite receipt of the said letter and various assurances given thereto, I was surprised and shocked to learn that the said shares have not ....
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....icularly his daughter (i.e. myself) and his wife. Thus, Pawan Kumar Ahluwalia and his family members were to hold the shares only as trustees in KJS. Late Shri KJS Ahluwalia apart from investments made in KOS, also made substantial investments and extended financial assistance in the form of unsecured loans to various other businesses owned and controlled by the accused persons. 11. Pursuant to the investments and support provided by Late Shri KJS Ahluwalia, the Company kept growing at a very good pace. Late Shri KJS Ahluwalia contributed approx. over Rs. 460 Crores in the form of investments and extended loans of over Rs. 130 Crore ever since the Company was acquired by Late Shri KJS Ahluwalia and his family for the Company's growth and expansion. Since the funds were being provided by Late Shri KJS Ahluwalia alone upon clear understanding that the shares held in individual names of Pawan Kumar Ahluwalia and his family shall always inure to the benefit of Late Shri KJS Ahluwalia and his immediate family, particularly his daughter (i.e. myself) and his wife. Thus, Pawan Kumar Ahluwalia and his family members were to hold the shares only in trust for our benefit in KJS. Late Sh....
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....a was held guilty and convicted in the matter titled "CBI Vs. Kamal Sponge Steel & Power Ltd. & Ors." For offences u/s 120-B, 420, 120-B r/w 420 IPC and Sections 13 (1) (d) (ii)/ 13 (1) (d) (iii) PC Act, 1988 vide judgment dated 19.05.2017 passed by the Court of Shri Bharat Parashar, Ld. Special Judge (PC Act) CBI-07, New Delhi Courts. 27. It is submitted that in order to secure our interest, I along with other victims had initiated civil proceedings against the accused persons by filing a Company Petition bearing CP No. 49/241-242/PB/2023 titled 'Himangini Singh & Ors. vs. KJS Cement (1) Ltd. & Ors.' before Hon'ble NCLT as stated hereinabove. The said Company Petition is still pending adjudication. Vide order dated 02.03.2023 passed in the said Company Petition, Hon'ble NCLT granted status quo in favour of the petitioners as under: "20. R-I Company has been there since 2007 and doing well as per balance sheet. No harm will be caused if the impugned EGM is restrained for the present. The balance of convenience is in favour of Petitioners as they stand reduced by various acts of Respondent. Therefore, we are of the considered view that Respondents should be restrained....
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....multaneously. Whether civil proceedings or criminal proceedings shall be stayed depends upon the fact and circumstances of each case." The criminal cases have to be proceeded with in accordance with the procedure prescribed under the Code of Criminal Procedure and existence of civil remedy/proceedings cannot take criminal acts out of jurisdiction of courts. Hon'ble Supreme Court took a similar view in Syed Askari Hadi Ali Augustine Imam and Ors. vs. State (Delhi Admn.) and Ors. (AIR 2009 SC 3232) that "-----------Indisputably, in a given case, a civil proceeding as also a criminal proceeding may proceed simultaneously. Cognizance in a criminal proceeding can be taken by the criminal court upon arriving at the satisfaction that there exists a prima facie case." Further, it has been observed asunder in a five judge bench judgment of Hon'ble Supreme Court titled Iqbal Singh Marwah & Anr vs. Meenakshi Marwah & Anr. 2005 II AD (Cri) SC 12: "24----------------------- While examining a similar contention in an appeal against an order directing filing of a complaint under Section 476 of Old Code, the following observations made by a Constitution Bench in M.S. Sheriff vs. State of Madr....
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....taining Allegations regarding ousting of the complainant and her family members from management and control of KJS to gain control over the company by the accused and stating as to how the shareholding of Sh. Lt. KJS Ahluwalia was reduced from 26.52% to 21% at the time of his death and also stating how in the event of his demise those shares were to be transferred to the complainant and a letter to that effect along with an email was sent to KJS of which nothing has been done and she hasn't even received a reply. Complainant also explains how Accused No. 1 represented himself to be eligible to take care of the company alone and how he is entitled to be given authority and responsibility. Allegations regarding creation of forged, false, and/or fabricated documents are explained via explaining the documents and the situations surrounding the creation and fabrication of those, i.e. gift deeds and resignation letter of Lt. Sh. KJS Ahluwalia from KJS cements. The first gift deed in question is dated 10.03.2017 for gift of unsecured loan of huge amount in favor of Accused No. 1 by forging signatures of the deceased and how he misused the forged gift deed in an unauthorized manner to issu....
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....e findings of the GST department to support her case by mentioning the amount up to which they have evaded GST highlighting the losses to the shareholders and the public exchequer. She supplements the allegations by highlighting the roles of the accused which have led to this situation. She additionally states that they indulged in illegal and fraudulent transactions of removal and misappropriation of company stocks and inventory and also falsification of the records and accounts of the company while siphoning funds of the company by showing and booking false and fictitious salary payments to the family members of the Accused No. 1 without rendering of any services, she has also attached the details of the salary and consultancy fees thus paid. 11. The Complaint highlights the loss caused to the Company by clandestine manufacture and supply of cement clinker and cement without issue of invoices and without accounting for the same in the books of accounts/records and using the sale proceeds for purchase of unaccounted raw material like lime stone, packing material (PP bags), jewellery, paintings and other articles and also used for meeting travel expenses etc., by the Petitioners h....
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....walia.MD and administratively to Shri KS Singhvi (Exhibit-CIV). The whatsapp chat between Shri Satyendra Rai and Shri Pawan Ahluwalia shows that he was seeking administrative approval from Shri Pawan Ahluwalia for all financial transactions of the company and also reporting to him the cash collection. The whatsapp chat between Shri M.K.Jain and Shri Pawan Ahluwalia shows that he got information about the quantity of crushed lime stone and the working of the crasher on daily basis on the basis of entries in the manual crusher hopper register. This establish the fact that Shri Pawan Kumar Ahluwalia was directly involved in the day to day management of the company, all clandestine activities including monitoring of collection of cash though he had claimed not to involve in day to day work of company. As per the entries in the cash book and as confirmed by Shri K.S. Singhvi and Shri B.K Tripathy. Shri B.K. Tripathy used to receive cash collected from the dealers and transporters. Cash has also been given to the wife and children of Shri Pawan Kumar Ahluwalia. Shri Pawan Kumar Ahluwalia, used the cash received against the sale of clandestinely manufactured clinker and cement for arrangi....
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....ced that it is necessary to interfere to prevent abuse of the process of the Court. In dealing with such cases, the High Court has to bear in mind that judicial intervention at the threshold of the legal process initiated against a person accused of committing offence is highly detrimental to the larger public and societal interest. The people and the society have a legitimate expectation that those committing offences either against an individual or the society are expeditiously brought to trial and, if found guilty, adequately punished. Therefore, while deciding a petition filed for quashing FIR or complaint or restraining the competent authority from investigating the allegations contained in FIR or complaint or for stalling the trial of the case, the High Court should be extremely careful and circumspect. If the allegations contained in FIR or complaint disclose commission of some crime, then the High Court must keep its hands off and allow the investigating agency to complete the investigation without any fetter and also refrain from passing order which may impede the trial. The High Court should not go into the merits and demerits of the allegations simply because the petitio....
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....of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognises and preserves inherent powers of the High Courts. All courts, whether civil or criminal, possess in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alique concedit, conceditur et id sine quo res ipsa esse non potest (when the law gives a person anything, it gives him that without which it cannot exist). While exercising powers under the section, the Court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such ....
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.... in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155 (2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the Act concerned (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the Act concerned, providing efficacious redress for the grievance of the aggrieved party. (7) Where a criminal proceeding is manifestly attended with mala fides and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on t....
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....d there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings. [See Dhanalakshmi v. R. Prasanna Kumar [1990 Supp SCC 686 : 1991 SCC (Cri) 142], State of Bihar v. P.P. Sharma [1992 Supp (1) SCC 222 : 1992 SCC (Cri) 192 : AIR 1991 SC 1260], Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC (Cri) 1059] , State of Kerala v. O.C. Kuttan [(1999) 2 SCC 651 : 1999 SCC (Cri) 304 : AIR 1999 SC 1044] , State of U.P. v. O.P. Sharma [(1996) 7 SCC 705 : 1996 SCC (Cri) 497] , Rashmi Kumar v. Mahesh Kumar Bhada [(1997) 2 SCC 397 : 1997 SCC (Cri) 415] , Satvinder Kaur v. State (Govt. of NCT of Delhi) [(1999) 8 SCC 728 : 1999 SCC (Cri) 1503 : AIR 1999 SC 3596] ....