Mohammad Wajid And 3 Ors vs State Of U.P. And Anr
2019 Latest Caselaw 4341 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Court No. - 64
 
                                                                 AFR
 
Case :- APPLICATION U/S 482 No. - 18806 of 2019
 
Applicant :- Mohammad Wajid And 3 Ors
 
Opposite Party :- State Of U.P. And Anr
 
Counsel for Applicant :- Sudhanshu Srivastava
 
Counsel for Opposite Party :- G.A.,A.S.G.I.
 

 
Hon'ble Arvind Kumar Mishra-I,J.

Heard Sri Sudhanshu Srivastava, learned counsel for the applicants, Sri Gyan Prakash, learned Additional Solicitor General of India for opposite party no.2, Sri Jitendra Kumar Rai, learned A.G.A. assisted by Sri Bhanu Prakash, Brief Holder for the State and perused the record.

This application under Section 482 Cr.P.C. has been filed for quashing the entire proceeding in Complaint Case No.720 of 2017, Serious Fraud Investigation Office Vs. Mohammad Iqbal and others, under Sections 420, 468, 471, 120B I.P.C., and Sections 211, 297, 299, 301, 678, 629-A of the Companies Act, 1956 and Sections 129, 184, 188, 189, 447 and 448 of the Companies Act, 2013, Police Station Gomti Nagar, District Lucknow, pending in the court of the Additional Sessions Judge, Court No.3 and Special Judge, (Companies Act), Dwarka, District Court / Delhi and quashing of the summoning order dated 24.01.2019 passed by the aforesaid court.

At the very outset, objection has been raised by the learned Additional Solicitor General of India, Shri Gyan Prakash to the maintainability of this application under Section 482 Cr.P.C before this Court. Ground being that this Court lacks the jurisdiction to entertain this application. In this case, the proceedings have been initiated on the direction of Hon'ble Apex Court and the investigation was done by special agency 'Serious Fraud Investigation Office' and violations of rules and regulations of provisions of the Companies Act, 1956, inter-alia, was found to have been committed extensively by a large number of accused including the present applicant - accused and after due investigation, complaint was filed in the special Court of District Dwarka at Delhi, which upon consideration of the contents and merit of the case has rightly summoned the accused- applicants - vide its order dated 24-1-2019 to face the trial (in Complaint Case No. 720 of 2017). Learned Additional Solicitor General of India added that the summoning order dated 24-01-2019 was previously challenged before the High Court of jurisdiction at Delhi in Criminal M.C. No. 647 of 2019 and Criminal M.A. No.2713 of 2019 but the petition has been rejected and the summoning order has been sustained.

In reply to the aforesaid objection, it has been submitted by the learned counsel for the applicants that the plea of exercise of jurisdiction under Section 482 Cr.P.C, in the absence of express bar to its exercise either in the Companies Act, 1956 or the provisions of Cr.P.C, shall be determined on the basis of 'cause of action' in a criminal case. It is always relevant as to where the cause of action arose. The auction-purchase was made at Lucknow and the subject matter of this auction was undeniably several sugar mills located in various districts, Bareilly, Shahjahanpur, Deoria, Jaunpur etc. and the central office of the applicants is situated at Saharanpur. The first information report was also lodged at District Lucknow.

The allegations are specific that the applicants-accused amassed huge money by indulging in illegal mining in and around areas of district - Saharanpur. These allegations have been tried to be sharpened by alleging that various false entities in the shape of companies and trust were created with the help of financially trained persons in order to legalize the money auction purchase was made at Lucknow in utter violation of rules and bye laws and sugar mills were purchased at considerable lower price than the minimum bidding price.

All these facts when taken as a whole and put together would palpably lead to conclusion that the entire 'cause of action' arose in this case exclusively within different places and districts of Uttar Pradesh. It is settled position while determining point of jurisdiction in a criminal case that the place where the crime was committed holds center position. The learned counsel also pressed in service provisions of Section 177 Cr.P.C and claimed that place of commission of the offence determines jurisdictional rights.

It is to be seen that there is no bar created, either in the provisions of the Companies Act or in the Cr.P.C, for exercise of jurisdiction at this juncture under section 482 Cr.P.C. In this case, cause of action for exercise of jurisdiction is scattered and widespread over a number of places and districts in Uttar Pradesh, say allegations concerning illegal mining and illegal auction purchase and claim of fake entities - Companies and Trusts etc. All these places - singly and collectively - when taken as whole will work in favour of exercise of jurisdiction under Section 482 Cr.P.C, at this stage - in the proceeding of the case - thus authorizing both the principal Court of the High Court of judicature at Allahabad, at Allahabad as well as Lucknow Bench. Simply because seat of the trial Court is located outside Uttar Pradesh would not, ipso facto, denude this High Court of exercise of its jurisdiction over the proceeding of the complaint case at Dwarka.

Learned counsel has placed reliance on a judgment (dated 10-10-2013) by the Full bench of this High Court - on point of exercise of jurisdiction under Section 482 Cr.P.C in the matter of application under Section 482 No. 7681 of 2012 - Paritosh Kumar Vs Union of India through C.B.I Abc Lucknow and others, with seven connected applications.

In his concluding argument, learned counsel engaged attention of this Court to particular contents of complaint moved before Special Judge Dwarka and claimed that in the same case when an F.I.R. was lodged at Gomti Nagar - at Lucknow at Case Crime No.1409 of 2017, the co-accused of this case approached this Court by filing petition before Division Bench - CMC - No.36872 of 2018 - wherein interim protection was granted by staying arrest of the petitioners vide order dated 18.12.2018 - copy whereof is annexure no.4 to this application.

Also considered above submissions.

Admittedly, in this case, cause of action arose within various places of Uttar Pradesh as the same is unequivocally reflected from bare perusal of various contents of the complaint in question.

Basic imputation is that huge money was amassed by the applicants by indulging in illegal mining in and around places at district Saharanpur. This amassed money was sought to be channelized through some non existing entities in shape and form of different trusts and companies and help of trained persons like auditors, accountants and clerks etc. was taken. Auction purchase of certain sugar mills (scattered over a few districts in Uttar Pradesh), at Lucknow was a move in furtherance of ill design to legalize ill-gotten money and surprisingly these mills were purchased at lower prices in the auction than was the minimum bidding price.

Thus, the entire gamut of the crime is not confined only to auction - purchase at Lucknow. The whole of the allegations made give way to money laundering at other places, as well. Auction-purchase at Lucknow appears to be a tip of the iceberg of the totality of the offence of money laundering allegedly committed by the applicants. Thus, field of the alleged crime is astonishingly gorgeous and widespread to different places in Uttar Pradesh. Auction-purchase cannot be read in isolation with the other crime committed by the applicants. The auction-purchase no doubt encompasses in its ambit - the various sugar mills - the subject matter of the auction - located in various districts of Uttar Pradesh. These sugar mills are the original cause and the auction sale is its natural effect. In the absence of sugar mills (located in various districts of Uttar Pradesh), there could not have been such auction sale. Auction sale is inalienably connected with the various sugar mills located in different districts of Uttar Pradesh.

As per allegations in complaint, nothing of the sort ever took place at Delhi. In the provisions of the Companies Act, 1956 and in Cr.P.C., there is no bar, express or implied, to the exercise of jurisdiction by this Court under Section 482 Cr.P.C. in the matter of this complaint case, in hand. The seat of the trial court being outside Uttar Pradesh at Delhi would not denude this High Court of its jurisdiction under Section 482 Cr.P.C. unless barred by provisions of Companies Act and Cr.P.C. Mandate of Full Bench judgment (aforecited) of Allahabad High Court is specific on point of cause of action in matter of a criminal case and exercise of jurisdiction under Section 482 Cr.P.C.

In view of above discussion, it can be conveniently held that this application under Section 482 Cr.P.C. is maintainable before this High Court against the proceeding of the complaint case (in hand) moved before the Special Court (Companies Act), Dwarka.

On meritorial aspect, three pronged arguments have been advanced by the learned counsel for the applicants.

First, the applicants are innocent purchasers of the sugar mills, they have acted within the parameter of law, but have been made scapegoat in order to cover up misdeeds of high officials of the State of Uttar Pradesh - who were entrusted with the task of carrying out auction - purchase of various sugar mills. Secondly, opposite party no.2 being the complainant is also the Investigating Officer of the case pursuant to the lodging of the first information report and the material collected in the investigation has been reproduced in the complaint. This is against principle of fair play and judicial propriety.

Thirdly, shoddy investigation has been done. The Investigating Officer has recorded statement of dead persons. One Bano Begum wife of Abdul Wahid died on 13.12.2015, whereas she has been arrayed at Serial No.3 in the complaint and her statement recorded. Similarly, one Mahboob Alam son of Abdul Rashid died on 24.06.2015 but his statement, too, was recorded by the Investigating Officer for which no plausible explanation can be given. Death certificates of both these have been made part of this application vide annexure no.4. Allegations regarding indulgence in money laundering and illegal mining by the applicants are specifically denied.

Learned Additional Solicitor General has retorted to aforesaid contentions and clarified that ample material has been collected against a large number of persons including all the applicants who have committed a number of offences whereby they made huge illegal gains in shape of money and the scrutiny of entire facts cannot be gone into casually at this juncture. Proper scrutiny of facts is to be done by the trial court itself. Ample proof of complicity of the applicants - accused in indulging money laundering exists. The applicants instead of participating in the proceeding before the trial court have rushed to this Court for no worthy cause.

Upon consideration of the various facts alleged in the complaint, it is apparent that proceeding has been initiated against the applicants by moving complaint before the Special Court (Companies Act) Dwarka - Delhi - which inter-alia involves allegations of violation of various laws / rules of Companies Act, 1956. Exposure is made to various illegal omissions and commissions in the background of illegal land mining, creating false entity and entering into sham transactions in the complaint.

The aforesaid factual as well as legal aspects need careful judicial scrutiny by the trial court itself and roving inquiry cannot be gone into by this Court at this juncture in exercise of powers under Section 482 Cr.P.C. Proper judicial scrutiny is the exclusive domain of the trial court.

Upon careful perusal of the summoning order, it is reflected that the same is based on material collected in investigation and the summoning order cannot be faulted with as a prima facie case for summoning is made out. Consequently, the prayer made for interference in the summoning order dated 24.01.2019 is refused.

At thus juncture, the learned counsel for the applicants relinquished the prayer for quashment of the summoning order and submitted that the applicants may be permitted to seek their discharge by filing appropriate application.

Considered the submission so raised. Under facts and circumstances of the case, it is provided that in case the applicants move an appropriate application before the trial court seeking discharge within three weeks from today, the same shall be considered and decided on its merit by speaking order after affording opportunity of hearing to both the sides.

In the first instance, no coercive action shall be taken against the applicants till the period of three weeks from today or till presentation of the application, whichever is earlier and in case the discharge application is moved within aforesaid stipulated period, then no coercive action shall be taken against the applicants till disposal of discharge application.

However, it is made clear that in the event no such application is moved withing the time prescribed above, this order will be of no avail to the applicants.

With aforesaid observation, this application stands disposed of.

Observations made in this order shall have no bearing on the merit of the case and shall not travel beyond it.

Order date :- 10.05.2019

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