Bombay High Court

Ashutosh Kumar And Anr vs State Of Maharashtra And Anr on 2 November, 2023

Bench: A.S. Gadkari, Sharmila U. Deshmukh

2023:BHC-AS:33474-DB

                Harish


                                                                       APL 955-2023-1.odt

                          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                CRIMINAL APPELLATE JURISDICTION
                              CRIMINAL APPLICATION NO. 955 OF 2023

                1. Ashutosh Kumar,
                Age: 52, Occu: Government Officer
                R/o. Plot 6-6, RSC-123, Mhada Layout,
                S.V. P. Nagar, Near St. Mary School,
                Andheri (w), Mumbai 400053.

                2. Monica Ashutosh Kumar
                Age: 48, Occu: Housewife,
                R/o. Plot 6-6, RSC-123, Mhada Layout,
                S.V. P. Nagar, Near St. Mary School,
                Andheri (w), Mumbai 400053.
                                                                      ...Applicant
                      V/s.
                1. The State of Maharashtra
                (At the instance of DCB CID Unit,
                at Byculla)

                2. Ramkumar Ramnarayan Dadhich,
                R/o- Flat No. 785, Pipalda House,
                Dadabadi Extension Scheme,
                P.S. - Dadabadi, Tehsil-Ladpura,
                Kota, Rajasthan.
                                                                      ...Respondents

                Mr. Anil Lala i/b Mr. Ashok Bhatia for the Applicant.
                Mr. Ajay Patil, APP for the Respondent-State.
                Dr. Uday Warunjikar a/w Mr. Dilip shukla for Respondent No. 2.


                                               CORAM : A.S. GADKARI &
                                                       SHARMILA U. DESHMUKH, JJ.

RESERVED ON : 13th OCTOBER, 2023.

PRONOUNCED ON : 2nd NOVEMBER, 2023.

JUDGMENT : (PER SHARMILA U. DESHMUKH, J.)

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1. The Applicants have invoked the jurisdiction of this Court

under Section 482 of Cr.P.C. seeking the relief of quashing of CR. No.

385 of 2023 dated 20th July, 2023 registered with the Versova Police

Station for the offences under Section 406, 420, 465, 467, 468, 471 and

Section 506 read with Section 34 of IPC and Section 3 and 4 of the

Maharashtra Protection of Interest of Depositors (In Financial

Establishments) Act, 1999.

2. The Applicant No. 1-Ashutosh Kumar is stated to be a 1992

batch of group "A" Civil Services Central Government Cadre Officer,

presently working as Regional Director of Northern Region of India in

the Plastics Export Promotion Council which is directly under the

administrative control of Ministry of Commerce and Industry

Department of Commerce, Government of India, New Delhi. The

Applicant No. 2 is the wife of Applicant No. 1.

3. The crime came to be lodged by the Respondent No. 2

alleging that the Applicants, their partner Manoj Patel and Manager

Sanjay Pandey induced the Respondent No.2 and other investors to

invest in land development projects by representing that, Applicant No.1

is a senior IAS officer and the Applicant No.2 is a director along with

him in LFS Gobal Pvt. Ltd. That, there are 9 to 10 companies functioning

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through which land development work is undertaken, films are financed

and if investment will be made, attractive returns would be given on the

investment. To gain their confidence, documents pertaining to

Kanjurmarg-Bhandup area were shown and relying upon the

misrepresentation, the First Informant invested around Rs.

1,50,00,000/- and the other investors invested an amount aggregating

to Rs. 4,25,00,000/- and as such, the total amount invested is Rs.

5,77,00,000/-. The allegation is that, there was neither return on the

investment nor the principle amount was repaid, and as such, the First

Informant and others have been cheated.

4. Record indicates that, the crime came to be lodged pursuant

to written complaint filed by Respondent No.2 with the Commissioner of

Police (Crime) Andheri, Mumbai. On 8th April, 2023, the Economic

Offence Wing issued notices to Manoj Patel and Sanjay Pandey calling

upon them to remain present on 14 th March, 2023 for inquiry in respect

of the complaint lodged by the Respondent No.2. After notices were

received by the aforestated two persons, the Applicants filed

Anticipatory Bail Application Nos. 882 of 2023 and 883 of 2023 before

the Sessions Court which were rejected vide Order dated 1st July, 2023.

It appears that, the investigation has commenced in CR. No. 385 of 2023

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and is underway.

5. Heard Mr. Anil Lala, learned counsel appearing for the

Applicant, Mr. Ajay Patil, learned APP for the Respondent-State and Dr.

Uday Warunjikar, learned counsel for Respondent No. 2.

6. Mr. Lala, learned counsel for the Applicants submit that,

based on undated, unsigned complaint, the FIR has been lodged and on

that basis, notices dated 8th April, 2023 have been issued by the

Commissioner of Police. According to him, the allegation in the FIR is

that, substantial cash amount has been handed over by the Respondent

No.2 and others, in respect of which, there is no acknowledgment by the

Applicants. He contends that, it is improbable that, such huge amount of

cash would be parted with without any document in writing. He would

further submit that the only cheque transaction is of the amount of Rs.

5,00,000/- which has also been deposited in the firm of Babulal

Meghwal, who is a third party. He would further submit that, the

Applicant No. 1 is a Central Government servant and the allegations are

unfounded. As regards the Applicant No.2, he submits that, the

Applicant No. 2 is a cancer patient and the allegations in the FIR do not

attribute any role to the Applicant No.2. He would urge that

continuation of the criminal proceedings would amount to an abuse of

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process of law. He would point out the complaint made on 17 th April,

2023 by the Applicant No. 1 to the Commissioner of Police stating that

on 6th April, 2023, a complaint was made by the Applicant against the

Respondent No. 2 and others for extortion and that those persons at one

point of time were associated with LFS group of companies wherein the

majority shareholder is the HUF of which the Applicant No. 1 is the

Karta. According to Mr. Lala, the association, if any, is with the LFS

group of companies and the Applicant No.1 has no connection with the

said companies in his individual capacity.

7. Learned APP submits that, the investigation is going on and

the statements of the witnesses have been recorded. He points out the

statements of Babulal Nandlal Meghwal, Mannalal Devkaranji Gujjar

and Jaising Amarsing Hada and would submit that, the allegations in

the FIR have been corroborated by these witnesses. He would further

submit that, the statements of the other investors have also been

recorded and the investigation reveals that huge amount has been

collected by the Applicants in cash. He would submit that, the

Applicants have misrepresented the investors about development of the

land at Kanjurmarg-Bhandup area and other investment proposals. He

pointed out that, the Applicant No.1 has executed a registered Power of

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Attorney appointing one M/s. Vinatia Buildcon Private Ltd. through its

directors Mr. Prakash Shekhar Kotiyan and Manoj G. Patel as his

Constituted Attorney to act on his behalf in respect of plot of land

bearing Survey No. 275 village Kanjur, Taluka Kurla admeasuring area

63,55,225.7 sq. mtrs. He submits that, the land bearing Survey No. 275

is government land and in the Power of Attorney registered with the

Sub-Registrar, the Applicant No. 1 has stated that, he owns, seizes and

possesses the land bearing Survey No. 275. He has further pointed out

that, the investigation has revealed about six crimes lodged in Delhi,

Mumbai and Rajasthan against the Applicant No. 1 and as regards the

Applicant No. 2, there are three crimes lodged in Mumbai and

Rajasthan. He would further point out that, the information obtained

from Registrar of Companies in respect of LFS Global Pvt. Ltd. shows

that, the Applicant No. 1 is/was director of the Company. Learned APP

further submits that, this is not a fit case for stifling the investigation

considering the manner in which there has been misuse of the position

by the Applicant No.1.

8. Dr. Warunjikar, learned counsel for Respondent No. 2

submits that as regards the sum of Rs. 5,00,000/-, the modus adopted

by the Applicant No. 1 is to accept the cash amount and to divert the

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same through different firms, so that the money is not traced to him.

Then the money is thereafter transferred through other channels, so that

there is no direct link with the Applicant.

9. We have considered the submissions and perused the record.

The inherent power under Section 482 of the Cr.P.C. is to be exercised

sparingly to prevent the abuse of process of law or otherwise to secure

the ends of justice or to give effect to any Order under the Code. In a

recent decision of the Apex Court in the case of Supriya Jain vs. State of

Haryana, SLP (Cri) No.3662 of 2023 [2023 LiveLaw (SC) 494], the Apex

Court held that, the small window that the law through judicial

precedents provides is to look at the allegations in the FIR and the

material collected in the course of investigation, without a rebuttal

thereof by the accused and to form an opinion upon consideration

thereof that an offence is indeed not disclosed from it. Unless the

prosecution is shown to be illegitimate so as to result in the abuse of

process of law, it would not be proper to scuttle it.

10. In light of the settled position of law as regards the exercise

of power under Section 482, the allegations in the FIR will have to be

scrutinised to ascertain whether the uncontroverted allegations prima

facie establish the offence or not.

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11. The allegation in the FIR is that, the Applicant No. 1 was

introduced to the Respondent No.2 as a highly placed IAS Officer and

the Applicant No. 2 as his wife and director along with him in various

companies. The allegation is that. it was projected to the Respondent

No.2 that, the Company in which the Applicants are the directors are

engaged in undertaking SRA/MHADA projects and other land

development projects in which, if an investment made, there would a

handsome return of profit.

11.1. To gain the confidence of the Respondent No. 2, the

documents in respect of Kanjurmarg land were shown and it was

represented to him that the Applicant No.1 being an IAS officer has good

relations with highly placed Central Government officers. The allegation

is that, in June, 2017, the Respondent No. 2 was informed about the

scheme for investing in the land development projects and he was

induced to become a member by making a payment of Rs. 5,00,000/-.

That the Respondent No.2 was informed that he cannot become a direct

member and he was made a sub member through Babulal Meghwal and

the amount of Rs. 5,00,000/- was directed to be paid by cheque in the

name of K. K. Engineering which is the firm of Babulal Meghwal. It is

alleged that, in July, 2017, a sum of Rs. 40,00,000/- was paid by the

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First Informant to the Applicant No.1 in the presence of Babulal

Meghwal, Jaysing Hada and Mannalal Gujjar in the corporate office of

Applicant No.1, located at Mumbai and at that time, Applicant No.2,

Manoj Patel and Sanjay Pandey was present.

11.2. The allegation is that, in this meeting, the documents

pertaining to Kanjurmarg-Bhandup land were shown and Power of

Attorney as having being obtained in respect of the said land and a copy

of the valuation report of the said land was also shown. In December,

2017, a sum of Rs. 30,00,000/- was paid by the Respondent No.2 to the

Applicant No. 1 in the presence of Babulal Meghwal, Jaising Hada and

Mannalal Gujjar. At that time along with Applicant No. 1 Manoj Patel

and Sanjay Pandey were present and they assured him that he will get

double the amount of the invested amount. In March, 2018, in the

presence of Mannalal Gujjar and Jaising Hada, the Respondent No.2

paid a sum of Rs. 40,00,000/- in cash to Applicant No.1 and Manoj Patel

and in October 2018, a sum of Rs. 35,00,000/- was paid in the presence

of Mannalal Gujjar, Jaising Hada and Babulal Meghwal. At that time

Applicant No.2, Manoj Patel and Sanjay Pandey had counted the cash

and assured him that, soon, the return on investment will be given.

11.3. The allegation is that, upon inquiry about profit, the

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Respondent No. 2 was informed that due to some technical difficulty

there has been a delay. That in March, 2019 upon insisting of return of

the money, the Applicant No. 1 informed the Respondent No. 2 that, the

promissory note would be given by his partner Manoj Patel and on 18 th

March, 2019, a promissory note was made out on the letter head of

firm, named Sai Ninad Enterprises signed by Manoj Patel on which

Babulal Meghwal has signed as a witness. That the promissory note, was

issued for the sum of Rs. 5,50,00,000/- with the promise that, the

money would be returned before 31 st September, 2019. It is alleged that,

as the money was not returned, an inquiry was made in which it was

revealed that in Kanjurmarg-Bhandup area there is no such land

belonging to the Applicant No.1 and the documents and valuation report

were shown are forged and fabricated.

12. Perusal of the FIR would indicate that, the amount of Rs.

1,45,00,000/- is alleged to have been handed over in cash to the

Applicant No.1 in the presence of Babulal Meghwal, Jaysing Hada and

Mannalal Gujjar. Learned APP has tendered the record of investigation

which includes over the statements of the witnesses. Perusal of the

statements of Babulal Meghwal, Jaising Hada and Mannalal Gujjar

discloses that, they have corroborated the statement that, the money

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was handed over in their presence to the Applicants. As far as the role of

the Applicant No.2 is concerned, in the meeting of July, 2017, when the

sum Rs. 40,00,000/- was handed over in cash to the Applicants and the

documents pertaining to the Kanjurmarg-Bhandup Land were shown,

she was present and had assured the Respondent No.2 that, the

assurance is being given by the Applicant No.1 who is a highly placed

Government officer and it has to be trusted. The cash amount is alleged

to be handed over to the Applicants.

13. From the allegations, prima facie it appears that, the

Applicant No.2 had received the cash amount alongwith Applicant No.1

and had misrepresented about the business. The Applicant No.2 had a

role to play in the entire conspiracy. It needs to be noted that, Section 34

of the IPC has also been applied in the present case. The money had

been handed over in her presence and the misrepresentation is that, the

investment is to be made in LFS Global Pvt. Ltd. of which Applicant No.2

is a director and that the said Company was handling the development

projects as well as financing film projects.

14. Considering the allegation in the FIR and the investigation

which has been carried out by the Police, the statement of the First

Informant as recorded in handing over the sum of Rs. 1,50,00,000/- has

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been corroborated by three witnesses. As such, merely because the

amounts were alleged to have been paid in cash, cannot be a reason to

disbelieve the First Informant. At the time of the quashing of the

proceedings, the veracity of the allegations is not required to gone into

and it will be a matter of trial as to how such huge amounts of cash was

generated by the First Informant. The uncontroverted allegations

reflected in the material on record, prima facie reveals the complicity of

the Applicants in the alleged offences and points out to the commission

of the alleged offences by the Applicants.

15. Mr. Lala, learned counsel for the Applicants after

deliberations sought permission to withdraw the Application. However,

we are not inclined to permit the Applicants to withdraw the

Application. This is for the reason that, the FIR as well as investigation

which has been carried out in the said crime reveals shocking state of

affairs. The Applicant No.1 is stated to be highly placed Government

Officer presently working as a Regional Director of Plastics Export

Promotion Council.

16. The statements of the witnesses prima facie indicate that, the

Applicant No.1 by misusing and misabusing his official position, have

deceived the First Informant and others and induced them to part with a

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huge amount of about Rs. 5,50,00,000/- under the guise of investing in

various SRA/MHADA projects and other development projects assuring

them of handsome return of profit.

17. What is startling is that, such a highly placed official has been

charged in six crimes which are lodged in Delhi, Mumbai and Rajasthan.

Not only that, the Power of Attorney which the witnesses claimed to

have been shown to them to induce them to invest into the development

project is in respect of land admeasuring about 63.55,225.7 sq. mtrs.

bearing Survey No. 275 situated at Village Kanjur Taluka. This huge

tract of land, according to the communication of the City Survey Officer,

belongs to Maharashtra State Government. This indicates that, not only

private individuals are sought to be deceived, but it appears that there is

a larger and wider conspiracy to deal with Government land without any

authority of whatsoever nature in that behalf.

18. We are also shocked to note that, the investigation discloses

that, as per the ROC details, the Applicant No. 1 is shown to be the

director in various companies, the details as under :

Name of Name of the Post held by the Period of the the person Company Applicant Holding Post

Ashutosh LFS Aviation Pvt. Ltd. Managing Director 2011 to 2014 Kumar Director 2017 to 2019

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Ashutosh LFS Constructions Managing Director 2011 to 2014 Kumar Pvt. Ltd.

                                            Director         2017 to 2019
         Ashutosh   LFS Distilleries Pvt.   Director         2017 to 2019
         Kumar      Ltd.
         Ashutosh   LFS Pharma &            Director         2017 to 2019
         Kumar      Healthcare Pvt. Ltd.
         Ashutosh   LFS Infrastructure      Managing Director 2011 to 2014
         Kumar      Pvt. Ltd.
                                            Director         2017 to 2019
         Ashutosh   LFS Power and           Managing Director 2011 to 2014
         Kumar      Natural Resources       Director         2017 to 2019
                    Pvt. Ltd.
         Ashutosh   LFS Chemicals &         Managing Director 2011 to 2014
         Kumar      Fertilisers Pvt. Ltd.   Director         2017 to 2019

19. We have our own doubts as regards the permissibility of an

Government Officer to occupy the post of Managing Director/Director in

private limited companies, considering that the Central Services

(Conduct) Rules, 1964 prohibit a Government Servant from engaging

directly or indirectly in any trade or business except with the previous

sanction of the Government. Considering the material which is

unearthed against the Applicants which reveals startling state of affairs,

we find it to be of utmost importance that the investigation is not stiffled

but is necessarily required to be continued.

20. It is necessary to trace the money trail so as to investigate as

to whether the amounts are being laundered through various companies

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incorporated by the Applicants in which either the Applicants or their

associates have been shown as a directors of the company. We find that

there is much more than meets the eye and the FIR cannot be quashed

at this stage.

21. We are completely satisfied with the manner in which the

investigating officer has conducted the investigation in the present

matter.

However, considering the fact that the Applicant No.1 is