Calcutta High Court (Appellete Side)
Suresh Kumar Agarwal vs State Of West Bengal & Anr on 29 July, 2022
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
Before:
The Hon'ble Justice Ananda Kumar Mukherjee
C.R.R. 1501 of 2014
With
IA No. CRAN 24 of 2022
Suresh Kumar Agarwal
Vs.
State of West Bengal & Anr.
With
C.R.R. 1739 of 2014
Surajit Mukherjee
Vs.
The State of West Bengal & Ors.
For the Petitioner : Mr. Sabyasachi Banerjee
(C.R.R.1501 of 2014) Mr. Ayan Bhattacharya
Mr. Aniruddha Agarwalla
Ms. N. Ahmed
Mr. D. Mukherjee
For the O.P. No.2: Mr. Phiroze Edulji
(C.R.R. 1501 of 2014) Mr. Koushik Kundu
For the State: Mr. Swapan Banerjee
(C.R.R.1501 of 2014) Mr. Suman Dey
For the Petitioner: Mr. Phiroze Edulji
(C.R.R. 1739 of 2014) Mr. Koushik Kundu
For the O.P. No.2: Mr. Sabyasachi Banerjee
(C.R.R. 1739 of 2014) Mr. Ayan Bhattacharya
Mr. Aniruddha Agarwalla
Ms. N. Ahmed
Mr. D. Mukherjee
For the State: Mr. Binay Panda
(C.R.R. 1739 of 2014) Ms. Puspita Saha
2
Heard on: 09.06.2022.
Judgment on: 29.07.2022.
Ananda Kumar Mukherjee, J. :-
1.
This revisional application under Section 397 and 401 read with Section
482 of the Code of Criminal Procedure has been filed by petitioner Suresh
Kumar Agarwal, one of the Directors of Piyarelal Imports and Exports Private
Limited, impleaded as Opposite Party No.2 petitioner in CRR No. 1739 of 2014,
against M/s Piyarelal Imports and Exports, Private Limited represented by Sri
Surajit Mukherjee wherein he has prayed for quashing of proceedings of Hare
Street Police Station Case No. 326 of 2009 under Sections 403, 406, 409, 418,
420 and 477A read with Section 120B of the Indian Penal Code giving rise to
G.R. Case No. 1414 of 2009 pending before the learned Chief Metropolitan
Magistrate at Calcutta and for setting aside of order dated 19.3.2013 passed by
learned Chief Metropolitan Magistrate, Calcutta whereby after submission of
Final Report by the investigating officer on dated 21.10.2012 the learned Chief
Metropolitan Magistrate was pleased to allow the prayer of the Opposite Party
in the 'Naraji Petition' and order reinvestigation of the case.
2. Brief fact of the case leading to the present application for revision is
that, petitioner was one of the Directors of Opposite Party No. 2 Company along
with his brother Ramesh Kumar Agarwal and they together looked after the day
to day affairs of the company. While petitioner managed the business of the
company at Mumbai, Ramesh Kumar Agarwal used to manage the business in
Kolkata.
3. M/s. R. Piyarelal Group of Companies was started by the father of
petitioner and Ramesh Kumar Agarwal who expired in the year 1994. After the
death of their mother in 2007 dispute cropped up between the two brothers
giving rise to several litigations between them and their families.
4. According to the petitioner Ramesh Kumar Agarwal surreptitiously filed
several Company Petitions in the name of Opposite Party No. 2 before the
Company Law Board, Principal Bench, New Delhi in December, 2007. During
pendency of the proceedings before the Company Law Board both the brothers
realized that it could not be possible for them to continue as a joint family with
joint family business and sought for partition and severance of the joint family
business and properties by distribution of various companies between two
groups and it was agreed that all the disputes and various company between
them would be amicably settled.
5. The parties approached the Hon'ble Company Law Board through Joint
Compromise Petition for settlement in terms of the prayers made in the
petition. After hearing the parties and on the basis of Joint Compromise
Petition filed by the parties for settlement, the company Law Board passed a
order on 27.2.2008. According to the petitioner Ramesh Kumar Agarwal did not
comply with the terms of the Civil degree passed by the Company Law Board
and execution petition was filed which went up to the High Court and certain
directions were passed in favour of the petitioner by order dated 16.3.2010 in
compliance with such direction books and accounts were handed over under
cover of a letter dated 31.3.2010. during pendency of the civil proceeding before
the competent court of law, Opposite Party No.2 through its authorized
representative, Surajit Mukherjee lodged a complaint against the petitioner
under Section 156(3) of the Code of Criminal Procedure before the learned
Chief Metropolitan Magistrate, Calcutta giving rise to C. Case No. 25092 of
2009, alleging commission of offence punishable under Section 403, 406, 409,
418, 420 and 477A of IPC read with Section 120B of the IPC.
6. On 21.5.2009 learned Chief Metropolitan Magistrate was pleased to
direct Officer-in-Charge, Hare Street Police Station to treat the complaint as
First Information Report and investigate the case. The same was registered as
Hare Street Police Station Case No. 326 of 2009 dated 3.6.2009 under Sections
403, 406, 409, 418, 420 and 477A read with Section 120B of the IPC. The
petitioner has contended that the subject matter in the complaint in the Hare
Street Police Station Case No. 326 of 2009 relates to the self same issues raised
by Ramesh Kumar Agarwal before the Company Law Board which broadly fall
under the categories as follows:
(i) Materials/Goods of the Stock of Mumbai Branch Office
disposed/transferred at low value to another Company of
petitioner.
(ii) Sale of various commodities by showing stock as shortage in
books.
(iii) Diversion of Maize at a lower value to another company controlled
by the petitioner himself.
7. The case of the petitioner is that the issues raised in the First
Information Report are all civil in nature and the same would appear from the
subject matter of C.A. No. 42 of 2010 and order dated 13.7.2010 passed by the
Company Law Board.
8. From the Joint Compromise Petition (Annexure P-1) it would appear that
the branch accounts of companies transferred by the petitioner to Ramesh
Kumar Agarwal were duly handed over after verification by the Auditors of
Ramesh Kumar Agarwal and after reconciliation of accounts and all stock,
Ramesh Kumar Agarwal received a sum of Rs. 4,05,12,167 as net balance from
the petitioner apart from Rs. 3,02,51,350 aggregating to Rs. 7,07,63,517. On
the basis of receipt of account duly verified by Opposite Party No. 2 as well as
other companies taken over by Ramesh Kumar Agarwal, from the petitioner,
the balance sheets and Annual Returns were filed before the Registrar of
Companies. It is only to usurp the Gokhale Road property and other claims of
the petitioner payable by Ramesh Agarwal under the consent order, the
impugned proceeding has been instituted through Opposite Party No.2 and all
such claims and counter claims are civil disputes and cannot attract the
offence under Criminal Law.
9. After investigation the investigating agency at the first instance
submitted a report in the final form, finding that the charges were civil in
nature and discharged the petitioner from the case. A notice regarding Final
Report of the case was served upon opposite party. The Opposite Party No. 2
filed a formal objection against the final report in the form of 'Naraji Petition'
before the learned Magistrate on 16.01.2013 a copy of which has been annexed
as 'P-10', the application was heard and a order dated 19.3.2013 was passed
by the Magistrate allowing the prayer of Opposite Party No.2 for reinvestigation.
10. It is urged by the petitioner that the learned Magistrate has passed and
the order for reinvestigation in a mechanical way and that the impugned order
is incorrect, procedurally untenable and legally unsustainable.
11. The petitioner prayed for quashing the proceeding in Hare Street Police
Station Case No. 326 of 2009 dated 3.6.2009 and the impugned order dated
19.3.2013 directing reinvestigation into the case on the grounds inter alia, as
follows:
(i) The impugned order suffers from illegality and any further
continuance of the instant proceeding is bad in law.
(ii) Learned Magistrate by taking judicial notice of the 'Naraji Petition'
and allowing reinvestigation into the alleged offence has acted in a
mechanical manner.
(iii) The Final Report dated 21.11.2012 would indicate that statement
of persons related to Opposite Party No.2 as well as employees of
other firms namely M/s Swapna Agarwal and Company, related to
Opposite Party No. 2 were duly recorded by the investigating
agency.
(iv) The Final Report would demonstrate that the
complainant/Opposite Party No.2 duly supplied copies of
documents to substantiate the case before the investigating agency
and those documents were duly considered by the investigating
agency during investigation.
(v) That the investigating agency also served notice upon the Opposite
Party No.2 to submit few original documents including sale
register, purchase and sale invoice, accounts books, but the
Opposite Party No.2 failed to provide such documents to the
investigating agency. Therefore, the submission made by the
Opposite Party No.2 alleging improper investigation does not stand
any ground.
(vi) It is a settled principle that in case of civil wrong and allegations
may or may not amount to criminal offence but continuation of
multiple proceedings would amount to abuse of process of court.
(vii) Learned Magistrate erred by taking judicial notice of the 'Naraji
Petition' and directing reinvestigation into the matter, which is
beyond the scope and jurisdiction vested upon learned Magistrate.
(viii) That there is no material to connect the petitioner with the offence
under Sections 420, 409 or 406 of the Indian Penal Code and that
petitioner was not entrusted with any property by the Opposite
Party No.2.
12. Accordingly, the petitioner prayed for quashing of the proceeding of Hare
Street Police Station Case No. 326 of 2009 giving rise to G.R. Case No. 1414 of
2009 and setting aside of the impugned order dated 19.3.2013 passed by
learned Chief Metropolitan Magistrate, Calcutta in G.R. Case No. 1414 of 2009
directing reinvestigation.
13. In connection with the same subject matter C.R.R 1739 of 2014 has been
filed by Surajit Mukherjee, who happens to be Opposite Party No. 2 in C.R.R
1501 of 2014 against the State of West Bengal and Suresh Kumar Agarwal as
Opposite Party No.2, who again was the petitioner in the earlier revisional
application.
14. In the other application under Section 482 and 483 of Cr. P.C petitioner
seeking a direction upon learned Chief Metropolitan Magistrate restraining him
from hearing bail application of accused/opposite party no. 3 till any specific
order is passed in C.R.R No. 1501 of 2014. A direction to the effect that order
dated 14.5.2014 passed in C.R.R 1501 of 2014 will not impede the
investigation officer of Hare Street Police Station Case No. 326 of 2009, to
continue with investigation and that further proceeding in G.R Case No. 1414
of 2009 was restricted only to the petitioner of the revisional application and
not applicable to the accused who is in custody.
15. Heard learned advocates for the petitioners in both the revisional
applications at length and in full.
16. The short question involved in these two revisional applications is
whether during pendency of a proceeding regarding severance and partition of
joint family business and properties in respect of the business of R.Piyarelal
group of business pending before Company Law Board, where Joint
Compromise Petition for settlement has been made by the parties and also for
settling the disputes, the criminal case initiated at the instance of M/s R.
Piyarelal Imports & Exports Limited, represented by Mr. Surajit Mukherjee,
Senior Executive of the company (Opposite Party No2) in C.R.R 1501 of 2014
and petitioner in C.R.R 1739 of 2014, pending before learned Chief
Metropolitan Magistrate, Calcutta being G.R. Case No. 1414 of 2009, should
continue or is liable to be quashed on the grounds disclosed. It is also to be
considered whether after submission of final report by Hare Street Police
Station, learned Magistrate was justified in considering the 'Naraji Petition' and
directing reinvestigation of the case.
17. Admittedly, Suresh Kumar Agarwal and his brother Ramesh Kumar
Agarwal were the Directors of M/s R. Piyarelal Group of companies which stood
in the name of their father who expired in 1994. Ramesh Kumar Agarwal
managed the business of the company at Calcutta while Suresh Kumar
Agarwal looked after and managed the business of the company at Mumbai.
Dispute cropped up after the death of their mother. Applications were made
before Company Law Board, Principal Bench, New Delhi for partition and
severance of Joint family business. Subsequently, Joint Compromise Petition
for settlement was filed in terms of the prayers made in such petitions. After
hearing the parties over their Joint Compromise Petition for settlement of
disputes, an order dated 27.02.2008, was passed which was agreed up by
Ramesh Kumar Agarwal and his family on one side and the petitioner and his
family members on the other side. While such proceedings and execution of the
Company Law Board orders were pending, Surajit Mukherjee representating
M/s Piyarelal Group of Companies filed a complaint under Section 156(3) of Cr.
P.C before the Learned Chief Metropolitan Magistrate Calcutta, giving rise to C
Case No. 25092 of 2009 alleging commission of offence under Sections 403,
406,409,418,420,477A read with Section 120B of the Indian Penal Code and
Hare Street Police Station was directed to treat the complaint as First
Information Report and investigate the matter.
18. It is also undisputed that after holding investigation police submitted a
report in Final form against which Opposite Party no.2 submitted a 'Naraji
Petition' and after hearing the parties and considering the petition Learned
Chief Metropolitan Magistrate passed the impugned order dated 19.03.2013,
whereby Learned Magistrate after going through the Case Diary and finding
that there was alleged misappropriation of money to the tune of
Rs.8,75,38,112/- by the accused, directed O.C, Hare Street Police Station to
reinvestigate into the offence properly through any other Investigating Officer
beside Mr. Achyananda Ghosh and collect all the documents from the
complainant if so required.
19. Bereft of the details, it would appear from relevant documents that
accused/petitioner Suresh Kumar Agarwal being one of the Directors of
Mumbai Branch of the complainant's company on 20.12.2007 entered into
criminal conspiracy with accused P.K. Rungta and Narendra Kumar Rajgoria
and pursuant to such conspiracy they dishonestly disposed of various
commodities from the stock of the branch office of the company at Mumbai to
their newly formed company M/s R Piyarelal Global Impex Ltd. at a very
marginal price and subsequently sold out the same at higher price and thereby
syphoned out a sum of Rs. 3,18,00000/- from the company. They also
misappropriated Rs.2,00,00,000/- worth of different types of pulses.
20. In course of investigation relating to the alleged misappropriation it was
noted that the complainant company entered into an agreement with S.T.C.L,
a Government of India Undertaking concerned with the complainant company
on 13.11.2006, represented by accused-petitioner Suresh Kumar Agarwal
whereby food grains weighing 17,128.86 M.Tones of Maize was procured from
Karnatak and Andhra Pradesh in the name of the complainant company by
obtaining financial assistance from S.T.C.L Ltd., a public sector undertaking,
in the name of Mumbai Branch of the complainant company and subsequently
fraudulently diverted the said stock to M/s R. Piyarelal Global Impex Limited,
the newly formed company of the accused person at a lower rate than the price
rate of commodities and thereby caused a loss to the complainant company to
the tune of Rs. 3,11,21,205/- . Further case of the complainant company is
that 2394.924 M.Tones of various commodities worth about Rs.2,83,76,157/-
was sold to different parties by the accused persons by fraudulently showing
the said materials in the stock of the complainant's company as shortage.
Thereby they misappropriated a sum of Rs.8,75,38,112/- of the complainant
company and cheated the complainant's company.
21. Alleged acts emerging from the documents placed in the Case Diary,
gives an inkling that penal offence are attracted and they are independent of
the civil dispute relating to partition of the joint family business of Late
Piyarelal Agarwal. In this context it would be apt to refer to the decision in the
case of P. Swaroopa Rani V. M. Hari Narayana alias Hari Babu; AIR 2008
SCC 1884 wherein it was held,
"17. It is, however, well settled that in a given case, civil proceedings
and criminal proceedings can proceed simultaneously. Whether civil
proceedings or criminal proceedings shall be stayed depends upon
the fact and circumstances of each case.... Filing of an independent
criminal proceeding, although initiated in terms of some observations
made by the civil court, is not barred under any statute... It goes
without saying that the respondent shall be at liberty to take
recourse to such a remedy which is available to him in law. We have
interfered with the impugned order only because in law
simultaneous proceedings of a civil and a criminal case is
permissible."
22. Relying upon the principle laid down in the above case I am inclined to
hold that despite pendency of any civil proceeding related to any property, a
criminal case arising out the same property may be preceded independently as
the nature and scope of the civil and criminal proceeding are different.
Therefore, I do not find any reason to quash the criminal proceeding arising out
of Hare Street Police Station Case No.326 of 2009 which relates to alleged
misappropriation of company funds by the petitioner in C.R.R 1501 of 2014
and others and cheating.
23. As regards the impugned order dated 19.03.2013 passed by Chief
Metropolitan Magistrate directing reinvestigation of the case, it appears to me
that Learned Magistrate was not vested with the jurisdiction of directing
reinvestigation in a case under Section 173(8) of Cr. P.C. It was appropriate on
the part of Learned Magistrate to direct further investigation into the case
instead of reinvestigation if he found satisfactory reasons for the same.
24. In the case of Vinay Tyagi Vs. Irshad Ali & Ors. reported in (2013) 5
SCC 762, it was held by the Hon'ble Supreme Court as follows:
"45. The power to order/direct 'reinvestigation' or 'de novo'
investigation falls in the domain of higher courts, that too in
exceptional cases. If one examines the provisions of the Code, there
is no specific provision for cancellation of the reports, except that the
investigating agency can file a closure report (where according to the
investigating agency, no offence is made out). Even such a report is
subject to acceptance by the learned Magistrate who, in his wisdom,
may or may not accept such a report. For valid reasons, the Court
may, by declining to accept such a report, direct "further
investigation", or even on the basis of the record of the case and the
documents annexed thereto, summon the accused.
46. The Code does not contain any provision which deals with the
court competent to direct "fresh investigation", the situation in which
such investigation can be conducted, if at all, and finally the manner
in which the report so obtained shall be dealt with. The superior
courts can direct conduct of a 'fresh'/'de novo' investigation, but
unless it specifically directs that the report already prepared or the
investigation so far conducted will not form part of the record of the
case, such report would be deemed to be part of the record. Once it
is part of the record, the learned Magistrate has no jurisdiction to
exclude the same from the record of the case. In other words, but for
a specific order by the superior court, the reports, whether a primary
report or a report upon "further investigation" or a report upon 'fresh
investigation', shall have to be construed and read conjointly. Where
there is a specific order made by the court for reasons like the
investigation being entirely unfair, tainted, undesirable or being
based upon no truth, the court would have to specifically direct that
the investigation or proceedings so conducted shall stand cancelled
and will not form part of the record for consideration by the Court of
competent jurisdiction."
25. In another case relied on behalf of the petitioner in C.R.R 1501 of 2014,
Bhagwant Singh Vs. Commissioner of Police & Anr. reported in (1985) 2
SCC 537 @ page 541, wherein it was held that,
"4. ...... The report may on the other hand state that, in the opinion
of the police, no offence appears to have been committed and where
such a report has been made, the Magistrate again has an option to
adopt one of three courses: (1) he may accept the report and drop the
proceeding or (2) he may disagree with the report and taking the
view that there is sufficient ground for proceeding further, take
cognizance of the offence and issue process or (3) he may direct
further investigation to be made by the police under sub-section (3)
of Section 156....."
26. Learned advocate for the accused/petitioner argued that Learned
Magistrate had the option to adopt any of the three courses of action on receipt
of the police final report.
i) He could have accept the report and dropped the proceeding.
ii) He may have disagree with the report and taking the view that there is
sufficient ground for proceeding further, taking cognizance of the
offence, issued process and
iii) He may direct further investigation to be made by the police under
sub-section (3) of Section 156.
27. It is argued that Learned Magistrate did not comply these procedure, the
impugned order passed by Learned Magistrate cannot be sustained.
28. I have perused the impugned order, 'Naraji Petition' and the materials in
the Case Diary. Mr. Swapan Banerjee, learned advocate for the State submitted
that there are sufficient material to proceed with further investigation of the
case.
29. Having considered the facts and circumstances and the nature of
allegations made against the accused/petitioner, I am of the view that the
Investigating Agency should be directed to continue with further investigation
of the case after taking into consideration all material particulars and tangible
material. A Final Report in such a case is unacceptable.
30. The impugned order passed by Learned Magistrate dated 19.03.2013 is
not tenable to the extent that he had directed reinvestigation of the case. It
would be appropriate to direct the Investigating Agency to continue with
further investigation of the case. Accordingly the impugned order dated
19.03.2013 is modified in the light of my above discussion. O.C Hare Street
Police Station is directed to cause further investigation into Hare Street Police
Station Case No. 326 of 2009 dated 03.06.2009, deputing a competent police
officer other than the earlier investigating officer.
31. The revisional application bearing no. C.R.R 1501 of 2014 is accordingly
allowed in part on contest.
32. In the light of my above discussion C.R.R No.1739 of 2014 is disposed of.
33. Interim order if any stands vacated. Let a copy of this order be
communicated to Learned Chief Metropolitan Magistrate, Calcutta, for
information and taking appropriate action for further investigation. In the light
of my above discussion.
34. All parties to act on the basis of a server copy of the Judgment and Order
placed on the official website of the Court.
35. Urgent Photostat certified copies of this order may be supplied to the
parties expeditiously if applied for, maintaining all formalities.
(Ananda Kumar Mukherjee, J.)
