Calcutta High Court (Appellete Side)
M/S. Haldia Steels Limited vs The State Of West Bengal & Anr on 17 October, 2023
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction)
Appellate Side
Present:
Justice Bibhas Ranjan De
C.R.R. 425 of 2016
M/s. Haldia Steels Limited
Vs.
The State of West Bengal & Anr.
With
C.R.R. 426 of 2016
IA No. CRAN 2 of 2016 (CRAN 1732 of 2016)
M/s. Haldia Steels Limited
Vs.
The State of West Bengal & Anr.
Mr. Sandipan Ganguly,Sr. Adv.
Ms. Manasmita Mukherjee, Adv.
Mr. Rahul Ganguly, Adv.
Mr. Pankaj Agarwal, Adv.
Ms. Champa Pal, Adv.
........For the Petitioner in CRR 425 of 2016
Mr. Rahul Ganguly
Ms. Manasmita Mukherjee
2
Mr. Pankaj Agarwal, Adv.
Ms. Champa Pal, Adv.
.........For the Petitioner in CRR 426 of 2016
Mr. Imarn Ali Adv.
Ms. Debjani Sahu, adv.
........For the State in CRR 425 of 2016
Mr. Bidyut Kumar Roy
Ms. Debjani Sahu
......... For the State in CRR 426 of 2016
Mr. Sachit Talukdar
Mr. Anirudhya Dutta.
........For the opposite party no. 2 in both CRR no.
425 of 2016 & 426 of 2016
Heard on :25.07.2023,01.08.2023, 02.08.2023,
04.08.2023, 09.08.2023, 25.09.2023
Judgment on : 17th October, 2023
Bibhas Ranjan De, J.
1. Both the revision applications having identical contentious
issues are required to be disposed of by this common
judgment.
CRR 425 of 2016
Background:-
2. The application was filed challenging the order dated
05.10.2015 passed by Learned Chief Metropolitan Magistrate,
refusing the prayer for further investigation of the case.
3. An application under Section 156(3) of the Code of Criminal
Procedure (for short CrPC) was filed by the petitioner before
the Learned Chief Metropolitan Magistrate, Calcutta which
was forwarded to Shakespeare Sarani Police Station where
complaint was registered as Shakespeare Sarani Police Station
Case No. 318 of 2014 under Section 120B /406/ 420 of the
Indian Penal Code by the Petitioner's Company, M/s. Haldia
Steels Limited represented by Kaushik Banerjee, a Manager
and Authorized Representative against the opposite party no.
2, Suresh Kumar Aggarwal proprietor of M/s. Haryana
Minerals . The aforesaid complaint was filed alleging, inter alia,
that the petitioners company was induced to make advance
payment of Rs. 50,00,000/- (Fifty lacs) through demand draft
towards supply of Manganese Ore which got duly credited to
the account of opposite party no. 2. But the advanced amount
was misappropriated by not supplying any Manganese Ore to
the petitioner's company as per memorandum of
understanding dated 12.12.2007 whereby opposite party no. 2
agreed to supply all Manganese raised by it to the petitioner's
company and nobody else.
4. According to memorandum of agreement, dated 12.12.2007
opposite party no. 2 being owner of the proprietorship
business of mining under the name and style of Haryana
Minerals was to convert his proprietorship business into a
private limited company. Upon such incorporation, opposite
party no. 2 was to transfer all his shares to the petitioner's
company or it's nominees by 20.03.2008 after getting total
consideration amount of Rs. 3,20,00,000.00/.(Rupees three
corers 20 lacs only). At the time of execution of agreement
petitioner company was to pay 50,00,000/- (rupees fifty lacs).
According to agreement, petitioner's company was to pay Rs.
1,00,00,000/- (rupees one crore) by cash against receipt
thereafter. On 15th February, 2008 petitioner's company was
to pay Rs. 25,00,000/- (rupees twenty five lacs) to the opposite
party no. 2. Again on 20.03.2008 petitioner's company was to
pay a sum of Rs. 95,00,000/-(rupees ninety five lacs).
According to memorandum of agreement petitioner company
was to pay balance amount of Rs. 50,00,000/- (rupees fifty
lacs) by cheque to the opposite party no.2 at the time of
transfer of total shares. In the mean time petitioner's company
was to continue purchase of Manganese Ore from the date of
execution of the agreement until the transfer of shares.
Opposite party no. 2 was to pay all government revenues viz.
royalty, forest cess, rent, sales tax and other dues payable in
respect of the scheduled area.
CRR 426 of 2016
Background
5. The application was filed challenging the order dated
05.10.2015 passed by Ld. Chief Metropolitan Magistrate,
refusing the prayer for further investigation of the case.
6. An application under Section 156(3) of the Code of Criminal
Procedure (for short CrPC) was filed by the petitioner before
the Learned Chief Metropolitan Magistrate, Calcutta which
was forwarded to Shakespeare Sarani Police Station where
complaint was registered as Shakespeare Sarani Police Station
case no. 317 of 2014 under Section 120B /406/ 420 of the
Indian Penal Code by the Petitioner's company, M/s. Haldia
Steels Limited represented by Kaushik Banerjee, a Manager
and Authorized Representative against the opposite party no.
2, Dattulal Muralidhariji Gandhi proprietor of M/s. Mohini
Industries. The aforesaid complaint was filed alleging, inter
alia, that the petitioner's company was induced to make
advance payment of Rs. 1,00,00,000/- (Rupees one crore)
through demand draft towards supply of Manganese Ore
which got duly credited to the account of opposite party no. 2.
But the advanced amount was misappropriated by not
supplying any Manganese Ore to the petitioner's company as
per memorandum of understanding dated 12.12.2007 whereby
opposite party no. 2 agreed to supply all Manganese raised by
it to the petitioner's company and nobody else.
7. According to memorandum of agreement dated 12.12.2007
opposite party no. 2 being owner of the proprietorship
business of mining under the name and style of Mohini
Industries was to convert his proprietorship business into a
private limited company. Upon such incorporation, opposite
no. 2 was to transfer all his shares to the petitioner's company
or it's nominees by 20.03.2008 after getting total consideration
amount of Rs. 3,20,00,000.00.(rupees three crore twenty lacs
only). At the time of execution of agreement petitioner
company was to pay 50,00,000/- (rupees fifty lacs). According
to agreement petitioner's company was to pay Rs.
1,00,00,000/- (Rupees one crore) by cash against receipt
thereafter. On 15.02.2008 petitioner's company was to pay Rs.
25,00,000/- (rupees twenty five lacs) to the opposite party no.
2. Again on 20.03.2008 petitioner's company was to pay a sum
of Rs. 95,00,000/-(rupees ninety five lacs). According to
memorandum of agreement the petitioner company was to pay
balance amount of Rs. 50,00,000/- (rupees fifty lacs) by
cheque to the opposite party no. 2 at the time of transfer of
total shares. In the mean time petitioner's company was to
continue purchase of Manganese Ore from the date of
execution of the agreement until the transfer of shares.
Opposite party no. 2 was to pay all government revenues viz.
royalty, forest cess, rent, sales tax and other dues payable in
respect of the scheduled area.
Argument advanced on both the revision applications.:
8. Ld. Senior Advocate, Mr. Sandipan Ganguly, appearing on
behalf of the petitioner in both the revision applications has
contended that petitioner company being one of the most
reputed concerns in the field of iron and steel since 1996, was
engaged in the business of manufacturing ferro alloys and
they were looking out for a steady source of supply of
Manganese Ore. At this juncture, the accused namely Suresh
Aggarwal (opposite party no.2 in connection with CRR 425 of
2016) and Dattulal Muralidhariji Gandhi (opposite party no. 2
in connection with CRR 426 of 2016) approached the officers
of the petitioner company with a proposal to operate the
Manganese Mine which was allotted to their (opposite party
no. 2 in CRR 425 and 426 of 2016 respectively) proprietorship
firm by the State of Madhya Pradesh. A sum of Rs. 3.20 crore
had been agreed upon in the memorandum of understanding
(for short MOU) dated 12.12.2007. In terms of the M.O.U. the
opposite party no. 2 was to firstly convert their proprietorship
firm to a private limited company duly incorporated under the
Companies Act, 1956 and then transfer the shares of the said
companies in the name of the petitioner company or it's
nominees by virtue of which the petitioner company would
become the owner of the said new company resulting in a
position through which they can utilize the mining lease
granted in favour of the proprietorship firm of opposite party
no. 2 in both the cases.
9. Mr. Ganguly has, next, submitted that in sharp contrast to the
terms of the agreement neither of the opposite party no. 2 (in
connection with both CRR 425 and 426 of 2016 respectively)
took any requisite steps to transfer the proprietary concern
into a private limited company. Moreover, in both the cases
opposite party no. 2 created an independent company namely
Haryana Minerals Manganese Ore (P) Limited in connection
with CRR 425 of 2016 and Mohini Manganese Ore (P) Limited
in connection with CRR 426 of 2016 with a mala fide motive.
Moreover, in CRR 425 of 2016 after formation of the private
limited company the opposite party no. 2 transferred only 28%
shares of the said company in favour of the petitioner. Thus,
the independent status of the proprietary concern holding the
mining lease in CRR No. 425 and 426 of 2016 respectively was
preserved and the petitioner was handed over ownership of a
private limited company, having no assets at all.
10. Mr. Ganguly has contended that as per Rule 17 of the
Mineral Concession Rules 1960, any kind of transfer of the
mining lease would require previous consent in writing of the
State Government. This said fact was definitely within the
knowledge of the opposite party no. 2, claiming to be an expert
in mining affairs. Despite this knowledge the opposite party
no. 2 induced the petitioner company to enter into the
agreement dated 12.12.2007 and thereby obtaining Rs.
96,20,350.00/- ( Rupees ninety six lac twenty thousand three
hundred fifty ) in connection with CRR 425 of 2016 and Rs.
3,26,000,00/- (Rupees Three crore twenty six lac) in
connection with CRR 426 of 2016.
11. In both CRR 425 & 426 of 2016 Mr. Ganguli submitted
that obtaining of environment clearance from the requisite
Governmental Department which is a pre-condition for
operation of a mine was to be provided by the opposite party
no. 2. Although, obtaining monetary benefits opposite party
no. 2 did not obtain the requisite Environment Clearance from
the requisite Government Department which resulted in
conversion of the said mine to a mere piece of land without
any commercial value therefrom as there wasn't any way of
extraction of Manganese Ore.
12. Mr. Ganguly, has further contended that a letter bearing
reference no. 3-66/2004/12/2 dated 29.12.2008 in
connection with CRR 425 of 2016 and a letter bearing
reference no. 3-65/2004/12/2 dated 17/09/2008 in
connection with CRR 426 of 2016 purportedly issued by the
Mining Department Government of Madhya Pradesh was
handed over to the petitioner by the opposite party no. 2 in
both the cases which was false and fabricated document. On
subsequent scrutiny it got also transpired that the property
tax as also the tax for non-ferrous mining and metallurgical
industries were continuously paid in favour of the Government
of Madhya Pradesh by the proprietorship firm of opposite party
no. 2 (in connection with CRR 425 of 2016 and CRR no. 426 of
2016) even after incorporation of the private limited company
dated 12.03.2008 in case of Haryana Mineral Manganese Ore
Private Limited in connection with CRR 425 of 2016 and
29.01.2008 i.e. date of incorporation of Mohini Manganese and
Ore(p) Ltd. in connection with CRR 426 of 2016 which meant
the records of the Government still reflected the propriety
concerns as the holder of the mining lease and not the private
limited companies subsequently incorporated in both CRR 425
of 2016 and 426 of 2016 consequently.
13. Mr. Ganguly has relied on a case of State of M.P. Vs.
Awadh Kishore Gupta and others reported in (2004) 1
Supreme Court Cases 691.
14. In opposition to that, Ld. Advocate Mr. Sachit Talukdar,
in both the revision applications, has contended that the
petitioner did not disclose in the Section 156 (3) complaint
that a written agreement was entered into between the parties
to acquire the mining lease and thereafter undertake the
operations thereof. The only complaint was the alleged non-
supply of Manganese Ore pursuant to a verbal agreement. Mr.
Talukder has further countered the claim of the petitioner
regarding failure to convert the proprietorship itself to a
company and creation of new company instead. Mr. Talukder
assailed that such procedure does not exist. The only
procedure possible is the creation of a separate company and
such company be permitted through its objectives in the
memorandum of association to acquire/take over or operate
with firms having similar objective.
15. Mr. Talukder has further submitted that the opposite
party no. 2 in both the cases have duly performed their part as
depicted in the agreement dated 12.12.2007. Furthermore, the
Managing Director of the petitioner company and his father
were the sole Directors of the newly formed company since
2008 till the time instant proceeding was initiated.
16. Next, Mr. Talukder advanced his argument regarding the
letters issued by the Government of Madhya Pradesh by
submitting that transfer of mining lease in favour of the newly
formed companies in both the cases is not at all purportedly
forged. In support of his contention, to make it more credible,
Mr. Talukder relied on the order thereby transferring mining
lease in favour of the newly formed companies received
through RTI from Government of Madhya Pradesh.
17. Mr. Talukder again submitted that sole allegation found
in the 156(3) complaint preferred by the petitioner regarding
the alleged non-supply of Manganese Ore by the opposite
party no. 2 despite receiving payment for the same was not
substantiated by the complainant by submitting documents
like the Purchase Order, copy of the memorandum of
understanding reportedly executed between the petitioner
company and company of opposite party no. 2 in both the
cases.
18. Before parting with his argument, Mr. Talukder has
referred to the agreement between the parties (MOU) and
submitted that opposite party no.2 of both the cases deposited
taxes with regard to their respective mining lease according to
the directives mentioned in the clause 9 & 10 of the same so
as to ensure that the mining lease did not lapse. Mr. Talukder
also contended that the allegation of failure to obtain
environmental clearance was never drawn to the notice of the
opposite party no. 2 in both the cases by the petitioner.
19. Mr. Talukder, in support of his contention relied on the
following cases:-
Anita Malhotra Vs. Apparel Export Promotion Council
reported in (2012) 1 Supreme Court Cases 520
Datti Kameswari Vs. Singam Rao Sarath Chandra and
another 2015 SCC OnLine Hyd 389.
20. Both the Ld. Advocates, Mr. Imran Ali and Mr. Bidyut
Kumar Roy, appearing on behalf of the State in connection
with CRR 425 and 426 of 2016, has submitted that the final
report was submitted relying on the investigation of a case of a
civil nature and memorandum of understanding (agreement)
between the parties was duly complied with by transferring the
mining lease in favour of the newly formed companies by the
opposite party no. 2 in connection with both the revision
applications.
21. In Awadh Kishore Gupta (supra) the Hon'ble Apex
Court laid down the following principle in dealing with an
application under Section 482 of CrPC for quashing
proceedings:-
" 13. It is to be noted that the investigation was not
complete and at that stage it was impermissible for the High
Court to look into materials, the acceptability of which is
essentially a matter for trial. While exercising jurisdiction
under Section 482 of the Code, it is not permissible for the
Court to act as if it was a trial Judge. Even when charge is
framed at that stage, the Court has to only prima facie be
satisfied about existence of sufficient ground for proceeding
against the accused. For that limited purpose, the Court
can evaluate material and documents on records but it
cannot appreciate evidence. The Court is not required to
appreciate evidence to conclude whether the materials
produced are sufficient or not for convicting the accused.
In Chand Dhawan v. Jawahar Lal [(1992) 3 SCC 317 : 1992
SCC (Cri) 636] it was observed that when the materials
relied upon by a party are required to be proved, no
inference can be drawn on the basis of those materials to
conclude the complaint to be unacceptable. The Court
should not act on annexures to the petitions under Section
482 of the Code, which cannot be termed as evidence
without being tested and proved. When the factual position
of the case at hand is considered in the light of principles of
law highlighted, the inevitable conclusion is that the High
Court was not justified in quashing the investigation and
proceedings in the connected case (Crime No. 116 of 1994)
registered by the Special Police Establishment, Lokayukta,
Gwalior. We set aside the impugned judgment. The State
shall be at liberty to proceed in the matter further."
22. Anita Malhotra (supra) held as follows:-
" 16. A reading of the above provisions makes it clear that
there is a statutory requirement under Section 159 of the
Companies Act that every company having a share capital
shall have to file with the Registrar of Companies an annual
return which includes details of the existing Directors. The
provisions of the Companies Act require the annual return
to be made available by a company for inspection (Section
163) as well as Section 610 which entitles any person to
inspect documents kept by the Registrar of Companies. The
High Court committed an error in ignoring Section 74 of the
Evidence Act, 1872. Sub-section (1) of Section 74 refers to
public documents and sub-section (2) provides that public
documents include "public records kept in any State of
private documents". A conjoint reading of Sections 159, 163
and 610(3) of the Companies Act, 1956 read with sub-
section (2) of Section 74 of the Evidence Act, 1872 makes it
clear that a certified copy of annual return is a public
document and the contrary conclusion arrived at by the
High Court cannot be sustained.
19. In Harshendra Kumar D. v. Rebatilata Koley [(2011) 3
SCC 351 : (2011) 1 SCC (Civ) 717 : (2011) 1 SCC (Cri) 1139]
, while considering the very same provisions coupled with
the power of the High Court under Section 482 of the Code
of Criminal Procedure, 1973 (in short "the Code") for
quashing of the criminal proceedings, this Court held: (SCC
pp. 361-62, para 25)
"25. In our judgment, the above observations cannot be
read to mean that in a criminal case where trial is yet to
take place and the matter is at the stage of issuance of
summons or taking cognizance, materials relied upon by
the accused which are in the nature of public documents or
the materials which are beyond suspicion or doubt, in no
circumstance, can be looked into by the High Court in
exercise of its jurisdiction under Section 482 or for that
matter in exercise of revisional jurisdiction under Section
397 of the Code. It is fairly settled now that while exercising
inherent jurisdiction under Section 482 or revisional
jurisdiction under Section 397 of the Code in a case where
complaint is sought to be quashed, it is not proper for the
High Court to consider the defence of the accused or
embark upon an enquiry in respect of merits of the
accusations. However, in an appropriate case, if on the face
of the documents--which are beyond suspicion or doubt--
placed by the accused, the accusations against him cannot
stand, it would be travesty of justice if the accused is
relegated to trial and he is asked to prove his defence before
the trial court. In such a matter, for promotion of justice or
to prevent injustice or abuse of process, the High Court may
look into the materials which have a significant bearing on
the matter at prima facie stage."
23. In Datti Kameshawari (supra) it was held in paragraph
16 as follows:-
" 16. A learned Single Judge of the same High Court in
W.P. No. 7860 of 2014, dated 19-03-2015 held that the
certified copies of the map of the house and building
construction permission from Nigar Nigam obtained under
the Right to Information Act, 2005 can be taken as
secondary evidence and it was held as follows:
Clause (f) of Section 65 of Evidence Act makes it crystal
clear that a certified copy permitted under the Evidence Act
or by any other law in force can be treated as secondary
evidence. Right to Information Act, in my view, falls within
the ambit of "by any other law in force in India". The
definition of "right to information" makes it clear that
certified copies of documents are given to the citizens under
their right to obtain information. In my view, the court
below has rightly opined that the documents can be
admitted as secondary evidence. I do not see any merit in
the contention that the documents obtained under the Act
of 2005 are either true copies or attested copies. The
definition aforesaid shows that the same are certified
copies. Even otherwise, it is interesting to note that in Black
Dictionary, the meaning of "certified copy" is as under:-
"Certified copy" - a copy of a document or record, signed or
certified as a true copy by the officer to whose custody
original is entrusted."
Since the documents are covered under section 65 of the
Evidence Act, there was no need to compare the same with
the originals."
24. Keeping an eye on the aforesaid observations of the
Hon'ble Apex Court, I delve into the merit of the revision
applications at hand.
Decision:
Admitted facts:-
25. It is not disputed that there was an agreement (MOU)
between the identical petitioner of both the revision
applications and opposite party no. 2 of the revision
applications. According to the agreement opposite party no. 2
of both the revision applications were to convert their
respective proprietorship business of mining into a private
limited company to be incorporated under the Companies Act
and upon incorporation of the private limited companies
mining lease of both the proprietorship concerns shall be
transferred in the name of newly incorporated private limited
companies.
26. Further admitted fact is that in respect of CRR 425 of
2016 opposite party no. 2 transferred 28% share to the
petitioner company and in case of CRR 426 of 2016 100%
share was transferred to Petitioner's Company.
Contentious issues:-
27. It is true that the applications under Section 156(3) of
CrPC in both the cases were filed alleging non-supply of
Manganese Ore in spite of payment of consideration money
but investigation of this case was conducted covering all the
issues between the parties in terms of MOU. This fact has not
been denied by Mr. Talukder at the time of argument.
Therefore, law was put into motion by making application
under Section 156(3) of CrPC in terms of agreement and
disputes between the parties and the investigation was
conducted accordingly covering all issues raised by the
parties. I do not find any Provision in the Code of Criminal
Procedure to restrict the investigating officer strictly on the
issue raised in the written complaint only. Therefore, I am not
agreeable with Mr. Talukder on this issue.
28. According to agreement (MOU) opposite party No. 2 in
connection with both the revision applications were to obtain
environmental clearance from the appropriate authority but
nowhere in the case diary, I find any single scrap of paper
showing environmental clearance which was a pre-requisite
for running mining activities as mentioned in the mining
lease.
29. According to agreement (MOU), both the opposite party
no. 2 in connection with revision applications agreed to
transfer the mining lease of their respective proprietorship
concern in favour of newly formed private limited companies.
According to opposite party no. 2, they already transferred
their respective mining lease in favour of the newly
incorporated companies in terms of a document issued by the
Madhya Pradesh Government. In fact during investigation,
investigating officer relied on the transfer of shares in favour of
the newly formed companies according to the order of transfer
of mining lease issued by the Government of Madhya Pradesh
and consequently investigating officer submitted final report.
30. To make the order of transfer of mining lease issued by
Madhya Pradesh Government, more credible, opposite party
no. 2 submitted the transfer order obtained through an
application under the Right to Information Act, countering the
allegation of forged document raised on behalf of the
petitioner.
31. The documents obtained through RTI submitted before
this Court did not comply with the prescribed parameters of
the RTI Act, 2005. The requirement is that the CPIO has to
endorse on the document "True copy of the document supplied
under RTI Act," sign and seal the document containing his
name, the title of CPIO and the name of his public authority.
Therefore, the document obtained through RTI cannot be said
to be admissible.
32. That apart subsequent deposit of tax in respect of mining
lease has further created a doubt regarding transfer of mining
lease in favour of the newly formed private limited companies.
From the evidence collected in the case diary it appears that
both the proprietary firms of opposite party no. 2 in both the
cases were continuing to pay all kind of taxes including lease
rent, surface rent etc. for a period subsequent to the date of
incorporation of newly formed private limited companies
(12.03.2008 in connection with CRR 425 of 2016 &
29.01.2008 in connection with CRR 426 of 2016).
33. Before parting with, it comes to my notice that as per
Rule 17 of the Mineral Concession Rules, 1960 any kind of
transfer of the mining lease requires previous consent in
writing of the State Government which is missing in our case.
34. All the discussion hereinabove, in my opinion, justify
further investigation of this case particularly for revealing the
credibility of the transfer of mining lease. Therefore, I need to
interfere with the order impugned in connection with both the
revision applications which appears to have been made
through copy-paste process.
35. As a sequel, orders impugned passed in G.R. case no.
2121 of 2014 and G.R. case no. 2120 of 2014 stand set aside.
36. Learned Chief Metropolitan Magistrate at Calcutta is
directed to give direction to the Police to further investigate the
case in terms of Provision of Section 173(8) of the Code of
Criminal Procedure, accordingly.
37. Both the revision applications being no. CRR 425 of 2016
& 426 of 2016 stand allowed.
38. Interim order, if there be any, stands vacated and all
pending applications, if any, stand disposed of accordingly.
39. Case diaries be returned.
40. All parties to the revisional applications shall act on the
server copy of this order downloaded from the official website
of this Court.
41. Urgent Photostat certified copy of this order, if applied
for, be supplied to the parties upon compliance with all
requisite formalities.
[BIBHAS RANJAN DE, J.]
