State vs Vipin Sharma & Ors.
2014 Latest Caselaw 3307 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                 RESERVED ON : 26th May, 2014
                                 DECIDED ON : 24th July, 2014

+                         CRL.A.484/2012

       STATE                                          ..... Appellant
                          Through :   Mr.M.N.Dudeja, APP.

                          VERSUS

       VIPIN SHARMA & ORS.                         ..... Respondents
                    Through :         Mr.Majid Memon, with
                                      Mr.S.Fernandes, Mr.Deepak Pathak
                                      and Mr.Rajnish Chuni, Advocates
                                      for R-1 to R-4.
                                      Mr.Ajay Verma with Mr.Gaurav
                                      Bhattacharya, Advocates for R-5.
                                       Mr.Charanjeet Singh, Advocate for
                                       R-6.

CORAM:
HON'BLE MR. JUSTICE S.P.GARG

S.P.GARG, J.

1. Challenge in this appeal is to an order dated 31.03.2012 of

learned Additional Sessions Judge in case FIR No.71/2009 registered at

Police Station Special Cell by which the respondents were discharged of

offence under Section 3 of the Maharashtra Control of Organized Crime

Act, 1999 (hereinafter referred to as 'MCOCA').

2. Briefly stated, the prosecution case as reflected in the charge-

sheet was that Vipin Sharma (R-1) arrested in Case FIR No.263/08 under

Sections 420/406/506/467/471/120-B IPC read with Section 12 Passports

Act Police Station Lajpat Nagar was known for his notorious criminal

activities and was involved in 22 criminal cases of cheating, forgery,

criminal breach of trust, attempt to culpable homicide not amounting to

murder, wrongful confinement and criminal intimidation etc. registered at

various Police Stations in Delhi, Haryana and Punjab. It was further

alleged that he and his associates (R-2 to R-6) collectively ran an

'organized crime syndicate' at D-111, Defence Colony, New Delhi and in

furtherance of their activities, cheated various persons in different States

to gain pecuniary benefits. By their illegal activities, they earned huge

wealth in Delhi and NCR. The courts of competent jurisdiction have

already taken cognizance of the offences including cases registered vide

FIR No.240/2004 under Section 308/342/420/506/34 IPC PS Defence

Colony; FIR No.595/2005 under Section 406/420/120-B IPC, PS Defence

Colony and many others in which the punishment is more than three years

against the respondents during the last ten years. Previous criminal

prosecutions failed to bring about any reformation in them. Their

unabated criminal activities prejudicial to the interest of public peace and

tranquility continued. R-1 to R-6 who are related to each other have

continued their activities jointly and singly by running the syndicate.

From the nefarious acts and designs of the respondents, it is evident that

they are desperate criminals and have cheated innocent people. To curb

the menace of the 'organized crime syndicate' and in order to keep peace

and tranquility in the society, a proposal for initiating the investigation

under Section 3 MCOCA as extended to Delhi was put up before the

competent authority. During the course of investigation and after the

arrest of the respondents various pan cards, mobile Sim cards, Visa Debit

Cards, passports and fake work Visas were recovered besides other

articles including one laptop computer and printer used for making and

printing fake visas and other travel documents etc. by R-6 on the direction

of R-1 and other syndicate members. The prosecution further alleged that

14 bank accounts of respondents having total transactions ranging from

`1,10,200/- to `1,83,35,093/- in various banks were found. Initially,

Honey Sharma (R-2) avoided her arrest and was declared Proclaimed

Offender. During the pendency of the case, R-1 and R-4 planned to flee

from judicial custody at Ludhiana. From the details of the cases in which

accused persons were involved/wanted/PO, it was evident that the existing

law was not sufficient to deliver justice to the victims. Provisions of

MCOCA were invoked against them.

3. After hearing the learned Additional Public Prosecutor and

the learned counsel for the respondents, the trial court concluded that

prima facie, the case under Section 3 MCOCA was not made out for

framing of charge against any of the respondents resulting in their

discharge with respect to offence under Section 3 of MCOCA. For other

offences the respondents were directed to face trial before the regular

criminal court. The State has challenged the discharge order in the appeal

in question. Vide order dated 30.04.2012, this Court stayed operation of

the impugned order.

4. Learned Additional Public Prosecutor urged that the

impugned discharge order cannot be sustained as the State was not

afforded opportunity to lead evidence to prove the allegations including

validity of the sanction. The trial court erred in analyzing the evidence

minutely on merits at the stage of consideration of charge. Respondents'

counsel justifying the impugned order urged that there was no material to

invoke the stringent provisions of MCOCA as allegations against the

respondents of committing offences of cheating and forgery could be dealt

with by regular courts. It was highlighted that the object of MCOCA is

fundamentally to curb the organized crime only when it is a serious threat

to the society. The crime syndicates generate illegal wealth by contract

killings, extortion, smuggling in contraband, illegal trade in narcotics,

kidnappings for ransom, collection of protection money and money

laundering etc. The illegal wealth accumulated due to these activities has a

serious adverse effect on the economic fabric of the country. It is further

urged that there cannot be an 'organized crime syndicate' among

respondent Nos.1 to 6 who all are the family members. The prosecution

was unable to bring any material on record as to who was actually running

the 'syndicate' and how all the respondents were its members. Only

broad perspective of the matter was that as per the prosecution allegations,

the respondents used to send people abroad allegedly on bogus Visas

thereby committing the offence of forgery, cheating, breach of trust etc.

There was no violence or threat of violence, intimidation or coercion as

contemplated under Section 2(e) of MCOCA. The alleged offences are

petty in nature and there was no loss to the Government exchequer. It

was further urged that the respondents have either been acquitted or

discharged in many cases; some cases have already been compounded. In

pending cases, the respondents have been granted bail. The respondents

have duly accounted for the assets obtained by them. Reliance has been

placed on different authorities i.e. Rajjitsing Brahmajeetsingh Sharma Vs.

State of Maharashtra and Anr. (2005) 5 SCC 294; Chenna Boyanna

Krishna Yadav Vs. State of Maharashtra and Anr. (2007) 1 SCC 242;

State of Maharashtra and Ors. Vs. Lalit Somdatta Nagpal & Anr.(2007) 4

SCC 171; Ram Bhai Natha Bhai Gadhvi & Ors. Vs. State of Gujarat with

Criminal Appeal No.162/1997 (1997) 7 SCC 744; State of Maharashtra

Vs. Vishwanath Maranna Shetty (2012) 10 SCC 561; Hitender Vishnu

Thakur & Ors.Vs. State of Maharashtra & Ors. (1994) 4 SCC 602; and,

State Govt. of NCT of Delhi Vs. Kahlil Ahmed in Crl.Rev.P.No.42/2012 &

Crl.M.A.No.975/2012.

5. Allegations against the respondents primarily were that they

cheated various persons over a span of a decade at various places on false

representation to send them abroad prompting them to part with their hard

earned money. Undoubtedly, various cases in Delhi, Punjab and Haryana

were registered against the respondents in this regard. List of such 25

pending criminal cases was annexed in Crl.M.A.No.796/2014 in Bail

Appl. No.15566/2013. It reveals that in case FIR Nos.592/02, 595/05,

104/07, 67/02, and 521/08, the matter have been

compromised/compounded resulting in acquittal of the accused therein.

In other cases, they have been granted bail. In case FIR Nos.104, 105 and

106/2007 registered at PS Rahon, Nawa Shehar, Punjab, under Section

420 IPC, by judgments dated 07.03.2014, R-1 has been convicted under

Section 420 IPC and sentenced to undergo RI for three years with fine

`10,000/- each. On perusal of bail orders in other cases, it transpires that

respondents were granted anticipatory/regular bail after they agreed to

return the complete/partial amount received from the complainants

therein. It is also not disputed that earlier R-2 (Honey Sharma) w/o Vipin

Sharma (R-1) was declared Proclaimed Offender. Subsequently,

supplementary charge-sheet was filed after her arrest. By an order dated

02.11.2012, her bail application was dismissed by this Court. Her Petition

being W.P.(Crl.) No.169/2012 was dismissed by Supreme Court vide

order dated 07.12.2012. All the contentions raised in the instant

proceedings were subject matter of bail application which did not find

favour with the courts. Learned Public Prosecutor emphasized in those

proceedings that R-2 was member of 'organized crime syndicate' along

with her husband, brothers and brothers-in-law. The 'syndicate' was

involved in 31 cases including attempt to commit culpable homicide not

amounting to murder, wrongful confinement, criminal intimidation,

cheating, forgery and criminal breach of trust and the offences under the

Passports Act etc. registered in various Police Stations in Delhi, Haryana

and Punjab. It was also informed that R-2 was declared Proclaimed

Offender in 7 out of 11 cases and she could be arrested after about two

years of registration of cases. In FIR No.263/08, the complaint Mr.Harish

Idnani, husband of real sister of Honey Sharma (R-2), alleged that she was

actually involved in activities of 'organized crime syndicate' and had not

even spared her own blood relations. Complainant alleged that the

offences had been committed by Honey Sharma (R-2) either jointly or

individually for pecuniary benefits in which they had used violence and

criminal intimidation besides committing cheating, forgery etc. According

to prosecution, the accused persons as a syndicate, had allegedly cheated

an amount of Rs. 4.5 crores from various victims. It was pointed out that

R-2 had five bank accounts in her name as well as aliases showing

transactions worth `1,83,35,093/-. These accounts were in the name of R-

2 and that of one fake Honey Bhardwaj. In order to conceal her identity,

R-2 got a PAN card issued in the name of Honey Bhardwaj. In her

income tax returns filed between the years 2007 and 2010, she declared

gross receipt of `26,84,770/- and gross profit `8,43,030/- as against her

actual total transaction of `1,83,35,093/-. She owned two cars; Audi A4

car bearing No. DL-3CAY-0130 registered in her name and Maruti Swift

bearing No. HR-51-AD-3187 in the name of Honey Bhardwaj. Various

passports containing fake visa stamps of New Zealand were recovered

from her house and the car being driven by her husband at the time of her

arrest. There were allegations in other FIR under Section 506 IPC. These

facts led this court to dismiss R-2's bail application. These facts are not

under challenge.

6. Declining to accept the respondents' justification for

accumulation of wealth, the Trial Court observed that providing of fake

passports or visas, as alleged, could not have been for any other purpose

but to have pecuniary gain.

7. The Trial Court based discharge order primarily on the

invalidity of sanction/approval as adequate material was not produced

before the competent authority and that the offences of cheating and

forgery sans violence or threat of violence were not sufficient to attract the

provisions of MCOCA. The alleged unlawful activities having been

undertaken by the accused persons did not qualify to fall within the ambit

of the Act. The reasoning given by the Trial Court for discharge is

unacceptable.

8. In Mahipal Singh (Dr.) Vs.CBI & Anr. 2012 V AD (Delhi)

767, this court relying upon various authorities observed that Aims and

Objects of MCOCA reveals that it was enacted to curb organized crime

which had posed a very serious threat to the society. The activities

mentioned therein ranged from killing, extortion, smuggling, terrorism,

illegal trade in narcotics, money laundering etc. It was categorical to

further hold that the list was not exhaustive.

The petitioner-Mahipal Singh faced criminal proceedings in

six cases under Sections 120B/ 420/511/467/471 IPC etc. where

provisions of Section 3 MCOCA were invoked. Rejecting the contentions

that the offences of cheating and forgery could not constitute the offence

of organized crimes as the same did not involve 'element' of coercion or

violence, it held:-

11"As regards the other limb of argument of the Petitioner that is the essential ingredients of organized crime that the continuing unlawful activity should have been committed by use of violence or threat of violence or intimidation or coercion or other unlawful means with the objective of gaining pecuniary benefits or gaining undue economic or the other advantage for himself or any other person, the provision was considered by the Hon'ble Supreme Court in Ranjitsing Brahmajeetsing Sharma Vs. State of Maharashtra and State of Maharashtra & Ors. Vs. Lalit Somdatta Nagpal & Anr.(supra). In Ranjitsing Brahmajeetsing Sharma Vs. State of Maharashtra 2005 (2) JCC 689 their Lordships held:

XXX XXX XXX XXX

32. The Statement of Objects and Reasons clearly state as to why the said Act had to be enacted. Thus, it will be safe to presume that the expression 'any unlawful means' must

refer to any such act which has a direct nexus with the commission of a crime which MCOCA seeks to prevent or control. In other words, an offence falling within the definition of Organized crime and committed by an Organized crime syndicate is the offence contemplated by the Statement of Objects and Reasons. There are offences and offences under the Indian Penal Code and other penal statutes providing for punishment of three years or more and in relation to such offences more than one chargesheet may be filed. As we have indicated hereinbefore, only because a person cheats or commits a criminal breach of trust, more than once, the same by itself may not be sufficient to attract the provisions of MCOCA."

12. In State of Maharashtra & Ors. Vs. Lalit Somdatta Nagpal & Anr. (2007) 2 SCC (Crl) 241 their Lordships held:

XXX XXX XXX XXX

63. As has been repeatedly emphasized on behalf of all the parties, the offence under MCOCA must comprise continuing unlawful activity relating to organized crime undertaken by an individual singly or jointly, either as a member of the organized crime syndicate or on behalf of such syndicate by use of coercive or other unlawful means with the objective of gaining pecuniary benefits or gaining undue economic or other advantage for himself or for any other person or for promoting insurgency. In the instant case, both Lalit Somdutt Nagpal and Anil Somdutt Nagpal have been shown to have been involved in several cases of a similar nature which are pending trial or are under investigation. As far as Kapil Nagpal is concerned, his involvement has been shown only in respect of CR No. 25/03 of Rasayani Police Station, Raigad, under Sections 468, 420, 34, Indian Penal Code and Sections 3, 7, 9 & 10 of the Essential Commodities Act. In our view, the facts as disclosed justified the application of the provisions of the MCOCA to Lalit

Nagpal and Anil Nagpal. However, the said ingredients are not available as far as Kapil Nagpal is concerned, since he has not been shown to be involved in any continuing unlawful activity."

XXX XXX XXX XXX

67. To apply the provisions of MCOCA something more in the nature of coercive acts and violence in required to be spelt out so as to bring the unlawful activity complained of within the definition of „organized crime‟ in Section 2(1)(e) of MCOCA.

XXX XXX XXX XXX

16. Though simplicitor offences of forgery and cheating committed more than once would not come within the ambit of "organized crime" however the same would not be applicable to a case where cheating and forgery are done continuously so as to rig/manipulate the results of the examinations. Their Lordships in Lalit Somdatta Nagpal (supra) held that violation of Sales Tax and Excise Laws are not intended to be the basis of application of the provisions of MCOCA and to apply the said provisions something in the nature of coercive acts and violence is required to be spelt out so as to bring the unlawful activity complained of within the definition of "organized crime.

XXX XXX XXX XXX

20. In view of the aims and objects of MCOCA though cases of simplicitor cheating and forgery may not come under the "unlawful means" however, if the same are committed in manner as an organized crime, particularly effecting the results of the examination, thus, de- stabilizing the education system, the said activity would certainly fall within the ambit of "unlawful means" as required in "organized crimes". The said "unlawful activity" has some semblance to coercion, intimidation

etc. as the same is performed by manipulating at an extensive level.

21. From the facts alleged against the Petitioner it is evident that the Petitioner was not involved in a simple case of forgery and cheating. He was rigging/manipulating the results by using "unlawful means" to obtain pecuniary gains. In view thereof I do not find any merit in the contention of the learned counsel for the Petitioner that MCOCA cannot be invoked against the Petitioner on the facts of the case as the basic ingredients of "organized crime" are not satisfied. Thus, the Petitioner will be proceeded for offence under Section 3 MCOCA only in RC/219/2011/E0007."

9. In Kamaljeet Singh (in judicial custody) Vs.State 148 (2008)

Delhi Law Times 170, this Court dismissed Kamaljeet Singh's appeal to

assail order on charge dated 12.10.2006 in FIR No.96/05, PS Chankya

Puri, registered under Sections 4 and 5 of Immoral Traffic (Prevention)

Act, 1956, Section 3(1) (ii), 3(4), 3(5) and Section 4 of MCOCA and

Section 420 read with Section 120B IPC. It was contended that the

appellant and his associates were involved in a common, apparently soft

crime which did not involve 'use of violence or threat of violence or

intimidation or coercion'. It was also alleged that the sanction was cryptic

in nature and did not show any application of mind. The Court

observed :-

"55. The charges in the present case not being for cheating simplicitor or for violation of any tax or excise

laws, and the present being a case of 'continuing unlawful activity' by an 'organized crime syndicate' with a wide network for illegal trafficking and prostitution, in my considered opinion, it is not possible to hold that the invocation of MCOCA in the present case was unjustified. It is also not possible to hold that the words "other unlawful means" contained in Section 2(e) are to be read as ejusdem generis/noscitur a sociis with the words violence, threat of violence, intimidation or coercion. However, even assuming the words "other unlawful means" are to be so construed, illegal trafficking of persons can safely be said to involve the use of violence, threat of violence, intimidation or coercion."

10. Regarding sanction, the observations of this Court in para 60

are relevant to note:-

"The further contention of the learned Counsel for the appellant that the sanction under Section 23(2) of the MCOCA is cryptic and shows non-application of mind, is also wholly misconceived as the sanction order clearly sets out that all the papers were perused by the sanctioning authority and thus it cannot be said that there was non-application of mind by the sanctioning authority as alleged. Apart from this, learned Counsel for the appellant has also not been able to point out any cogent reason to buttress his contention that the sanction has been wrongly accorded by the sanctioning authority. There is, Therefore, no merit in his contention that Section 23(2) of the MCOCA, reproduced above, comes to the aid of the appellant."

11. Similarly in Crl.M.C.No.4341/2011 Shiv Murat Dwivedi @

Shiva, this Court vide order dated 26.03.2012 upheld the charges under

Section 3 MCOCA, in FIR No.44/2010 registered at Police Station Saket

whereby the petitioner was accused of running a racket of prostitution. It

observed:

"For the purpose of initiating proceedings under MCOCA Section 2 (d)(e)(f) defines and indicates that the organized crime syndicate is a gang which indulges in organized crime. This gang may consist of two or more persons, either acting singly or collectively, such a gang should be found to indulge in continuing unlawful activities, i.e. activities which is prohibited by law and is a cognizable offence punishable with imprisonment for three years and more. The activity would be terms as a continuing unlawful activity if more than one charge- sheet has been filed before the competent court against the members of gang either individually or jointly within the preceding ten years. However, it must be established that such an offence or unlawful activity is undertaken by a person with the objects of gaining pecuniary benefits or gaining undue economic or other advantages for himself or any other persons or for promoting insurgency. Such unlawful activity could include the use of violence or threat of violence or intimidation or coercion".

12. In the instant case as per Annexure 'A' respondents either

singly or jointly were involved in 31 criminal cases at various police

stations at Delhi, Punjab and Haryana for cheating number of victims of

their hard earned money ranging from `1 lac to `90 lacs, spread over a

period of about ten years. Apparently, registration of criminal cases under

the ordinary law did not have any deterrent effect and they unabatedly

continued to indulge in the unlawful activities in an organized manner.

They accumulated huge wealth by making false and fraudulent

representation to the victims to send them abroad for getting jobs on

payment of huge money by illegal means. They were found in possession

of various fake visas of various countries; they also obtained fake PAN

numbers; obtained bail orders on payment or return of part of the cheated

amount. In number of cases they remained absconded. R-1 and R-4 even

attempted to flee from judicial custody. In FIR No.240/04 registered at

Police Station Defence Colony under Sections 308/342/420/506/34 IPC

allegedly the complainant was assaulted on demand of money back. In

FIR No.263/08 registered at Police Station Lajpat Nagar under Section

420/406/506/120B IPC and FIR No.104/2007 registered under Section

420/34 IPC at Police Station Chankyapuri allegation of criminal

intimidation on asking for return of cheated amount were leveled. In case

FIR No.521/08 registered at Police Station City Karnal under Section 306

IPC, Const.Mangat Singh in the suicide note levelled serious allegations

against some of the respondents. In case FIR No.494/00 registered at

Police Station Shakarpur under Sections 420/506/34 IPC, the respondents

were charged by an order dated 17.09.2011 whereby they cheated Sham

Lal who had to remain in custody at Jamaica due to over stay. Allegedly

R-1 took him to Thailand and threatened to kill when he demanded his

money back. The victims were cheated to the tune of `4.5 crores. R-5 had

five accounts in different banks, two PAN cards in different names. From

the above referred cases, it cannot be said at this stage that the acts by

which the victims were cheated and various documents were forged and

fabricated, the respondents did not indulge in violence. Only when

various criminal cases were registered, the respondents, to save their skin

and to obtain bail, offered to return some of the cheated amount.

13. The matter was at its initial stage of consideration of charge.

The Trial Court was not required to enter into meticulously consideration

of evidence and material placed before it. Even a very strong suspicion

founded upon materials leading the Court to form a presumptive opinion

as to the existence of the factual ingredients constituting the offence

alleged, was enough for framing of charges. The Trial Court was not

expected to make a roving enquiry into the pros and cons of the matter

and to weigh evidence as if it was conducting a trial. Discharge of the

accused of the offences under Section 3 MCOCA, at this stage was

improper.

14. The prosecution was not accorded a reasonable opportunity

to produce evidence to prove that the sanction/approval granted was on

merits and after proper application of mind. The respondents not only

indulged in unlawful activities by cheating innocent victims on the false

inducement of sending them abroad by illegal means but also allegedly

forged passports and visas playing fraud upon the authorities. Registration

of number of criminal cases did not have any effect to prevent them to

discontinue their illegal activities. Under these circumstances, initiation

of stringent provisions of Section 3 MCOCA cannot be held unjustified to

curb the illegal activities for which the Act has been enacted.

15. Taking into consideration all the facts and circumstances of

the case, the impugned order whereby the respondents were discharged of

the provisions of Section 3 MCOCA cannot be sustained and is set aside.

Appeal filed by the State/appellant is allowed.

16. The trial court is directed to proceed with trial on merits by

framing charges under the provisions of MCOCA in accordance with law.

The observation made in this order will not have any impact on the merits

of the case. Trial Court record along with copy of the order be sent back

forthwith. All pending applications stand disposed of.

(S.P.GARG) JUDGE JULY 24, 2014/sa