Jharkhand High Court

Pramod Maheshwari vs The State Of Jharkhand on 20 September, 2023

                                                     1               W.P. (Cr.) No. 361 of 2019


                   IN THE HIGH COURT OF JHARKHAND AT RANCHI
                             W.P. (Cr.) No. 361 of 2019
            1.   Pramod Maheshwari
            2.   Saurav Maheshwari                            ... Petitioners
                                       -Versus-
            1.   The State of Jharkhand
            2.   Pradeep Chitlagia                            ... Respondents
                                             -----

            CORAM:       HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
                                             -----
            For the Petitioners       : Mr. Nitin Kumar Pasari, Advocate
            For the State             : Mr. Deepankar, A.C. to G.A.-III
            For Respondent No.2       : Mr. Badal Vishal, Advocate
                                             -----

08/20.09.2023     Heard Mr. Nitin Kumar Pasari, learned counsel for the petitioner, Mr.

Badal Vishal, learned counsel for opposite party no.2 and Mr. Deepankar,

learned counsel for the State.

2. This petition has been filed for quashing the entire criminal

proceedings in connection with Ratu P.S. Case No.93/2018 arising out of

Complaint Case No.1806/2018, corresponding to G.R. Case No.2971/2018

registered under Section 420, 406, 467, 468, 471 and 34 of the Indian Penal

Code, pending in the court of the learned Judicial Magistrate, Ranchi. The

prayer is also made for declaring passing of an order under Section 156(3)

Cr.P.C. by the learned court is bad in law.

3. The complaint case was filed alleging therein that the petitioners and

other accused persons and respondent no.2 are known to each other and

are engaged in business. In the year 2008, respondent no.2 along with the

petitioners and three other accused persons had established a company,

wherein, accused no.1 looked after the day to day work on accused no.4.

One rice mill was setup at Futkal Toli, P.S. Ratu, District-Ranchi under the

said company in the name and style of Prateek Agro Experts Pvt. Ltd. The

said company engaged Bank of India, Shyamali Branch as its banker and

with the joint decision of the Directors it was agreed that the said account's

operation would be carried by the signature of accused no.1 and the said

bank also provided loan to the company. After some time of starting of the

operation of the Rice mill, the accused persons with their connivance started

cheating. Accused no.4 and accused no.1 are cousin and upon his

instruction, accused no.1 started selling the goods on under determined

price, which caused difficulty to the company and the liability towards the

bank loan increased. Upon opposing the same accused persons and the

petitioner used to quarrel. For such reason on 12.02.2018, a meeting was

held between the petitioners, other accused persons and the respondent

no.2 in presence of firm's Chartered Accountant, wherein, it was concluded

that the accused no.1 will buy the said land and plant and further would pay

Rs. 4 Crore to respondent no.2 as his share till 31.03.2018. It was further

alleged that if the amount is not paid till 31.03.2018, penalty of Rs.50 Lakhs

shall be paid. Pursuant to which one understanding (minute) was entered

into wherein respondent no.2, petitioners, other accused persons and

Chartered Accountant had put their signature voluntarily and the original

copy of the said understanding was kept with accused no.4 and respondent

no.2 was supplied with the photo copy of the same. It was also alleged that

the petitioners and other accused persons created a forged resolution in the

name of company that accused nos. 2 and 5 would operate the bank

account and the same was submitted with the bank, which was informed to

respondent no.2 through bank. It was further alleged that the petitioners

and accused nos. 1, 2 and 4 in connivance with each other wants to remove

the respondent no.2 fraudulently and appoint accused nos. 5 and 6 as

Directors. On 10.04.2018 at 07:00 A.M., information was received that some

persons are uninstalling the machines of the plant on the instruction of the

petitioners and other accused persons, pursuant whereto respondent no.2

along with witness nos. 1, 2 and 3 went to the factory and restricted the

uninstallation upon which the persons uninstalling the machine ran away.

Respondent no.2 got confirm that the petitioners and other accused persons

in connivance with each other have conspired and created the company to

defraud respondent no.2 by selling the stocks and embezzle and also

submitted the forged resolution of the company.

4. Mr. Pasari, learned counsel for the petitioners submits that the

petitioners are Directors of M/s. Prateek Agro Export Pvt. Ltd., Ranchi and

petitioner no.1 is amongst the founder Director of the company and the

petitioner no.2 joined as Director of the said company w.e.f. 05.05.2008. He

submits that initially the signing authorities in the company were amonst

the Directors in two sets:

      (a)    Pradip Chitlangia and Nawal Chitlangia.

      (b)    Pramod Maheshwari and Saurav Maheshwari.

5. Mr. Pasari, learned counsel for the petitioners further submits that

almost after 1 ½ years, one Narayan Holani was inducted as a Director of

the company w.e.f. 01.07.2019 with consent of all the Directors. He also

submits that the dispute between the parties cropped up in the year 2017,

when the petitioners could found that being the signatory in agreement with

the Government of Jharkhand for procurement of paddy, some foul play was

done at the instance of the complainant/informant and when confronted no

plausible much less any reasonable reply could be given by the

complainant/informant. He submits that in this background, the case has

been lodged, wherein, the allegations are made against the petitioners. He

submits that the said case was not affidavited. He submits that the case of

the petitioners is fully covered in view of the judgment passed by the

Hon'ble Supreme Court in the case of Babu Venkatesh and others v.

State of Karnataka and another, reported in (2022) 5 SCC 639. He

further submits that the case with regard to the dispute in question was

also initiated by the complainant before the National Company Law Tribunal,

Kolkata. He submits that in view of Section 241 of the Companies Act, 2013,

the dispute is required to be adjudicated by the Tribunal constituted under

the Companies Act, 2013. He submits that Section 242 of the Companies

act deals with the power of the said Tribunal. On these grounds, he submits

that the FIR may kindly be quashed.

6. On the other hand, Mr. Vishal, learned counsel for respondent no.2

submits that only the FIR has been registered and at this stage, this court

may not interfere. He further submits that since stay has been granted by

this court, the investigation is not going on. He submits that once the

investigation will be completed, everything will be clear. He also submits

that so far as the case before the National Company Law Tribunal, Kolkata is

concerned, that has been dismissed for default and no case is pending with

regard to the dispute in question before the Tribunal under the Companies

Act, 2013. He further submits that in view of Annexure-F dated 26.09.2019

annexed with the reply to the supplementary affidavit, the Registrar of

Companies cum Official Liquidator, Ranchi warned the petitioners not to

harm the complainant in the shelter of the letter dated 09.01.2019. He

submits that the actions are being taken by the petitioners, which is not

appreciated. On these grounds, he submits that the court may not interfere.

He relied upon the judgment passed passed by the Hon'ble Supreme Court

in the case of State of Orissa and another v. Saroj Kumar Sahoo ,

reported in (2005) 13 SCC 540. He refers paragraph 11 of the said

judgment and submits that the principle of exercising power under Section

482 Cr.P.C. has been dealt with therein. Paragraph 11 of the said judgment

is quoted herein below:

"11. As noted above, the powers possessed by the High Court under Section 482 CrPC are very wide and the very plenitude of the power requires great caution in its exercise. The court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard- and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. [See Janata Dal v. H.S. Chowdhary [(1992) 4 SCC 305 : 1993 SCC (Cri) 36] and Raghubir Saran (Dr.)v. State of Bihar [(1964) 2 SCR 336 : AIR 1964 SC 1 : (1964) 1 Cri LJ 1] .] It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complaint cannot be proceeded with. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in the court which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by themselves be the basis for quashing the proceedings."

7. Mr. Deepankar, learned counsel for the respondent-State submits that

there is allegation in the complaint of creating false documents for

operation of the bank account of the company. He further submits

that however the investigation is not going on in view of the stay granted

by this court.

8. In view of the above submissions of the learned counsel for the

parties, the court has gone through the materials on record including the

contents of the complaint petition. In paragraph 8 of the complaint petition,

there is allegation of creating false document by the accused nos. 1 to 4 for

operating the bank account of the company, namely, M/s. Prateek Agro

Export Pvt. Ltd. There is further allegation in paragraph 10 of the complaint

that the accused have made the said document by way of connivance.

Thus, there are allegations against the petitioners.

9. Section 241 of the Companies Act, 2013 speaks of a dispute which

has been done in a bonafide manner i.e. civil in nature and that can be

agitated before the Tribunal. It is not bar that if a fraudulent action is there,

the company or its Director will not be prosecuted. In view of that, the

argument of Mr. Pasari, learned counsel for the petitioners with regard to

Section 241 of the Companies Act is not being accepted by this court

considering that only FIR has been challenged at this stage.

10. Further, it has been pointed out that the said case before the Tribunal

has been dismissed for default. Thus, now there is no separate case

pending before the Tribunal if it is accepted that the dispute is same in

nature, however, the dispute in present case appears to be criminal one.

11. The learned court has sent the matter under Section 156(3) Cr.P.C. for

registration of the FIR for investigation. In the complaint, there is no prayer

of sending the matter to the police under Section 156 (3) Cr.P.C. Simply a

complaint was filed before the learned court and the learned court has

chosen not to proceed under Section 202 Cr.P.C. and he has referred the

matter under Section 156(3) Cr.P.C. Seeing the complaint, it further

transpires that the complaint has been filed alleging therein creation of false

document for operation of the bank account of the company. Looking into

the complaint petition, it further transpires that the complaint is not

affidavited. Once the complaint is filed, the learned court is empowered to

proceed in terms of Section 200 Cr.P.C. and he is having three options (i) to

examine the complaint himself by way of solemn affirmation and proceed;

(ii) he may in such a situation refer the matter to the police under section

156(3) Cr.P.C.; and (iii) by such other person as in terms of Sub-section (1)

of Section 202 Cr.P.C.

12. In the present case, admittedly the learned court below has not

examined the complaint that is why the complainant has not been called

upon to make his statement on Solemn Affirmation. The learned court

referred the matter to the police under Section 156(3) Cr.P.C. and for

referring the same, judicial mind is required to be applied by the learned

court and this aspect of the matter has been considered by the Hon'ble

Supreme Court in the case of Priyanka Srivastava and another v.

State of Uttar Pradesh and others , reported in (2015) 6 SCC 287 in

paragraphs 27, 29, 30 and 31. In paragraph 27 of the said judgment, the

Hon'ble Supreme Court has held that the learned Magistrate has to remain

vigilant with regard to allegations made and the nature of allegations and

not to issue directions without proper application of mind. It has been held

that the application which has been filed under Section 156(3) Cr.P.C. must

be affidavited to show that the person who has filed the complaint may be

responsible.

13. The another aspect of the matter is that once the complaint has been

referred under section 156 (3) Cr.P.C. and the same has been registered

whether the High Court sitting under Article 226 of the Constitution of India

or under section 482 Cr.P.C. can quash the entire proceeding or not. Seeing

the burden upon the learned Magistrate, if on a reading of complaint he

finds the allegations therein disclose a cognizable offence and that the

forwarding of the complaint to the police station for investigation under

Section 156(3) Cr.P.C. will be conducive and save the valuable time of the

learned Magistrate from being wasted in enquiring into the matter and

considering this aspect of the matter whether the High Court is required to

quash the criminal proceeding when the entire allegation is hazy and not

reflected as yet and that stage would arise only after investigation is

concluded it can be safely said that this is a premature of filing of this

petition. Reference may be made to the case of HDFC Securities Limited

& Others Vs. State of Maharashtra & Another reported in (2017) 1

SCC 640, in which Section 156(3) Cr.P.C. has been considered by the

Hon'ble Supreme Court and it has been held in para 9, 10, 24 and 27 as

under:-

"9. On the contrary, before the High Court it was submitted on behalf of Respondent 2 that an order under Section 156(3) of the Criminal Procedure Code requiring investigation by the police does not cause any injury of irreparable nature which requires quashing of the investigation. It is further stated that the stage of cognizance would arise after the investigation report is filed. Therefore, the application filed by the appellants before the High Court is nothing but premature and thus there is no need for exercising the powers of the High Court either under Article 227 of the Constitution of India or under Section 482 of the Code. Further contention of the respondent before the High Court was that the inherent powers under Section 482 of the Code should be sparingly used.

10. The High Court held that the direction given to the police by the Magistrate under Section 156(3) of the Code for carrying out the investigation into the complaint and to submit a report, cannot give a right to the appellants for quashing the same since such an order would be based absolutely on speculations upon the report not filed. Further, it would result in prejudging the complaint. In these circumstances, the High Court dismissed the said application.

xxx xxx xxx

24. Per contra, the learned counsel for Respondent submitted that the complaint has disclosed the commission of an offence which is cognizable in nature and in the light of Lalita Kumari case, registration of FIR becomes mandatory. We observe that it is clear from the use of the words "may take cognizance" in the context in which they occur, that the same cannot be equated with "must take cognizance". The word "may" gives discretion to the Magistrate in the matter. If on a reading of the complaint he finds that the allegations therein disclose a cognizable offence and that the forwarding of the complaint to the police for investigation under Section 156(3) will be conducive to justice and save the valuable time of the Magistrate from being wasted in enquiring into a matter, which was primarily the duty of the police to investigate, he will be justified in adopting that course as an alternative to taking cognizance of the offence, himself. It is settled that when a Magistrate receives a complaint, he is not bound to take cognizance if the facts alleged in the complaint, do not disclose the commission of an offence.

xxx xxx xxx

27. It appears to us that the appellants approached the High Court even before the stage of issuance of process. In particular, the appellants challenged the order dated 4-1-2011 passed by the learned Magistrate under Section 156(3) CrPC. The learned counsel appearing on behalf of the appellants after summarising their arguments in the matter have emphasised also in the context of the fundamental rights of the appellants under the Constitution, that the order impugned has caused grave inequities to the appellants. In the circumstances, it was submitted that the order is illegal and is an abuse of the process of law. However, it appears to us that this order under Section 156(3) CrPC requiring investigation by the police, cannot be said to have caused an injury of irreparable nature which, at this stage, requires quashing of the investigation. We must keep in our mind that the stage of cognizance would arise only after the investigation report is filed before the Magistrate. Therefore, in our opinion, at this stage the High Court has correctly assessed the facts and the law in this situation and held that filing of the petitions under Article 227 of the Constitution of India or under Section 482 CrPC, at this stage are nothing but premature. Further, in our opinion, the High Court correctly came to the conclusion that the inherent powers of the Court under Section 482 CrPC should be sparingly used."

14. There are allegations of creating false documents for operating the

bank account of the company. The learned court has been pleased to send

the matter under Section 156(3) Cr.P.C.

15. In the judgment relied by the learned counsel for the petitioners in

Babu Venkatesh (supra), the case was related to civil proceeding and in that

case, civil proceeding was going on and the complaint was filed. In the case

in hand, the complaint has been filed and no prayer was made to send the

same under Section 156(3) Cr.P.C. and that decision was taken

independently by the learned court to send the matter under Section 156(3)

Cr.P.C. and that has been done by way of applying judicial mind. In view of

the above, he has chosen to exercise his power in terms of Section 156(3)

Cr.P.C.

16. In the case of Ramdev Food Products Limited Vs. State of

Gujarat reported in (2015) 6 SCC 439, the Hon'ble Supreme Court has

again considered Section 156(3) Cr.P.C. Paragraphs 22 and 25 of the said

judgment are quoted hereinbelow:

"22. Thus, we answer the first question by holding that: 22.1. The direction under Section 156(3) is to be issued, only after application of mind by the Magistrate. When the Magistrate does not take cognizance and does not find it necessary to postpone the issuance of process and finds a case made out to proceed forthwith, direction under the said provision is issued. In other words, where on account of credibility of information available, or weighing the interest of justice it is considered appropriate to straightaway direct investigation, such a direction is issued.

22.2. The cases where Magistrate takes cognizance and postpones issuance of process are cases where the Magistrate has yet to determine "existence of sufficient ground to proceed". Category of cases falling under para 120.6 in Lalita Kumari may fall under Section 202.

22.3. Subject to these broad guidelines available from the scheme of the Code, exercise of discretion by the Magistrate is guided by interest of justice from case to case.

xxx xxx xxx

25. We are of the view that the maxim does not apply for interpretation of Section 202(3) for the reasons that follow. In our view, the correct interpretation of the provision is that merely negating the power of arrest to a person other than police officer does not mean that police could exercise such power. The emphasis in the provision is to empower such person to exercise other powers of in charge of a police station than the power of arrest. As regards the power of police to arrest, there are express provisions dealing with the same and power of police to arrest is not derived from or

controlled by Section 202(3). The said power is available under Section 41 or under a warrant. The power remains available subject to conditions for exercise thereof. For example, it can be exercised if cognizable offence is committed in the presence of a police officer [Section 41(1)

(a)]. Under Section 202, since the Magistrate is in seisin of the matter and has yet to decide "whether or not there is sufficient ground for proceeding", there is no occasion for formation of opinion by the police about credibility of available information necessary to exercise power of arrest as the only authority of the police is to give report to Magistrate to enable him to decide whether there is sufficient ground to proceed. Power of arrest is not to be exercised mechanically."

17. In the case of Sakiri Vasu v. State of U.P., reported in (2008) 2

SCC 409, Section 156(3) Cr.P.C. has also been considered by the Hon'ble

Supreme Court in paragraphs 12 to 18, which are quoted hereinbelow:

"12. Thus in Mohd. Yousuf v. Afaq Jahan this Court observed: (SCC p. 631, para 11) "11. The clear position therefore is that any Judicial Magistrate, before taking cognizance of the offence, can order investigation under Section 156(3) of the Code. If he does so, he is not to examine the complainant on oath because he was not taking cognizance of any offence therein. For the purpose of enabling the police to start investigation it is open to the Magistrate to direct the police to register an FIR. There is nothing illegal in doing so. After all registration of an FIR involves only the process of entering the substance of the information relating to the commission of the cognizable offence in a book kept by the officer in charge of the police station as indicated in Section 154 of the Code. Even if a Magistrate does not say in so many words while directing investigation under Section 156(3) of the Code that an FIR should be registered, it is the duty of the officer in charge of the police station to register the FIR regarding the cognizable offence disclosed by the complainant because that police officer could take further steps contemplated in Chapter XII of the Code only thereafter."

13. The same view was taken by this Court in Dilawar Singh v. State of Delhi (JT vide para 17). We would further clarify that even if an FIR has been registered and even if the police has made the investigation, or is actually making the investigation, which the aggrieved person feels is not proper, such a person can approach the Magistrate under Section 156(3) CrPC, and if the Magistrate is satisfied he can order a proper investigation and take other suitable steps and pass such order(s) as he thinks necessary for ensuring a proper investigation. All these powers a Magistrate enjoys under Section 156(3) CrPC.

14. Section 156(3) states:

"156. (3) Any Magistrate empowered under Section 190 may order such an investigation as abovementioned." The words "as abovementioned" obviously refer to Section 156(1), which contemplates investigation by the officer in charge of the police station.

15. Section 156(3) provides for a check by the Magistrate on the police performing its duties under Chapter XII CrPC. In cases where the Magistrate finds that the police has not done its duty of investigating the case at all, or has not done it satisfactorily, he can issue a direction to the police to do the investigation properly, and can monitor the same.

16. The power in the Magistrate to order further investigation under Section 156(3) is an independent power and does not affect the power of the investigating officer to further investigate the case even after submission of his report vide Section 173(8). Hence the Magistrate can order reopening of the investigation even after the police submits the final report, vide State of Bihar v. J.A.C. Saldanha (SCC : AIR para 19).

17. In our opinion Section 156(3) CrPC is wide enough to include all such powers in a Magistrate which are necessary for ensuring a proper investigation, and it includes the power to order registration of an FIR and of ordering a proper investigation if the Magistrate is satisfied that a proper investigation has not been done, or is not being done by the police. Section 156(3) CrPC, though briefly worded, in our opinion, is very wide and it will include all such incidental powers as are necessary for ensuring a proper investigation.

18. It is well settled that when a power is given to an authority to do something it includes such incidental or implied powers which would ensure the proper doing of that thing. In other words, when any power is expressly granted by the statute, there is impliedly included in the grant, even without special mention, every power and every control the denial of which would render the grant itself ineffective. Thus where an Act confers jurisdiction it impliedly also grants the power of doing all such acts or employ such means as are essentially necessary for its execution."

18. In the case of Ramdev Food Products Limited (supra), the Hon'ble

Supreme Court has held that the learned Magistrate can either direct for

registration of case under section 156(3) Cr.P.C. or to take cognizance. The

guidelines issued by the Hon'ble Supreme Court in the case of Babu

Venkatesh (supra) and Priyanka Srivastava (supra) have got scheme of the

Code which provide exercise of discretion by the learned Magistrate guided

by interest of justice from case to case as held in para 22.3 of Ramdev Food

Products Limited (supra).

19. In view of the above discussions, reasons and analysis and looking

into the law laid down in the case of H.D.F.C. Securities Limited (supra) and

Ramdev Food Products Limited (supra) , the court comes to the conclusion

that this is a premature petition. Further, there are allegations of creating