Madhya Pradesh High Court
The State Of Madhya Pradesh vs Ashok Jain on 26 May, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:13744
1 CRR-444-2024; 5422-2023 & 925-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 26th OF MAY, 2025
CRIMINAL REVISION No. 444 of 2024
ASHOK JAIN
Versus
THE STATE OF MADHYA PRADESH
.............................................................................................................................
Appearance:
Mr. Satyendra Kumar Vyas - Senior Advocate assisted by Mr. Shantanu
Sharma and Ms. Neha Yadav - Advocates for applicant.
Mr. Anirudh Malpani - Government Advocate for respondent / State.
Mr. Vivek Dalal - Advocate for complainant / objector.
.............................................................................................................................
WITH
CRIMINAL REVISION No. 5422 of 2023
RAJEEV AGNIHOTRI
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
.............................................................................................................................
Appearance:
Mr. Anil Khare - Senior Advocate appearing through Video Conferencing
assisted by Mr. Amol Shrivastava - Advocate for applicant.
Mr. Anirudh Malpani - Govt. Advocate for the respondent No.1 / State.
Mr. Satyendra Kumar Vyas - Senior Advocate assisted by Mr. Shantanu
Sharma and Ms. Neha Yadav - Advocates for respondent No.2.
.............................................................................................................................
Signature Not Verified
Signed by: SOUMYA
RANJAN DALAI
Signing time: 26-05-2025
12:20:30
NEUTRAL CITATION NO. 2025:MPHC-IND:13744
2 CRR-444-2024; 5422-2023 & 925-2024
CRIMINAL REVISION No. 925 of 2024
THE STATE OF MADHYA PRADESH
Versus
ASHOK JAIN
.............................................................................................................................
Appearance:
Mr. Anirudh Malpani - Government Advocate for the applicant / State.
Mr. Satyendra Kumar Vyas - Senior Advocate assisted by Mr. Shantanu
Sharma and Ms. Neha Yadav -Advocates for respondent.
.............................................................................................................................
Reserved on : 17/05/2025
Pronounced on : 26/05/2025
ORDER
Having regard to the similitude in the controversy involved in all
these petitions heard analogously learned counsels for the parties assailing
impugned order dated 23/08/2023 in Sessions Trial No.535of 2021 (Police
Station Kanadiya Vs. Ashok Jain) and this common order will govern all these
petitions.
2. By impugned order the application of Accused Ashok Jain
(Revisionist in CRR 444 of 2024) has been partially allowed, discharging him
qua section 465, 467, 468, 471, 201, 406 of IPC, but declined to discharge for
offence under Section 420 IPC, which is triable by Magistrate, and hence
transferred the case to the Magistrate Court. State and the Complainant-Rajeev
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Agnihotri have filed CRR 925 of 2024 and CRR no 5422 of 2023 respectively,
against discharge, and the Accused-Ashok Jain has filed CRR 444 of 2024
against declining discharge for offence under Section 420 IPC. (For the sake of
brevity, parties have been referred hereinafter as Complainant, Accused and
State/ Prosecution.) All three parties (Accused, Complainant and the State) have
filed the respective revision petitions.
3. Facts necessary for disposal these petitions in nutshell are that
Complainant filed a complaint against Accused, Revisionist in CRR 444 of
2024, Neelesh Jains/o Chandra Prakash Jain and Ankit Jain s/o Ashok Jain for
taking action against them for the offences u/s 406,417,420,463,464,467,468
and 471 r/w S. 120-B Indian Penal Code, 1860 (IPC) alleging that all the three
persons hatched conspiracy to play fraud upon him for usurping his Lands.
Ashok Jain who is in profession of constructing colony and buildings in the
name of Pushp Ratn builders with the intent of usurping lands of the
Complainant, approached him in year 2008 for raising construction of multi
storey building and township on the land of the Complainant situated in village
Khajarana area 1.239 hectare(1.34.000 Sq feet)(as per synopsis submitted by
Complainant area of lands of the Complainant is 1.876) stating that township
will be completed in 2-3 years and it will give him huge profit and on this
representation entered into an agreement dated 16/04/2008 with him wherein
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63% of the constructed buildings was to be given to him (Complainant)(as per
agreement dated 63% was to be given to Accused and 37% was to come in share
of the Complainant).
4. Accused further allured him representing that he has got
incorporated a shell company in the name and style of Pushp Ratn Reality Pvt
Ltd with share capital of Rs 5,00,000/-. If he adopts the company and transfers
his lands in the company, he will transfer all the shares in the name of his family
and also shares equal to the price of lands in the name of Complainant and thus
he will become owner of the company. On this Complainant and the Accused
entered into an agreement dated 14/09/2009 and the Complainant transferred his
lands value of 2.50 Crores in the name of company without consideration but
Accused did not allot any share to the Complainant. The Accused induced him
to invest Rs 3,02,16,500 in Socrus Pharmaceuticals Ltd and Socrus Bio Science
Ltd companies of the Complainant. As per assurance 50% share capital in the
name Accused and his family was not transferred in the name of the
Complainant to give him sole ownership on the company.
5. On 26/09/2011, with intent to cheat the Complainant, Accused
forging his signatures got prepared a cancellation deed to cancel MOU dated
14/09/2009 for ousting the Complainant and his family from the company and
for grabbing his lands and buildings. On this complaint, enquiry was conducted
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by City superintendent of police Khajarana Distt Indore and report dated
17/02/2021 was submitted wherein finding Accused guilty of alleged offences,
recommendation was made for prosecuting the Accused for commission of
offences punishable under Section 420, 406, 465, 467, 468, 471 of IPC. First
Information No. 198 dated 30/03/2021 was registered at P.S. Kanadiya, Indore
and investigation ensued.
6. The Accused was arrested on 23.05.2021 and Charge Sheet adding
offence under Section 201 IPC to those already alleged in FIR. The Charge
Sheet was filed before receipt of report sought on 14.06.2021 by State from the
State Examiner of the Questioned Documents, Government of Madhya Pradesh,
Jehangirabad, Bhopal. Upon receipt of the report dated 30.07.2021 of the State
Examiner by Superintendent of Police (East), Indore, the same was made part of
record and charge sheet was filed against the Accused after completion of
investigation.
7. Thereafter, on 20.10.2021, the Accused had filed an Application
seeking discharge under Section 227 of CrPC before the Ld. Session Court.
8. After hearing the parties, Ld. Sessions Court vide order dated
23.08.2023 had partially allowed the discharge application and discharged the
Accused qua offences under sections 465, 467, 468, 471, 201, 406 of IPC. The
case was transferred to the Magistrate Court as the sole remaining offence i.e.
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420 of IPC is triable by magistrate.
9. The Complainant also preferred an IA 6903 of 2025 on 15.05.2025
through Ld. counsel Shri Vivek Dalal praying for permission to assist the Court
to support the framing of charges under Section 420 IPC. Shri Anil Khare,
learned Senior Counsel is already appearing on behalf of the Complainant in
CRR No 5422/2023 and has been heard in details in all the revision petitions
including one filed by the Accused i.e. CRR No 444/2024. Written synopsis to
support framing of charge was also filed on behalf of the Complainant and has
been considered. In the aforesaid background IA 6903 of 2025 filed on behalf of
the Complainant has been dismissed by separate order dated 17/05/2025.
10. Ld. Senior counsel for the Accused submits that present FIR is an
after-thought orchestrated by the Complainant against the innocent Accused
intended towards causing wrongful loss to the Accused and wrongful gain to the
Complainant. The present lis is a Civil Dispute has been given a criminal Colour
as arm twisting measure. Undisputedly Lands originally of Complainant were
transferred to Company Pushp Ratna Realty Pvt. Ltd. on 31.03.2009. Thereafter,
all decisions and acts were done by the Company through Directors, being from
both groups, i.e. Jain and Agnihotri. MoU was entered into between three parties
Company, Accused & Complainant on 14.09.2009 after Lands were of the
ownership of the Company. MoU was cancelled on 26.09.2011 by way of
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Cancellation Deed by the same three parties. Value Addition to Project done by
Jain's by infusing around Rs. 15 crores + land purchases and MoU's, which is
acknowledged in Balance Sheets since 2009 till the last Balance Sheet in 2020,
wherein signatures of Agnihotri's and Jain's both are there, hence not disputable.
Joint Venture Agreements and Further Adjoining Lands Purchased by Accused,
including the lands adjoining the main road, only after which the lands
originally of Complainant gained value as combined land parcel was now
adjacent to road and permissions for High-Rise Buildings could now be
obtained.
11. He further submits that essential ingredients for Cheating not being
established since there is no wrongful loss or any intent to deceive from the
inception. Accused has not withdrawn any profits or money from the Company
and all the benefits to be derived on account of the agreements and
understandings on execution of project have not been derived by the Accused,
hence no Instance of Cheating can be established.
12. He further submits that limited dispute emanating from the case is
that as per Complainant, Accused allegedly forged signature of Complainant on
the deed of Cancellation of MoU for cheating him by having such an intent.
Since the signature of Complainant has been proved to be genuine on the
Cancellation of MoU, by virtue of the unchallenged report of State Examination
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Agency (part of Supplementary Chargesheet), the question of cheating whether
being done, on account of the Cancellation of MoU itself is unsustainable, as the
complaint only revolves around the allegation that the Accused, in order to cheat
the Complainant, had forged the signatures of the Complainant on the
Cancellation of MoU. Thus, the present proceedings hold no water.
13. He further submits that the Complainant is even otherwise well
aware of the fact that the present dispute is an inter-se Dispute, pertaining to the
shareholders, wherein the Complainant had earlier proceeded with the
Arbitration and later has also moved a petition under sections 241- 242 of the
Companies Act, 2013, alleging oppression and mismanagement. The NCLT
being the appropriate forum for Company related disputes, was also observed in
the proceedings before the Ld. Commercial Court in 2020 as well, after which
Arbitration took place.
14. He further submits that Complainant has made Reference to
Agreement dated 16.04.2008, but averments are as per MoU dated 14.09.2009.
False statement that the Accused approached him, rather he had approached
Accused on account of his goodwill. Further false statement has been made with
respect to shares that he owns 63%, rather Accused was allotted 63% and
Complainant was to get only 37% of constructed area. False statement that
project was committed to be delivered in 2-3 years, rather no time was
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committed as it was yet to be decided. False statement that Service Charge was
to be received by Ashok Jain, rather no mention of Service Charge in this
Agreement, but Service Charge is basis on the MoU in dispute dated
14.09.2009. All references made are as per disputed MoU dated 14.09.2009 but
shown as if in Agreement dated 16.04.2008 hence, no cheating deception since
beginning, rather MoU dated 14/09/2009 is post transfer of lands in the
company stating such clauses. Land admittedly transferred by Complainant to
Company on 31.03.2009, and the conditions referred to were on account of
payment of Rs 255 lakhs was received by Complainant himself.
15. The statement of Complainant is completely opposite to the actual
stand since even as per MoU dated 14.09.2009, it was Complainant who
approached Accused with the proposal and not the contrary as stated. Ignorance
of law is no excuse as claimed by the Complainant that he had no knowledge of
share and company law. False statement that Complainant had no knowledge of
Company law and Shares, the same is a blatant lie since lands transferred to
Pushp Ratna Realty Pvt. Ltd. also included lands in the name of 2 Companies
where Complainant was promoter himself, namely Socrus Pharmaceuticals Ltd.
and Socrus Biosciences Ltd., both being Public Limited Companies, and also
more astonishing that he was even the Promoter of a Listed Company since
1996.
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16. Ld. Sr. Counsel further submits that it is falsely stated that no
consideration in cash nor any shares were transferred against the transfer of land
in the company. It is shown above that Rs. 2.55 crores were received by the
Complainant and the registered Sale Deeds transferring lands to Pushp Ratna
Realty Pvt. Ltd. prove that shares were issued and the same was then uploaded
with the RoC. Registered Sale Deeds. Amounts paid by the Companies of the
Complainant to Pushp Ratna Realty Pvt. Ltd. to the tune of Rs. 3.02 crores, and
the same being grabbed by the Accused is a false statement since no amounts
have been paid to Accused in personal capacity and all the amounts received by
the Company are recorded in the Audited Balance Sheets, since 2009 and the
same being also signed by Father of the Complainant.
17. Ld. Sr. counsel submits that it has been stated by the Complainant
that Accused paid 5 lakhs only and became 50% owner of the land in the
company, whereas the fact is that the company was originally 100% (50000
shares of Face Value10 each totalling to Rs. 5 lakhs) owned by the Accused, and
subsequently fresh shares were issued to the Complainant family in lieu of the
land transferred which resulted in equal distribution of shares being 50-50 after
the fresh capital was introduced, making total shares issued now to 1,00,000
with Face Value of Rs. 10 each making total paid up capital to Rs. 10 lakhs.
Hence, the Complainant entered into the company and not as if the Accused. It
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is pertinent to mention here in that till 31 March 2020 Accused and group has
invested nearly a sum of Rs. 15 crores in the company.
18. Ld. Sr. counsel further submits that allegation that Accused has
tried to grab complete shareholding in the company in order to grab the land, for
which Accused and his family proposed a Right Issue. Rather, the correct state
is that an equal distribution of right issue for Rs. 10 crores (shares worth) was
proposed in a board meeting of the company in order to meet the dire financial
needs of the company in order to complete the project. The said board meeting
was attended even by the son of the Complainant, which is apparent from the
minutes of the meeting. It was a conscious decision of the Complainant at the
relevant time in 2019 to not opt for the Right issue, validly open for him to opt,
hence upon the Complainant, not opting and rather only the Accused having
subscribed to the fresh issue, the amount of Rs. 5 crores as offered to the
Accused was freshly infused only at the instance of the Accused as a result of
which the shareholding after such Right issue changed to 78% of the Accused
and around 21% of the Complainant. Notably the number of shares as held by
the Complainant prior to this right issue, remain intact even today as 50,000.
19. Ld Sr. counsel lastly submits that all the averments under this point
are mere reproduction of the clauses in the MoU dated 14.09.2009, which have
no relevance today, since the said MoU has already been cancelled on
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26.09.2011. It is alleged that the Accused and his family members produced a
forged cancellation deed stating to have cancelled the MOU dated 14.09.2009
for the purpose of cheating the Complainant, and grabbing the share of his
family in the company and the lands. Since the signature on the cancellation
deed has already been proved to be genuine of the Complainant, hence no
further question can remain intact. On these miscellaneous submissions Ld Sr.
Counsel urges the court to allow the revision petition No. 444/2024 filed on
behalf of the Accused to also discharge him of the charges under s. 420 of IPC.
He further prays for dismissal of revision petitions No 5422/2023 and petition
No. 925/2024 filed on behalf of the Complainant and State of M.P. seeking
quashment of impugned order dated 23/08/2023 to the extent it absolves the
Accused of the charges u/s 467, 468, 471, 406 and 201 of IPC.
20. Per contra, Ld Sr. Counsel for the Complainant, Shri Anil Khare on
facts submit that The Complainant invested all his lands into the company
without insisting upon the consideration in cash and accepted only 46,632
shares of Rs. 10/- each on the basis of the representation and commitment by the
Accused that the entire company and the project would belong to the
Complainant and his family after completion of the project as per the undisputed
MoU dated 14.09.2009.
21. Ld. Sr. Counsel further submits that the Accused maliciously
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increased the amount of shares from Rs. 10/- each to Rs. 700/- by showing a
bogus premium of Rs. 690/- on each share whereas there was no asset or income
of the company apart from the share capital of Rs. 5,00,000/- on the date of
resolution dated 20.03.2009. A perusal of the share certificates would show that
the amount of premium was only on paper and no consideration existed and no
share certificates were issued for Rs. 700/-. The Complainant was always kept
in the dark and under the belief that since the ownership and directorship in the
company would be equally maintained and after the completion of the project
the entire company would belong to the Complainant as per MoU dated
14.09.2009 never insisted upon payment of any money or issuance of shares for
his lands. If the shares of the said value of Rs. 3.26 crores would actually have
been been issued to the Complainant then the Complainant and his family
members would have had a control of around 98% shares of the company. It is
clear that the said transaction was done in furtherance of the understanding
arrived at between the parties of maintaining 50:50 shareholdings which was
reduced into writing in MoU dated 14.09.2009. Contrary to the statements of the
Accused no balance sheets were ever signed by the Complainant's side except
the purported balance sheet of the year 2013-2014 which has been allegedly
signed by the late father of the Complainant Shri Ramashankar Agnihotri who
passed away in 2016 and the said balance sheet is the only balance sheet that
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has never been filed with the Registrar of Companies (ROC) which makes it
suspicious. Further this document has been produced by the Accused during
investigation and as per his own statements, therefore the same is not relevant
unless proved in trial.
22. Ld. Sr. Counsel further submits that from 2009-2017, a perusal of
the balance sheets and other statements would show that the Complainant and
his sources have invested an amount of Rs. 1.99 crore by cheques and another
Rs. 5.47 crore by way of cash into the company. The Accused and his family
members have withdrawn around Rs. 11,78,08,011/- in his personal accounts
and accounts of his family members without any intimation to the Complainant
and without any board resolution. Whereas only an amount of Rs. 9,43,18,000/-
was deposited by him. A loan of Rs. 1.97 crore received on 6.06.2016 and from
7.06.2016 to 10.06.2016 an amount of Rs. 1.90 crores has been withdrawn by
the Accused. As on the date of filing of challan (on 22.06.2021) only an amount
of Rs. 19,000/- has been left in the books. This clearly showcases
misappropriation by the Accused of the funds of the company. The disputed
agreement for cancellation of MoU dated 26.09.2011 was presented before the
Commercial Court only to escape from the liability of the Accused and to
illegally eject the Complainant and his family from the company and their lands.
The conduct of the parties clearly shows that many years after the said disputed
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cancellation the terms of the MoU were being acted upon by the parties till date
and the Accused appointed the directors from the Complainants side and also
did not dispute the holding of shares and directorships by the Complainant and
his family members till various disputes arose in 2019.
Submissions in respect of Offence of Forgery:-
23. Ld. Sr. Counsel relying upon the judgments in Manorama Naik
V/s State of Orissa reported in 2022 Live Law SC 297, Ramprasad Jatav
Vs. State of M.P. CRR 600/2022 (M.P.)(para 16-18), Vijay Kant Shrivastava
Vs. State of M.P. (MCRC 40620/23) Jabalpur), Swami Brijesh
Ballabhacharya Vs. State of M.P. (MCRC 35177/22) further submits that, the
learned trial court has mainly given a singular reason to absolve the respondent
No.2 from charges of forgery as defined under Section 463 of the IPC on the
ground that the State Examiner of Questioned Documents report dated 30.07.21
favours the Accused. The above conclusion reached by the learned trial court is
unsustainable for the following reasons:-
"a. A negative handwriting expert report cannot be a ground for
discharge since the handwriting/signatures can also be proved by
other methods u/s 45, 47 and 73 of Evidence Act, 1872 which is
during trial.
b. Handwriting expert report has to be proved during trial and
cannot be held to be conclusive at the stage of framing of charges.
Expert report without examination of the said expert is of no
evidentiary value as on mere favourable or unfavourable expert
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report no conviction or acquittal can be made.
c. It is a settled position that an expert report by itself is not
sufficient to reach to any conclusion about the guilt or innocence
of any person. The report has to be proved during trial by
examination of the expert and also has to be corroborated by
material particulars. Report of Government Examiner will not
prevail over Private Examiners report if the Govt. Examiner is not
examined in trial. Reliance is placed upon Padum Kumar Vs.
State of UP (2020) (3) SCC 35 (Para 14-16), S.P.S. Rathore Vs.
CBI & Anm. (2017) 5 SCC 817 (Para 47-50), State of H.P. Vs.
Jai Lal & Ors. (1999) 7 SCC (280) (Para 17-20).
d. There are conflicting reports of handwriting experts: The court
could not have taken into consideration only one report of
handwriting expert in favour of Accused. The learned court has
failed to observe principles in the case of State of Mahrashtra Vs.
Sukhdev Singh (Para 29) by forming an opinion at the stage of
framing of charge by non examination of relevant facts and
circumstances which could only be possible during trial. Reliance
is also placed on Dayal Singh Vs. State of Uttaranchal (2012) 8
SCC 263 (Para 34).
e. Section 227 of Cr.P.C. cannot be invoked to discharge the
Accused only on the basis of expert report Ghulam Hassan Beigh
Vs. Mohd. Maqbul Magrey (2022) (12) SCC 657. (Para 29-31)
f. There are allegations of forging other documents which have not
been examined by any expert. The case of the prosecution is not
only against the disputed document dated 26/09/11 but also
includes the other two documents dated 19/09/2011 and
10/04/2013 which were submitted by the Accused purporting to be
"Terms of Settlement" arrived at between the parties which have
prima facie been found to have been forged and fabricated as per
Section 463 and the originals have been withheld and not been
produced by the respondent No.2 and therefore charge under
Section 201 was added.
g. Handwriting expert report of State Examiner is partially in
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favour of Complainant. The opinion on the second document
purporting to be a handwritten note of the terms of settlement as
submitted by the Accused have been found to have not been
written in the handwriting of Complainant. Therefore, giving
credence to the allegation that the disputed cancellation MoU dated
26.09.2011 does not record any terms of settlement.
h. The handwriting expert categorically opines against the Accused
regarding the undated and handwritten "terms of settlement"
between the parties not being in the handwriting of the
Complainant but goes a step further to opine that the crossed
(illegible) signatures are of the Complainant to support of the
Accused, but the fact remains that no such opinion was sought
from the expert. This clearly raises grave suspicions which further
required the said expert to be examined."
24. Ld. Sr. Counsel further submits that there are various
undisputed facts which raise concerns about the genuineness of the said
cancellation MoU dated 26.09.2011 which were required to considered
during trial:
"1. Terms of the disputed document dated 26/09/11 itself arouse a
grave suspicion about the genuineness of the said document since
it is highly suspicious that any person would sign on an agreement
for cancellation of the earlier terms and conditions which would
actually extinguish all his rights in his land without any payment of
consideration and without even recording or mentioning any terms
of settlement in the cancellation deed. The said fact was observed
by this Hon'ble Court while deciding AC No. 9/2020 order dated
23.08.2021. Thereafter, by way of afterthought the handwritten
terms of settlement, board resolution and other documents were
produced to give credence to the forged document dated
26.09.2011.
2. It is also highly improbable and suspicious that the terms of
settlement as referred in the document dated 26/09/11 would be
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recorded after executing a document on 10/04/2013. It is further
improbable that why was such important documents were not
registered and have been filed for the first time during
investigation whereas in the previous proceedings these documents
were never presented. It is clear that the said document was
prepared to grab control over the company.
3. Board resolution dated 24.09.11 regarding cancellation of MoU
dated 14.09.2009 was never filed with ROC nor there are any trail
documents such as notice of board meetings and entries in records
of the company or statutory compliances under the Companies Act,
1956. The said document clearly suspicious inside many places
there is mention of year 2019 instead of 2009 which clearly shows
the mental condition of the maker of the document that it was
written in 2019. It appears that the document has been prepared in
a hurry and very casually to support illegal fraud and deceit
practised by the Accused since at all times the management and
records of the company were in the possession of the Accused.
4. Stamp number on the Agreement for Cancellation dated
26.09.2011 is U090402 while stamp number on MoU dated
19.09.2011 both produced by the Accused is U224721, which is
around 1,34,319 serial numbers of the subsequent document issue
within 7 days. Both these stamps have been purchased from the
same stamp vendor. This clearly points to prima facie fakeness of
the said stamp papers.
5. From the conduct of the parties it is clear that the so called
"terms of settlement" were never acted upon, as if the said MoU
dated 14.09.2009 was never cancelled. That, it is clear from the so
called "terms of settlement that the Complainant was to get the
balance share of land after distribution, and original documents
were to be handed over by the Complainant, and 100% shares of
Complainant were to be transferred to Accused. The subsequent
and former conduct of the parties is a relevant fact under Section 8
of Evidence Act, 1872. There was no partition of the parcels of
land, there was no change in the proportion of directorship as per
clause 7 and 8 of the MoU of 2009, and the shares remained intact
with the Complainant's side. In fact in 2016 after the death of Mr.
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Ramashankar Agnihotri his grandson Harshit Agnihotri was
appointed a director to maintain ratio of 2 directors from each side
as per clause 7 vide board resolution dated 30.09.2017. In fact as
per the verified account statements of Complainant and his
companies it is clear that even after the forged cancellation
agreement the Complainant kept pumping money into the
company till 2017 and also gave money to Accused and his family
for the purpose of project. The Complainant's side paid (by
cheque) around Rs. 1.99 crore to the company, Rs. 1.38 crore to
the Accused and family members by cheques. (around Rs. 1.89
crore was paid after the forged cancellation in 26.09.2011). In fact
on 31.03.2017 the Accused acknowledges the transfer of shares to
Jayshree Agnihotri and various family members of Complainant as
per Clause 16 of MoU clearly evidencing that the shares were held
by the Complainant and there was no cancellation."
25. In response to submissions on behalf of the Accused regarding
no evidence that the Accused is the maker of forged document and hence
cannot be punished for offences of forgery, Ld. Sr. Counsel submits that it
is legally and also factually incorrect on the followings points:
"i. The forged document dated 26.09.2011 purporting to be an
Agreement of Cancellation of MoU dated 14.09.2009 and
handwritten document (P/13) is signed by Accused as an executor
of the said document, hence he is a privy to the said forged
agreement.
ii. All the witnesses of the said document dated 26.09.2011 are
family members of Accused being the son and nephew of the
Accused.
iii. The said document dated 26.09.2011 are family members of
Accused being the son and nephew of the Accused.
iv. The said documents were admittedly was always in possession
of Accused and he never disclosed the same until his nefarious
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20 CRR-444-2024; 5422-2023 & 925-2024
agenda of illegally removing the directors and gaining control of
the company by reducing share capital and misappropriating the
funds surfaced and was produced for the first time before the
Commercial Court in the year 2019. The other handwritten
document was produced only during investigation.
v. The Accused is the one who has derived a direct advantage as a
result of the said forged documents which has caused wrongful
loss to the Complainant. The terms of these documents are giving
clear and absolute advantage and control of the company and its
assets to the Accused without any corresponding benefit or right to
the Complainant.
vi. The Complainant in his statements has clearly stated that the
said documents has been forged by the Accused to gain control
over the company.
vii. Even after the alleged cancellation the terms of MoU dated
14.09.2009 were followed by the parties, such as the Complainant
continued investing in the project, Harshit Agnihotri was inducted
as director in 2017, the shares of the Complainant's family
remained with the Complainant, which was duly acknowledged
and consented by the Accused. The terms of the handwritten forged
document were never acted upon, hence its existence is extremely
doubtful."
26. Ld. Sr. Counsel submits that in the present case there is ample
evidence of forgery of two documents as referred. Even otherwise it has been
held that if there is no direct evidence that who has actually forged the
signatures or who is the maker of the document, the person using the said
document and benefitting from it can be convicted with the aid of Section 109
IPC on the basis of circumstantial evidence and it can be held that the Accused
himself got the signatures forged and the same is sufficient for his trial. Ld Sr.
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Counsel placed reliance on the paragraph 15 of judgment in the case of Bank
Of India vs Yeturi Maredi Shanker Rao & Anr. 1987 (1) SCC 577, which is
extracted as under as under:
"As regards the offence under Section 467 read with Sec. 109, the
learned High Court acquitted the respondent because it came to the
conclusion that there is no evidence to establish as to who forged
the signatures of P.W. 1 on the withdrawal form. It is no doubt true
that so far as the evidence about the forgery of the signatures of
P.W. 1 on the withdrawal form is concerned there is no evidence
except the fact that the signatures are forged and the further fact
that this withdrawal form was in the possession of respondent
Accused who presented it in the Bank and obtained money
therefrom and pocketed the same. From these facts an inference
could safely be drawn that it was the respondent Accused who got
signatures of P.W. 1 forged on this document as it was he who used
it to obtain money from the Bank from the account of P.W. 1 and
pocketed the same. It is no doubt true that there is no evidence as
to who forged the signatures of the withdrawal form but the
circumstances indicated above will lead to the only inference that it
was the Accused respondent who got the signatures of P.W. 1
forged on the withdrawal form. In this view of the matter therefore
the acquittal of the respondent for an offence under Section 467
read with Sec. 109 also could not be justified."
27. He further submits that the judgment in the cases of Shiela
Sebastian (2018) is factually different and not applicable since it the said
judgment there was no allegation or proof regarding the Accused having made
the forged document as he was not a signatory to the disputed PoA and the
evidence revealed that some imposter had got the PoA drafted and executed
pretending to be the Complainant who was never investigated. In the case at
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22 CRR-444-2024; 5422-2023 & 925-2024
hand there is substantial circumstantial evidence to suggest the Accused is the
maker of the false document in terms of the judgment of Bank of India (supra)
sufficient to try the Accused for forgery. Further the case of Mohd. Ibrahim &
Ors. Vs. State of Bihar & Anr. (2009) 8 SCC 751 is also on different facts as
the court was deciding the issue whether a sale deed executed by the Accused
under his own signatures wrongly claiming a right to the said property can be
held to be a forged document or not. There was no allegation of forging any
signature or document.
28. As per Section 471 IPC using as genuine a forged document:
Whoever fraudulently or dishonestly uses as genuine any document which he
knows or has reason to believe to be a forged document, shall be punished in the
same manner as if he had forged such document. Even on the assumption that
the Accused was not himself the "maker of the document" as per Section 464
IPC, he admittedly being a signatory to the said documents and keeping the
same in his possession has used the documents against the Accused for harming
and causing loss to the Complainant with the express knowledge of it being
forged documents and therefore he can be convicted under Section 471 which is
punishable and treated at par with forgery.
29. In para 8 of A.S. Krishnan Vs. State of Kerala (2004) 11 SCC
576 (Anne-P/3), it has been held in para 8 that:
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23 CRR-444-2024; 5422-2023 & 925-2024
"The essential ingredients of Section 471 are (i) fraudulent or
dishonest use of document as genuine (ii) knowledge or reasonable
belief on the part of person using the document that it is a forged
one. Section 471 is intended to apply to persons other than forger
himself, but the forger himself is not excluded from the operation
of the Section. To attract Section 471, it is not necessary that the
person held guilty under the provision must have forged the
document himself or that the person independently charged for
forgery of the document must of necessity be convicted, before the
person using the forged document, knowing it to be a forged one
can be convicted, as long as the fact that the document used stood
established or proved to be a forged one. The act or acts which
constitute the commission of the offence of forgery are quite
different from the act of making use of a forged document."
30. As per Section 464 IPC: A person is said to make a false
document or false electronic record-
"First Who dishonestly or fraudulently-
(a) makes, signs, seals or executes a document or part of a
document;
(b) makes or transmits any electronic record or part of any
electronic record;
(c) affixes any electronic signature on any electronic record;
(d) makes any mark denoting the execution of a document or the
authenticity of the electronic signature, with the intention of
causing it to be believed that such document or part of document,
electronic record or electronic signature was made, signed, sealed,
executed, transmitted or affixed by or by the authority of a person
by whom or by whose authority he knows that it was not made,
signed, sealed, executed or affixed; or"
31. Ld. Sr. counsel further submits that the Accused was himself
an executant and signatory to the said disputed / forged documents which
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24 CRR-444-2024; 5422-2023 & 925-2024
he knew and believed has not been executed by the Complainant therefore
he is liable for forgery.
32. He further submits that the present case is squarely covered by the
cases of Bank Of India vs Yeturi Maredi Shanker Rao and A.S. Krishnan
Vs. State of Kerala (supra.) On the basis of facts narrated above it is clear that
the Accused is liable to be tried for forgery under the charged sections for
forging and using both documents the alleged cancellation MoU dated
26.09.2011 and also the handwritten document (P/13) which was produced and
used by the Accused. On the aforesaid premise Ld. Sr. Counsel submits that,
there are allegations that the document has been forged by the Accused or at his
instance to derive unlawful benefit, which is clearly supported by circumstantial
evidence on record.
Submissions in respect of Offence of Breach of Trust:
33. Ld. Sr. Counsel further submits that, as per the chargesheet the
allegations and relevant facts constituting criminal breach of trust are that:
a. The Complainant and family members transferred their
property in favour of the company run by Accused and his
family members on the promise and contractual
understanding that the Complainant and his family members
would invest in the project and at all times the directorship
would remain in the ratio of 2:2 and after the completion of
project after discharging all the liabilities including the
service charges the Accused, the entire company, the profits
and the project would stand transferred to the Complainant
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and his family. Therefore it is clear that the ownership of the
lands were never divested by the Complainant it was only an
entrustment of the property in favour of the company which
was managed and run by Accused, for a limited time and
purpose of development of project. Thereafter, the company
and ownership was to be transferred back to the Complainant
as per MoU dated 14.09.2009.
b. The property was transferred without any consideration and
only 46,632 shares of Rs. 10/- each were issued and price of
the shares was increased to Rs. 700/- only on paper since the
premium of Rs. 690/- was offered only on paper and there
was no money or income in the company to support such a
share premium of around 3 crores.
c. The conduct of the Accused from 2009 to 2017 clearly shows
that huge amounts of money was misappropriated by the
Accused into his and family's personal accounts without any
authorisation, resolution explanation including the amount of
loan provided by Shri Ram Finance. At all times the control
over the accounts of the company was with the Accused. The
Complainant invested Rs. 1.99 crore by cheques and 5.47
crores by cash. On the date of investigation only Rs. 19000/-
was left in the account of the company.
d. Thereafter, when disputes arose as to the appointment of
directors in 2019 the Accused produced a forged agreement of
cancellation of MoU dated 26.11.2011 which virtually
extinguished all the rights of the Complainant in the said
company and also the control over the land which was
transferred on paper without any consideration. By act of
forgery and manipulation in company records the Accused has
attempted to convert to his own use the property and the
assets entrusted by the Complainant in favour of the company
under the dominion and control of Accused and his family. It
is a clear case of criminal breach of trust as per Section 405 of
the IPC.
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26 CRR-444-2024; 5422-2023 & 925-2024
e. It is clear that the Accused misused his position as the director
of the company and handling affairs of the company to grab
the assets of the company from its rightful owners and
misappropriate properties of the company for his own use.
34. Ld. Sr. Counsel in respect of the reasons of discharge under the said
offence by the learned trial court submits that:
The dispute is not in relation to partners or partnership firm but
against the Accused as a director of the company and
misappropriating the assets and funds of the company entrusted
by the Complainant for his own personal gain and in view of
the law laid down in the cases of RK Dalmia Vs. Delhi
Administration AIR 1962 SC 1821 (Para 94-98) and
Shivnarayan Laxminarayan Vs. State of Maharashtra AIR
1980 SC 439 (PARA 5-11). That holds the directors are only
an agents but is in the position of trustee and have clear
dominion over the assets of the company over which they have
control and can be held liable for criminal breach of trust.
In the present case there are specific allegations against the
Accused and it is not a case of vicarious liability.
Merely because a civil claim is maintainable it does not mean
that a criminal complaint cannot be entertained. The pendency
of a civil case between the parties cannot be a ground to refuse
criminal process if the allegations in the complaint/FIR clearly
make out a criminal case. To bolster his submissions Ld
Sr.Counsel placed reliance upon judgments by Apex Court in
Priti Saraf Vs. State of NCT 2021 SCC Online SC 206, MS
Sheriff Vs. State of Madras AIR 1954 SC 397, SW
Palanitkar Vs. State of Bihar (2002) 1 SCC 241, M.
Krishnan Vs. Vijay Singh AIR 2001 SC 3014, and Punit
Beriwala Vs. State of NCT Delhi 2025 INSC 582.
Submissions on behalf of the Complainant in CRR 444/2024 regarding
quashment of charges under Section 420 of the IPC.
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35. Ld Sr. Counsel submits that it is clear from the facts of the case that
the Accused induced the Complainant to deliver his property and investment to
the company under the control of the Accused on the pretext of MoU dated
14.09.2009, without paying any consideration of Rs. 3.2 crore and on mere
issuance of 46,632 shares of Rs. 10/- each and showing the premium of Rs.
690/- only on paper. It has also stated that the Accused in furtherance of his
intentions divested the Complainant's family of their directorship and control of
the company in violation of the MoU dated 14.09.2009 and later produced a
forged document which virtually extinguished all the rights of the Complainant
in the said company, over the project and over the control of his lands.
36. Ld. Sr. Counsel further submits that the understanding and terms of
MoU dated 14.09.2009 were arrived at between the parties prior to the transfer
of lands in the company. The board resolution dated 20.03.2009 which
authorised the company to purchase lands in lieu of shares of Rs. 10/- each and
a further premium of Rs. 690/- on each share is not in dispute. It clearly shows
that that the intention of the Accused was never to pay any consideration since
there was no income/profit or asset of the company to issue such a premium and
the amount was only on paper. The sale deeds were executed on 31.03.2009 but
the word shares was added in place of cash after execution. The sale deeds were
registered from 26.09.2009 to 15.04.2010 (i.e. after the MoU dated 14.09.2009.
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28 CRR-444-2024; 5422-2023 & 925-2024
Therefore it is clear that on the date of MoU (14.09.2009) no title had passed to
the company. On these submissions Ld Sr. counsel emphasises that the intention
to deceive prevailed since inception in the mind of the Accused.
37. Ld. Sr. Counsel lastly submit that the allegations regarding breach
of trust regarding misappropriation of money are independent to allegations
regarding cancellation of MoU and therefore in view of independent set facts
both offences under Section 406 and 420 IPC can be maintained in the present
case.
38. In response to arguments of the Accused in written note dated Ld.
Sr. Counsel submits that The ingredients of criminal offences under the
appropriate sections are clearly made out. The present dispute is a criminal
offence which is clearly distinguishable from the civil disputes pending between
the parties, and the same is not an impediment to proceed with criminal trial
simultaneously. The issue of Rights Issue has no bearing on the present case and
the same is not even part of the investigation or chargesheet. Moreover, the
Accused has suppressed that upon the objections of the Complainant the
Registrar of Companies has refused to take on record board resolutions and
forms relating to Rights Issue and has declared it as defective. The issue of
Rights Issue as on today stands in favour of the Complainant. The defence of
Accused is irrelevant at this stage. It is incorrect that the complaint was filed
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29 CRR-444-2024; 5422-2023 & 925-2024
after a year. It is submitted and as mentioned above the Complainant filed
various complaints before the police station but the same were not acted upon.
Even otherwise as per settled law delay in filing of complaint cannot result in
discharge since it is always open to explain the delay in trial. To buttress the
aforesaid proposition Ld Sr. Counsel has placed relaiance on the judgments by
the Apex Court in Manendra Prasad Tiwari v. Amit Kumar Tiwari, 2022
SCC OnLine SC 10572, Skoda Auto Volkswagen (India) Private Limited.
Vs. State of U.P. and others, reported in (2021) 5 SCC 795, Punit Beriwala
Vs. State of NCT Delhi (2025 INSC 582)
39. Ld. Counsel further submits that he Accused has suppressed the
order dated 23.09.2021 passed in AA No.54/2020 by this Hon'ble Court,
whereby the Hon'ble Court in a challenge to the order of the Commercial Court
dated 23.11.2020 has recorded a finding:
"If appellant prefers an application under section 17 of the
Arbitration and Conciliation Act. 1996 before the Tribunal, the
Tribunal may be directed to decide it in accordance with law
without getting mechanically influenced by order dated 23-11-
2020 passed by the Commercial Court, Indore. It is also agreed
that this order of Commercial Court dated 23-11-2020 will not be
used against the appellant in any other legal proceedings.
....In view of the consensus arrived at, the Arbitration Appeal is
disposed off.... The parties shall be bound by their stand taken
hereinabove."
Inspite of the clear directions and undertaking given before the Hon'ble
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30 CRR-444-2024; 5422-2023 & 925-2024
Court the Accused has relied upon and read over the said order during the
course of hearing and hence is not only guilty of suppression but also contempt
of court.
40. Learned Sr. Counsel further submits that the details of amount
withdrawn by the Accused and invested by them has been clearly mentioned in
the account statements. Also amount of Rs. 5 crore invested only in 2020 after
the complaint had been made and the Complainant was ousted from the
company, on accounts of Right issue which has been disallowed. It is also
denied that the balance sheets till 2020 have been signed by both parties. It is
submitted that only one balance sheet of the year 2013-14 was purportedly
signed by the late father of the Complainant which was the only balance sheet
never filed with ROC makes it suspicious. As per statements of accounts and
other evidences given by the Complainant that the Accused has committed a
misappropriation of around Rs. 2.34 crore, The Complainant has also given
amounts directly into the accounts of Accused and his family members. He
further submits that the report of the Examiner is not unchallenged. The case of
the Complainant is that the said report cannot be made the basis of discharge
without trial and without examination of the handwriting expert.
41. Ld. Sr. Counsel further submits that it is clear from the
material on record and allegations that:
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31 CRR-444-2024; 5422-2023 & 925-2024
"i. The Accused deceived the Complainant to invest/transfer in the
lands into the company only upon paper consideration in form of
shares upon an assurance given through MoU dated 14.09.2009
that at all times till the completion of the project the Complainant
and his family members would be equal participants in the
company (through shareholding and directorship) and the company
will stand transferred to the Complainant's side upon completion of
the project and all the profits and ownership would belong to the
Complainant's side.
ii. The Accused never intended to honour this deceptive
representation since inception which is clear from the conduct of
non payment of entire security amount of Rs. 2.5 crore as per the
MoU dated 16.04.2008, passing of resolution on 20.03.2009 or
purchase of land for shares of Rs. 10 and then increasing the value
of shares in the books by falsely showing a bogus premium of Rs.
690/- per share, and then entering into the MoU dated 14.09.2009
never intending to honour the same.
iii. This is clear from the conduct of the Accused relating to
misappropriation of amounts of companies and investments made
by the Complainant, manipulation of company records, and
illegally ejecting the Complainant's family by using a forged
document of cancellation of MoU dated 26.09.2011 and forged
handwritten terms of settlement and highjack the control of the
company and the land that the Accused intended to cause wrongful
loss of assets and investments to the Complainant as defined under
Section 23 IPC.
iv. That, it is clear that all the ingredients of Section 415 are
satisfied in the present case."
Response to submission on behalf of the Accused that the handwriting
expert report of the State Examiner in favour of the Accused is more
reliable than private handwriting expert report obtained by the
Complainant.
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32 CRR-444-2024; 5422-2023 & 925-2024
42. Ld. Sr. Counsel on for Complainant submits that:
"i The issue of reliability of the handwriting expert report is a
question of fact and can be adjudicated only during trial.
ii. The Accused has failed to give any answer to the basic legal
issue whether an unproved expert report can be relied at the stage
of discharge.
iii. Further the Accused himself has stated that the original of the
disputed documents were in his possession which he always
retained.
iv. The expert has to be examined by the Accused during trial with
an opportunity for prosecution to examine him.
v. In Padum Kumar's case ((2020 (3) SCC 35 (Para 3 & 7), the
Hon'ble SC had refused to rely upon the report of State Examiner
in favour of the Accused on account of his non examination by
Accused and convicted the Accused for offence of forgery on the
basis of and corroborating evidence direct and circumstantial
evidence."
Response to submission on behalf of the Accused that if offence of cheating
is not made out then no forgery can be assumed.
"i. This is incorrect. The said submission may be relevant only in
case of an offence under 468 IPC (Forgery for the purpose of
cheating), but not in cases under Sections 463 (Forgery), 471
(Using as genuine a forged document or an electronic record) of
the IPC which are each distinct and standalone offences which are
punishable as per Section 465 IPC.
ii. That, even under Section 468 intention to cheat is a relevant
factor even if actual cheating has not taken place.
iii. Intention to cheat and actual cheating are clearly made out in
the case hence even Section 468 IPC would be applicable."
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33 CRR-444-2024; 5422-2023 & 925-2024
Response to submission on behalf of the Accused that the Complainant has
received entire consideration in lieu of his lands to the tune of Rs. 2.55 crore
hence no loss has been caused, and the Complainant himself has violated
the MoU dated 16.04.2008 and sold the plots individually and received
around Rs. 170 Lakhs from third persons.
43. Ld. Sr. Counsel submits that the amounts were received in lieu of
agreements from the purchasers of the Petitioner's share in terms of MoU dated
16.04.2008 but the same did not materialise due to no progress in the project.
The said amounts were returned to the purchasers as per the conditions of
agreements itself which had the deadline of 1.11.2009 also as per the statements
of the Complainant. No complaints or cases were filed by the purchasers for
return of amount. The property was held by the Complainant on the said date
and not transferred to the company. In fact the entire parcels of land including
the ones included in MoU dated 16.04.2008 were transferred to the company
vide registered sale deeds in lieu of subsequent MoU dated 14.09.2009, clearly
showcasing that there was no subsisting claim in respect of the said property nor
the Accused raised any objection. Further the amount of Rs. 85 lakhs allegedly
received by the Complainant in lieu of the MOU dated 16.04.2008 has no
bearing on the subsequent transfer of land by virtue of MoU dated 14.09.2009
as the same was returned and it is further clear from the fact that the Accused
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34 CRR-444-2024; 5422-2023 & 925-2024
never raised any claim about the same and there is no reference of the
Complainant having received this money in any of the further admitted
agreements such as Mot dated 14.09.2009, or any of the registered sale deeds
executed in favour of the company. Further the Complainant in his statements
has also stated about returning the same. Moreover, this fact about retention of
money which is prima facie contrary to record has been alleged by the Accused
in his defence and the burden to prove the same during trial is on the Accused
not the Complainant and the defence of the Accused cannot be looked into at the
stage of discharge and has to be proved by him during trial.
Response to submission on behalf of the Accused that Amount of loan from
Shriram Finance has been withdrawn by the Accused for satisfaction of his
loan granted to the company.
44. Ld. Sr. Counsel submits that the said fact being the
defense/explanation of the Accused is not relevant at the stage of framing of
charges. In fact, the Accused has clearly admitted his malicious conduct that the
amount of loan which was taken for the development of project in the name of
the company was utilised by him for allegedly repaying the loan to himself and
not for the project. Further the fact of there being excess withdrawal of Rs. 2.53
crores by the Accused in his personal accounts, while the Complainants were
shareholders and directors of the company as highlighted in para is an
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35 CRR-444-2024; 5422-2023 & 925-2024
undisputed fact based on the bank statements of the company as on 26.06.2021
till the date of filing of challan. The said withdrawal was without any board
resolution or any authority of law. On the said date only an amount of Rs.
19,001/- was remaining in the accounts of the company. Further from accounts
summaries of Complainant, his company Socrus Pharma and his family
members and the cheque details it is clear that the Complainant invested around
Rs. 1.99 crores (from 2009-2017) other than cash into the company which has
been unaccounted and has been withdrawn by Accused in his personal accounts.
Thus from the fact of misappropriation is clearly established.
Response to submission on behalf of the Accused that no money has been
deposited by the Complainant after cancellation of MoU on 26.09.2011.
45. The fact is false and incorrect. The Complainant and his mother
invested around Rs. 51.31 lakhs into the company by cheques other than the
amount paid to Ashok Jain and his family members after the alleged
cancellation of MoU on 26.09.2011. This further shows that the MoU was not
cancelled.
Response to submission on behalf of the Accused that in FIR wrongs facts
have been mentioned:
46. Ld. Sr. Counsel submits that it is incorrect that reference made to
agreement dated 16.04.2008 but averments as per 14.09.2009. Both the
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36 CRR-444-2024; 5422-2023 & 925-2024
agreements dated 16.04.2008 and 14.09.2009 have been referred in the FIR as
well as complaint, it has specifically been stated that as per earlier agreement
the share of the Complainant and Accused was to be 37% and 63% respectively
and later the same was superseded by way of agreement dated 14.09.2009. In
response to the allegation that Lands transferred by Complainant to company on
31.03.2009, and the conditions referred for an account of payment received by
the Complainant around 255 lakhs Ld Sr. Counsel submits that amounts
mentioned in on page nos. 409 (50 lakhs), 417 (40 lakhs), and 424 (30 lakhs)
and 429 (50 lakhs) in total Rs. 170 lakhs were received on account of selling of
the units to third parties which came into the share of Complainant as per MOU
dated 16.08.2008 condition on page (5). The same was not received from
Company or Accused. It is not a part of sale consideration nor has any bearing
to the present dispute. Moreover, the language of agreement itself states that if
the sale deed is not registered by 1-11-2009 then the said amounts shall be
returned. The amounts have been returned by the Complainant to these third
parties, hence no money received. In response to the allegation that
Complainant had no knowledge of shares Ld. Sr. Counsel submits that these
facts are wholly subjective and irrelevant at the stage of consideration of
discharge. As mentioned above the amount of Rs. 2.55 lakhs was never received
by the Complainant in lieu of transfer of his lands. Further it is clear that in lieu
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37 CRR-444-2024; 5422-2023 & 925-2024
of consideration of Rs. 3.2 crore only shares of Rs. 4,66,320/- (46,632 shares of
Rs. 10 each were transferred). Vide board resolution dated 20.03.2009 whereby
the Accused unilaterally increased the price of equity shares 46,632 from 10 to
700, thereby increasing the total value of the shares held by the applicant to
3,26,46,000 which would be the consideration of the land as shown in the sale
deeds. It is pertinent to mention that the said unilateral increase was clearly
fraudulent since the value of the shares were increased by 690 by showing it as
a premium, whereas there was no money or income in the company to support
such a premium. At this point of time the entire shareholding of the company
was only 5,00,000/- the company could not have shown a premium of Rs.
3,21,76,080/-. The value of Rs. 3,21,76,080/- was only on paper. If the shares of
the said value would actually have been issued to the Complainant then the
Complainant and his family members would have had a control of around 98%
shares of the company instead of 50:50. It is clear that the said transaction was
done in furtherance of the understanding arrived at between the parties of
maintaining 50:50 shareholding which was reduced into writing in MoU dated
14.09.2009.
ADDITIONAL SUBMISSIONS:
47. Ld. Sr. Counsel further submits that the allegations of criminal
breach of trust and cheating under Section 406/409 and 420 can co-exist if they
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relate to different transaction. In the present case the offence of breach of trust is
separately made out in case of misappropriation of money of the company into
the personal accounts of the Accused and family members. The offence of
Section 420 is made out separately on the allegations of allurement and false
representation on behalf of the Accused to make the Complainant transfer his
lands into the company without consideration on the strength of MoU dated
14.09.2009 and later illegally ousting the Complainant sides directors and
reducing their shareholding by forging the agreement of cancellation of MoU
dated 26.09.2011 to divest the Complainant of his assets as well as control in the
company.
48. He further submits that the Accused has failed to answer the issue
of admissibility and reliance of expert report at the stage of framing of charges
which clearly stands in favour of the Complainant. The Accused has not made
any submissions regarding the misappropriation of amount of Rs. 2.53 crore.
The Accused has also not been able to dispute or point out any contrary
inference from the chargesheet that an amount of Rs. 1.99 crore was invested by
cheques from the Complainant's side into the company. The balance amount in
the account of Rs. 19000/- as on June 2021 has also not been disputed by the
Complainant. It has also not been disputed that even after the alleged
cancellation the Accused the shares of the company remained with the
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Complainant's side and the directors from the Complainant's side were also
inducted and acknowledged by the Accused till the year 2019. There was no
reference of the said cancellation or rights of the Complainants in the company
till before the disputes arose between the parties. These facts are sufficient to
frame charges against the Accused. The allegations regarding breach of trust
(misappropriation of amounts of the company and investments made by
Complainant during the tenure of directorship of the Complainant's family) and
cheating are different and mutually exclusive and can be sustained
simultaneously in the peculiar facts of the case being different transactions and
acts each giving rise to its own consequences.
49. He lastly submits that the entirety of the arguments of the Accused
cantered around his defences and explanations of his conduct. The same are
wholly irrelevant at the stage of framing of charges. Moreover, the burden to
prove the facts asserted by the Accused in his defence is on the Accused and not
on the prosecution. The court can only be expected to see whether the evidence
on record is sufficient to arouse grave suspicion in against the Accused for
proceeding with the trial. The Accused cannot expect the court to hold a mini
trial while doing a microscopic evaluation of the material on records held in
State of Rajasthan v. Ashok Kumar Kashyap, 2021 SCC OnLine SC 314.
Relying upon the judgment in Tarun Jit Tejpal v. State of Goa, (2020) 17 SCC
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556, it is submitted that the Hon'ble Supreme Court also observed that the
submissions made on the merits of the case should be taken at an appropriate
stage, including the defence of the Accused, as the same is not relevant at the
stage of framing of charge.
50. Heard rival submissions of counsels for the parties raised at bar at
length on all the issues and perused the records and judgments relied upon by
the parties. Ample opportunity was given to the parties who have meticulously
taken the Court through the material adduced in the charge sheets along with the
impugned order.
51. Before adverting to the facts of the case, it is pertinent to deal with
the objection on behalf of the Complainant that Criminal Revision filed on
behalf of the Accused No. 444/2024 is time barred and no application for
condonation of delay has been filed, therefore, it be dismissed as such. The
objection has been opposed from the accused side on the ground that no such
defect was ever raised by the Office that petition is time barred. Even otherwise
during pendency of this petition, objection in this regard was not raised by either
of the parties. It is only during final hearing the objection has been raised which
should be treated as waived and delay if any impliedly condoned.
52. Heard and considered the rival submissions in this regard. It is not
disputed that the objection with regard to petition filed on behalf of the Accused
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being time barred has not been raised by the Office, therefore, no occasion arose
for the Accused to file application for the condonation of delay. It is only during
course of final hearing the objection has been raised. Since the Court has found
that Revision Petition filed on behalf of the Accused along with the other
Petitions filed on behalf of the Complainant and the State of M.P. have merits
and to be admitted for final hearing, therefore, petition on behalf of the Accused
in the interest of justice at this stage cannot be dismissed on the sole ground that
it is time barred. Therefore, the objection raised half way during final hearing is
dismissed and delay if any in filing petition is hereby condoned.
53. The case of prosecution as emerging from the chargesheet is as
follows:
"a. Complainant and his family members owned various parcels
of land admeasuring 1.876 hectares at village Khajrana,
Indore.
b. On 16.04.2008, an MoU was signed between Accused and
Complainant to construct a residential project on the land of
the Complainant and share in the project was determined at
the ratio of 37% (Complainant) and 63% (Accused). The
Accused incorporated a company with his family members in
the name of Pushp Ratna Realty Ltd. On 17.06.2008 with a
paid-up capital of Rs. 5 lakhs that was subsequently changed
to Pushp Ratna Realty Pvt. Ltd. (Company)on 19.01.2009.
c. The title of immovable property of the Complainant was
transferred by registered documents executed between Pushp
Ratna Realty Pvt. Ltd. through director Mr. Ashok Jain and
the respective landowners and the sale deeds were registered
between 31.03.2009 to 27.10.2009, in name of Company
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against the consideration being 46.632% shares (46632) in the
company.
d. On 14.09.2009, tripartite MoU was executed between the
Complainant, Accused and the Company that the entire
construction cost shall be borne by the Complainant and the
Accused shall be entitled to service charge of Rs. 189 per
square feet and upon completion of the project and the share
of Accused would stand transferred in the name of the
Complainant. It was decided that Complainant and Accused
will nominate two directors each on the board of the
company.
e. 50,000 Shares were allotted to Complainant on face value Rs.
10 each with a premium of Rs. 690/- per share, although there
was no networth of the company to justify the premium. Out
of the 50,000 shares, 46632 shares were allotted by the
company to Complainant group in lieu of the land transferred
to the company and 3368 shares were allotted on payment of
Rs. 23,57,600/- at the same rate of Rs. 700 per share. Accused
had illegally recorded an amount of Rs. 3,21,76,080.00 in the
books of the company as sale consideration and caused undue
gain onto himself.
f. The Accused had allotted 67 flat units for a sum of Rs. 10.27
crores and committed completion of construction within 30
months. Neither the construction of the allotted flats is
complete, nor the Complainant has compensated for the same.
Only a sum of Rs. 3.86 crores has been reflected in the books
of company as on 2019-20 and the balance amount of Rs.
6.41 crores is misappropriated by the Accused.
g. On 31.05.2016 the company got sanctioned a loan of Rs. 1.97
crores from Shriram Finance. Immediately thereafter, an
amount of Rs. 1.9 crores was withdrawn/ transferred by the
Accused, and thereby the Accused illegally gained and caused
illegal loss to the company.
h. On 23.11.2020, the Accused had illegally enhanced the
shareholding of Accused group in the company without
waiting for the limitation period of 90 days pursuant to the
order by the Commercial Court and thereby took illegal
procession of the land.
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i. The original Agreement of Cancellation dated 26.09.2011 was
recovered on 29.05.2021 by prosecution under section 27 of
the Indian Evidence Act. The complaint alleged that his
signatures have been forged on the said document dated
26.09.2011 and the said document was never executed. The
original Agreement of Cancellation dated 26.09.2011 was sent
to State Examiner of the Questioned Documents, Government
of Madhya Pradesh, Jehangirabad, Bhopal on 14.06.2021
since the signatures of the Complainant on the Agreement of
Cancellation dated 26.09.2011 were denied by him and
forgery was alleged against the Accused.
j. Originals of agreements entered in the years 2008, 2009, 2011
and 2013 and original minutes of meetings were not supplied
by the Accused, and therefore offence under section 201 IPC
was added in the first chargesheet.
k. State Examiner of Questioned Document, Government of
Madhya Pradesh, Jehangirabad, Bhopal submitted its report
dated 30.07.2021 that forms part of supplementary final
chargesheet. As per the report, the signatures that were denied
by the Complaint have been in fact found to be of the
Complainant. By accepting the forensic report, the State has
preferred to not to array the witnesses on the Agreement of
Cancellation dated 26.09.2011 as Accused and closed the
investigation."
54. The order dated 23.08.2023 discharges the Accused under section
465,467,468,471 of IPC on the strength of forensic report of Government of
Madhya Pradesh. Further the Accused has been discharged of the offence
punishable under section 406 of IPC on the reasoning that 420 and 406 cannot
co-exist and are mutually destructive. In so far as section 420 of IPC is
concerned, the Ld. Trial Court has held that whether the intention of the
Accused were dishonest at the very outset or not, is a subject matter of trial and
there is prima-facie case made out against the Accused for the offence
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punishable under Section 420 of IPC.
55. To appreciate the controversy in right prospective it is apposite to
reproduce provision with regard to discharge as enshrined in S. 227 of CrPC
which runs as under:-
"227. Discharge. If, upon consideration of the record of the case
and the documents submitted therewith, and after hearing the
submissions of the Accused and the prosecution in this behalf, the
Judge considers that there is not sufficient ground for proceeding
against the Accused, he shall discharge the Accused and record his
reasons for so doing."
(emphasis supplied)
56. The crystallized judicial view is that at the stage of framing charge,
the court has to prima facie consider whether there is sufficient ground for
proceeding against the Accused from the record of the case to assess if the facts
emerging there from taken at their face value disclose the existence of all the
ingredients constituting the alleged offence. The words "not sufficient ground
for proceeding against the Accused" appearing in the section postulate
exercise of judicial mind by the Court to the facts of the case in order to
determine whether a case for trial has been made out by the prosecution.
However, in assessing this fact, the Court has power to shift and weigh the
material for the limited purpose of finding out whether or not, a prima facie case
against the Accused has been made out.
57. The legal principles applicable in regard to consideration of a
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discharge application have been summarised and laid down in the oft quoted
judgment of Hon'ble Supreme Court in M.E. Shivalinga Murthy vs Central
Bureau of Investigation (2020) 2 SCC 768, wherein Hon'ble Supreme Court
of India held:
"17. This is an area covered by a large body of case law. We refer
to a recent judgment which has referred to the earlier decisions,
viz., P. Vijayan v. State of Kerala and another and discern the
following principles:
17.1. If two views are possible and one of them gives rise to
suspicion only as distinguished from grave suspicion, the Trial
Judge would be empowered to discharge the Accused.
17.2. The Trial Judge is not a mere Post Office to frame the charge
at the instance of the prosecution.
17.3. The Judge has merely to shift the evidence in order to find out
whether or not there is sufficient ground for proceeding. Evidence
would consist of the statements recorded by the Police or the
documents produced before the Court.
17.4. If the evidence, which the Prosecutor proposes to adduce to
prove the guilt of the Accused, even if fully accepted before it is
challenged in cross-examination or rebutted by the defense
evidence, if any, ―cannot show that the Accused committed offence,
then, there will be no sufficient ground for proceeding with the
trial‖.
17.5. It is open to the Accused to explain away the materials giving
rise to the grave suspicion.
17.6. The court has to consider the broad probabilities, the total
effect of the evidence and the documents produced before the court,
any basic infirmities appearing in the case and so on. This,
however, would not entitle the court to make a roving inquiry into
the pros and cons.
17.7. At the time of framing of the charges, the probative value of
the material on record cannot be gone into, and the material
brought on record by the prosecution, has to be accepted as true.
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17.8. There must exist some materials for entertaining the strong
suspicion which can form the basis for drawing up a charge and
refusing to discharge the Accused."
(emphasis supplied)
58. At this state it would also be apt to quote the Judgment Hridaya
Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168 to demonstrate the
ingredients of the offence of cheating:
"13. Cheating is defined in Section 415 of the Code as:
415. Whoever, by deceiving any person, fraudulently or dishonestly
induces the person so deceived to deliver any property to any
person, or to consent that any person shall retain any property, or
intentionally induces the person so deceived to do or omit to do
anything which he would not do or omit if he were not so deceived,
and which act or omission causes or is likely to cause damage or
harm to that person in body, mind, reputation or property, is said
to ‗cheat'.
Explanation. --A dishonest concealment of facts is a deception
within the meaning of this section.‖
The section requires--
(1) deception of any person;
(2)(a) fraudulently or dishonestly inducing that person
(i) to deliver any property to any person, or
(ii) to consent that any person shall retain any property; or
(b) intentionally inducing that person to do or omit to do
anything which he would not do or omit if he were not so
deceived, and which act or omission causes or is likely to
cause damage or harm to that person in body, mind,
reputation or property.
14. On a reading of the section it is manifest that in the definition
there are set forth two separate classes of acts which the person
deceived may be induced to do. In the first place he may be
induced fraudulently or dishonestly to deliver any property to any
person. The second class of acts set forth in the section is the doing
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or omitting to do anything which the person deceived would not do
or omit to do if he were not so deceived. In the first class of cases
the inducing must be fraudulent or dishonest. In the second class of
acts, the inducing must be intentional but not fraudulent or
dishonest.
15. In determining the question it has to be kept in mind that the
distinction between mere breach of contract and the offence of
cheating is a fine one. It depends upon the intention of the Accused
at the time of inducement which may be judged by his subsequent
conduct but for this subsequent conduct is not the sole test. Mere
breach of contract cannot give rise to criminal prosecution for
cheating unless fraudulent or dishonest intention is shown right at
the beginning of the transaction, that is the time when the offence
is said to have been committed. Therefore it is the intention which
is the gist of the offence. To hold a person guilty of cheating it is
necessary to show that he had fraudulent or dishonest intention at
the time of making the promise. From his mere failure to keep up
promise subsequently such a culpable intention right at the
beginning, that is, when he made the promise cannot be
presumed."
(emphasis supplied)
59. Inability of fulfilling contractual obligation due to reasons beyond
the control without culpable intent is not an offence. It is not dispute that
Accused is into the family run business of real estate development since long
back and has delivered scores of projects of constructed premises. The Accused
is not a 'fly by night' operator.
60. Counsel for the Accused has pointed out from the record of the case
that -
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(i) delay in construction has been caused due to the disputes
amongst the Complainant and Accused,
(ii) Complainant had made incorrect recording of total land area
while obtaining permissions,
(iii) the same had led to cancellation of Town and Country
Planning permission,
(iv) these reasons were beyond the control of the Accused,
(v) the land continues to be in the name of the company, and is
not transferred to the Accused,
(vi) all the sale proceeds or loans were also received by the
company,
(vii) the company is not arraigned an Accused,
(viii) the availing of the loans or the manner thereof is not
disputed. Whereas it is the case of the prosecution at the
instance of the Complainant that the loan amount of Rs. 1.97
Crore received by the company from Shri Ram Finance on
06.06.2016 was illegally siphoned by the Accused into his
and his family members account without there being any
minutes or consent from the Complainant, However, it is not
disputed that Accused and his family members had already
advanced loans of about Rs. 6.45 Crores from FY 2012-
2013 to FY 2016-2017 into the company through banking
channels,
(ix) It is further pointed out by the counsel for the Accused from
the record of the case that from 10.06.2016 to 31.12.2016,
i.e. immediately after the loan from Shriram Finance was
obtained, the Accused family has invested a further sum of
Rs.1.90 Crores into the company,
(x) It is also a matter of record that the cash infusion by
Accused family into the project is about Rs. 10.03 Crores as
against by complaint family of Rs. 2.18 Crores which is
evident from the last balance sheet filed with the RoC,
(xi) Thus, the case of the Complainant that immediately after
disbursement of loan from Shriram Finance except the sum
of Rs. 19,000 lying in the bank, rest of the money was
siphoned off by the Accused, is contrary to the record of the
case.
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(xii) It is further the case of Prosecution that the Accused had
sold 67 units to various flat purchasers for a sum of Rs.
10.27 crores, and only a sum of Rs. 3.68 crore was deposited
in the books of the company, and the balance amount has
been misappropriated by the Accused. The statements of
some of the allottees recorded and relied upon by the
prosecution reveals that the entire sum of allottees was paid
through banking channel into the accounts of the company.
There is no material or not even slightest indication in the
chargesheet to even remotely suggest that either cash or
payments in non-company accounts have been made. From
the perusal of record, no case of wrongful gain to the
Accused and corresponding wrongful loss either to the
Complainant or the company is made out.
(xiii) In order to make out an offence of cheating, the Accused
must have an intention to cheat at very outset, while
inducing the victim to part with the property. Such an
intention needs to be examined and assessed from the
attendant circumstances and material which in this case,
speaks for itself in the favour of the Accused. It is pertinent
to mention here that in the instant case, it is evident from the
Agreements relied upon by the parties that it is the
Complainant who approached the Accused for getting
executed Project of Township Building on his lands. It is not
a case where the Accused approached the Complainant and
induced him to part with his lands as stated in the FIR. In
view of, the infusion of cash of around Rs. 10 crores by the
Accused family as against the infusion of around Rs. 2
crores by the Complainant in the company, and delay in
construction for the reasons beyond the control of the
Accused, no mens rea is forthcoming qua the Accused to
attract offence of section 420 from the record of the case to
justify, subjecting the Accused to face trial for the offence
punishable under Section 420 of IPC.
(xiv) It is also well settled that Section 420 and Section 406
cannot be invoked for same transaction. Hon'ble Supreme
Court of India in the case of Lalit Chaturvedi & Ors. Vs
State of UP - No. 13485 of 2023) has recorded as under:
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―There are decisions which hold that the same act or transaction
cannot result in an offence of cheating and criminal breach of
trust simultaneously. (Wolfgang Reim and Others v. State and
Another, 2012 SCC OnLine Del 3341; Mahindra and Mahindra
Financial Services Ltd. and Another v. Delta Classic (P.) Ltd.,
(2011) 6 Gauhati Law Reports 604; Mukesh Sharma v. State of
Himachal Pradesh, 2024:HHC:35.) For the offence of cheating,
dishonest intention must exist at the inception of the transaction,
whereas, in case of criminal breach of trust there must exist a
relationship between the parties whereby one party entrusts
another with the property as per law, albeit dishonest intention
comes later."
(emphasis supplied)
(xv) In the wake of presence of overwhelming material in favour
of Accused, and allegation of forgery also being found to be
false, the issue of determination of 'intention to cheat' cannot
be a ground sufficient to subject the Accused to trial in
peculiar facts of this case and the Accused deserved to be
discharged from the allegation of Section 420 of IPC.
(xvi) No cogent material could be pointed out by the State or the
Complainant from the records to point out commission of any
offence with requisite mens rea. It would be gross miscarriage
of justice to subject an Accused to trial for any offence of
cheating specially in facts of this case where the allegations of
the Complainant are found to be false and motivated. The
objections raised on behalf of the Complainant with the aid of
various case laws relied upon as mentioned hereinabove do
not come to the rescue of the Complainant as the FIR which
has set law in motion is a bundle of misstatements with regard
to the share of the Complainant in constructed area of the
Project, amount infused and taken away by the Complainant
and other material facts.
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61. Reliance has been placed on exculpatory statement of Accused
under section 27 of the Indian evidence act, in support of the case of the
prosecution about forgery of MoU dated 26.09.2011.
62. It is case of prosecution that the Accused had forged signatures of
the Complainant on agreement for cancellation dated 26.09.2011 thereby
cancelling MoU dated 14.09.2009. FIR had been registered by the Police
placing reliance on the Handwriting expert reports of 2 private examiners
obtained by the Complainant on Photocopy of the alleged forged cancellation of
MoU document. Record of the case reveals that prosecution had forwarded the
original MoU dated 26.09.2011 to State Department of Questioned Document,
Jehangirabad, Bhopal. The forensic finding reveals that the signatures on the
agreement for cancellation dated 26.09.2011 were of the Complainant. It is
matter of record that the application of Complainant for repeat forensic
examination moved by the Complainant was rejected by the Ld. Trial Court vide
order dated 17.07.2023, has not been challenged and that has attained finality.
The report dated 31.07.2021 by the State Department of Questioned Document,
Jehangirabad, Bhopal records in its findings as:
"III. the person who wrote the red enclosed, standard writing, and
signatures, stamped and marked B-1 to B-12 & B-13 to B-24 (said
to be written by Rajiv Agnihotri) also wrote the read enclosed,
questioned signatures, similarly, stamped and marked Q-5, Q-6 &
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the signature, stamped and marked Q-9 exists below the/is used to
obliterate it.‖
IV. the person who wrote the red enclosed, standard writing,
stamped and marked A-7 to A-14 (said to be written by Ashok Jain)
did not write the red enclosed questioned writing stamoed and
marked Q-7 and Q-8, as the standard writing stamped ad marked
A-7 to A-14 consist of very poor writing skill with respect to
question, writing stamped and marked Q-7 and Q-8 respectively,
and as per fundamental rule ―no one can write in higher skill than
he possess‖ clearly establishes the above fact."
63. The Complainant has relied upon the judgements in the case of
Manorama Naik vs. State of Orissa (SC Criminal Appeal No. 423 of 2023),
Ramprasad Jatav vs. State of MP (CRR 600/2022), Vijay Kant Shrivastava vs.
Stat of MP (MCRC 40620/2023), Swami Brijesh Ballabhacharya vs. State of
M.P. (MCRC 35177/2022) to assert that forensic report and its author need to be
examined during trial. Such an interpretation of law would render the provision
of discharge as a dead letter. The Complainant on one side relies upon the two
private handwriting expert's opinion in his favour, but assails the opinion given
by handwriting expert of questioned documents from PHQ, Bhopal. He cannot
blow hot and cold in the same breathe. It is true that handwriting expert's
opinion needs to be tested at the time of his examination before the Court, but
when question about ascertaining prima facie case and grave suspicion at the
stage of discharge pops up, it can be looked into along with other material and
attending circumstances appearing in the prosecution case. The guidelines
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concerning the factors of discharge are captured in the judgement of M.E.
Sivalangam Murthy (supra). Moreover, the witness to the alleged forged
documents (son and nephew of the Accused) are arrayed as prosecution witness
and the same not disputed either by state or the Complainant. Therefore, the
parallel drawn by the prosecution between forensic report in this case and
postmortem reports in judgments relied upon by the Complainant that are in
backdrop of allegation of 302 IPC (where statement and corroboration by
eyewitness is crucial), does not aide the case of the Complainant or the state.
Judgments are not like statutes, and application thereof would depend on
peculiar facts of each case. The judgments relied upon by the Complainant and
the prosecution have no applicability in the peculiar facts of the instant case.
64. Undisputedly, as per the records of the case, the value of the Equity
Shares with Premium issued to the Complainant faction against the sale of land
to the Company in 2009 were periodically also reflected in the corresponding
audited balance sheets of the respective years since then. Balance Sheet in the
past was signed and filed with the statutory authorities by the father of the
Complainant as well and relevant norms were also adhered to. Raising dispute
on shareholding/ valuation belatedly and despite such admissions in the past by
the Complainant faction, is now nothing but an arm-twisting method to allege
wrongdoings by the Accused for creating undue pressure.
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65. It is submitted by the Accused that due to scarcity of funds to
complete the project, a Rights Issue was floated to raise a sum of Rs. 10 Crores
against equity in the year 2019. Until then the Complainant as well as the
Accused were holding 50% shares each in the company, and both could exercise
this offer by investing Rs. 5 crores each. It is submitted that such proposal of
equal subscription was floated before the Board of Directors, including the
Complainant group which is also recorded in the Board Meeting dated
23.10.2019, whereupon the Complainant group despite being aware of the need
of funds in the Company did not participate in the Rights Issue wherein only the
Accused subscribed to the proportioned issue of Rs. 5 crores to it, hence it is the
Complainant who is responsible himself for the change in shareholding due to
increased number of shares of the Accused upon infusing the funds to the tune
of Rs. 5 crores. The said issue had been dealt by the Ld. Commercial Court on
the application of the Complainant bearing MJC AC 335/2019, wherein the
Complainant assailed the Right Issue executed, whereby the application was
ultimately dismissed vide final order dated 23.11.2020 finding no merit in the
submission of the Complainant. However, it is submitted by the parties that an
appeal to the said order of Commercial Court was preferred by the Complainant
in case bearing AA No. 54 of 2020 before this Court wherein it was mutually
decided between the Accused and Complainant herein upon consenting to the
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formation of the Arbitral Tribunal, that the order of the Commercial Court shall
not be used against the Complainant in any other proceeding. Be that as it may,
from the perusal of records of the chargesheet it is evident even otherwise that
the Complainant group had due and prior information of the said Right Issue,
and it is not as if the Accused has reduced the shares of the Complainant in
order to grab the land/ control in the company. The grievance if any with regard
to the affairs of the Company or mismanagement therein including raising of
value of share from Rs.10/- to Rs.700/- without any premium and grievance
with regard to not giving prior notices for the Board meetings can also be dealt
with by the NCLT and other appropriate forums constituted there for but it
cannot be based for prosecution of alleged forgery or playing fraud by the
Accused. The Complainant has intermingled the issues related to the Company
affairs in this case giving a colour of criminality to the case of pure civil nature.
Similarly, sale deeds with regard to the lands of the Complainant have been
executed in favour of the company 30/03/2009 and registered in between
26/09/2009 to 15/04/2010. The issue with regard to non-payment of
consideration have also been raised belatedly in the instant case to give
weightage to the allegations against the Accused whereas no complaint has been
lodged prior to the present FIR with regard to the fact of non payment of
consideration and that the Accused has with ulterior motive inserted the word
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'shares' in place of cash which also falsifies the grievances raised in this regard
on behalf of the Complainant.
66. It has been alleged by the Complainant that certain funds had been
paid by the companies/ entities of the Complainant to the family members of the
Accused which have not been returned by them with mal intention. Per contra,
the Accused has submitted that the same had been received in personal stand-
alone capacity and have no bearing with the company or the project. It is a
matter of record and the same cannot be disputed that the said funds had been
tendered to the family members of the Accused in their personal capacity and
the same cannot be made a part of the instant lis.
67. The assertion of the State as well as the Complainant that the
Accused has usurped the land or benefits arising there from is also not true as
the land still belongs to the company. The issue of shareholding is pending
before the jurisdictional forums in multiple proceedings under Company law
and Commercial law and the same cannot be assessed in criminal proceedings.
A report from independent State agency can not be brushed aside on bald and
vague allegations. In view of the fact that the signatures on the agreement for
cancellation dated 26.09.2011 have been found to be of the Complainant, and
the Accused has not been found to be maker of the hand written note rather
signatures under hand note though crossed with various straight lines and
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disputed by the Complainant, has been opined to be of the Complainant by the
handwriting expert of questioned documents, in such circumstances the
allegations against the Accused under section 465, 467, 468 and 471 do not
survive and mere on surmises that agreement for cancellation dated 26.09.2011
is beneficial only for the Accused, therefore, it be treated that he has forged the
documents goes against the settled principles of criminal jurisprudence.
68. The allegations of illegal enhancement of shareholding by the
Accused with an intention to have an illegal possession over the subject
property pertains to the compliance of the provisions of Companies Act, 2013,
Companies Act 1956 Law and the same falls within the jurisdiction of civil
court. Hon'ble Apex Court has time and again deprecated the practice of abuse
of police machinery for resolution of commercial disputes.
69. It is alleged by the Complainant that the directors from his family
were removed illegally by the Accused group from the Company. From the
perusal of the record, it is evident that the directors from the Complainant group
being the Son and Mother of the Complainant, who were earlier directors in the
Company, were disqualified under section 167(1)(b) and 164(2) of the
Companies Act, 2013 respectively, for which the Form DIR -12 have also been
filed on the appropriate portal, hence the same cannot be alleged to have been
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done with any malice or ulterior motive and no role has been played by the
Accused for removing them from the company.
70. The allegation viz the offence under section 201 of IPC is
essentially based on non-cooperation by the Accused pursuant to his arrest.
Investigation is complete and non-confession by an Accused cannot amount to
non-cooperation. There is no material/ witness to evidence destruction of
material. The material available with the Accused has been provided to the
State.
71. Findings of forensic report, findings in order dated 02.05.2025 in
WA No. 1289 of 2025 issuing a show cause to Complainant for contempt for
allegedly playing fraud upon court by procuring order of further investigation
by mala-fidely suppressing relevant facts in arguments both by the Complainant
and the state and a history of civil dispute across multiple civil and commercial
forums demonstrates mala-fide in initiation of the case and the manner in which
the case is attended to by the Complainant and the state.
72. The Complainant placed on record a copy of ―receipt of filing the
SLP‖ registered as Diary No. 27122/2025 against an interim order dated
02.05.2025 passed by a Division Bench in WA 1289/2025. It was also brought
to knowledge by the Accused that the Complainant had sought further
investigation in the case by filing applications under section 173(8) CrPC;
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which came to be rejected by an order dated 17.07.2023 passed by Ld. Trial
Court. That has not been challenged by the Complainant or the State. However,
the Complainant in his Writ Petition No. 5801 of 2025, by resorting to
deliberate mis-statement and suppression of the (1) order dated 17.07.2023
rejecting the request of the Complainant to seek further investigation, (2) filing
of the first and final chargesheet, (3) forensic report dated 31.07.2021, (4) order
of discharge, obtained an ex-parte order dated 03.03.2025, construed as
direction of further investigation, wherein it was recorded that:
"2. Learned Counsel for the Petitioner submits that though FIR
has been registered, but no further steps have been taken in the
matter. The respondent are sitting tight over the matter despite the
representation having been made by the Petitioner. A prayer has
been made for a direction to the concerned authority to duly
consider the representation of the petitioner.
3. Learned counsel for the respondent/State has submitted that the
representations of the petitioner shall be considered in accordance
with law."
(emphasis supplied)
73. After the aforesaid order, during trial, summons was served by
police upon several family members of the Accused including the female
members. The conduct of the Complainant and investigating officer do not
inspire confidence. The Accused filed WA No. 1289 of 2025 assailing the order
dated 03.03.2025 fraudulently obtained by suppression and deliberate mis-
statement in light of the judgment of the Hon'ble Supreme Court of India in the
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case of A V Papayya Sastry Versus Government of AP - (2007) 4 SCC 221,
Rekha Sharad Ushir Versus Saptashrungi Mahila Nagari SahkariPatsansta
2025SCCOnline SC 641. The Division Bench vide the said Order dated
02.05.2025 in WA No 1289 of 2025 had stayed the operation of ex parte order
dated 03.03.2025 obtained by the Complainant and recorded thus:
"Respondent no 2 is also directed to reply as to why the contempt
proceedings be not initiated against him for obtaining the
favourable order by supressing the order dated 17.07.2023."
(emphasis supplied)
74. Complainant had informed the Court that it has filed SLP against
order dated 02.05.2025 passed in WA No 1289 of 2025 before the Hon'ble
Supreme Court of India, and attempted to seek postponement of the instant
proceedings beyond the conclusion of the aforesaid SLP. Thus, conduct of the
Complainant himself is not above board.
75. Upon careful consideration of the record of the case, relied upon
documents, written and oral submissions on behalf of the Accused, Complainant
and the State at length, for the reasons recorded hereinabove, I am of considered
view that material available on record do not raise grave suspicion against the
Accused which is required for framing charges against him for the offences of
which he has been discharged and also for the offence under section 420 of IPC.
There are no sufficient grounds for proceeding against the Accused by
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subjecting him to trial for any of the alleged offences punishable under Section
201, 420, 406, 465, 467, 468, 471 of IPC. There is no palpable and manifest
error in impugned order discharging the Accused from the offences alleged
under sections 201, 406, 465, 467, 468, 471 of IPC. Trial Court failed in
appreciating the material collected in instant case that no charge for offence
even under s.420IPC is made out.
76. Resultantly, Cr.R.No.444 of 2024 filed by the Accused is allowed.
Impugned order of trial court dated 23/08/2023 is hereby affirmed to the extent
it discharges the Accused of the offences under Ss. 201, 406, 465, 467, 468, 471
of IPC but that part of order whereby framing of charge u/s. 420 IPC against
him has been directed is hereby set aside and the Accused is also discharged
from the offence u/s. 420 IPC and Cr.R.No.5422 of 2023 filed by the
Complainant and Cr.R.No.925 of 2024 filed by the State fails as sans merits and
are hereby dismissed. No order as to costs.
Certified copies as per rules.
(BINOD KUMAR DWIVEDI)
JUDGE
Soumya
