Dillip Prasad Shaw & Another vs State Of Orissa And Another
2023 Latest Caselaw 2474 Ori

        IN THE HIGH COURT OF ORISSA AT CUTTACK

                     CRLMC No.1237 of 2016

  Dillip Prasad Shaw & Another        ....             Petitioners
                           Mr. Subir Palit, Senior Advocate and
                               Mr.Abhishek Srivastav, Advocate


                               -Versus-


  State of Orissa and Another           ....      Opposite Parties
                       Mr. A.K. Pani, Standing Counsel Vigilance
            CORAM:
            JUSTICE R.K. PATTANAIK

              DATE OF JUDGMENT:28.03.2023

1.

Instant petition under Section 482 Cr.P.C. is filed by the petitioners assailing the order of cognizance under Annexure-9 passed in T.R. No.36 of 2014 and the entire proceeding in Vigilance G.R. Case No.74 of 2010 pending in the file of learned Special Judge, Vigilance, Bhubaneswar on the grounds inter alia that the same is bad in law and hence, therefore, liable to be quashed in exercise of the Court's inherent jurisdiction.

2. In fact, the company, namely, M/s. Aryan Infrastructure is engaged in construction of apartments, wherein, petitioner No.1 is the Managing Director and petitioner No.2 as its Director, who have challenged the Vigilance proceeding initiated against them later to the lodging of the FIR and registration of Bhubaneswar Vigilance P.S. Case No.74 dated 6th December, 2010 and the consequential order of cognizance under Annexure-9.

3. Heard Mr. Palit, learned Senior Advocate appearing for the petitioners and Mr. Pani, learned counsel for the Vigilance Department.

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

4. Mr. Palit, learned Senior Advocate submits that the allegation in the FIR under Annexure-8 is to effect that the petitioners purchased lands at lower cost than the prevailing market price and in that respect, for undervaluation, additional duty and registration charges have duly been paid as per the procedure under Section 47A of the Indian Stamp Act read with Chapter-V of the Orissa Stamp Rules and hence, the continuation of the Vigilance proceeding should not be allowed and that too when, the DSR has already been exonerated of the levelled charges by a judgment of this Court dated 19th April, 2018 in CRLMC No.5165 of 2015, whereby, the order of cognizance dated 5th September, 2014 in T.R. Case No.36 of 2014 as against him was quashed.

5. On the contrary, Mr. Pani, learned counsel for the Vigilance Department submits that the prosecution vis-a-vis the petitioners should not be quashed on the ground that the DSR was exonerated and that apart, they are liable for an offence under Section 423 IPC for being party to the alleged transaction and for having provided false information in order to avoid payment of stamp duty and registration which is recoverable from them under law and therefore, notwithstanding the deficit duty and registration charges paid and deposited, the criminal proceeding should be allowed to continue.

6. Gone through the contents of the FIR as at Annexure-8. As per the said report, the Vigilance Department received reliable information regarding purchase of lands at a lower price from the prevailing market price by the company of the petitioners and in that connection, an enquiry was held and it was found that as per the market price, the stamp duty and registration fee stood at Rs.13,50,300/- and Rs.1,98,000/- against which Rs.2,37,440/- and Rs.33,314/- respectively have been collected in respect of the transactions and therefore, the petitioners and the DSR, who

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

abused his official position and showed undue favour to the former are liable for mischief being party to the criminal conspiracy. After the investigation was completed, the chargesheet was filed against all the three but as claimed, the DSR was discharged by judgment in CRLMC No.5165 of 2015.

7. The question is, whether, the petitioners can be criminally prosecuted for the alleged offences under Sections 13(2) read with Section 13(1)(d) of Prevention of Corruption Act and Sections420 and 120-B IPC? The DSR against whom the FIR was lodged was exonerated of the charges due to want of any material showing his indulgence and criminal intent as revealed from a copy of the judgment dated 19th April, 2018 in CRLMC No.5165 of 2015. Admittedly, the company purchased the lands in the year 2005. It is not in dispute that the valuation was assessed in a proceeding under Section 47-A of the Indian Stamp Act and the differential stamp duty and registration fee was deposited by the petitioners.

8. Mr. Palit, learned Senior Advocate for the petitioners submits that since a proceeding under the Indian Stamp Act was initiated and the deficit duty and registration fee was deposited, the Vigilance proceeding against the petitioners pending before the learned Special court should be quashed as its further continuation in T.R. No.36 of 2014 would be an abuse of process of law and cause undue harassment to them. Mr. Pani, learned counsel for the Vigilance Department, however, submits that notwithstanding discharge of the DSR, the petitioners are liable for prosecution since they deliberately lowered the price and avoided to pay the revenue.

9. The fact of impounding and due assessment of valuation is not disputed. It is stated that the Stamp Collector-cum-ADM and DR, Khurda issued notice to the petitioners to show cause as to why

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

the deficit stamp duty and registration fee not to be realized from them in respect of the sale deed dated 2nd March, 2005 in UV Misc. Case No.716 of 2005 in terms of Section 47-A of the Indian Stamp Act read with Rule-24 of the Orissa Stamp Rules. According to Mr. Palit, the petitioners appeared and submitted the reply stating that the market value of the property which is the subject of the alleged sale deed has been rightly set forth because of the fact that the property to be a land locked and did not have access or pathway to the public road and for the fact that the available pathway was encroached. It is further stated that the petitioners were served with notice in Certificate Case No.12 of 2009 for payment of deficit stamp duty and registration fee for an amount of Rs.7,87,800/- and therein they claimed for one time settlement and also deposited 60% of the deficit duty and registration fee on 13th April, 2013 and finally the rest of the duty was deposited on 6th October, 2015. Against the aforesaid backdrop, the petitioners have claimed for discharge as no useful purpose would be served to prosecute them criminally when the deficit duty and fee was deposited and all the more when the DSR was exonerated.

10. The DSR was discharged as there was absence of mens rea and that apart FIR was lodged almost after 5 years and also due to lack of evidence to show and satisfy as to the manner in which he derived any benefit out of the transaction or in any manner party to the conspiracy with the petitioners besides the fact that he had booked the transaction as undervalued but with some amount of delay while placing the matter before the Stamp Collector for which no assumption of being guilty or liable for misconduct could be derived.

11. So far as the petitioners are concerned, they said to have connived with the DSR and undervalued the alleged transaction. But, in due course, action under Section 47-A of the Indian Stamp

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

Act was initiated by the DSR and finally on realization of the deficit stamp duty and registration fee, the certificate proceeding was dropped. Had there been any tacit understanding between the petitioners and the DSR, the latter would not have referred to the matter to the Collector for determination of the market value of the property in terms of Section 47-A of the Stamp Act as it was required under law by then which was also the conclusion reached at by this Court while disposing of CRLMC No.5165 of 2015.

12. In the instant case, there is no denial to the fact that the Stamp Collector while considering the matter referred to him under Section 47-A of the Stamp Act issued notice to the petitioners to explain as to why the sale deed was undervalued. The GPA holder was also noticed in the said proceeding and finally notice dated 22nd November, 2012 was received by the petitioners from the Sub-Collector, Bhubaneswar under Section 6 of the Orissa Public Demand Recovery Act, 1962 for payment of deficit stamp duty and registration fee and therein OTS was prayed for and allowing them to deposit the duty at 40% remission as per the notification dated 27th November, 2012 of the Revenue and Disaster Management Department Govt. of Odisha and according to Mr. Palit, learned Senior Advocate, 60% of the deficit stamp was paid on 13th April, 2013 by a treasure challan (Annexure-3) and finally on intimation, they deposited the up-to-date interest on 6th October, 2015 vide Annexure-7 and it was informed to the Stamp Collector on 6th February, 2016. From the above, as it appears, the petitioners deposited the stamp duty and registration fee realized in terms of Section 47-A of the Indian Stamp Act and thereafter, the FIR was lodged by the Vigilance Department which was in 2010 as against the fact that the proceeding before the Stamp Collector was initiated in 2005. It is made to understand

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

that the petitioners explained the reason behind the valuation of the property and why it was undervalued below the market price but the same was not accepted which ultimately led them to deposit the stamp duty and registration charges through Annexures-3 and 7. No doubt, in view of Section 43 of the Stamp Act, a prosecution can be initiated for offences against stamp law provided it appears to the Collector that the offence was committed with an intention of evading payment of the proper duty. In the case at hand, it does not appear to be that the prosecution was launched on the recommendation of the Stamp Collector. In any way, the Vigilance action could still be initiated provided a pattern in series of transactions of undervaluation is detected or exposed. The petitioners seems to have offered an explanation and not only that when the sale deeds were tendered for registration, the DSR referred it to the Collector as per Section 47-A of the Indian Stamp Act. Considering the totality of the facts, it does not appear to be a case of evading payment of duty with the requisite mens rea in conspiracy with the DSR who simply failed to report the undervaluation with an endorsement as per the check list and was exonerated, especially when, the such undervaluation was referred to the Authority for determination of its market value in order to realize the deficit duty and registration fee.

13. A criminal prosecution may lie besides a civil action provided the required guilty intent to commit an offence is prima facie established. In the present case, the petitioners paid the deficit duty and registration fee in a proceeding under Section 47-A of the Indian Stamp Act after the case was referred to the Collector and when the DSR was exonerated, to attribute malafide or any bad intent on the part of the petitioners, in the considered view of the Court, would not be justified. It does not appear to be case

Dillip Prasad Shaw & Another Vrs. State of Orissa and Another

where the petitioners apparently connived with the registering authority in order to get through undervaluation to avoid paying admissible duty nor is it a case where the petitioners shown to be responsible for undervaluation in series of transactions for which the Vigilance action was initiated. Therefore, the conclusion is that in absence of any criminal intent not prima facie proved, the prosecution against the petitioners would not be justified especially when the DSR was discharged which weakened the prosecution case and to a considerable extent demolished the theory of conspiracy.

14. Accordingly, it is ordered.

15. In the result, the CRLMC stands allowed, As a necessary corollary, the order of cognizance under Annexure-9 passed in T.R. No.36 of 2014 and the entire proceeding in Vigilance G.R. Case No.74 of 2010 pending in the file of learned Special Judge, Vigilance, Bhubaneswar vis-à-vis the petitioners are hereby quashed for the reasons discussed herein above.

(R.K. Pattanaik) Judge UKSahoo