Sri Ramesh Kumar M vs The State Of Telangana And Another
2021 Latest Caselaw 1994 Tel

             HON'BLE SRI JUSTICE K. LAKSHMAN

             CRIMINAL PETITION No.722 OF 2021
ORDER:

This Criminal Petition is filed under Section 482 of the

Code of Criminal Procedure, 1973 (for short 'Cr.P.C.') to quash

the proceedings in C.C.No.8140 of 2020 pending on the file of

XII Additional Chief Metropolitan Magistrate at Nampally,

Hyderabad. The petitioner herein is Accused No.11 in the said

case. The offences alleged against the petitioner herein are

under Sections 409, 420, 464, 465, 466, 468 and 471 read with

120-B of IPC.

2. Heard Sri A.Ramesh, learned senior counsel,

representing M/s. Pillix Law Firm, for the petitioner, learned

Assistant Public Prosecutor and Sri B.Narasimha Sharma,

learned counsel for 2nd respondent and perused the record.

3. As per the charge sheet, the allegations against the

petitioner are as follows:-

i) 2nd respondent is an entity registered with Income Tax

Department under Section 80(G) and Section 12AA of the

Income Tax Act, 1961 (for short, 'the Act'). Donations made to

this firm will be entitled to 50% tax exemption. The petitioner

herein/A.11, who has donated an amount of Rs.50,00,000/-

during the financial year 2015-16, claimed tax exemptions

through Income Tax Returns (ITRs) of Rs.87,50,000/-by

submitting fake certificates under Section 35(i)(ii) of the Act, for

the assessment year 2016-17. The modus operandi adopted by

the petitioner herein is also specifically mentioned in the charge

sheet. Therefore, the petitioner herein has committed the above

said offences.

4. Sri A.Ramesh, learned Senior counsel would submit

that the petitioner herein is having high profile and he is

philanthropist. He is Managing Director of 'Mohan Mutha

Exports Private Limited', which is a global business

conglomerate with interest in various business segments

including infrastructure projects, water energy, shipping and

manufacturing. The Government of India has recognized this

Company as 'Two Star Export house'. The petitioner herein is

part of the present working Committee of FICCI, former Regional

Chairman of EEPC India, former Vice President of SAARC

Chamber of Commerce and Industry, Former President of

Southern India Chamber of Commerce and Industry. The

petitioner has held many business delegations sponsored by

Ministry of commerce and Ministry of External Affairs. Thus the

petitioner is having his own reputation in the society. Therefore,

he has not committed any offences as alleged by the 2nd

respondent. He has believed A.2 and made donations. There is

no mens rea in giving donations to A.2 and the petitioner never

claimed any exemption illegally on the said donations. He would

further submit that the 2nd respondent has not made the said

company i.e. Mohan Mutha Exports Private Limited, to which

the petitioner herein is the Managing Director as accused.

According to the 2nd respondent, donations were made by the

said company and not by the petitioner herein in his individual

capacity. Therefore, in the absence of any specific allegation

against the petitioner herein, he is not vicariously liable for any

offence.

5. Learned Magistrate has mechanically took cognizance of

the offences against the petitioner herein by putting rubber

stamp. The role played by the petitioner herein is also not

explained in the charge sheet by the Investigating Officer. He

has placed reliance on the principle laid down by the then High

Court of Andhra Pradesh, reported in TGL Groundnut

Corporation Vs. The Agricultural Market Committee1.

Learned Senior counsel would further submit that the petitioner

herein has withdrawn the said donations and submitted his

revised returns. He has also paid tax. Learned senior counsel for

the petitioner, referring to the contents of the charge sheet

would submit that the said allegations lacks ingredients of the

offences against the petitioner herein. With the said

submissions, the learned counsel for the petitioner sought to

quash proceedings in C.C.No.8140 of 2020.

6. On the other hand, Sri B.Narasimha Sharma, learned

standing counsel appearing for the 2nd respondent would submit

that the petitioner herein donated said amount of

Rs.50,00,000/- and claimed an amount of Rs.87,50,000/- as

exemption. Modus operandi in claiming bogus claim to get

benefit by the petitioner herein is also specifically mentioned in

1985 (1) APLJ (HC) 368

the charge sheet. The petitioner herein has addressed a letter

dated 18.11.2019 to the 2nd respondent informing that he is

withdrawing the said donations and submitting fresh returns.

The said facts would reveal that the petitioner herein has

admitted his guilt and also commission of offence and therefore

he has submitted fresh returns. There are several triable issues

and the petitioner herein has to face trial and prove his

innocence. There are specific allegations against the petitioner

herein. Therefore, the said defence of vicarious liability has to be

taken by the petitioner herein during the course of trial in the

said Calendar Case. Instead of doing so, he has filed the present

Criminal Petition to quash the proceedings in C.C.No.8410 of

2020. With the said submissions, he sought to dismiss the

present petition.

7. In view of the above stated rival submission, it is not in

dispute that the petitioner herein has donated an amount of

Rs.50,00,000/- on 24.03.2016 i.e. during the financial year

2015-16 and claimed tax exemption through ITRs for

Rs.87,50,000/- by submitting certificate under Section 35(i)(ii) of

IT Act for the assessment years 2016-17. According to the 2nd

respondent, it is a fake certificate. According to the petitioner, it

is a genuine certificate. Therefore, it is a triable issue.

8. The petitioner herein has filed returns on 30.11.2016.

He has claimed exemption of Rs.87,50,000/- and according to

the 2nd respondent, the petitioner has submitted a fabricated

certificate. In the charge sheet and also in the counter, there is

specific allegation that the petitioner is a part of a large rocket

involving bogus claim of deduction under Section 35(1)(ii) of the

I.T. Act, 1961. He was a beneficiary during the assessment year

2016-17. Only after the action of the department which revealed

the fraudulent activity, the petitioner came forward to forego the

claimed bogus deduction. The action of the petitioner is an

afterthought to absolve himself from prosecution as a partner in

larger criminal conspiracy to evade taxes due to the

Government.

9. There is also specific allegation that the petitioner is a

part of syndicate which has hatched criminal conspiracy to

evade taxes. In the present case, the tax advantage derived is

around Rs.22.43 Crores. The Government is deprived of to the

said extent. The petitioner herein has claimed said exemption by

producing false certificate. The petitioner herein has not

voluntarily withdrawn bogus claim of deduction under Section

35(i)(ii) of the I.T.Act,1961. It was only during assessment

proceedings when the petitioner was asked to prove genuineness

of the donation to A.2-the RDS, he came forward to withdraw of

bogus claim with deduction. The same was after departmental

action of the beneficiaries and principal conspirator including

the petitioner herein. There is a specific allegation that the

action of the petitioner is well planned afterthought rather than

bona fide mistake which is being claimed by the petitioner

herein. Thus, the petitioner herein claimed advantage of

Rs.87,50,000/- in his original returns under Section 35(i)(ii) of

the I.T.Act.

10. Thus, the above said discussion would reveal that,

prima facie, there are serious allegations against the petitioner

herein. There are several triable issues. The total tax advantage

derived was around Rs.22.43 Crores which would have accrued

to the Government. Thus, Government is deprived to the said

extent. It is loss to public exchequer. The petitioner has not

voluntarily forgone the claim of exemption claimed on the basis

of false donation certificate received by him and when he was

asked to prove the genuineness of the said certificate during the

assessment procedure, then only the petitioner agreed to forgo

such exemption. Thus, the petitioner has to prove his innocence

by facing trial. The contention of the petitioner that there is no

mens rea is also triable issue in view of the facts stated supra.

11. In this regard, it is apt to refer to the decision rendered

by the Hon'ble Supreme Court in Kamal Shivaji Pokarnekar v.

The State of Maharashtra2, wherein the Apex Court has

categorically held that quashing criminal proceedings was called

for only in a case where complaint did not disclose any offence,

or was frivolous, vexatious, or oppressive. If allegations set out

in complaint did not constitute offence of which cognizance had

been taken by Magistrate, it was open to High Court to quash

same. It was not necessary that, a meticulous analysis of case

. AIR 2019 SC 847

should be done before trial to find out whether case would end

in conviction or acquittal. If it appeared on a reading of

complaint and consideration of allegations therein, in light of the

statement made on oath that the ingredients of the offence are

disclosed, there would be no justification for High Court to

interfere. The defences that might be available, or facts/aspects

which when established during trial, might lead to acquittal,

were not grounds for quashing complaint at threshold. At that

stage, only question relevant was whether averments in

complaint spell out ingredients of a criminal offence or not. The

Court has to consider whether complaint discloses that prima

facie, offences that were alleged against Respondents.

Correctness or otherwise of said allegations had to be decided

only in trial. At initial stage of issuance of process, it was not

open to Courts to stifle proceedings by entering into merits of

the contentions made on behalf of Accused. Criminal

complaints could not be quashed only on ground that,

allegations made therein appear to be of a civil nature. If

ingredients of offence alleged against Accused were prima facie

made out in complaint, criminal proceeding shall not be

interdicted.

12. In Skoda Auto Volkswagen India Private Limited Vs.

The State of Uttar Pradesh and Ors3, the Hon'ble Apex Court

referring to the various judgments rendered by it categorically

held that the High Courts in exercise of its inherent powers

AIR 2021 SC 931,

under Section 482 of Cr.P.C has to quash the proceedings in

criminal cases in rarest of rare cases with extreme caution.

13. In view of law laid down by the Hon'ble Apex Court and

in view of the above said discussion, as there are serious

allegations against the petitioner herein and there are several

triable issues, this Court is not inclined to quash the

proceedings in C.C.No.8410 of 2020 and the petitioner failed to

make out any case to quash the said proceedings. Therefore,

this Criminal Petition is liable to be dismissed.

14. In the result, the Criminal Petition is accordingly

dismissed.

As a sequel, miscellaneous petitions, if any, pending in the

Criminal Petition shall stand closed.

____________________ K. LAKSHMAN, J Date:05 .07.2021.

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