Telangana High Court
G.V.Praveen Kumar vs The State Of Telangana on 18 December, 2020
Author: K. Lakshman
Bench: K. Lakshman
HONOURABLE SRI JUSTICE K. LAKSHMAN CRIMINAL PETITION Nos.3839, 4356, 4339 and 4434 OF 2020 COMMON ORDER:
Since these criminal petitions arise out of the same crime, they are being disposed of by way this common order.
2. Criminal Petition No.3839 of 2020 is filed by A1, Criminal Petition No.4339 of 2020 is filed by A3 to A5 and Criminal Petition No.4434 of 2020 is filed by A2 under Section 482 of Cr.P.C to quash the proceedings in Crime No.245 of 2020 pending on the file of Raidurgam Police Station, Cyberabad. A1 has also filed Criminal Petition No.4356 of 2020 under Section 438 of Cr.P.C to grant anticipatory bail in the very same crime.
3. The offences alleged against the petitioners herein are under Sections - 420, 406, 409, 468, 471 and 506 read with 34 of IPC.
4. Heard Mr. P. Sajan Kumar and Mr. M.V. Subba Reddy, learned counsel for the respective petitioners, Mr. P. Shreyas Reddy, learned counsel for the de facto complainant and the learned Public Prosecutor.
5. The allegations leveled against the petitioners/accused in the complaint dated 05.06.2020 filed by M/s. Divya Sree NSL Infrastructure Pvt. Ltd., de facto complainant, represented by its Chief Financial Officer and the Authorized Representative, Mr. C. Narayana Rao, are as follows:
KL,J Crl.P. No.3839 of 2020 & batch 2
i). The de facto complainant company has constructed, developed and owns an SEZ Facility in about Ac.25s.99 guntas in Raidurgam comprises of several buildings and facilities in SEZ Area (Special Economic Area) has called for bids from the interested vendors to provide various manpower / house keeping/electrical and repairs. Accordingly, the de facto company has engaged the services of M/s. Cura Facilities (A3) for the period from 2011 to May, 2019, M/s. G V R Facilities (A4) for the period from 2014 to May, 2019, M/s. We Care Facility Services (A5) for the period from 2016 to May, 2019 and Mircom Technologies (A6) for the period from 2016 to May, 2019. The de facto complainant company has issued various work orders to the above said accused vendors for the above said period.
ii). In the work orders, the de facto complainant company has specifically mentioned the number of workers, type of workers with specific skills for each specified building/facility in the SEZ area. The de facto complainant company has also instructed the accused vendors for proper payments to the workers and their obligations to comply with all related laws, including Employees Provident Fund Act, 1952, Employees State Insurance Act, 1948 and Payments of Wages Act, 1936. As per the work orders, the accused vendors have to make the stipulated monthly payments for each of the workers, deposit the relevant monies with the statutory authorities and also provide necessary, timely reports/documents to the statutory authorities KL,J Crl.P. No.3839 of 2020 & batch 3 constituted under the employee benefit legislations, such as Regional EPFO and ESIC.
iii). A1 was appointed as Facilities Manager in the de facto complainant's company vide order dated 01.12.2016 and A2 was appointed as Building Manager in M/s. Divya Sree NSL Orion SEZ Company vide order dated 10.02.2013. A1 and A2 have conspired with the accused vendors, misappropriated and cheated the company's money by showing the workers in less number than those specified under work order, but claiming full payments.
iv). From February, 2019 onwards, the company installed retina eye/fingerprint attendance systems for the workers. It was found that 30% to 40% of workers were absent and yet the accused vendors claimed payments covering the absentee workers. Thus, the de facto complainant company strongly suspected that the case even prior to the installation of the bio-metric attendance systems at the SEZ. The accused vendors have created fake IDs of the workers and claimed and paid payments for such workers.
v). On coming to know about the same, the de facto complainant company has lodged the complaint dated 27.07.2019 with SHO, Raidurgam against the accused complaining about the fraud, cheating, criminal misappropriation and criminal breach of trust committed by them. The SHO, in turn addressed a letter requesting the de facto complainant company to cause internal audit investigation into the affairs of the accused since they have to prove the KL,J Crl.P. No.3839 of 2020 & batch 4 discrepancy, misappropriation, fraud, cheating committed by the accused.
vi). Accordingly, the de facto complainant company has caused an internal enquiry by appointing Laxminiwas, Chartered Accountant, as an enquiry officer, who in turn, after conducting enquiry has submitted a report pointing out various lapses and also misappropriation of funds of the company and fraud played by each of the accused.
vii). The fraud played by the accused caused wrongful financial losses, which are specifically mentioned in the complaint dated 05.06.2020. The de facto complainant company has also specifically mentioned in the complaint dated 05.06.2020 about the excess monies collected for the workers towards EPF benefits etc., including the misappropriation. The de facto complainant company has initiated disciplinary action against A1 and A2 and imposed punishment of dismissal from service after following the due procedure laid down under law.
viii). On 20.06.2019 and 17.07.2019, A1 and A2 have criminally intimidated the company's staff i.e. Mr. Appal Naidu, Ms. Bhanusree and Mr. Naveen and told them that they will physically harm them if they interfere with the activities of A1 and A2. The de facto complainant company duly enclosing copy of the audit report along with complaint dated 05.06.2020 requested P.S. Raidurgam to take action against the accused as per law.
KL,J Crl.P. No.3839 of 2020 & batch 5
6. Contentions of A2 to A5:
i). Mr. C. Narayana Rao, who has lodged the complaint representing the de facto complainant, is not having authorization/Board resolution to lodge the complaint dated 05.06.2020 on behalf of M/s. DivyaSree NSL Infrastructure Pvt. Ltd.
The complaint was lodged only on suspicion, but not on facts.
ii). In the complaint itself, the de facto complainant stated that the accused have committed fraud for the years from 2011 to May, 2019 and whereas they have lodged the complaint on 05.06.2020 and thus, there is abnormal delay in lodging the complaint.
iii). A2 to A5 have not committed any offence and they were implicated in a false case. A2, being Building Manager appointed on 10.11.2013 is nothing to do with the alleged offences as alleged by the de facto complainant.
iv). The role of Building Manager is very limited and he is nothing to do with the statutory payments etc., of the de facto complainant company.
v). No opportunity was given to the accused while conducting audit report and it is behind their back. The tabular form mentioned in the audit report would reveal that A2 to A5 have not committed any fraud.
vi). The contents of the complaint dated 05.06.2020 lacks the ingredients of offences alleged against the accused and no cognizance of offence is made out. Reliance was placed on Section 154 Cr.P.C.
KL,J Crl.P. No.3839 of 2020 & batch 6
7. Contentions of A1:
i). A-1 was appointed as Facilities Manager vide order dated 01.12.2016 and his role is very limited. He is not responsible for the alleged misappropriation for the period from 2011 to 2019. No opportunity was given to him while conducting audit. The contents of the complaint lacks the ingredients of the offences alleged against him. There is no entrustment of money/property. The allegations are omni bus allegations against him and there is no specific allegation.
The de facto complainant has already initiated the disciplinary action against A-1 and imposed the punishment of dismissal from service on him. There is no allegation of forgery for the purpose of cheating and harming reputation in the entire complaint against A-1. A-1 is nothing to do with A-3. He has not committed any offence, much less the offences alleged against him.
8. Contentions of the de facto complainant:
i). A1, being Facilities Manager appointed on 01.12.2016, has started A3 firm and its activities were started with effect from 01.09.2017. The partner of A3 firm is none other than the own sister of A1. In proof of the same, copy of license issued by the competent authority under the provisions of Telangana Shops and Establishments Act is filed.
ii). A2 is the Managing Partner of A5 firm. A2 has entered into a service agreement with the South Central Railway with regard to the providing service to the South Central Railway and A2 has KL,J Crl.P. No.3839 of 2020 & batch 7 signed the service agreement dated 08.05.2019 as Managing Partner of A5 i.e. M/s. We Care Facilities Services. In proof of the same, copy of the service agreement dated 08.05.2019 is filed.
iii). A1 and A2 being Facility Manager and Building Manager committed have committed misappropriation, fraud and cheated the de facto complainant.
iv). On 27.07.2019, the de facto company lodged a complaint with the SHO, Raidurgam, who in turn requested the de facto complainant to cause an internal audit with the affairs of the accused. Pursuant to the same, the de facto complainant has caused internal enquiry by appointing Laxminiwas, Chartered Accountant, who in turn, after completion of audit, submitted report pointing out the misappropriation, fraud played by the accused. Thereafter, along with copy of the said audit report, the de facto complainant has lodged the complaint dated 05.06.2020. The details of the fraud, misappropriation played by the accused are specifically mentioned in the complaint dated 05.06.2020 including the period, amount etc.
v). The contents of the complaint would make out a prima facie case against the accused and it also makes out a cognizable offence. Therefore, the police Raidurgam have registered Crime No.245 of 2020 for the above said offences and the petitioners/accused instead of cooperating with the Investigating Officer by producing the information and documents as sought by the Investigating Officer, filed the present petitions.
KL,J Crl.P. No.3839 of 2020 & batch 8
vi). As stated in the complaint dated 05.06.2020, the petitioners/accused have committed criminal breach of trust, mis- appropriation, cheating of huge amounts of the de facto complainant and the manner in which they have committed offences is also specifically mentioned. The modus operandi adopted by each of the accused is also specifically mentioned in the complaint dated 05.06.2020
9. From the above stated facts and submissions, the undisputed facts are as follows:
i) The de facto complainant i.e. M/s. DivyaSree NSL Infrastructure Pvt. Ltd., is a company and it constructed, developed and owns an SEZ Facility in about Ac.25.99 guntas in Raidurgam comprises of several buildings and facilities for use by Information Technology and Information technology Enable Services Establishments.
ii) The said company has engaged A3 to A6 firms for providing various services including house keeping to the man power and electrical and repair works to the work orders issued. A1 was appointed as Facility Manager vide order dated 01.12.2016. A2 was appointed as Building Manager, vide order dated 10.11.2013.
10. The following factual aspects have to be investigated into by the Investigating Officer during the course of investigation in the present crime:
KL,J Crl.P. No.3839 of 2020 & batch 9
i). Ms. K.Jyotsna D/o Mr. Musileswara Rao is the own sister of A1 and she is the Managing Partner of A3 i.e. M/s. Cura Facilities.
ii). The said M/s. Cura Facilities is commenced its business activities from 01.09.2017.
iii). The nexus between A-1 and A-3 including the relation of Ms. K.Jyotsna with A-1 with specific reference to the Certificate issued by the Authority under the Telangana Shops and Establishment Act, 1988.
iv). A2 is the Managing Partner of M/s. We Care Facility Services i.e. A5. A2 has entered into service agreement on 08.05.2019 with South Central Railway for providing man power services and he has represented A5 in the said agreement.
v). The nexus between A-2 and A-5 including the fact that A-2 is the Managing Partner of A-5 with specific reference to the Service Agreement dated 08.05.2019 signed by A-2 on behalf of A-5.
vi). From February, 2019 onwards, the de facto complainant has installed retina eye/fingerprint attendance systems for the workers.
vii). In the said installation, the de facto complainant found that 30% to 40% of the workers were absent and yet the accused vendors claimed payments covering the absentee workers. On strong suspicion of the de facto complainant company that the same was done even prior to the installation of the bio-metric attendance systems at the SEZ.
KL,J Crl.P. No.3839 of 2020 & batch 10
viii). The various serious lapses / misappropriation pointed out by Laxminiwas Chartered Accountant in the report require investigation. Several aspects mentioned in the said enquiry report including lapses etc. also require investigation.
ix). The excess monies alleged to have been collected for the workers EPF and ESI, wage sheet, leave wages etc and wrongful loss caused to the de facto complainant by each of the accused requires investigation.
x). The date of knowledge of the said misappropriation committed by the accused also requires investigation.
xi). A1 was instrumental (on account of his job role) in the recommendation and approval of work orders of A3 at the time of A3 as a vendor to the company had deliberately and with fraudulent intent suppressed the fact of his direct/indirect ownership is also an aspect to be investigated into by the Investigating Officer.
xii). A6 has the same registered address as that of A3 as evidenced by the letter-head of A3 and the address mentioned by A6 in the invoices is also a factual aspect to be investigated by the Investigating Officer.
xiii). Removal of the address from the letter-heads by A-3 as soon as the de facto complainant company engaged the services of A6.
xiv). A6 was floated by A-1 with a view to gain wrongfully and cheat the de facto complainant.
KL,J Crl.P. No.3839 of 2020 & batch 11
11. The de facto complainant relying on the audit caused by Laxminiwas, Chartered Accountant, specifically mentioned that the accused have caused wrongful loss in the following manner:
i) Rs.2,55,00,757/- towards works EPF and ESI;
ii) Rs.4,26,87,565/- towards workers benefits i.e. uniform, shoes, fees and leave wages;
iii) Rs.4,48,700/- towards excess amount caused wrongful loss for one set of 46 contract employees;
iv) Rs.46,93,614/- towards financial loss caused by A4 for the financial year 2017-18;
v) Rs.69,68,565/- during the financial year 2018-19;
vi) Rs.94,10,257/- and Rs.21,70,191/- under the guise of PF and ESI for the financial year 2017-18 and 2018-19 respectively by accused vendors;
vii) Rs.15,16,335/- for the financial years 2017-18 and Rs.26,58,068/- for the financial year 2018-19 caused by A5;
viii) Rs.3,57,71,946/- caused wrongful by A3, an amount of Rs.2,67,95,222/- by A4, Rs.56,21,153/- by A5.
12. The said misappropriation of huge amounts are caused by the accused as per the complaint dated 05.06.2020. The modus operandi adopted by each of the accused is specifically mentioned in the complaint dated 05.06.2020. The role played by each of the accused is also specifically mentioned in the complaint dated 05.06.2020. The complaint dated 05.06.2020 is supported by the internal audit report of Laxminiwas, Chartered Accountants. The de facto complainant has also filed certificate of registration to show that A-1 is having nexus with A-3 and also filed service agreement to prove that A2 has nexus with A5.
KL,J Crl.P. No.3839 of 2020 & batch 12
13. Thus, there are specific allegations and overt acts against each of the accused. The de facto complainant has filed Board Resolution dated 19.07.2011 of the said M/s. DivyaSree NSL Infrastructure Pvt. Ltd., wherein it was resolved authorizing Mr. C. Narayana Rao, Chief Financial Officer, to execute, deal sign petitions, affidavits, applications, caveat petitions and such other documents, which are to be filed before any Court of Law and to do all such acts and things. Whether the said C. Narayana Rao is having authorization/Board Resolution to represent the said company is again a matter to be investigated into by the Investigating Officer. Thus, there are several factual aspects, which are to be investigated into by the Investigating Officer.
14. The Hon'ble Apex Court in Sau. Kamal Shivaji Pokarnekar v. State of Maharashtra1 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 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. 1 . AIR 2019 SC 847 KL,J Crl.P. No.3839 of 2020 & batch 13 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.
15. As discussed supra, there are several factual aspects have to be investigated into by the Investigating Officer. In the complaint dated 05.06.2020 supported by audit report of Laxminiwas, Chartered Accountant, the documents filed by the de facto complainant would reveal that the contents of the complaint would make out a prima facie case for the offences alleged against them and also a cognizable offence. The role played by each of the accused is specifically mentioned in the complaint dated 05.06.2020. The modus operandi adopted by each of the accused including the allegations of the de facto complainant that A1 is having nexus with A3 and A2 is having nexus with A5 is a matter to be investigated into by the Investigating KL,J Crl.P. No.3839 of 2020 & batch 14 Officer. Thus, the allegations are very specific and there are specific overt acts against each of the accused and huge amounts were alleged to have been misappropriated by the accused.
16. In view of the same, this Court is not inclined to quash the proceedings in Crime No.245 of 2020 in exercise of its inherent power under Section 482 Cr.P.C. In view of the serious allegations, the Investigation may require custodial interrogation, A1 is not entitled for anticipatory bail.
17. This Court has directed the Investigating Officer not to arrest A1 and A2. However, it is made clear that the investigation may go on. As such, the interim order dated 23.09.2020 and 25.09.2020 granted by this Court is also vacated.
18. Accordingly, the Criminal Petition Nos.3839, 4356, 4339 and 4434 of 2020 are hereby dismissed.
As a sequel, miscellaneous petitions pending, if any, in the Criminal Petitions shall stand closed.
__________________ K. LAKSHMAN, J Date: 18.12.2020 kvrm