Delhi High Court - Orders
Ats Infrastructure Limited & Ors vs State Of Nct Of Delhi & Ors on 18 December, 2023
Author: Rajnish Bhatnagar
Bench: Rajnish Bhatnagar
$~102 & 103
* IN THE HIGH COURT OF DELHI AT NEW DELHI
102.
+ W.P.(CRL) 3729/2023
ATS INFRASTRUCTURE LIMITED & ORS. ..... Petitioners
Through: Mr. Abdhesh Chaudhary, Mr.
Nishikant Singh, Mr. Ritik Malik, Mr.
Akhil Suri and Ms. Geetanjali,
Advocates.
versus
STATE OF NCT OF DELHI & ORS. ..... Respondents
Through: Mr. Amol Sinha, ASC with Mr.
Kshitiz Garg, Mr. Ashvini Kumar,
Ms. Chavi Lazarus and Mr. Arjun
Singh Kadian, Advocates.
Insp. Neeraj, P.S.EOW.
103.
+ W.P.(CRL) 3740/2023
DOMUS GREENS PRIVATE LIMITED ..... Petitioner
Through: Mr. Abdhesh Chaudhary, Mr.
Nishikant Singh, Mr. Ritik Malik, Mr.
Akhil Suri and Ms. Geetanjali,
Advocates.
versus
STATE OF NCT OF DELHI & ORS. ..... Respondents
Through: Mr. Amol Sinha, ASC with Mr.
Kshitiz Garg, Mr. Ashvini Kumar,
Ms. Chavi Lazarus and Mr. Arjun
Singh Kadian, Advocates.
Insp. Neeraj, P.S.EOW.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:37
CORAM:
HON'BLE MR. JUSTICE RAJNISH BHATNAGAR
ORDER
% 18.12.2023 CRL.M.A. 34740/2023 In W.P.(CRL) 3729/2023 CRL.M.A. 34796/2023 In W.P.(CRL) 3740/2023
1. Exemption allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(CRL) 3729/2023 AND CRL.M.A. 34739/2023 (stay) W.P.(CRL) 3740/2023 AND CRL.M.A. 34795/2023 (stay)
3. Both the petitions have been filed under Article 226 of the Constitution of India read with Section 482 Cr.P.C. by the petitioner for quashing of FIR No. 82/2023 under Sections 406/420/120B IPC registered at Police Station EOW and all proceedings emanating therefrom.
4. It has been argued by the learned Counsel for the petitioners that no offence under Section 406/420/120 IPC is made out as the ingredients of the said sections are not fulfilled and dispute is purely civil in nature which has been given a criminal colour and it is arising only out of MOUs/Tripartite Agreement amongst the parties. It has been argued that the present FIR is frivolous, vexatious and is manifestly attended with malafide and has been maliciously instituted with ulterior motive.
5. It is further submitted that the said Tripartite Agreement, has been signed between Domus Greens Private Ltd.(Developer of the project "ATS DOLCE" at Greater Noida, Gautam Budh Nagar, Uttar Pradesh) and the respective respondents and ATS Infrastructure This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:37 Limited. It is also submitted that as per the said Agreement, it was required of ATS Infrastructure to pay a requisite fixed-sum of amount for purchasing the Units from the respondents/complainants, in view of the individual Tripartite Agreement signed with each respondents respectively, wherein the respondents claimed to have purchased the aforesaid Units from Domus Greens Private Limited.
6. It is submitted that both the Developer (petitioner in W.P(CRL) No. 3740/2023) and the purchaser (petitioner No.1 in W.P(CRL) No. 3729/2023) have filed individual Petitions. Further, in the petition filed by the purchaser, other parties have also been impleaded as petitioners and according to the Learned Counsel, although Petitioner No.2and Petitioner No.4 are presently the Directors in the Petitioner No.1 Company, however at the time of transaction of the aforesaid Allotment/Tripartite MOU(s) etc., Petitioner No.4 was not a Director of the Company. Moreover, Petitioner No.3 is an erstwhile Director in the said Company and the mala fide in instituting the present FIR is writ large from the fact that Petitioner No.5 is neither a Director in the Petitioner No.1 Company nor has got any relation whatsoever with the Petitioner No.1 or DGPL except for the fact that Petitioner No.5 is the daughter of the Petitioner No.2 and apparently has been impleaded in the said FIR as an Accused without any correlation whatsoever, merely to cast undue pressure for wreaking vengeance on the Petitioner No.2, who is the director of the Petitioner No.1 Company, due to private & personal grudges.
7. It is further submitted by learned counsel for the petitioners that there are material suppressions and malicious concealment of vital This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:37 facts in the FIR, which have intentionally and deliberately not been disclosed in order to give the present civil dispute a criminal colour.It has been submitted that the factum of the Respondent/Complainant having initiated proceedings under section 138 of the Negotiable Instrument Act for the same amount of Purchase value & PDC issued has not been disclosed in the FIR. Further, proceeding under section 7 of the IBC, 2016 before the Ld. NCLT, New Delhi having been initiated by the respondent/complainant has not been disclosed by them in the said FIR. It has been further submitted that the OC for the project in question has been obtained, however the respondent/complainant were never interested in their allotment and were merely speculative investor as held by the Ld. NCLT, New Delhi and merely certain breach of the terms of the Tri-partite Agreement could not fulfil the stringent ingredients of section 420/406 IPC. The learned counsel in that regard has relied on a recent judgment passed by the Supreme Court in the case of Sarabjit Kaur v/s State of Punjab and Anr. (2023) SCC Online 210, wherein the court observed that "A breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceeding". Relying on the said judgment, it has been submitted that the worst case against the petitioners may be that they could not keep up their promise as per the Agreement and apparently there is no dishonest or fraudulent intention of the petitioners, whether at the inception of the Tri-partite Agreement so as This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38 to attract the ingredients of section 420 IPC or dishonest intention after the Tri-partite Agreement, so as to attract the ingredients of section 406 IPC.
8. The learned Counsel has next placed reliance on the judgment of Vijay Kumar Ghai v. State of WB, (2022) 7 SCC 124, to submit that the Hon'ble Apex Court has time and again cautioned about converting purely civil disputes into criminal cases and also referred to the judgment of Indian Oil Corpn. [Indian Oil Corpn. V. NEPC India Ltd., (2006) 6 SCC 736, wherein the Apex Court noticed the prevalent impression that since civil law remedies are time consuming and do not adequately protect the interests of lenders/creditors and therefore there had been a growing trend to settle civil disputes and claims by applying pressure through criminal prosecution. It has been submitted that in that case, the Apex Court clearly observed to deprecate and discourage all such initiation of criminal cases, which do not involve any criminal offence. It has been argued that the transaction as is apparent from the terms of the Tri-partite Agreement was purely an investment and Purchase Agreement and even for the sake of argument, the respondent/complainant were entitled for recovery only of the purchase value and the criminal machinery cannot be used for recovery of any amount. According to the Learned Counsel, merely because since the transaction was of year 2016 and the respondent/complainant may face a hurdle of limitation in Civil recovery, the criminal machinery cannot be utilized to supplement the said recovery proceedings against the petitioners. It has been further argued that a detailed reply had been sent to the Police by the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38 petitioners on 14.10.2023 i.e before the lodging of the present FIR and the petitioners have answered to all the queries, which also show that the dispute, if any is purely civil & contractual in nature and notwithstanding the said reply, the police had went ahead to lodge the present FIR on 02/11/2023. Thus, the Learned Counsel has submitted to quash the present FIR by referring to the seminal judgment of State of Haryana V/s Bhajan Lal &Ors. AIR 1992 SC 81.
9. Learned counsel for the petitioner has also relied upon the judgment passed by the co-ordinate Bench of this Court in Shiv Kumar and Another V. State of NCT of Delhi and Another in Crl.M.C. 1537/2023 whereby FIR No. 7/2022 under Sections 420/406/120B IPC, registered at P.S. Economic Offence Wing involving similar questions of facts and law was quashed and has prayed that in order to avoid any miscarriage of justice the investigation or any proceedings arising of the said FIR should be stayed and has also relied on the following judgments:
Mitesh Kumar J. SHA Vs State of Karnataka, 2021 SCC Online 976;
Wolfgang Reim &Ors. Vs State &Anr. 2012 SCC Online Del 3341
Sunil Bharti Mittal Vs CBI, 2015(4) SCC 609;
Shiv Kumar Jatia V/s State of NCT of Delhi;
N. Raghavender V/s State of A.P, 2021 SCC Online 1232;
R. Nagender Yadav V/s State of Telangana, (2023) 2 SCC 195;
Sarabjit Kaur Vs State of Punjab and Anr. 2023 SCC Online 210;
Sushil Sethi V/s The state of Arunachal Pradesh, (2020) 3 SCC 240;
Randheer Singh V/s the state of U.P &Ors. (Criminal Appeal No. 932
of 2021).
10. Issue notice. Learned ASC for the State as well as learned This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38 counsel for the complainant appears on advance notice and accepts notice.
11. It is submitted by learned ASC duly assisted by learned counsel for the complainant that the order dated 09.06.2023 passed by NCLT is under challenge in an appeal filed by the respondents. It is further submitted that judgments hereinabove relied upon by the petitioner are not applicable in the present case. He seeks time to file status report. Learned counsel for the complainant further submits that the judgment relied upon by the petitioner Shiv Kumar and Another (supra) is under challenge before the Hon'ble Supreme Court.
12. I have perused the FIR and the judgement referred by the Ld. Counsel for the petitioners as well as the judgment passed in Shiv Kumar and Another V. State of NCT of Delhi and Another in Crl.M.C. 1537/2023 by the co-ordinate bench of this court, whereby FIR having the similar facts and circumstances was quashed.
13. In the present case, it is seen that the rights of the parties arise from the individual allotment letters and the MOUs/ Tri-partite Agreement executed inter-se between them. The FIR has been essentially lodged as the buy-back scheme as assured by the petitioners could not be fulfilled in terms of the said Agreement. This court finds that PDC's for the buyback purchase amount were issued to the Respondent/Complainant at the time of the said execution of the Tri-Partite Agreement itself and from the several terms of the said Agreement, apparently, the said MOU/ tripartite Agreement seems to be an Agreement to sell as has also been held by the Ld. NCLT, New Delhi vide its order dated 09.06.2023 filed by the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38 Respondent/Complainant. Further, it is seen from the FIR that PDC's have been given for a deferred sale consideration to the respondent/Complainant. It is not the case that the petitioners have not actually developed any project by the name of ATS DOLCE or that the property did not exist or that the allotment of flats were done for a property which never existed. Occupation Certificate has been granted by the concerned Authority on 16.03.2023.
14. Further, from the averment of the FIR it is seen that right at the time when the Tri-partite Agreement was executed between the parties, the respondent/complainant had been given PDC for the buy- back amount in the year 2016 itself. As per the Agreement, the said PDC became due for payment on the respective dates as mentioned in the said Cheque after a Holding period. The FIR categorically mentions that the respondent/complainant, had been extending the Holding period and the dates on the PDC's and have been also accepting fresh Cheque's in lieu of the earlier Cheque's.
15. The respondent/complainant have already initiated proceedings under the provisions of Section 138 Negotiable Instrument for the same amount as has been mentioned in the present FIR, which this court is informed is presently pending before the competent Magistrate Court. The alleged transaction is of year 2016 and the present FIR has been lodged after seven years of the said transaction. It seems the respondent/complainant have intensified their adventure of lodging the present FIR apparently due to the long process of 138 NI Act proceedings coupled with the fact that an unfavourable order was passed by the NCLT on 06.09.2023 as the complaint, which has This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38 culminated into the present FIR had been filed on 09.11.2022.
16. This court finds that though a case of breach of trust may be both a civil wrong and a criminal offence there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence and giving colour of criminal case to dispute which is otherwise purely civil and contractual in nature would tantamount to an abuse of the process of court. The Hon'ble Apex court deprecated the practise of setting Criminal Machinery in motion for breach of civil or contractual disputes. Reliance can be placed upon Iqbal V/s state of U.P 2023 SCC Online SC 949.
17. Learned ASC has sought time to file the status report. The Learned Counsel appearing for the Respondents/ complainant, may also file a reply before the next date of hearing with an advance copy to the other side.
18. List on 24th January 2024.
19. Taking the overall view of the matter and looking into the facts and circumstances of this case, the Investigation in the FIR No. 82/2023 under Sections 406/420/120B IPC registered at Police Station EOW and all proceedings emanating therefrom shall remain stayed till the next date of hearing.
RAJNISH BHATNAGAR, J DECEMBER 18, 2023/sd This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/12/2023 at 21:56:38