Gujarat High Court
Jaikumar Kirankumar Begani vs State Of Gujarat & on 7 April, 2017
Author: J.B.Pardiwala
Bench: J.B.Pardiwala
R/SCR.A/724/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 724 of 2016
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JAIKUMAR KIRANKUMAR BEGANI....Applicant(s)
Versus
STATE OF GUJARAT & 1....Respondent(s)
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Appearance:
MR HARDIK A DAVE, ADVOCATE for the Applicant(s) No. 1
M/S PATEL ADVOCATES, ADVOCATE for the Respondent(s) No. 2
MR SALIL M THAKORE, ADVOCATE for the Respondent(s) No. 2
MR MITESH AMIN, PUBLIC PROSECUTOR for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA
Date : 07/04/2017
ORAL ORDER
1. By this writapplication under Article 226 of the Constitution of India, the writapplicant - original accused seeks to invoke the inherent powers of this Court praying for quashing of the F.I.R. being C.R. No.I5 of 2015 registered with the C.I.D. Crime, Ahmedabad Zone, for the offence punishable under Sections406, 409, 420, 465, 467, 468, 471 120B of the I.P.C.
2. The case of the first informant may be summarized as under: 2.1 The first informant is one of the Directors of a Company, by the name the 'Forever Precious Jewellery & Diamond Ltd.' The company is engaged in the business of Jewellery, as is apparent from its name itself. The applicant herein is the former Director of the very same company. The applicant ceased to be the Director of the Company some time in the year 2013 and the First Information Report was inducted as a Director in Page 1 of 9 HC-NIC Page 1 of 9 Created On Tue Aug 15 18:57:17 IST 2017 R/SCR.A/724/2016 ORDER the year 2014. It is the case of the first informant that the audit report prepared by a team of auditors revealed something very shocking. The audit report pointed out the various acts of illegalities and irregularities committed by the applicant herein in the course of his tenure as a Director. In such circumstances, to protect the interest of the company, the first informant thought fit to lodge the F.I.R.
2.2 The sum and substance of the allegations levelled in the F.I.R. are that the applicant herein misused his position as a Director and converted or rather misappropriated the assets of the company to his own use and to the use of the other parties related to him. It is alleged that the applicant purchased diamonds at a high price and sold them at a low price to the persons related to him, thereby causing loss of Rs.67.19 crore to the company. It is also alleged that the old jewellery was melted for the purpose of making new jewellery thereby causing loss of Rs.4.50 crore. It is alleged that the amount in that regard was misappropriated by the applicant. It is alleged that infact no such old jewellery was melted and new jewellery was made. The applicant changed the company process code in the programme and projected a wrong picture that the jewellery was converted. No entries in that regard were effected at that any point of time in the records. It is alleged that at the different branches there are no entries as regards to whom the stock was sent and who were the salesman who carried out the job. There are also allegations of creating false bills pertaining to the purchase of the diamonds. There are allegations of issue of cheques in favour of the fictitious persons. It is further alleged that the applicant herein entered into a business transaction with the Param Jewellers. The Param Jewellers is a company owned by the father and wife of the applicant herein jointly. He is alleged to have sold the gold jewellery and gold coins at a low price to the Param Jewellers, thereby causing loss of Page 2 of 9 HC-NIC Page 2 of 9 Created On Tue Aug 15 18:57:17 IST 2017 R/SCR.A/724/2016 ORDER Rs.7.25 crore to the company. During the years 201112 and 201213, the Param Jewellers procured gold and diamond from the company at a low price and derived a profit of Rs.38.75 crore. There are allegations of purchase of one BMW from one Suresh Patel at Rs.46 lac and the same car was sold to M/s. Shanta International (company owned by the applicant himself) at Rs. 38 lac. In the same manner, a Mercedes was purchased from the Shaman Used Car Private Limited at Rs.27.62 lac and was sold to the Param Jewellers at Rs.18.89 lac, thereby causing loss to the company. There are allegations of spending amount towards the personal things from the funds of the company. In paragraph11 of the FIR, there are allegations of creating false documents, false accounts as regards the sold of the gold jwellery to the Param Jewellers.
2.3 In such circumstances referred to above, the FIR for the offence punishable under Sections406, 409, 420, 465, 467, 468, 471, 120B of the I.P.C. came to be registered.
3. On 04/02/2016 the following order was passed by this Court in the matter:
1. The applicant before me has been arraigned as an accused in the first information report in his capacity as one of the former directors of a limited company running in the name of Forever Precious Jewellery & Diamond Ltd.. My attention is drawn to the minutes of the meeting of the Board of Directors held on 30th March, 2011, wherein three directors are shown to be present, one of those is the applicant before me. The name of one Shri Jatin R. Mehta also figures in the list of the directors present on that date. It appears that the following was resolved;
"DELEGATION OF POWERS AND RESPONSIBILITIES The Board opined that, as the Company is expanding its business rapidly worldwide and in view of operational feasibility it is advisable on the part of the Company to delegate the powers, responsibilities and onus on the senior persons of the Page 3 of 9 HC-NIC Page 3 of 9 Created On Tue Aug 15 18:57:17 IST 2017 R/SCR.A/724/2016 ORDER Organization, accordingly it was discussed by the Board that Company should delegate the powers and respective onus with reference to the Geographic Segments and business line and accordingly it was Resolved as under.
RESOLVED THAT the entire Export and Domestic Wholesale Business of Gold and Gold Jewellery, Loose Diamonds and Diamond Jewellery shall now onwards be looked after by Mr. Jatin R. Mehta the Director of the Company as he has extensive experience in International Market and varied contacts at International Level.
RESOLVED FURTHER THAT in suppression of earlier Resolutions and Agreement with Mr. Jatin R. Mehta, the Managing Director of the Company, he shall now onwards exclusively look after the Domestic Retail Jewellery Business for the Company as he has CoreCompetence in Retailing."
2. The principal argument of the learned counsel appearing for the applicant is that since 2011, Mr. Jatin R. Mehta took over the responsibility so far as the entire export and domestic wholesale business of Gold and Gold Jewellerry, Loose Diamonds and Diamond Jewellery is concerned. It was further resolved that the applicant before me would be in exclusive charge of the domestic retail jewellery business for the Company.
3. It has been further pointed out that there is a prosecution pending as on today against Mr. Jatin R. Mehta instituted by the C.B.I. The said prosecution is for embezzlement and misappropriation of the funds of a Nationalized Bank to the tune of thousands of crores. It is further pointed out that in the said prosecution, the C.B.I. has cited the present applicant as one of the prime witnesses. It is further alleged that the present first information report is lodged at the instance of Mr. Jatin R. Mehta, who has absconded and is at abroad. It is further submitted that only with a view to exert pressure on the applicant herein since he is one of the prime witnesses in the C.B.I case, a false first information report has been registered.
4. I am conscious of the fact that the first information report is quite in details, and also the fact that the anticipatory bail application of the applicant is rejected. However, in the wake of what has been submitted before me, the first informant owes some explanation as regards the decision or rather the resolution which was passed by the Company at a point of time when he was not the Director. It seems that the first informant was inducted as a director of the company in 2014. For this limited purpose, I am inclined to issue notice.
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5. Let notice be issued to the respondents, returnable on 25.2.2016. Mr. Patel, the learned APP, waives service of notice for and behalf of the respondent No.1. The respondent No.2 be served directly through the investigating officer of the concerned police station.
6. Till the next returnable date, no coercive steps be taken against the applicant on the condition that he shall extend full cooperation to the investigating officer and shall remain present as and when called for, for the purpose of interrogation.
Direct service is permitted.
4. Mr. S.V. Raju, the learned senior counsel appearing for the applicant vehemently submitted that the allegations of forgery are without any foundation and baseless. According to him, even if the entire case put up by the first informant is believed or accepted to be true, none of the ingredients to constitute the offence as alleged are spelt out. It is submitted that the applicant herein is sought to be held liable as a former Director of the Company. If that be so, according to the learned senior counsel, no vicarious liability can be attached to the applicant. The principle of vicarious liability is sometime foreign so far as the offences under the I.P.C. are concerned. It is also submitted that the F.I.R. is nothing, but a counterblast and to divert the entire attention from one Mr. Jatin Mehta, who is responsible for cheating the banks to the tune of about Rs.7,000 crore. According to the learned senior counsel, his client has been made a scapegoat. In the prosecution instituted by the C.B.I. against Mr. Jatin Mehta, the applicant has been shown as one of the important witnesses. It is also submitted that the report of the Special Auditor cannot be the basis of filing of the FIR and even if the report is believed or accepted to be true, it does not say in so many words that the applicant has committed any offence. In such circumstances referred to above, Mr. Raju, the learned senior counsel appearing for the applicant submits that there being merit in this application, the same be allowed and the FIR be quashed.
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5. On the other hand, this application is vehemently opposed by the Mr. N. D. Nanavati, the learned senior counsel appearing for the first informant. He would submit that the plain reading of the FIR discloses commission of a cognizable offence. According to him, the investigation is at a very crucial stage. There are direct allegations of cheating and forgery against the applicant. He would submit that the report of the auditor on record makes the picture more than clear. In such circumstances, according to him, no case is made out for quashing of the FIR at this stage.
6. Mr. Mitesh Amin, the learned Public Prosecutor appearing for the respondent State submitted that no case worth the name is made out for quashing of the FIR. Mr. Amin made available the papers of the investigation carried out so far for the perusal of this Court to point out that more than a primafacie case is made out. Mr. Amin submitted that after this Court passed the order dated 04/02/2016 referred to above, substantial investigation has been carried out and the materials collected makes out more than a primafacie case against the applicant. Mr. Amin invited the attention of the Court to a certain statements of different persons recorded by the Investigating Officer in the course of the investigation. Such statements were read over to show the dubious transactions carried out by the applicant herein.
7. Having heard the learned counsel appearing for the parties and having considered the materials on record, the only question that falls for my consideration is whether the FIR should be quashed.
8. Bynow, it is well settled law that the High Court would be justified to quash the FIR in exercise of its extra ordinary jurisdiction Page 6 of 9 HC-NIC Page 6 of 9 Created On Tue Aug 15 18:57:17 IST 2017 R/SCR.A/724/2016 ORDER under Article 226 of the Constitute of India or the inherent powers under Section482 of the Cr.P.C. if the case falls within any of the categories laid down by the Supreme Court in the case of State of Haryana Vs. Bhajan Lal reported in AIR 1992 SC 604. I may quote the categories laid down by the Supreme Court as contained in Para108 of the judgment.
"108. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
2. Where the allegations in the First Information Report and other materials, if any, accompanying the F. I. R. do not disclose a cognizable offence, justifying an investigation by police officers under Section 156 (1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
4. Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a noncognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
5. Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient Page 7 of 9 HC-NIC Page 7 of 9 Created On Tue Aug 15 18:57:17 IST 2017 R/SCR.A/724/2016 ORDER ground for proceeding against the accused.
6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/ or where there is a specific provision in the Code or the oncerned Act, providing efficacious redress for the grievance of the aggrieved party.
7. Where a criminal proceeding is manifestly attended with mala fide and/ or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge."
9. I am of the view, having regard to the materials on record and the nature of the allegations that I should not interfere with the investigation at this stage. The power of quashing the criminal proceedings should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the Court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the Court to act according to its whim or caprice. Such is the dictum of law laid by the Supreme Court in the case of Bhajan Lal (Supra). The principles explained by the Supreme Court in Bhajan Lal (Supra) has been followed consistently till this date.
10. I would not like to go further into the matter as that might cause prejudice to the applicant herein. I am informed that the applicant had applied for anticipatory bail before the Sessions Court and the same came to be rejected. Since I am not inclined to entertain this quashing application, the interim protection earlier granted would also come to an end. If the applicant is apprehending arrest at the hands of the police, then it shall be open for him to pray for anticipatory bail before this Court.
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It is needless to clarify that whatever has been observed by me are primafacie observations and shall not be construed as an expression of final opinion as regards the commission of the offence as alleged.
11. For the forgoing reasons, this application is fails and is hereby rejected. Adinterim protection earlier granted stands vacated forthwith.
(J.B.PARDIWALA, J.) aruna Page 9 of 9 HC-NIC Page 9 of 9 Created On Tue Aug 15 18:57:17 IST 2017