Delhi High Court - Orders
Sherif Muin Khan vs State Of Nct Of Delhi & Anr on 22 May, 2024
$~104
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CONT.CAS(C) 868/2024 & CM APPL. 30830/2024
SHERIF MUIN KHAN ..... Petitioner
Through: Mr. Shashank Kashyap, Ms. Nistha
Gupta and Mr. Anuj Panwar, Advs.
M: 9415152494
Email: [email protected]
versus
STATE OF NCT OF DELHI & ANR. ..... Respondents
Through: Mr. Abhinav Singh, Mr. Praveen
Kaushik and Ms. Avni Singh, Advs.
M: 9811188892
Email: [email protected]
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
ORDER
% 22.05.2024 CM APPL. 30830/2024 (For Exemption)
1. Exemption allowed, subject to just exceptions.
2. Application is disposed of.
CONT.CAS(C) 868/2024
3. The present petition has been filed alleging willful disobedience of the judgment dated 15th September, 2023 passed in CRL. M.C. No. 298/2023.
4. Learned counsel appearing for the petitioner submits that by way of the aforesaid judgment there is a clear and categorical finding that once investigation is being carried out by the Serious Fraud Investigation Office ("SFIO"), then the subsequent FIR by the Economic Offences Wing ("EOW"), cannot continue.
5. He draws the attention of this Court to paragraphs 58, 67, 68, 69, 91, Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25 92 and 93 of the aforesaid judgment dated 15th September, 2023, which read as under:
"xxx xxx xxx
58. It is in view of the aforesaid that this Court is to determine the legitimacy of the impugned FIR registered pursuant to the making of the second complainant dated 15.08.2021 in view of the pending SFIO proceedings initiated by the Central Government on 14.10.2021 under Section 212 of the 2013 Act pursuant to making of the first complaint dated 14.06.2021. Thus, what is to be seen is the question of filing, continuance and prosecution of the proceedings before EOW. When those before the SFIO are already in subsistence is indeed a matter of concern calling for adjudication by this Court.
xxx xxx xxx
67. Further, once the legislature in its wisdom upon considering the gravity and complexity of the offences involved into the affairs of the Company has carefully crafted and carved out an expert body like the SFIO for a definitive purpose with a clear and special objective in the mind48 then in the opinion of this Court, no other parallel agency like EOW in the present case can be held to be competent to look into the same set of facts/allegations.
68. In any event, in the opinion of this Court, it could not have been the intention of the legislature for allowing any parallel proceedings to be 47 [1969] 3 WLR 706 48 Id. Para 59 conducted by any other agency as it would not only be futile but also entail more confusion and trouble, particularly if there are diverse decisions/ outcome from two or more different sets of proceedings. The same would tantamount to sheer abuse of the process of law. Once an investigation has been initiated by the SFIO under Section 212 of the 2013 Act, a parallel investigation by a separate agency into the affairs of the Company, considering the bar under Section 212(2), is not permissible. As per the facts involved herein, admittedly, the SFIO had already filed numerous Interim Report(s) before this Court and before NCLT.
69. Taking note of all the aforesaid as they stand today, in the opinion of this Court, there is no reason for the subsequent impugned FIR before the EOW to continue.Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25
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91. Consequently, coming to the end, albeit, before drawing final curtains to the present litigation and conclusions thereon, this Court would like to categorically express that after an overview of the aforesaid factual matrix and legal proposition discussed hereinabove, the investigation (to be) conducted by the EOW pursuant to registration of the subsequent impugned FIR is liable to be quashed as the prior ongoing investigation conducted in the form of SFIO proceedings is arising out of the 2013 Act, which being a Special Act will prevail over the General Act, the IPC. Further due to commonality of the allegations involved, wherein, the subsequent allegations made in the impugned FIR are already subsumed and thus shall be considered by the SFIO during the proceedings conducted by it resulting from the first complaint dated 14.06.2021 made to the MCA.
92. Therefore, the discussions entailed hereinabove has led this Court to the conclusion that the second complaint dated 15.08.2021 to the EOW resulting in registration of the impugned FIR is not maintainable in the current form, moreover, whence the first complaint dated 14.06.2021 and the second complaint dated 15.08.2021 are verbatim and are involving the same set of facts and are against the very same individual(s) and are made by the same complainant i.e., respondent no.2. Further, in view of Section 212(17)(a) read with Section 212(2) of the 2013 Act and based upon all the contentions raised by the learned (senior) counsels for the parties coupled with the documents on record, in the considered opinion of this Court, the impugned FIR is liable to be quashed and transferred to the SFIO as the proceedings thereunder are not maintainable in the eyes of law.
CONCLUSIONS:
93. Accordingly, in view of the aforesaid legal and factual position, this Court is thus proceeding to quash the FIR No. 06/2023 dated 12.01.2023 registered under Section(s) 406/420/120-B IPC at P.S. EOW, New Delhi qua the petitioner i.e., Mr. Ashish Bhalla only. Further, in view of Section 212(17)(a) of the 2013 Act, all the documents available with the Investigating Officer, EOW shall be transferred to the Serious Fraud Investigation Office Head Quarter, New Delhi, within a period of four weeks from today, which is already seized of the complaint and investigation thereof (ongoing) against WTC group of Companies ordered by the Ministry of Corporate Affairs vide order dated 14.10.2021 under Section 212 of the Companies Act, 2013.
xxx xxx xxx"Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25
6. By relying upon the aforesaid judgment, it is submitted that the continuation of the investigation under FIR No. 6/2023 by the respondents, i.e. Police Station EOW, New Delhi, cannot continue, as it is in the teeth of the judgment.
7. Per contra, learned counsel appearing for the respondents submits that the FIR in question, i.e., FIR No. 6/2023, Police Station EOW, New Delhi, has been quashed only qua Ashish Bhalla. Further, he has handed over a copy of order dated 27th February, 2024 passed by the Metropolitan Magistrate ("MM")-01, New Delhi District, Patiala House Court, New Delhi, wherein, directions have been issued to carry out further investigation by the EOW in the aforesaid FIR.
8. The aforesaid order dated 27th February, 2024 passed by the learned MM-01, Patiala House Court, New Delhi, is taken on record. The said order, reads as under:
"IN THE COURT OF SHRI YASHDEEP CHAHAL Metropolitan Magistrate-01: New Delhi District : PHC: New Delhi.
FIR No. 6/2023 dated 12.01.2023 P.S.: Economic Offences Wing Under Section: 406, 420, 120-B IPC State Vs. Rajiv Dawar 27.02.2024 Present: Ld. APP for State.
Mr. Harshit Vashisht, Ld. Counsel for Applicant/Petitioner.
Status report was filed on the previous date and the matter is kept today for arguments on the status report on behalf of the complainant. It is submitted by the complainant that the original complaint addressed to the Special Commissioner of Police, Economic Offences Wing (EoW), had mentioned nine persons in the list of accused persons. It is stated that primarily the I.O. had interrogated only one accused, namely, Mr. Ashish Bhalla.
Perusal of the status report as well as the application reveals that Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25 the captioned FIR with respect to accused Ashish Bhalla has been partially quashed by the Hon'ble High Court and the said order is stated to have attained finality before the Hon'ble Supreme Court. The present application is filed by the complainant raising the grievance that the I.0. Has failed to interrogate the remaining accused persons and the investigation of the entire case has been directed in a wrong direction. The complainant has referred to thestatus report filed by the I.O., specifically para No. 9 of the report, whichindicates the diversion of funds from the accused company to various subsidiary and step down subsidiary companies. The report further indicates the present status of investigation in para No. 14. The said para reveals that the I.O. has sent a reminder notice to 'GNIDA' for obtaining certain documents. The I.O. has also sent a notice to Director of the accused company to provide copy of lease deed, financial ledger etc. At the outset, the complainant has placed reliance on the decision of the Hon'ble Supreme Court in Jagjeet Singh Vs. Ashish Mishra, (2022) 9 SCC 321 to advance the point of locus of the complainant at all stages of a criminal proceeding. There appears to be no quarrel with respect to the said position and the participatory rights of the complainant are well established, not just in the Cr.PC and the aforesaid decision, but also in the standing orders of Delhi Police which mandatrily require the I.O.s to keep the complainant informed about the status of investigation in his case.
Perusal of the status report corroborates the submission of the complainant that the investigation is being directed in a manner that indicates no emphasis on the roles of the accused persons, originally mentioned by the complainant. It is understandable that the present case is a multi victim fraud and the investigation is being carried out in a comprehensive manner. However, the same cannot be used as a tool to deprive the complainant from a fair investigation into the allegations levelled by the individual complainants, such as the complainant present before this Court. In the report filed by the I.O., there is no indication of any investigation with respect to the accused persons, mentioned in the complaint. Furthermore, there is no indication withrespect to the money trail or diversion/siphoning of funds from the holding company to the subsidiary/step down subsidiary companies. I find myself in agreement with the complainant that the details regarding the key managerial personnel of these companies must have been obtained by the I.O., so as to direct the investigation towards a logical conclusion.
In light of these submissions, the concerned I.O. is directed to look into the aspects which are un-investigated despite lapse of a considerable time.
Let a consolidated status report be filed by the I.O.
Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25Let a copy of this order be sent to the DCP concerned so as to ensure appropriate supervision on the merits of this investigation. It may be noted that passage of considerable time in an investigation could have the consequence of loss of substantial evidence and, therefore, it is incumbent upon the I.O. to procure the best evidence at the earliest opportunity.
Let a compliance report be filed by the DCP concerned in terms of this order. The status report, to be filed on the next date, shall also be forwarded by the DCP concerned.
Put up on 10.04.2024.
(Yashdeep Chahal) Link M.M.-01: PHC: NDD 27.02.2024"
9. Learned counsel further relies upon paragraphs 90 and 93 of the aforesaid judgment dated 15th September, 2023, which reads as under:
"xxx xxx xxx PART QUASHING:
90. This Court on a perusal of the petition herein finds that although as many as 14 persons (including companies) have been named in the impugned FIR but since there is one petitioner i.e., Mr. Ashish Bhalla and considering the prayer in the present petition, the impugned FIR can only be quashed qua the petitioner herein. In any event it has been established by the Hon'ble Supreme Court that part quashing of a FIR is permissible under law. Reliance is placed upon Lovely Salhotra & Anr. vs State (NCT of Delhi) & Anr.61 wherein the Hon'ble Supreme Court has held as under:-
"3. We have taken into account the facts of the matter in question as it appears to us that no cognizable offence is made out against the appellants herein. The High Court was wrong in holding that the FIR cannot be quashed in part and it ought to have appreciated the fact that the appellants herein cannot be allowed to suffer on the basis of the complaint filed by Respondent 2 herein only on the ground that the investigation against co-accused is still pending. It is pertinent to note that the learned Magistrate has opined that no offence is made out against Co-accused 2, 3, 4 and 6 prima facie. According to us, the FIR in question filed against the appellants herein by Respondent 2 is only an afterthought with the sole intention to pressurise the appellants not to prosecute their criminal complaint filed by them under Section 138 of the Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25 Negotiable Instruments Act, 1881."
Reliance is further placed upon Hitesh Verma v. State of Uttarakhand62wherein the Hon'ble Supreme Court has held as under:-
"This Court in a judgment reported as Ishwar Pratap Singh v. State of U.P. [Ishwar Pratap Singh v. State of U.P., (2018) 13 SCC 612 : (2018) 3 SCC (Cri) 818] held that there is no prohibition under the law for quashing the charge-sheet in part. In a petition filed under Section 482 of wherein the Hon'ble Supreme Court has held as under:-
the Code, the High Court is required to examine as to whether its intervention is required for prevention of abuse of process of law or otherwise to secure the ends of justice. The Court held as under : (SCC p.618, para 9) "9. Having regard to the settled legal position on external interference in investigation and the specific facts of this case, we are of the view that the High Court ought to have exercised its jurisdiction under Section 482 CrPC to secure the ends of justice. There is no prohibition under law for quashing a charge-sheet in part. A person may be accused of several offences under different penal statutes, as in the instant case. He could be aggrieved of prosecution only on a particular charge or charges, on any ground available to him in law. Under Section 482, all that the High Court is required to examine is whether its intervention is required for implementing orders under the Criminal Procedure Code or for prevention of abuse of process, or otherwise to secure the ends of justice.A charge-sheet filed at the dictate of somebody other than the police would amount to abuse of the process of law and hence the High Court ought to have exercised its inherent powers under Section 482 to the extent of the abuse.
There is no requirement that the charge-sheet has to be quashed as a whole and not in part. Accordingly, this appeal is allowed. The supplementary report filed by the police, at the direction of the Commission, is quashed.""
61(2018) 12 SCC 391 62 (2020) 10 SCC 710 xxx xxx xxx CONCLUSIONS:
93. Accordingly, in view of the aforesaid legal and factual position, this Court is thus proceeding to quash the FIR No. 06/2023 dated 12.01.2023 registered under Section(s) 406/420/120-B IPC at P.S. EOW, New Delhi Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25 qua the petitioner i.e., Mr. Ashish Bhalla only. Further, in view of Section 212(17)(a) of the 2013 Act, all the documents available with the Investigating Officer, EOW shall be transferred to the Serious Fraud Investigation Office Head Quarter, New Delhi, within a period of four weeks from today, which is already seized of the complaint and investigation thereof (ongoing) against WTC group of Companies ordered by the Ministry of Corporate Affairs vide order dated 14.10.2021 under Section 212 of the Companies Act, 2013.
xxxx xxx xxx"
10. He, thus, submits that investigation qua the other complainant has to continue.
11. At this stage, learned counsel appearing for the petitioner submits that as per the direction given in the aforesaid judgment, all the records had to be transferred to the SFIO for the purposes of carrying out investigation by the said authority.
12. Responding to the aforesaid, learned counsel appearing for the respondents submits that the copy of the requisite documents, in terms of the judgment, have already been transferred to the SFIO.
13. Considering the submissions made herein, let reply be filed by the respondent within a period of four weeks.
14. Rejoinder thereto, if any, be filed within two weeks thereafter.
15. Re-notify on 22nd August, 2024.
MINI PUSHKARNA, J MAY 22, 2024/kr Signature Not Verified Digitally Signed By:CHARU CHAUDHARY Signing Date:27.05.2024 09:28:25