Orissa High Court
Mohammed Moquim vs State Of Odisha (Vigilance) .... ... on 19 October, 2022
Author: B. P. Routray
Bench: B. P. Routray
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLA No.880 of 2022
Mohammed Moquim .... Appellant
Mr.Pitambar Acharya, Senior Advocate
-versus-
State of Odisha (Vigilance) .... Opposite Party
Mr.Srimanta Das, Senior Standing Counsel
along with Mr.Sanjaya Kumar Das, Standing Counsel
CORAM:
JUSTICE B. P. ROUTRAY
ORDER
th 19 October.2022 Order No. I.A.No.1657 of 2022 arising out of CRLA No.880 of 2022
5. 1. The Appellant-Mohammed Moquim has preferred CRLA No.880 of 2022 against the impugned judgment of conviction and sentence dated 29th September, 2022 passed by the learned Special Judge, Vigilance, Bhubaneswar in T.R. Case No.1 of 2009.
2. Five accused persons including the present Appellant were prosecuted jointly for different offences under the Prevention of Corporation Act (hereinafter referred as 'the P.C. Page 1 of 15 Act') as well as Indian Penal Code (hereinafter referred as 'the I.P.C.'). First and Second accused persons are the then Managing Director and Company Secretary of Odisha Rural Housing Development Corporation (ORHDC) and they were charged with commission of the offences under Section 13(2) read with Section 13(1)(d) of the P.C. Act along with offences under Sections 468, 471, 420 and 120-B of the I.P.C. The Company, namely, M/s. Metro Builders Pvt. Ltd. is the 3rd accused and the present Appellant (4th accused) is its Managing Director. The offences charged against the present Appellant are under Sections 468, 471, 420 and 120-B of the I.P.C. only. The fifth accused, namely, M/s.Piyushdhari Mohanty is a Director of M/s. Metro Builders Pvt. Ltd.
3. It is alleged that during the period from June to August, 2000, all the accused persons including the present Appellant forged certain documents such as loan appraisal report, N.O.C. from the Fire Officer etc, and by using the same as genuine, obtained permission from Bhubaneswar Development Authority and applied for a term loan of Rs.1.5 Crores to ORHDC. The loan Page 2 of 15 was illegally sanctioned and disbursed in favour of M/s. Metro Builders Pvt. Ltd. without keeping adequate security, thereby causing wrongful loss to the ORHDC. It is further alleged that the then Managing Director of ORHDC, without any financial power, sanctioned and disbursed the loan amount to the tune of Rs.1.5 Crores in connivance with the Company Secretary and other accused persons, that too when M/s. Metro Builders Pvt. Ltd. was a known defaulter. The loan was sanctioned and disbursed in hurry intending to provide such illegal pecuniary advantage to M/s. Metro Builders Pvt. Ltd.
4. Seventeen witnesses were examined by the prosecution before the trial court. Based on their evidence and the documents adduced from the side of the prosecution as well as defence, the trial court convicted the Appellant and other accused persons for the offences charged against them respectively. The appellant is sentenced to undergo rigorous imprisonment for three years each for the offences under Sections 468, 471, 420 and 120-B of the I.P.C., besides payment of fine of Rs.50,000/- for each such offences. The Managing Director of ORHDC and the Company Page 3 of 15 Secretary were further convicted and sentenced under Section 13(2) of the P.C. Act in addition to the offences under the I.P.C.
5. Being aggrieved with the conviction and sentence, the Appellant has preferred the appeal along with three Interlocutory Applications praying for bail pending appeal, for stay realization of fine amount and for stay/suspension of the conviction. The present application is relating to stay/suspension of the conviction.
6. Previously, this Court by order dated 10th October, 2022 in I.A.No.1657 of 2022 and I.A.No.1656 has allowed the Appellant to be released on bail pending appeal and further stayed realization of the fine amount. It needs to be mentioned here that in the said order dated 10th October, 2022, this Court granted bail to the Appellant upon considering the fact that he was all along on bail in course of the trial and investigation and the sentence of imprisonment is for limited period of three years. But consideration of such facts could not be reflected in the said order explicitly. Thus such facts that, execution of sentence pending appeal is suspended and the Appellant is allowed to be released Page 4 of 15 on bail upon consideration of the facts that he was all along on bail during investigation as well as the trial and the sentence of imprisonment is for limited period of three years, are need to be read as a part of the order dated 10th October, 2022.
7. While praying for suspension of conviction in the present application, it is submitted that the Appellant is a sitting Member of the Odisha Legislative Assembly from 90 Barabati- Cuttack Assembly Constituency and he took oath of the Office on 23rd May, 2019. It is submitted that the Appellant has completed only three and half years till now as a Member of the House and by operation of Section 8(3) of the Representation of the People Act (hereinafter referred to as 'the R.P. Act'), he earned disqualification upon his conviction and sentence. It is further submitted that unless the conviction is stayed pending appeal, irreparable loss will be caused to him, which cannot be compensated later.
8. Law on the aspect of stay of conviction is no more res integra. In the case of Lily Thomas v. Union of India, AIR 2013 SC 2662, the Hon'ble Supreme Court declared Section 8(4) of the Page 5 of 15 R.P. Act as ultra vires to the Constitution of India and made it inoperative prospectively. The relevant observations of the Supreme Court are reproduced below:-
35. In Ravikant S. Patil v. Sarvabhouma S. Bagali [(2007) 1 SCC 673 : (2007) 1 SCC (Cri) 417] a three-
Judge Bench of this Court, however, observed: (SCC p. 679, para 15) "15. It deserves to be clarified that an order granting stay of conviction is not the rule but is an exception to be resorted to in rare cases depending upon the facts of a case. Where the execution of the sentence is stayed, the conviction continues to operate. But where the conviction itself is stayed, the effect is that the conviction will not be operative from the date of stay. An order of stay, of course, does not render the conviction non-existent, but only non-operative. Be that as it may, Insofar as the present case is concerned, an application was filed specifically seeking stay of the order of conviction specifying the consequences if conviction was not stayed, that is, the appellant would incur disqualification to contest the election. The High Court after considering the special reason, granted the order staying the conviction. As the conviction itself is stayed in contrast to a stay of execution of the sentence, it is not possible to accept the contention of the respondent that the disqualification arising out of conviction continues to operate even after stay of conviction."
In the aforesaid case, a contention was raised by the respondents that the appellant was disqualified from contesting the election to the Legislative Assembly under sub-section (3) of Section 8 of the Act as he had been convicted for an offence punishable under Sections 366 and 376 of the Penal Code and it was held by the three-Judge Bench that as the High Court for special reasons had passed an order staying the conviction, the disqualification arising out of the conviction ceased to operate after the stay of conviction. Therefore, the disqualification under sub-sections (1), (2) or (3) of Section 8 of the Act will not operate from the date of order of stay of conviction passed by the appellate court under Section 389 of the Code or the High Court under Section 482 of the Code.
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37. The only question that remains to be decided is whether our declaration in this judgment that sub-section (4) of Section 8 of the Act is ultra vires the Constitution should affect disqualifications already incurred under sub-sections (1), (2) and (3) of Section 8 of the Act by sitting Members of Parliament and State Legislatures who have filed appeals or revisions against their conviction within a period of three months and their appeals and revisions are still pending before the court concerned.
38. Under sub-sections (1), (2) and (3) of Section 8 of the Act, the disqualification takes effect from the date of conviction for any of the offences mentioned in the sub-sections and remains in force for the periods mentioned in the sub-sections. Thus, there may be several sitting Members of Parliament and State Legislatures who have already incurred disqualification by virtue of a conviction covered under sub-section (1), or sub- section (2) or sub-section (3) of Section 8 of the Act. In Golak Nath v. State of Punjab [AIR 1967 SC 1643] , Subba Rao, C.J. speaking on behalf of himself, Shah, Sikri, Shelat and Vaidialingam, JJ. has held that Articles 32, 141, 142 of the Constitution are couched in such a wide and elastic terms as to enable this Court to formulate legal doctrines to meet the ends of justice and has further held that this Court has the power not only to declare the law but also to restrict the operation of the law as declared to future and save the transactions, whether statutory or otherwise, that were effected on the basis of the earlier law. The sitting Members of Parliament and State Legislature who have already been convicted for any of the offences mentioned in sub-sections (1), (2) and (3) of Section 8 of the Act and who have filed appeals or revisions which are pending and are accordingly saved from the disqualifications by virtue of sub-section (4) of Section 8 of the Act should not, in our considered opinion, be affected by the declaration now made by us in this judgment. This is because the knowledge that sitting Members of Parliament or State Legislatures will no longer be protected by sub-section (4) of Section 8 of the Act will be acquired by all concerned only on the date this judgment is pronounced by this Court. As has been observed by this Court in Harla v. State of Rajasthan [AIR 1951 SC 467 : (1952) 53 Cri LJ 54] : (AIR p. 468, para 8) Page 7 of 15 "8. ... it would be against the principles of natural justice to permit the subjects of a State to be punished or penalised by laws of which they had no knowledge and of which they could not even with the exercise of reasonable diligence have acquired any knowledge." However, if any sitting Member of Parliament or a State Legislature is convicted of any of the offences mentioned in sub- sections (1), (2) and (3) of Section 8 of the Act and by virtue of such conviction and/or sentence suffers the disqualifications mentioned in sub-sections (1), (2) and (3) of Section 8 of the Act after the pronouncement of this judgment, his membership of Parliament or the State Legislature, as the case may be, will not be saved by sub-section (4) of Section 8 of the Act which we have by this judgment declared as ultra vires the Constitution notwithstanding that he files the appeal or revision against the conviction and/or sentence.
39. With the aforesaid declaration, the writ petitions are allowed. No costs.
9. In the case of Rama Narang v. Ramesh Narang and others, (1995) 2 SCC 513, the Supreme Court has observed as follows:
19. That takes us to the question whether the scope of Section 389(1) of the Code extends to conferring power on the Appellate Court to stay the operation of the order of conviction.
As stated earlier, if the order of conviction is to result in some disqualification of the type mentioned in Section 267 of the Companies Act, we see no reason why we should give a narrow meaning to Section 389(1) of the Code to debar the court from granting an order to that effect in a fit case. The appeal under Section 374 is essentially against the order of conviction because the order of sentence is merely consequential thereto; albeit even the order of sentence can be independently challenged if it is harsh and disproportionate to the established guilt. Therefore, when an appeal is preferred under Section 374 of the Code the appeal is against both the conviction and sentence and therefore, we see no reason to place a narrow interpretation on Section 389(1) of the Code not to extend it to an order of conviction, although that issue in the instant case recedes to the background Page 8 of 15 because High Courts can exercise inherent jurisdiction under Section 482 of the Code if the power was not to be found in Section 389(1) of the Code. We are, therefore, of the opinion that the Division Bench of the High Court of Bombay was not right in holding that the Delhi High Court could not have exercised jurisdiction under Section 482 of the Code if it was confronted with a situation of there being no other provision in the Code for staying the operation of the order of conviction. In a fit case if the High Court feels satisfied that the order of conviction needs to be suspended or stayed so that the convicted person does not suffer from a certain disqualification provided for in any other statute, it may exercise the power because otherwise the damage done cannot be undone; the disqualification incurred by Section 267 of the Companies Act and given effect to cannot be undone at a subsequent date if the conviction is set aside by the Appellate Court. But while granting a stay of (sic or) suspension of the order of conviction the Court must examine the pros and cons and if it feels satisfied that a case is made out for grant of such an order, it may do so and in so doing it may, if it considers it appropriate, impose such conditions as are considered appropriate to protect the interest of the shareholders and the business of the company.
10. In K.C.Sareen vs. CBI, Chandigarh, (2001) 6 SCC 584, the Supreme Court by relying on the decision in the case of Rama Naranga has observed as follows:
"11. The legal position, therefore, is this: though the power to suspend an order of conviction, apart from the order of sentence, is not alien to Section 389(1) of the Code, its exercise should be limited to very exceptional cases. Merely because the convicted person files an appeal in challenge of the conviction the court should not suspend the operation of the order of conviction. The court has a duty to look at all aspects including the ramifications of keeping such conviction in abeyance. It is in the light of the above legal position that we have to examine the question as to what should be the position when a public servant is convicted of an offence under the PC Act. No doubt when the appellate court admits the appeal filed in challenge of the conviction and sentence for the offence under the PC Act, the superior court should normally suspend the sentence of imprisonment until disposal of the appeal, because refusal Page 9 of 15 thereof would render the very appeal otiose unless such appeal could be heard soon after the filing of the appeal. But suspension of conviction of the offence under the PC Act, dehors the sentence of imprisonment as a sequel thereto, is a different matter."
11. In State of Maharashtra vs. Balakrishna Dattatrya Kumbhar, (2012) 12 SCC 384, the Supreme Court has observed as follows:
15. Thus, in view of the aforesaid discussion, a clear picture emerges to the effect that the appellate court in an exceptional case, may put the conviction in abeyance along with the sentence, but such power must be exercised with great circumspection and caution, for the purpose of which, the applicant must satisfy the court as regards the evil that is likely to befall him, if the said conviction is not suspended. The court has to consider all the facts as are pleaded by the applicant, in a judicious manner and examine whether the facts and circumstances involved in the case are such, that they warrant such a course of action by it. The court additionally, must record in writing, its reasons for granting such relief. Relief of staying the order of conviction cannot be granted only on the ground that an employee may lose his job, if the same is not done.
12. In the case of Lok Prahari vs. Election Commission of India, (2018) 18 SCC 114, the Supreme Court has observed as follows:
16. These decisions have settled the position on the effect of an order of an appellate court staying a conviction pending the appeal. Upon the stay of a conviction under Section 389 CrPC, the disqualification under Section 8 will not operate. The decisions in Ravikant S. Patil [Ravikant S. Patil v. Sarvabhouma S. Bagali, (2007) 1 SCC 673 : (2007) 1 SCC (Cri) 417] and Lily Thomas [Lily Thomas v. Union of India, (2013) 7 SCC 653 :
(2013) 3 SCC (Civ) 678 : (2013) 3 SCC (Cri) 641 : (2013) 2 SCC (L&S) 811] conclude the issue. Since the decision in Rama Narang [Rama Narang v. Ramesh Narang, (1995) 2 SCC 513] , Page 10 of 15 it has been well settled that the appellate court has the power, in an appropriate case, to stay the conviction under Section 389 besides suspending the sentence. The power to stay a conviction is by way of an exception. Before it is exercised, the appellate court must be made aware of the consequence which will ensue if the conviction were not to be stayed. Once the conviction has been stayed by the appellate court, the disqualification under sub-sections (1), (2) and (3) of Section 8 of the Representation of the People Act, 1951 will not operate. Under Article 102(1)(e) and Article 191(1)(e), the disqualification operates by or under any law made by Parliament. Disqualification under the above provisions of Section 8 follows upon a conviction for one of the listed offences. Once the conviction has been stayed during the pendency of an appeal, the disqualification which operates as a consequence of the conviction cannot take or remain in effect. In view of the consistent statement of the legal position in Rama Narang [Rama Narang v. Ramesh Narang, (1995) 2 SCC 513] and in decisions which followed, there is no merit in the submission that the power conferred on the appellate court under Section 389 does not include the power, in an appropriate case, to stay the conviction. Clearly, the appellate court does possess such a power. Moreover, it is untenable that the disqualification which ensues from a conviction will operate despite the appellate court having granted a stay of the conviction. The authority vested in the appellate court to stay a conviction ensures that a conviction on untenable or frivolous grounds does not operate to cause serious prejudice. As the decision in Lily Thomas [Lily Thomas v. Union of India, (2013) 7 SCC 653 : (2013) 3 SCC (Civ) 678 : (2013) 3 SCC (Cri) 641 : (2013) 2 SCC (L&S) 811] has clarified, a stay of the conviction would relieve the individual from suffering the consequence inter alia of a disqualification relatable to the provisions of sub-sections (1), (2) and (3) of Section 8.
13. In the instant case, the maximum sentence is for a period of three years and all such sentences for each offence are directed to run concurrently. The allegation is pertaining to availing loan of Rs.1.5 Crores illegally. The offence relates to the year 2000 and at the time of commission of offence, the Page 11 of 15 Appellant was not in the political field, but was a businessman. His prayer is objected by the Vigilance Department. Learned Senior Standing Counsel (Vig.) submits that this Petitioner has criminal antecedents of similar nature and other vigilance cases pending against him are,
(i) Bhubaneswar Vigilance P.S. Case No.34/2007 dated 06.09.2007, U/s.13(2) r/w Sec.13(1)(d) of the P.C.Act, 1988 and Section 120-B/467/468/471/420 of the IPC and Special Leave Appeal (Crl.) No. 5303 of 2008 pending trial.
(ii) Cuttack Vigilance P.S. Case No.83/2012 dated 28.12.2012, U/s.13(2) r/w Sec.13(1)(d) of the P.C.Act, 1988 and Sec.467/468/471/420/120-B of the IPC and Charge-sheet No.10 dated 22.09.2022 has been submitted.
(iii) Cuttack Vigilance P.S. Case No.84/2012 dated 28.12.2012, U/s.13 (2) r/w Sec.13(1)(d) of the P.C. Act, 1988 and Sec.467/468/471/420/120-B of the IPC is awaiting sanction against accused Public Servant.
(iv) Cuttack Vigilance P.S. Case No.85/2012 dated 31.12.2012, U/s 13(2) r/w Sec.13 (1) (d) of the P.C. Page 12 of 15 Act, 1988 and Sec.467/468/471/420/120-B of the IPC is pending investigation
(v) Vigilance Cell P.S. Case No.17/2017 dated 18.09.2017, U/s.13(2) r/w Sec.13(1)(d) of the P.C. Act, 1988 and Sec.467/468/471/420/120-B of the IPC is pending investigation.
14. Mr.Das, learned Senior Standing Counsel thus submits that, when it is proved that the Petitioner has availed loan by producing forged and fabricated documents and he was having other vigilance cases pending against him, benefit of stay of conviction should not be extended in his favour.
15. Mr.Acharya, learned Senior Counsel submits on the other hand that those vigilance cases stated to be pending against the Appellant are all created and out of those five cases mentioned above, three are at the stage of investigation, in one case charge- sheet has been submitted recently on 22nd September, 2022 after ten years of investigation and in the last one case the trial is still awaiting. Therefore, those cases cannot be considered as an impending factor to allow his prayer.
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16. Admittedly, the Appellant is presently continuing as a Member of the Odisha Legislative Assembly, duly elected from Barbati-Cuttack Legislative Assembly Constituency. He is elected for a term of five years and took oath on 23rd May, 2019. Still there is around one and half years to complete the term in normal circumstances. So, keeping in view his position as sitting MLA of Odisha Legislative Assembly, the loss befall on him due to the conviction would be irreparable unless the same is stayed. This will also lead to an untimely bye-election to burden the public exchequer. Further, considering the limited period of his sentence for three years and the offences involved, which are neither punishable with death nor imprisonment for life, it is felt apposite to grant stay of the conviction pending appeal since the impact of loss due to disqualification would not only be enormous for the Appellant but also be for the public-exchequer. The Appellant has the statutory right to prefer appeal under Section 374 Cr.P.C. against his conviction and the appeal being admitted by this Court, no reason is found to make a narrow interpretation to debar the Petitioner from disqualification. Since the appeal is pending for Page 14 of 15 hearing, expressing of any opinion on merit of the appeal or giving any finding on merit at this stage would likely cause prejudice to either parties. Thus for the limited purpose of this application and taking note of the special facts of the case, this is found an exceptional case to stay the order of conviction.
17. As such, the prayer is allowed and the impugned judgment of conviction passed by the learned Special Judge, Vigilance, Bhubaneswar in T.R.Case No.1 of 2009, in respect of the present appellant, is stayed pending appeal.
18. List the appeal on 22nd February, 2023 for hearing. In the meantime, the Registry is directed to prepare the paper books and serve upon concerned counsels appearing for the respective parties and the parties are directed to come ready for hearing.
( B.P. Routray) Judge CRB Page 15 of 15