Karnataka High Court
Megacity (Bangalore) Builders And ... vs The Serious Fraud Investigation Office on 9 October, 2020
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 09TH DAY OF OCTOBER, 2020
BEFORE
THE HON'BLE MR. JUSTICE JOHN MICHAEL CUNHA
CRIMINAL REVISION PETITION NO.1415 OF 2019
C/W
CRIMINAL REVISION PETITION NOS.1419 OF 2019,
1424 OF 2019, 1428 OF 2019, 1435 OF 2019, 1420
OF 2019, 1422 OF 2019, 1423 OF 2019
AND 1462 OF 2019
IN CRL.R.P.NO.1415/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027.
Represented by Director,
Sri.C.P.Gangadhareswara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by Assistant Director. ...Respondent
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(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.280/2018.
IN CRL.R.P.NO.1419/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027.
Represented by its Director,
Sri.C.P.Yogeshwara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
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This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.377/2018.
IN CRL.R.P.NO.1424/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027.
Represented by its Director,
Sri.C.P.Yogeshwara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
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dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.379/2018.
IN CRL.R.P.NO.1428/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.1, Chandralok, 5th Cross,
Gandhinagar,
Bangalore - 560 009.
Represented by its Director,
Sri.C.P.Gangadhareswara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
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Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.378/2018.
IN CRL.R.P.NO.1435/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City, CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.380/2018.
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IN CRL.R.P.NO.1420/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027.
Represented by Director,
Sri.C.P.Yogeshwara. ...Petitioner
(By Sri.Kiran S Javali, Senior Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.283/2018.
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IN CRL.R.P.NO.1422/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.1, Chandralok, 5th cross,
Gandhinagar,
Bangalore - 560 009.
Represented by its Director,
Sri.C.P.Gangadharareswara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.284/2018.
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IN CRL.R.P.NO.1423/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.1, Chandralok, 5th Cross,
Gandhinagar,
Bangalore - 560 009.
Represented by its Director,
Sri.C.P.Gangadhareswara. ...Petitioner
(By Sri.Kiran S Javali, Senior Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.282/2018.
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IN CRL.R.P.NO.1462/2019
BETWEEN:
Megacity (Bangalore) Builders
& Developers Pvt. Ltd.,
At No.120, Mega Tower,
Kengal Hanumanthaiah Road,
Bangalore - 560 027.
Represented by Director,
Sri.C.P.Gangadharareswara. ...Petitioner
(By Sri.Kiran S Javali, Advocate a/w
Sri.Chandrashekara K., Advocate)
AND:
The Serious Fraud Investigation Office,
Ministry of Corporate Affairs,
Government of India,
2nd Floor, Paryavaran Bhawan,
CGO Complex, Lodhi Road,
New Delhi - 110 003.
Represented by
Assistant Director. ...Respondent
(By Sri.Madhukar M Deshpande, Spl. Panel Counsel)
This Criminal Revision Petition is filed under Section
397 r/w Section 401 Cr.P.C. praying to set aside the order
dated 17.09.2019 passed by the LXXXI Additional City Civil
and Sessions Judge, Bengaluru City CCH - 82 (Special
Court Exclusively to deal with Criminal Cases related to
elected MPs/MLAs in the State of Karnataka) in
Spl.C.C.No.281/2018.
These Criminal Revision Petitions coming on for
Admission this day, the Court made the following:
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COMMON ORDER
The only question involved in these petitions is whether prior notice was required to be issued to the petitioners before impleading them as co-accused under Section 319 Cr.P.C.?
2. Placing reliance on the decision of this Court in Crl.RP.No.231/2016 dated 30.03.2016 whereby following the decision of the Hon'ble Supreme Court in JOGENDRA YADAV & OTHERS Vs. STATE OF BIHAR reported in AIR 2015 SC 2951, Sri.Kiran.S.Javali, learned counsel for petitioners submitted that, this Court has clearly laid down in the above judgment that it is incumbent upon criminal courts to issue prior notice to a person calling upon him or her to show cause as to why he/she should not be made an additional accused under Section 319 Cr.P.C. Further, in the said judgment, it is held that only on giving an opportunity of being heard, a suitable order should be passed. "If the order is passed summoning a particular person in terms of Section 319
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Cr.P.C. without giving prior notice, such an order would not withstand the legal scrutiny".
Learned counsel also pointed out that in addition to the above proposition, this Court has also reiterated that, whenever a person is sought to be summoned as an additional accused in terms of Section 319 Cr.P.C. not only prior notice calling upon him to show cause is to be issued, but also the judge dealing with the case has to take extra caution to satisfy himself/herself that a stronger evidence exists as the basis for taking such action.
3. The learned Special Panel Counsel appearing for respondent, however submitted, by making the above application, the company by name Megacity (Bangalore) Builders & Developers Pvt. Ltd., was sought to be implicated as co-accused. The proposed company was represented by its Directors who were already arraigned as accused in the respective petitions except in Crl.R.P.No.1462/2019. Even before this Court, the very same Directors are representing the proposed company
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and therefore, there was substantial compliance of the order passed by this Court and hence, there is no justification to interfere with the impugned order.
4. I have considered the submissions and have gone through the impugned orders passed by the trial Court and have also perused the records as well as the judgment of this Court in Crl.R.P.No.231/2016 dated 30.03.2016.
5. The complainant is the Serious Fraud Investigation Office, Ministry of Corporate Affairs. The original accused were Sri.C.P.Yogeshwara, Ms.Manju Kumari, Sri.P.Mahadevaiah, Sri.C.P.Gangadhareshwara, Sri.Ramesh.H.R., and Sri.Sambashiv Rao. The complaint was filed in 2012 before the then Special Court for Economic Offences. It is only in the year 2019, applications were filed under Section 319 Cr.P.C. in the respective petitions seeking to implead the company as co- accused.
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6. The impugned order discloses that after calling for objections of the original accused the learned Special Judge has passed the impugned order without notifying the petitioners or without affording an opportunity of hearing to the petitioners as laid down in the decision referred supra.
7. The contention of the learned Special Panel Counsel that the Directors of the proposed accused are already parties to the proceedings and are aware of the proceedings and therefore, no prior notice is required to the proposed accused cannot be accepted. Undeniably, the proposed accused is a legal entity. No doubt, the original accused are sought to be prosecuted as the Directors of the said company. But, in the absence of any material to show that as on the date of making the above application the original accused are continuing as the Directors of the said company and are authorized to represent the said company, notice to the said original accused cannot be construed as notice to the company.
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Even otherwise, as per the dictum laid down in the above decisions, notice is required to be taken to the proposed accused to get it represented through any of its representatives or authorized persons in accordance with the byelaws of the company. The knowledge of the Directors of the company cannot be imputed to the company, especially, in the matter of proceeding against the company for a criminal offence. In that view of the matter, the submission of learned Panel Counsel, in my view, cannot be accepted. As the records indicate that there was no prior notice to the proposed accused and no opportunity of hearing was given, the impugned orders, in my view, being contrary to the law laid down in the above decisions, cannot be sustained.
8. Accordingly, the petitions are allowed. The impugned orders dated 17.09.2019 are set aside. The matters are remitted to the trial Court to consider the applications afresh by notifying the petitioners and affording an opportunity of hearing to the proposed
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accused in accordance with law. All other legal and factual contentions urged by the parties are left open for consideration by the Special Court at the appropriate stage.
Sd/-
JUDGE bkp