Telangana High Court
Bellezza Apartments Ownersand 3 Others vs State Of Telangana And 2 Others on 26 November, 2020
Author: K. Lakshman
Bench: K. Lakshman
THE HONOURABLE SRI JUSTICE K. LAKSHMAN
CRIMINAL PETITION No.3548 OF 2020
ORDER:
This petition is filed under Section 482 Cr.P.C., to quash the complaint in Crime No.601 of 2020 pending on the file of KPHB Colony Police Station, Cyberabad district. The petitioners are accused in the said crime. The offences alleged against the petitioners are under Sections 406, 418 and 420 of IPC.
2. Heard Sri B.Adi Narayana Rao, learned Senior Counsel representing Sri Srinivasa Rao Bodduluri, learned counsel for the petitioners, Sri Pattabhi Vemulapati, learned counsel representing Sri Rambabu, learned counsel for the respondent Nos.2 and 3 and learned Public Prosecutor for the respondent No.1-State. Perused the record.
3. Contentions of the petitioners in the memorandum of Criminal Petition are:
(i). The contents of the complaint lacks ingredients of the offences alleged against the petitioners herein.
(ii). There is alternative dispute resolution mechanism in the Bye-laws of the 1st petitioner-Bellazza Apartments Owners Welfare Association (for short, '1st petitioner Association') and the respondent Nos.2 and 3 without availing the said alternative mechanism, filed the present complaint with the 2 above said police, who in turn registered a case in Cr.No.601 of 2020 for the above said offences.
(iii). The police have no power to investigate into the allegations made in the complaint since they are intra Management Committee of the 1st petitioner Association.
(iv). There was amendment to the Bye-laws of the respondents Society and the same was intimated to the Registrar concerned. As per Section 8(5) of the A.P. Societies Registration Act, 2001(for short, 'the Act'), there is no need to register the amended Bye-laws and mere intimation of the same to the Registrar is sufficient.
(v). With regard to the applicability of the Bye-laws including the amended Bye-laws, the same cannot be gone into by the police while conducting investigation in the present crime No.601 of 2020.
(vi). The intra-Management Committee disputes have to be decided by the District Judge under Section 23 of the Act.
(vii). Out of 362 Members, 240 Members have attended the General Body Meeting and the attendees of the said meeting have ratified the resolutions taken by the Managing Committee. 95% of the attendees of the General Body Meeting have ratified the actions of the Managing Committee including certain payments.
(viii). Some of the Members have filed O.P.No.2 of 2020 before the XV Additional District & Sessions Judge, Kukatpally, seeking to declare the resolutions passed by 3 General Body, dated 24.03.2019, 14.12.2019 and 09.08.2020 as null and void and they have also filed two Interlocutory Applications seeking to appoint Receiver and to conduct audit by third parties. Arguments were advanced in the said Interlocutory Applications and the XV Additional District & Sessions Judge and Sessions Judge, Kukatpally has already reserved the said two applications for orders.
(ix). 175 Members have filed their affidavits in the said O.P.No.2 of 2020 stating that the impugned resolutions were all passed duly by the General Body and the Managing Committee has been doing excellent work in the past and also the above case filed by the petitioners therein is only to cause avoidable disturbance in the affairs of the said Society.
Without waiting for the outcome of the said Interlocutory Applications and also the O.P.No.2 of 2020, the respondent Nos.2 and 3 herein have lodged the present complaint with a mala fide intention to harass the petitioners herein.
(x). The learned Senior Counsel has referred several provisions of the Bye-laws of the said Association and would contend that it is a matter to be adjudicated by the civil Court under Section 23 of the Act but not by the Police. Learned Senior Counsel has referred the letter dated 31.03.2019 submitted by the Deputy Manager (Facilities) of the 1st petitioner Association complaining about the illegal acts of Mrs. Padmaja Reddy, Deputy Commissioner of Police (DCP), w/o Mr. Kalyan Reddy, the e-mail addressed by Mrs. Padmaja 4 Reddy dated 31.03.2019, the letter dated 31.03.2019 by housekeeping staff and also the Postman. By referring the same, learned Senior Counsel would submit that Mrs. Padmaja Reddy is DCP and her husband is Ex-Managing Committee Member of the 1st petitioner Association and at the instance of the said DCP, the Police have registered the case and harassing the petitioners herein. With the said submissions, the learned Senior Counsel seeks to quash the proceedings in Cr.No.601 of 2020.
4. On the other hand, Sri Pattabhi, learned counsel representing Sri S.Rambabu appearing for respondent Nos.2 and 3 would submit that the contents of the complaint, prima facie made out the cognizable offence. Therefore, the Police registered the present case and it is at the crime stage. The Investigating Officer has to conduct investigation by collecting the evidence. He has to record the statements of the witnesses. Learned counsel has referred certain provisions of Cr.P.C. including Sections 157, 172 and 173. The alleged General Body Meeting, dated 09.08.2020 is post-registration of the present crime.
5. Basing on the complaint lodged by the 2nd respondent, the present President of the 1st petitioner Association, the Police, KPHB Colony Police Station have registered two cases vide Cr.Nos. 807 of 2020 and 808 of 2020 for the offences under Sections 406, 418, 424 and 420 of IPC. Since the punishment for the said offences is 7 years 5 or below 7 years, the Police have already invoked procedure laid down under Section 41-A Cr.P.C. against the Ex- Managing Committee Members of the 1st petitioner Association including Sri M.Kalyan Reddy husband of Ms. Padmaja Reddy, DCP. The police are investigating into the said crimes. Therefore, the allegations of the petitioners that the DCP is influencing the Police is far from truth and it is baseless allegation. With the said submissions, the learned counsel for the respondent Nos. 2 and 3 seeks to dismiss the present Criminal Petition.
6. Learned Public Prosecutor would submit that the contents of the complaint dated 01.08.2020 would constitute the cognizable offence and therefore, the Police have registered a case in Cr.No.601 of 2020. The Investigating Officer is collecting evidence and recording the statements of the witnesses. It is at crime stage. The petitioners herein, instead of cooperating with the Investigating Officer, sought stay of all further proceedings including arrest of the petitioners herein.
7. On perusal of the complaint dated 01.08.2020, the allegations against the petitioners/accused are that the petitioner Nos.2 to 4 President, Secretary and Treasurer of the 1st petitioner Association have committed misappropriation of funds, cheating, Mischief and Criminal breach of trust. Bye- law No.6 of the Society stipulates that utilization of all funds has to be with the prior permission of the General Body. As 6 per bye-law No.94, the Management of the affairs of the society shall vest in the Committee duly constituted as per the bye-laws of the Society as the apex body to over see the management of the Society.
8. Bye-law No.121 sets out the duties of the Managing Committee, Bye-law No.124 deals with the books of accounts, records and registers that have to be maintained by the Society. Bye-law No.128 stipulates that any payment by the Society in excess of Rs.1500/- has to be paid by a crossed account payee cheque. Bye-law No.140(a)(i) deals with spending limits of the Managing Committee and provides that the Committee can incur a one-time expenditure of up to Rs.2 lakhs towards repairs and maintenance and any other expenditure in excess of this requires the prior sanction of the General Body. Bye-law No.140(a)(iii) further stipulates that the General Body shall decide the limit upto which expenditure towards repairs and maintenance may be incurred by the Committee without calling for tenders.
9. Thus, the petitioner Nos. 2 to 4 being the Managing Committee Members of the 1st petitioner Association, without following the procedure laid down under Bye-laws of the 1st petitioner Association, have misappropriated the funds. The details of the funds misappropriated including payment of Rs.5 lakhs to M/s Sumanjali Parboiled Private Limited, under the guise of donation is also specifically mentioned. The Managing Committee has been entrusted with the property of 7 the 1st petitioner Association and it has dishonestly used and disposed of the property in violation of the Bye-laws. The amount of Rs.42 lakhs was spent for Covid expenses, by the petitioner Nos.2 to 4 and other Managing Committee Members of the 1st petitioner Association in violation of the provisions of the Bye-laws of the Society.
10. Basing on the complaint dated 01.08.2020 lodged by the respondent Nos. 2 and 3, the Police have registered a case vide Cr.No.601 of 2020 for the offences under Sections 418, 420 and 406 of IPC.
11. According to Sri B.Adinarayana Rao, learned Senior Counsel, the said allegations cannot be investigated into by the Police and the same are to be adjudicated by the Civil Court under Section 23 of the Act. Section 23 of the Act deals with disputes regarding management. Whereas, the allegations leveled against the Managing Committee Members of the 1st petitioner Association including the Petitioner Nos.2 to 4 herein are that they have misappropriated the funds of the 1st petitioner Association in violation of the Bye-laws and also committed cheating and criminal breach of trust etc. and the same is within the purview of Section 23 of the Act. Admittedly, some of the Members have filed O.P.No.2 of 2020 seeking to declare the resolutions dated 24.03.2019, 14.12.2019 as null and void. The two Interlocutory Applications were filed in the said O.P. seeking to appoint receiver to conduct affairs of the society and also to conduct 8 the audit of the Society by the third party. The said two Interlocutory Applications are pending for orders before the civil court. The said O.P. is also pending.
12. As per the principle laid down by the Hon'ble Apex Court in Lalita Kumari vs. Government of Uttar Pradesh1 if the contents of the complaint prima facie constitutes cognizable offence, the Police have to necessarily register the case and investigate into the matter.
13. As discussed above, there are serious allegations of misappropriation of funds of the 1st petitioner Association against the petitioner Nos. 2 to 4 herein. The details of the misappropriation including amounts, nature and also the relevant provisions of the Bye-laws were specifically mentioned in the complaint. Whether the 1st petitioner Association has submitted the amended Bye-laws with the appropriate authority as per the provisions of the Act, is a matter to be investigated into by the Investigating Officer.
14. There are several factual aspects which are to be investigated into by the Investigating Officer. Section 157 of CrPC deals with procedure for investigation. Section 172 of CrPC deals with diary of proceedings in investigation and Section 173 of CrPC deals with report of the Police Officer to be filed on completion of investigation. Admittedly, two cases vide Cr.No.807 of 2020 and 808 of 2020 are pending against the Management Committee Members on the complaint 1 (2014) 2 SCC 1 9 lodged by the 2nd petitioner, President of 1st petitioner Association. The same are also at crime stage and Investigating Officer is investigating into the said allegations. The Investigating officer has to collect evidence, record statements of the material witnesses including Members of the 1st petitioner Association and others.
15. It is apt to refer the decision of the hon'ble Apex Court in a recent Judgment in Kamal Shivaji Pokarnekar Vs. The State of Maharashtra2 wherein it is categorically held as follows:-
"Quashing the criminal proceedings is called for only in a case where the complaint does not disclose any offence, or is frivolous, vexatious, or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same. It is not necessary that a meticulous analysis of the case should be done before the trial to find out whether the case would end in conviction or acquittal. If it appears on a reading of the complaint and consideration of the allegations therein, in the light of the statement made on oath that the ingredients of the offence are disclosed, there would be no justification for the High Court to interfere.
Defences that may be available, or facts/aspects which when established during the trial, may lead to acquittal, are not grounds for quashing the complaint at the threshold. At that stage, the only question relevant is whether the averments in the complaint spell out the ingredients of a criminal offence or not.
2 AIR 2019 SC 847 10 The correctness or otherwise of the said
allegations has to be decided only in the Trial. At the initial stage of issuance of process it is not open to the Courts to stifle the proceedings by entering into the merits of the contentions made on behalf of the accused. Criminal complaints cannot be quashed only on the ground that the allegations made therein appear to be of a civil nature. If the ingredients of the offence alleged against the accused are prima facie made out in the complaint, the criminal proceeding shall not be interdicted."
16. As discussed supra, in the present case the contents of the complaint, prima facie, made out a cognizable offence. It is at crime stage. The Police are investigating into the matter. As per the principle laid down by the hon'ble Apex Court in the above said judgment that the criminal complaints cannot be quashed only on the ground that the allegations made therein appears of a civil nature and if the ingredients of the offences alleged against the accused are prima facie made out in the complaint, the criminal proceedings shall not be interdicted. There are several aspects to be investigated into by the Investigating officer. The two other crimes are pending against the Ex-Managing Committee of the 1st petitioner Association. The said crimes were registered on the complaint lodged by the 2nd petitioner, President of the 1st petitioner Association. The Punishment for the offences leveled against the accused in the said crimes vide Cr.Nos. 807 and 808 of 2020, the Police have already invoked procedure laid down under Section 41-A Cr.P.C. Even 11 in the present case also the punishment for the offences alleged against the petitioners is imprisonment for seven years and below seven years, the Police have to necessarily follow the procedure laid down under Section 41-A Cr.P.C.
17. Therefore, the Criminal Petition is disposed of directing the Investigating Officer/Station House Officer, to strictly follow the procedure laid down under Section 41-A Cr.P.C., and also the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar v. State of Bihar and another3. The Investigating Officer/Station House Officer is also directed not to arrest the petitioners till completion of investigation and filing of final report. However, the petitioners shall cooperate with the Investigating Officer by producing documents and furnishing the information as sought by him in completing investigation.
18. The stay of all further proceedings in Cr.No.601 of 2020 pending on the file of the Station House Officer/Investigating Officer, KPHB colony Police Station, Cyberabad district, granted vide order dated 09.09.2020 stands vacated.
Miscellaneous petitions, pending if any, shall stand closed.
_________________ K. LAKSHMAN, J Date:26.11.2020.
vvr 3 (2014) 8 SCC 273