Allahabad High Court
Smt. Mamta Mittal And Another vs State Of U.P. And Another on 10 December, 2020
Equivalent citations: AIRONLINE 2020 ALL 2420
Author: Suneet Kumar
Bench: Suneet Kumar
HIGH COURT OF JUDICATURE AT ALLAHABAD Reserved on 24.11.2020 Delivered on 10.12.2020 Court No. - 2 Case :- APPLICATION U/S 482 No. - 12651 of 2020 Applicant :- Smt. Mamta Mittal and another Opposite Party :- State of U.P. and another Counsel for Applicant :- Gaurav Singh Chauhan, R.P.S. Chauhan Counsel for Opposite Party :- G.A., Rahul Chaudhary Hon'ble Suneet Kumar, J.
1. Heard Shri Amrendra Nath Singh, learned Senior Counsel assisted by Shri Gaurav Singh Chauhan and Shri R.P.S Chauhan, learned counsels for the applicant; and, Shri Dharmendra Singhal, learned Senior Counsel, assisted by Shri Shivendra Raj Singhal and Rahul Chaudhary, learned counsels for the opposite party and learned AGA for the State.
2. Learned counsel for the applicant, at the outset, submits that the application titled as ''Amendment Application' be read as ''Supplementary Affidavit' bring on record the cognizance order.
3. Applicants have filed this application under Section 482 of Code of Criminal Procedure, 1973 (for short "Cr.P.C."), seeking following relief:
"It is, therefore, most respectfully prayed that this Hon'ble Court may graciously be pleased to allow the instant application u/s 482 Cr.P.C. and quash the entire proceedings of Case no. 22977 of 2019, (State Vrs. Seems Goel and others), under sections 420, 406, 409, 120B I.P.C., Police Station - Kavi Nagar, District Ghaziabad pending in the court of Chief Judicial Magistrate, Ghaziabad and further be pleased to quash the charge sheet dated 27.05.2019 and consequential cognizance order dated 20.06.2019 arising out of Case Crime No. 1889 of 2018, under Sections 420, 406, 409, 120B I.P.C. Police Station - Kavi Nagar, District Ghaziabad."
4. The facts giving rise to the instant petition, briefly stated, is as that opposite party no. 2 (G.S. Raghav) lodged a first information report (FIR) dated 06.09.2018 against 10 suspected accused alleging that he had invested 2,04,30,623/- in Earth Iconic Infrastructures Pvt. Ltd. (hereinafter referred to as the "offending company"), wholly owned subsidiary company of "Earth Infrastructures Ltd. The directors and share holders of the offending company fraudulently cheated the complainant of his investment. It is alleged that co-accused Rohit Batra and Amit Yadav (presently approver) introduced the complainant to the directors. The applicants herein are share holders of the offending company; on the assurance of the accused applicant invested money in good faith in the project of the offending company; the accused had assured return at 14 per cent on the investment. It is further alleged that company issued 41 cheques at rupees 75,21,059/- returning the money to the complainant, out of which 28 cheques (worth rupees 50,90,436/-) were encashed but 21 cheques, at rupees 24,30,623/-, bounced. The investigating officer exonerated the applicants, charge-sheet dated 22.02.2019 came to be submitted against the directors (husbands of the applicants) of the offending company. The learned Chief Judicial Magistrate has taken cognizance vide order dated 23.04.2019.
5. It appears that on further investigation, a supplementary charge-sheet was submitted against the applicants on 27.05.2019 and cognizance thereon was taken by learned Magistrate on 28.06.2019, which is under challenge.
6. It is urged that applicants are share holders of the offending company; applicants have been falsely implicated merely for the reason that their husbands are directors of the offending company and other companies; taking the allegation on face value no offence is made out against the applicants; it is a case where an investment was made in the project of the offending company; the company returned part of the investment and interest thereon; the dispute is primarily of civil nature; in any case, applicants were never, directly or indirectly, involved in the affairs of the company except being share holders. It is further urged that applicants have remedy under Negotiable Instruments Act, 1881.
7. Learned A.G.A., representing the State, and learned Senior Counsel appearing for the opposite party no. 2 submit that applicants have not approached the Court with clean hands; material facts have been suppressed; learned Magistrate issued non-bailable warrant against them on 19.03.2019, coercive proceedings have been initiated under Section 82 Cr.P.C. It is further submitted that applicants have not disclosed their credentials and have not brought on record their relationship with the offending company and the directors. The offending company is a wholly owned subsidiary company of "Earth Infrastructures Ltd". The offending company in order to make wrongful gain by cheating and defrauding the public at large, floated various commercial real estate projects. In furtherance thereof company prepared forged documents with regard to title of the land and invited money/investment against the projected constructions over the plots on fake and fictitious documents. To perpetuate the fraud and cheating the invested money was syphoned from offending company to other companies in which applicants are directors. The said fact has not been disclosed, nor explained by the applicants as to how huge sums of money was transferred from offending company to the company of which applicants are directors. It is urged that it is a glaring case of organized economic crime since inception to dupe gullible investors, thereby, embezzling huge sums of money.
8. It is further urged that after syphoning of the money, to different companies, most of the companies have gone into winding up/liquidation. It is further submitted that material collected by investigating officer (for short ''I.O.') reflects that large number of shell companies were floated by the family members and relatives to defraud the investors/home buyers. Smt. Mamta Mittal, first applicant, is the director/additional director of 25 such companies, whereas, Smt. Renu Gupta, second applicant, is director/additional director in 26 companies; their husbands are directors of the defrauding company; large sums of money was transferred from defrauding company to shell companies of which applicants are director. It is a case of fraudulently syphoning of money in criminal conspiracy to defraud and cheat the public and investors. It is further urged that the scam is of over 15 thousand crore and the funds of over 8 thousand investors have been syphoned through fictitious companies. The intention of the accused from the very inception was to cheat on forged and manufactured documents. The projects have not seen the light of the day.
9. I have considered the rival submissions and perused the material placed on record.
10. The I.O. during investigation has noted the sum of money transferred from one bank account to another bank account of sister companies; details of the bank accounts and name of the banks in which the money was transferred has been furnished in the case diary. The transactions are over and above 32 crores, in some cases, similarly detailed transactions of other companies and bank account has been noted. During investigation, it has surfaced that directors of the offending company, who happen to be husband of applicants, floated shell companies in the name of their employees, wifes and relatives. The money invested was routed and syphoned off through the shell companies owned by the applicants. The list of over 50 shell companies owned by the applicants has been detailed by the I.O. It has also been brought on record the extracts taken from the Ministry of Corporate Affairs of the list of companies in which applicants are directors. The Court at this stage will not enter into the merits examining the evidence. The applicants have not disputed the factum that they are directors of large number of companies and received funds from the offending company, which has not been explained in the petition. The plea that they are mere share holders of the offending company would not absolve them of their prima facie involvement in the alleged offence. The allegations, inter alia, against the applicants is of deep rooted criminal conspiracy. The I.O. has collected sufficient material and evidence to prima facie support the allegation of criminal conspiracy. The ingredients to constitute the offence of criminal conspiracy merely requires an agreement/understanding to commit an illegal act, or an legal act by illegal means, no further overt act is required unlike offence under Section 34 or Section 109 I.P.C.
11. Under the garb of commercial transaction the investors were duped of their investment. The money was transferred to shell companies, thereafter, the companies went into winding up. The edifice of the alleged commercial project was setup on fraudulent projects based on forged documents to dupe the investors. The economic crime was executed giving an impression that it is an economic commercial project, but on investigation, the lid covering the fraud has been exposed. In the given facts the applicants conspired with their husbands to defraud by floating several hundred shell companies. It is not a case of commercial failure of a project floated by a company as is being portrayed. The fraud and forgery has been, prima facie, committed by the directors of the offending company conspiring with their wives, who are directors of over 50 companies in whose bank account money was diverted. The contention that the applicants are share holders of the offending company would not absolve them of criminal conspiracy. There is sufficient material/evidence and strong suspicion to link the applicants in commission of the offence. The applicants and other accused have been charged in their individual capacity and not for the affairs of the company. The companies of which the applicants are directors appear to be mere companies on paper and/or shell companies. The investigation is still kept open and pending as the list of companies is never ending.
12. Contention of learned counsel for the applicant that complainant has remedy of taking recourse to arbitration; under Insolvency and Bankruptcy Code, 2016, and/or under Section 18 of Real Estate (Regulation and Development) Act, 2016 is of no avail as the prosecution has been lodged for commission of the crime which directly involves the applicants and the directors in criminal conspiracy. Learned counsel for the applicant is unable to show any provision that would bar criminal prosecution in the circumstances.
13. Learned counsel for the applicant failed to point out any illegality, infirmity or jurisdictional error in the impugned order of learned Magistrate taking cognizance so as to warrant interference.
14. The application, being devoid of merits, is accordingly dismissed.
Order Date :- 10.12.2020 P. Sri.