Gujarat High Court
Sterling Oil Resources Ltd vs State Of Gujarat on 26 July, 2023
NEUTRAL CITATION
R/SCR.A/1789/2017 ORDER DATED: 26/07/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION NO. 1789 of 2017
With
R/SPECIAL CRIMINAL APPLICATION NO. 1792 of 2017
With
R/SPECIAL CRIMINAL APPLICATION NO. 1794 of 2017
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STERLING OIL RESOURCES LTD., & 4 other(s)
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MR NILESH A PANDYA(549) for the Applicant(s) No. 1,2,3,4,5
MR. SOAHAM JOSHI, APP for the Respondent(s) No. 1
RULE SERVED BY DS for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 26/07/2023
COMMON ORAL ORDER
1. Since the issues involved in the present applications are identical in nature, Special Criminal Application No. 1789 of 2017 is considered as leading matter and all the petitions are decided together.
2. By way of this petition under Articles 226 and 227 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, petitioners have approached this Court for seeking the following reliefs :
"(A) This Hon'ble Court be pleased to call for R&P of Page 1 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined Criminal Case No.33610 of 2016 pending before the learned JFMC, Vadodara and after perusing the same, be pleased to quash and set aside the Criminal Case No.33610 learned of 2016 pending JFMC, Vadodara before filed by respondent No.2 original complainant.
the the (B) During disposal Hon'ble further No.33610 the of Court pendency hearing this and application, be pleased proceedings of 2016 of to final this the Case the stay Criminal pending learned JFMC, Vadodara. before (C) Any other and further reliefs as deemed just and proper looking to the facts of this case, may kindly be granted in favour of the petitioner, in the interest of justice."
3. The background of facts is case as per the case of the petitioners in the captioned leading petition are as such that on 4.4.2016, the petitioners received notice under Negotiable Instruments Act, 1881 from the respondent No.2 mainly contending that SBLC loan / credit facility obtained by Sterling Global Oil Resources Pvt. Ltd., Mauritius, which is group companies of Sandesara Group and they entered into loan / credit facility agreement Page 2 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined with UCO Bank and SBLC Credit facility of USD 232 Million from UCO bank, MID Corporate branch for which sanction is granted by the UCO Bank on 12.3.2014 which came to be reviewed on 6.10.2015 and further modification on 30.11.2015. It is further the case of the petitioners in this petition that various agreements and deeds came to be executed by petitioners in favour of UCO Bank and also agreed for the terms and conditions stipulated in it at free will. Further, the petitioners failed to repay the amount of various facility / obligations specified in the modification dated 30.11.2015 within a stipulated period after various verbal as well as written intimation. It is further the case of the petitioners in this petition that the petitioner No.1 gave cheques duly singed by petitioner No.5 as an authorized signatory of petitioner Nos.2 to 4 Directors of the petitioner No.1 company along. with letter dated 4.12.2015. Furthermore, the aforesaid two cheques were returned unpaid on 24.3.2016 with advice 'funds insufficiency. Hence, the notice under Section 138 of the NI Act is issued. It is further the case of the petitioners in this petition that on 18.4.2016, the petitioners gave detailed reply and contended that the Page 3 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined present notice under Section 138 of the NI Act is not at all maintainable considering the disputed cheques. It is also pointed out that two cheques issued by the petitioners which is by Sterling Oil Resources Ltd. to the Sterling Oil 'Resources Ltd. itself as if it -was merely an account transfer instrument / entries. It is further the case of the petitioners in this petition that on 16.5.2016, in spite of that, the respondent No.2 filed the Criminal Case No.33610 of 2016 before the learned Magistrate First Class, Vadodara. In response to that the trial court has issued the summons to all the petitioners to remain present for the charge of Section 138 of the NI Act. Hence, the present petition is preferred.
4. Learned advocate Mr. Nilesh A. Pandya appearing on behalf of the petitioners has submitted that in the facts and circumstances of the present case and the identical petition is already decided by the Co-ordinate Bench of this Court in the case of Hitesh Narendrabhai Patel C/O Sterling Oil Resources Limited (sorl) versus Uco Bank Through Asst. General Manager D.S. Rathore and Others rendered in Special Criminal Application No.6730 of 2017 dated 22.2.2023, and has submitted that Page 4 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined at present he has no instruction in the matter. Therefore, the submissions made in the aforesaid judgment dated 22.2.2023 may be considered the submissions made in the present petition(s) at the bar, and therefore, sappropriate order may be passed after considering the averments made in the present petition.
5. Rule is served to respondent No.2, but has not chosen to appear or contest the matter.
6. Learned APP appearing on behalf of the respondent - State has opposed for granting any relief to the petitioners under Section 482 of the Criminal Procedure Code or under Article 226/227 of the Constitution of India. In identical matters, the Court has refused to exercise the same and considering the nature of the litigation and dispute, the offence involved, which is subject matter of the present petition, and therefore, he prays that this Court should not exercise the powers under Section 482 of the Criminal Procedure Code or Article 226/227 of the Constitution of India.
7. I have considered the submissions made at the by the Page 5 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined respective parties. In light of the above, the matter is considered by taking into account the submissions made at the bar in the judgment, which is pointed out in the identical matter decided by the Court in the case of Hitesh Narendrabhai Patel C/O Sterling Oil Resources Limited (sorl) versus Uco Bank Through Asst. General Manager D.S. Rathore and Others (supra), more specifically, paragraphs 2.1 to 7 are relevant, as under:
2.1. It is the case of the petitioner that before filing a complaint, the complainant served statutory notice on 04.04.2016 which came to be replied by SORL Company and others and according to the petitioner, full details regarding cheques having been disclosed to the complainant and by narrating the details of the cheques, petitioner has raised a grievance that the complainant Bank was neither holder nor can legally become the holder in due course which a sine qua non for filing of the compliant under Section 138 of the Negotiable Instrument Act. According to the petitioner, cheques were drawn on the Catholic Syrian Bank Ltd., and the cheque return memo should have been issued by Catholic Syrian Bank (CSYB). However, the respondent UCO Bank has issued cheque return memo for subject cheques, which is not legally a valid document for the purpose of filing a compliant and as Page 6 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined such, by raising multiple contentions, present petition is filed for the purpose of seeking quashment of criminal case as referred to above.
3. The co-ordinate Bench upon unilateral version of the petitioner was pleased to issue notice made it returnable on 24.11.2017 and in the meantime, ad-
interim relief had been granted in terms of paragraph 9(b) and since then, the matter was pending. Today, when the matter is taken up for hearing, learned advocate Mr. Nilesh Pandya, appearing on behalf of the petitioner has submitted that appropriate order be passed since he is not in touch with the petitioner since long and further he has also submitted that for want of sufficient instructions, he is not in a position to canvass submission any further and has left it to the discretion of the Court since the matter is pending for quite some time.
4. As against this, Mr. Pranav Desai, learned advocate appearing on behalf of the respondent Bank has submitted that the petition for quashing may not be entertained in view of the fact that clear prima facie offence is made out in the complaint and as such, has submitted that the complainant may be given an opportunity to prove the case during the course of trial of criminal case as referred to above. Looking to the Page 7 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined conduct of the petitioner also according to Mr. Desai, it is desirable that this is not a fit case for exercising jurisdiction either in extraordinary jurisdiction or under Section 482 of the Code of Criminal Procedure. Learned advocate Mr. Desai has further submitted that since no specific contentions have been canvassed which may even persuade this Court to exercise extraordinary jurisdiction and as such, the petition may not be entertained in view of the settled position of law as propounded by series of decision on the issue of exercising inherent powers for quashing criminal case. It has been further submitted that on the basis of the documents attached to the petition compilation, normally such power for quashment of the complaint not to be exercised and as such, has requested to dispose of the petition.
5. Learned APP appearing on behalf of the respondent - State has submitted that the discretion of quashing a criminal complaint deserves to be exercised in rarest of rare case and no such case is made out by the petitioner so as to exercise such jurisdiction and as such, has requested the Court not to entertain the petition. In fact, according to learned APP, the complaint in question is of the year 2016 and as such, same deserves to be dealt with properly by the court concerned wherein the petitioner will have full Page 8 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined opportunity to raise any defence including the issue which has been raised in the present petition and hence has requested to dismiss the petition.
6. Having heard the learned advocates appearing for the respective parties and having gone through the material on record, few circumstances are required to be noticed by the Court as can be seen from the assertion made by the complainant in the criminal case.
6.1. At the first instance, it would reflect from the complaint filed in the court of learned Judicial Magistrate, First Class, Vadodara by the respondent Bank that a specific assertion has been made as to in which manner the offence is said to have been committed. A specific assertion has also been made as to how cause of action has arisen which has necessitated the Bank to lodge complaint. Few assertions deserves to be quoted hereunder :-
"3. That the SBLC loan/credit facility obtained by STERLING GLOBAL OIL RESOURCES PVT. LTD., Mauritious, which is group companies of SANDESARA GROUP and have, inter alia, entered into Loan/Credit Facility Agreements with UCO Bank and taken (SBLC) Credit facilities of Page 9 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined USD 232 Million from UCO Bank, MID Corporate Branch vide sanction letter No.UCO/MC/HD-REC/2013-14/379 dated 12/3/2014 and Review vide HO Sanction No.HO/Corp.Credit/ 2118/2015-16 dated 6/10/2015 and further modification dated 30/11/2015 and you had executed the various agreements and deeds in favour of UCO Bank and agreed for the terms and conditions stipulated in it at free will. That you are fails to repay an amount of various facilities/obligations specified in the modification dated 30/11/2015 within a stipulated period after various verbal as well as written intimation.
4. That in discharge of your liability pertaining to modification dated 30/11/2015, you No. 5 has issued and delivered in part to our client with, Cheques of you No. 1 company which was duly signed by you No. 5 as an Authorised Signatory of Directors No. 2 to 4 of company alongwith letter dated 4/12/2015, the details of cheques are given below:
Sr. Bank Cheque Date Amount Reason for Issue of No. Name No. Cheque
1. The 336695 15.12.2015 2,14,59,000.00 PDC For interest of Sept.
Catholic 2015 in Sterling SEZ
Syrian Infrastructure Ltd.
Bank Ltd.,
Mumbai
2. - do - 336718 15.12.2015 67,27,00,000.00 PDC equivalent to amount
of SBLC issued.
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NEUTRAL CITATION
R/SCR.A/1789/2017 ORDER DATED: 26/07/2023
undefined
3 - do - 336696 15.12.2015 52,56,000.00 PDC For interest of Sept.
2015 in Sterling Oil
Resources Ltd.
Total 69,94,15,000.00
5. That upon receipt of the above cheques, on your request the above mentioned cheques were presented in our client's UCO Bank, MID Corporate Branch after your consent and you promised to clear the outstandings. However, the cheques were returned unpaid on 11/3/2016 with the advice 'Funds Insufficient'.
5. That on account of the dishonor of the said cheque, the complainant had served a legal notice dated 4/4/2016. upon the accused by way of Registered Post on dated 6/4/2016 and 7/4/2016.
However, despite service of notice, the accused has not taken any steps to liquidate his liability and has failed to make balance payments to the complainant towards the amount covered under the said cheque, within the statutory period of 15 days or thereafter and given a vague reply for escaping from your legal liability. Thus, the Accused has, therefore committed an offence within the meaning of Section 138 and other sections of the amended provisions of the Negotiable Instruments Act, 1881, for which he is Page 11 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined liable to be prosecuted and punished.
6. That the accused has paid an amount of Rs.59,97,00,000/- out of payment against cheque No. 336713 and still Rs.7,30,00,000/- is not received by complainant.
7. That the accused have failed to make payment against the said cheque which has been done by them malafidely, intentionally and deliberately and knowingly. That at the time of issuing the said cheques the accused were fully aware that the said cheques will not be honored on presentation. Therefore, the accused has dishonestly induced the complainant a sum of RS.
69,94,15,000 (RUPEES SIXTY NINE CRORE
NINTY FOUR THOUSAND FIFTEEN
THOUSAND ONLY) fully knowing that he cannot repay the said amount to the complainant.
8. That the accused is guilty of offence under Section 138, Negotiable Instruments Act and is also liable to be prosecuted under Section 420 of the Indian Penal Code.
6.2. The aforesaid assertions which have been made in the complaint deserves proper adjudication since the Page 12 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined averments are required to be examined by the court concerned. When in such a serious manner offence alleged to have been committed, this Court is of the clear opinion that on hyper-technicality which is though mentioned in the memo has not been agitated nor projected nor submitted before the court, the Court would not like to examine in exercise of jurisdiction under Section 482 of the Code of Criminal Procedure where the scope is very very limited. Apart from that it is trite law that under Section 482 of the Code of Criminal Procedure, powers no doubt can be exercised, but in rarest of rare case and the complaint cannot be throttled at the initial stage itself. Further the point which has been mentioned in the petition can still be agitated by the petitioner before the competent court where the complaint is pending since so many years and though ad-interim relief was granted, the resultant effect is that the complaint which is otherwise required to be adjudicated in detail has been intercepted by the petitioner in the present proceedings and now at this stage, without pressing any such contentions in detail, has left it to the discretion of the Court. So in this peculiar background of the fact instead of examining the issue it would be apt and appropriate that this point which has been tried to be canvassed by mentioning in the petition can be taken, pleaded before the court concerned, since the petitioner is having Page 13 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined ample opportunity to agitate. Hence, in the considered opinion of this Court, this is not a fit case in which powers under Section 482 of the Code of Criminal Procedure of such circumstance on hand deserves to be exercised.
7. The scope propounded by the Hon'ble Apex Court for exercise of jurisdiction under Section 482 of the Code of Criminal Procedure is well defined and one of the relevant proposition propounded in a decision in the case of Google India Private Limited v. Visaka Industries reported in (2020) 4 SCC 162, the Court deems it proper to quote the relevant observations hereunder:
"42. The contours of the jurisdiction of the High Court under Section 482 is no longer res integra. We would think that it is sufficient if we only advert to the judgment of this Court in State of Haryana and others v. Bhajan Lal and others17. This Court held as follows:
"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the Page 14 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised. (1992) Supp (1) SCC 335 (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an Page 15 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar Page 16 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.
103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act Page 17 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined according to its whim or caprice."
43. As to what is the scope of the expression "rarest of rare cases" indicated in paragraph 103, we may only refer to the judgment of this Court in Jeffrey J. Diermeier and another v. State of West Bengal and another18 wherein the law laid down by a Bench of three Judges in Som Mittal v. Govt. of Karnataka19 has been referred to:
"23. The purport of the expression "rarest of rare cases", to which reference was made by Shri Venugopal, has been explained recently in Som Mittal (2) v. Govt. of Karnataka [(2008) 3 SCC 574 : (2008) 1 SCC (L&S) 910 : (2008) 2 SCC (Cri) 1] . Speaking for a Bench of three Judges, the Hon'ble the Chief Justice said: (SCC pp. 580-
81, para 9) (2010) 6 SCC 243 (2008) 3 SCC 753 "9. When the words 'rarest of rare cases' are used after the words 'sparingly and with circumspection' while describing the scope of Section 482, those words merely emphasise and reiterate what is intended to be conveyed by the words 'sparingly and with circumspection'. They mean that the power under Section 482 to quash Page 18 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023 NEUTRAL CITATION R/SCR.A/1789/2017 ORDER DATED: 26/07/2023 undefined proceedings should not be used mechanically or routinely, but with care and caution, only when a clear case for quashing is made out and failure to interfere would lead to a miscarriage of justice. The expression 'rarest of rare cases' is not used in the sense in which it is used with reference to punishment for offences under Section 302 IPC, but to emphasise that the power under Section 482 CrPC to quash the FIR or criminal proceedings should be used sparingly and with circumspection."
(Emphasis supplied)
8. In view of the aforesaid circumstance and in view of the background of this peculiar nature of controversy in the considered opinion of this Court, this is not a fit case in which powers under Section 482 of the Code of Criminal Procedure deserves to be exercised. Accordingly, petition being meritless stands dismissed. Rule is discharged. Ad-interim relief, if any, stands vacated.
(SANDEEP N. BHATT,J) DIWAKAR SHUKLA Page 19 of 19 Downloaded on : Sat Sep 16 23:01:25 IST 2023