Orissa High Court
Afr M/S. Eden Infraprojects vs Republic Of India (Cbi) ...... ... on 28 July, 2023
Author: Sashikanta Mishra
Bench: Sashikanta Mishra
IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMC No. 1054 of 2023
Application under Section 482 of the Code of Criminal
Procedure, 1973.
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AFR M/s. Eden Infraprojects
Private Limited ...... Petitioner
-Versus-
Republic of India (CBI) ...... Opp.Party
Advocate(s) appeared in this case:-
_________________________________________________________
For Petitioner : Mr. Milon Mukherjee, Sr. Advocate
with M/s. Amarnath Sen, Malay
Dhar, P.K. Das, D. Dutta, Mrs.
Supria Patra, Miss P. Shaw,
For Opp. Party: Mr. Sarthak Nayak,
Advocate for CBI.
_________________________________________________________
CORAM:
JUSTICE SASHIKANTA MISHRA
JUDGMENT
28th July, 2023 SASHIKANTA MISHRA, J. The petitioner No.1, M/s. Eden Infraprojects Private Limited is a Company incorporated under the Companies Act, 2013 based at Kolkata and is represented by its Director, who is the petitioner No.2. The petitioner No.3 is another Director of the Company. All the three petitioners are accused in SPE No. 5 of 2014 Page 1 of 22 pending in the Court of leaned Special C.J.M.(C.B.I.), Bhubaneswar for the alleged commission of offence under Sections 420/409/120-B of IPC read with Section 3 and 4 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short "the PCMCS Act"). In the present application filed under Section 482 Cr.P.C., the petitioners pray for quashment of the above mentioned criminal proceedings along with orders dated 27.12.2022, 06.01.2023, 20.01.2023 and 03.02.2023 passed by the Court below in issuing NBW/A.
2. The brief facts, relevant only to decide the present application are that an FIR was lodged on 15.05.2013 in Baliapal Police Station by Sri Sumanath Sahu, S.I. of Police of Baliapal Police Station alleging that a non-banking financial company, namely, Tower Infotech Ltd., located at Baliapal has been collecting public deposits throughout Odisha by alluring depositors with promise of high rate of interest. Colourful brochures were printed by the Company to attract the general public to invest with false impression that it is running on profits. Enquiry revealed that the Company is not a listed Page 2 of 22 company with either Reserve Bank of India as NBFC or in National Stock Exchange of India. Thus, its activities were completely illegal. Basing on such report, Baliapal P.S. Case No. 85 of 2013 was registered against the Managing Director, Ramendu Chattopadhyaya and seven other officials of the Company under Sections 420/120-B/34 of IPC read with Sections 4, 5 and 6 of the PCMCS Act. In course of investigation, the Supreme Court of India in the case of Subrata Chattoraj vs. Union of India in its order dated 09.05.2014 directed the CBI to register a criminal case against the chit fund companies under the relevant provisions of IPC and other laws. Accordingly, the CBI registered an FIR vide Case No. RC-
10(S)/201/CBI/SCB/Kol. dated 04.06.2014 against the Company, Tower Infotech Ltd. and several persons associated with it treating Baliapal Police Station Case No. 85 of 2013 as the base case. Eventually the said case was registered as Special Case No. 5 of 2014 in the Court below, in which supplementary charge sheet was submitted by the CBI keeping investigation open under Section 173(8) of Cr.P.C.. In course of investigation by Page 3 of 22 CBI, the complicity of the petitioner No.1, Company and its officials having surfaced, notices were issued by the CBI to its Directors to produce documents. It was revealed that Tower Group of Companies offered to invest Rs.10 Crores in a township project at a place called, Maheshtala in Kolkata, pursuant to which it paid a sum of Rs.250 Lakhs on different dates to the petitioner No.1 Company.
3. The matter being further investigated final charge sheet was also submitted on 26.12.2022 for the aforesaid offences. While the petitioner No.2 was not arrested during investigation, petitioner No.3 was described as absconder in the supplementary charge sheet. By order dated 10.01.2017, cognizance of the offences was taken. By further order dated 27.12.2022, summons was issued by the Court below to several accused persons including petitioner No.2 and NBW was issued against petitioner No.3 and another accused person. At this stage, the petitioners have approached this Court in the present application.
4. Heard Mr. Milon Mukherjee, learned Senior Counsel assisted by Mr. Amarnath Sen, learned counsel Page 4 of 22 for the petitioners and Mr. Sarthak Nayak, learned counsel for the CBI.
5. Mr. Mukherjee would argue that the materials on record even accepted on their face value are not enough to impute any criminal liability on the petitioners, inasmuch as there is absolutely nothing to show that the petitioner No.1 Company was ever engaged in any chit fund business. It had entered into an agreement with M/s. Tower Infotech Ltd. in ordinary course of its business without having any knowledge that the money invested by the said Company was tainted being collected as deposits from general public through different schemes. Mr. Mukherjee would further contend that the fact of investment of Rs.2.50 crores made by M/s. Tower Infotech Ltd. in the petitioner No.1 Company was duly recorded in its books of accounts which were produced before the Investigating Officer during investigation. Therefore, submission of charge sheet under various provisions of the PCMCS Act is entirely misconceived. Mr. Mukherjee would further submit that in so far as the order of the Court below in issuing NBW against petitioner Page 5 of 22 No.3 is concerned, the same is also bad in law for the reason that the petitioner No.3 had fully cooperated with the investigation at all times and there is nothing to show that he had not done so. Several notices were issued under Section 91 of the Cr.P.C. to the Petitioner No.1 Company which petitioner No.2 responded by submitting all relevant documents. He even appeared before the I.O. and his statement under Section 161 Cr.P.C. was also recorded. Petitioner No.3 had also appeared before the Investigating Officer on 10.05.2016 but he could not do so pursuant to notice dated 26.06.2020 as he was in U.S.A. and travel restrictions were in place because of Covid-19 pandemic. Nevertheless he had duly complied with the notice by sending the documents asked for not only on that occasion but also thereafter. Thus, it cannot by any stretch of imagination be held that petitioner No.3 had not cooperated with the investigation. Mr. Mukherjee therefore, submits that the Investigating Officer has not produced any material whatsoever to show that the petitioner No.3 had not cooperated with the investigation. Mr. Mukherjee further argues that even otherwise, the Page 6 of 22 Court below could not have directly issued NBW without being satisfied that the same was justified on the facts of the case instead of mechanically accepting the version of the I.O. as noted in the charge sheet. To buttress his contentions as above, Mr. Mukherjee has relied upon the decisions of the Apex Court as well as of this Court in the case of Inder Mohan Goswami v. State of Uttaranchal, reported in (2007) 12 SCC 1; Siddhartha vs. State of Uttar Pradesh and another, reported in (2022) 1 SCC 676; Aman Preet Singh vs. C.B.I., reported in AIR, 2021 SC 4154; Satender Kumar Antil v. CBI, reported in (2022) 10 SCC 51; and Samshad Alam vs. Assistant Director E.D. (CRLMC No. 2220 of 2023)
6. Mr. S. Nayak, learned counsel appearing for the CBI has raised a preliminary objection as regards maintainability of the petition in so far as it relates to prayer for quashing of the orders passed by the Court below directing issuance of NBW against petitioner No.3. In this context, Mr. Nayak would argue that the above relief is confined only to petitioner No.3 and since the relief claimed is in respect of a criminal matter it is Page 7 of 22 necessary for the person seeking relief (petitioner No.3) to swear the affidavit accompanying the petition. In the instant case however, the affidavit has been sworn by petitioner No.2. In this regard Mr. Nayak has relied upon a decision of the Delhi High Court in the case of Amrinder Singh vs. State of NCT of Delhi, reported in 2022 SCC OnLine Del 24.
On merits of the case, Mr. Nayak would argue that there being clear proof of collection of huge funds by M/s. Tower Infotech Ltd. over a long period of time by floating different schemes to allure the gullible depositors, it cannot be believed for a moment that the petitioner No.1 Company had no knowledge of its activities. Further, it is also difficult to believe that despite entering into a business transaction to the tune of Rs. 10 crores for a township project with M/s. Tower Infotech Ltd., the petitioner No.1 Company and its Directors would be oblivious of its nature of business and reputation in the market. Therefore, acceptance of a sum of Rs.2.50 crores by the petitioner No.1 Company from M/s. Tower Infotech Ltd. has to prima facie be treated as an acceptance of a Page 8 of 22 portion of the ill-gotten money of the said Company. Mr. Nayak would further argue that the contentions raised by the petitioners are such as can only be examined during trial as the same forms their defence in the case. Therefore, according to Mr. Nayak, no case for interference by this Court is made out at the threshold.
As regards the prayer for quashment of the orders passed by the Court below directing issuance of NBW is concerned, Mr. Nayak would argue that the petitioner failed to respond to several notices and summons issued by the I.O. during investigation nor appeared before him, for which he was described as absconder in the charge sheet. Given his conduct therefore, it is reasonably apprehended that he would not cooperate with the trial also. Therefore, the Court below must be held to have rightly directed issuance of NBW.
7. I have considered the rival submissions referred above and have also gone through the case record in detail. As evident, the following three issues fall for consideration in the present case:
i. Regarding maintainability of the application.Page 9 of 22
ii. Regarding merits of the prayer for quashment of the proceedings.
iii. Regarding merit of the prayer made for quashment of the NBW.
Regarding Maintainability
8. As already stated, Mr. Nayak objects to the application under Section 482 of Cr.P.C. on the ground that the petitioner No.3 should have sworn the affidavit accompanying it as the relief claimed for quashment of NBW/A pertains only to him. Mr. Mukherjee responded to such objection by referring to the relevant provisions of the High Court of Orissa Rules, 1948 and by submitting that said Rules permit any one of the petitioners, where there are more than one, to swear the affidavit accompanying the petition being duly authorized by others. In the instant case, the affidavit accompanying the application is sworn by Mr. Amitava Patra, petitioner No.2 paragraph-3 of which mentions that he has been authorized by the petitioner Nos. 1 and 3 to swear the affidavits. Rule-4 of Chapter-VI under Part-2 of the Rules of the High Court of Orissa Rules, 1948 reads as under; Page 10 of 22
"4. Every petition and every affidavit shall be entitled "In High Court of Orissa" and shall be:
(i) Neatly typed on superior quality A4 size paper (29.7 cm x 21 cm) having not less than 75 GSM with printing on 15[both] side of the paper with Font-Times New Roman, Font Size-14, in one and half line spacing (for quotations and indents- font size in single line spacing), with margin of 5cm on left and right and 3 cm on top and bottom.
(ii) couched in proper language; and
(iii) signed and dated either by the petitioner or declarant or his advocate.
Provided that in case where the petition is filed from the judgment or order of a Subordinate Court as in the case of Civil Revision, Criminal Revision and Civil Review and where the facts are borne out by the records of the Court, an affidavit signed and dated by the Advocate's clerk may be accepted and the parties' affidavit dispensed with.
(iv) presented either by the petitioner or declarant or his recognised agent or his Advocate or some person appointed in writing in each case by such Advocate to present the same."
Chapter-XVIII of the Rules relates to procedure in criminal cases. Sub-Rule(2) of Rule 5 reads as follows;
"5(2). Every petitions for relief on Criminal matter shall contain a declaration supported by an affidavit of the applicant himself or his authorized agent stating if, any other application either u/s 438 or 439 Cr.P.C. or u/s 482 Cr.P.C. or Criminal Revision or a Writ Petition (Criminal) concerning the same case of the Court below is pending or has been disposed of by the High Court or any other Court upon such petition being filed either by the applicant or by any party to such proceeding including the accused involved in the case with result thereof if such case is disposed of."Page 11 of 22
9. Bare reading of the provisions quoted above would reveal that even in criminal matters, such as, applications under Section 482 of Cr.P.C., the authorized agent of the petitioner No.1 can swear the affidavits on behalf. In the instant case, the petitioner No.2 has sworn the affidavit being duly authorized by petitioner No.3. This is entirely in consonance with the Rules of the High Court of Orissa.
10. The case of Amrinder Singh (supra) cited by Mr. Nayak would have no application to the present case in view of the specific provision contained in the Rules governing filing of petitions in the High Court of Orissa. Obviously the Rules if any, framed by the Delhi High Court would have no application to cases filed before the High Court of Orissa because of existence of specific of specific Rules governing the field. Thus, the preliminary objection regarding maintainability as raised by Mr. Nayak is found to be without merit.
Regarding Merits.
11. Mr. Mukherjee, learned Senior Counsel argued at length in his attempt to persuade the Court that the Page 12 of 22 simple act of accepting deposit of Rs.2.50 Crores by the Petitioner No.1 Company from M/s. Tower Infotech Ltd. cannot by itself be viewed with suspicion to such extent as to implicate it and its Directors in the case, particularly when there is nothing to show that it had ever indulged in any chit fund business or had any role to play in such business allegedly carried out by M/s. Tower Infotech Ltd. The bonafides of the petitioner No.1 Company can be further seen from the fact that acceptance of the deposit of Rs. 2.50 crores has not been concealed by it but duly endorsed in its books of accounts. The petitioner No.1- Company has further proved its bonafides by depositing Rs.1.50 crores in the Court below during pendency of this case being permitted by this Court, which is in addition to the amount of Rs.1.50 crores already secured by the CBI freezing the account. Thus, the entire financial liability, if at all of the petitioner Company has been squared off.
12. The principles relating to quashing of proceedings by invoking power under Section 482 of Cr.P.C. have been laid down by Constitution Bench Page 13 of 22 decision of the Apex Court in the case of State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, which has been subsequently followed by numerous pronouncements of the Apex Court and different High Courts of the country. Without delving into the details of such guidelines it would suffice to note that this Court would exercise its inherent power under Section 482 Cr.P.C. to prevent the abuse of process of Court or to give effect to any provision of the Code and to secure ends of justice. On going through the arguments advanced by Mr. Mukherjee, this Court feels persuaded to rather accept the contentions put forth by Mr. Nayak, learned counsel for CBI that what is essentially being raised at this stage is nothing but the defence of the accused. It is trite that cognizance of offence in a criminal case can be taken if prima facie material exists to show commission of the offence. Similarly, charge can be framed against the offenders if on the materials collected by prosecution a grave suspicion arises that the accused persons may have committed the alleged offence. In the case at hand there is prima facie evidence that M/s. Page 14 of 22 Tower Infotech Ltd. had indulged in illegal collection deposits from depositors though several schemes floated by it. It is also prima facie borne out from the record that said Company had committed to invest Rs. 10 crores in a project undertaken by the petitioner Company, out of which a sum of Rs. 2.50 crores was paid. This, by itself shows a tangible link between M/s. Tower Infotech Ltd. and the petitioner No.1-Company, which is enough to sustain a criminal proceeding. It must be kept in mind that it was on the direction of the Apex Court that investigation of the present case as also the cases involving 43 other companies was transferred to the CBI for investigation.
From the above discussion, it is difficult for this Court to be persuaded to invoke its inherent powers to quash the entire criminal proceedings in so far as it relates to the petitioners. The relief claimed in this regard is therefore, found to be devoid of merit. Regarding Quashment of the NBW
13. As already stated, the petitioner No.3 was described as absconder in the charge sheet. The Page 15 of 22 petitioners have enclosed several notices issued under Section 91 of Cr.P.C. by the I.O. under Annexure-3 series. It is seen that such notices were issued on 10.05.2016, 26.06.2020 and 13.08.2020 calling upon the petitioner No.3 in his capacity as Director to petitioner No.1 Company to furnish certain documents/records. It further appears that by letter dated 14.08.2020, the petitioner No.2 furnished the required documents/records to the I.O. Petitioner No.3 has relied upon a medical certificate issued on 03.05.2020 by an American doctor stating that he was under the doctor's professional medical care for several ailments. It has been submitted that the petitioner No.3 was in America during the relevant period. This assertion has not been specifically refuted by the CBI.
14. It is seen that the notices issued under Annexure-3 series required the Company to produce detailed balance sheet, ledger account of M/s. Tower Infotech Ltd., agreement entered into with the said Company, utilization of funds received from the said Company etc. All these documents/records are said to have been submitted to the I.O. by petitioner No.2. Not a Page 16 of 22 single notice has been produced from the side of the prosecution to show that there was ever any notice issued regarding any matter exclusively personal to petitioner No.3. The same were issued to him in his capacity as the Director of the Company. For immediate reference one of such notices is extracted hereinbelow:
"No. 3286/RC 10/S/2014-Kol. Dated 10.05.2016 Notice U/S. 91 Cr.P.C.
To Shri Injrajit De Director of Eden Infra Projects Private Limited 9B, Wood Street, 3rd Floor West Wing Kolkata-700016, West Bengal Ref. Investigation of CBI, SCB SIT Kolkata Case No. RC-10(S)/2014-Kolkata against Tower Infotech Ltd. reg...
Whereas it has been made to appear that the production of the documents/article (mentioned below) is necessary for the purpose of the investigation now being made into the above mentioned offence, you are hereby directed to produce same before the undersigned on or before 16th day of May 2016 at 1100 hrs at above mentioned address positively without fail.
(v) Audited Balance sheet of Eden Infra projects Private Limited for the years during which funds were received from Tower Infotech Ltd.
(vi) Ledger A/c of Tower Group Companies showing the receipts from Tower Group Companies and its balance as on date.
(vii) Certified copy of agreement entered in to with Tower Group Companies.
(viii) Details of utilization of funds received from Tower Group Companies.
(ix) Any other documents relevant to this.
Sd/-
[Sibu Ranjan De] Inspector, CBI/SCB/SITKolkata Investigating Officer (Mob. 09051613467) Page 17 of 22 Thus, none of the notices so issued required the petitioner No.3 to appear for his interrogation apart from production of the documents/records mentioned therein.
15. This Court therefore, fails to understand the reason as to why petitioner No.3 was described as absconder in the charge sheet. Nothing has been stated in the charge sheet that petitioner No.3 had deliberately avoided to respond to the notices issued by the I.O.. Even otherwise, it does not stand to reason at all that merely because the I.O. describes the petitioner No.3 as absconder in the charge sheet that the Court below would be obliged to issue a NBW/A to procure his attendance.
16. In Siddhartha (supra), the apex Court held that in the normal and in ordinary course police should always avoid arresting a person and sending him to jail if it is possible to complete the investigation without his arrest and if every kind of cooperation is provided by the accused to the I.O.
17. It is stated at the cost of repetition that the requirement of the I.O. as reflected in the notices issued under Section 91 of Cr.P.C. was fully complied with Page 18 of 22 though not personally by the petitioner No.3 but by another Director of the Company. But, that is besides the point.
18. In the case of Inder Mohan Goswami (supra), the Apex Court held as under:
When non-bailable warrants should be
issued
53. Non-bailable warrant should be issued to bring a person to court when summons or bailable warrants would be unlikely to have the desired result. This could be when:
• it is reasonable to believe that the person will not voluntarily appear in court; or • the police authorities are unable to find the person to serve him with a summon; or • it is considered that the person could harm someone if not placed into custody immediately.
54. As far as possible, if the court is of the opinion that a summon will suffice in getting the appearance of the accused in the court, the summon or the bailable warrants should be preferred. The warrants either bailable or non- bailable should never be issued without proper scrutiny of facts and complete application of mind, due to the extremely serious consequences and ramifications which ensue on issuance of warrants. The court must very carefully examine whether the criminal complaint or FIR has not been filed with an oblique motive.
55. In complaint cases, at the first instance, the court should direct serving of the summons along with the copy of the complaint. If the accused seem to be avoiding the summons, the court, in the second instance should issue bailable warrant. In the third instance, when the court is fully satisfied that the accused is avoiding the Page 19 of 22 court's proceeding intentionally, the process of issuance of the non-bailable warrant should be resorted to. Personal liberty is paramount, therefore, we caution courts at the first and second instance to refrain from issuing non- bailable warrants.
56. The power being discretionary must be exercised judiciously with extreme care and caution. The court should properly balance both personal liberty and societal interest before issuing warrants. There cannot be any straitjacket formula for issuance of warrants but as a general rule, unless an accused is charged with the commission of an offence of a heinous crime and it is feared that he is likely to tamper or destroy the evidence or is likely to evade the process of law, issuance of non-bailable warrants should be avoided.
57. The court should try to maintain proper balance between individual liberty and the interest of the public and the State while issuing non-bailable warrant.
19. From the principles culled out from the referred cases, the order passed by the trial Court directing issuance of NBW at the first instance appears hasty and unjustified. It also shows that there was no application of mind to the facts and circumstances of the case. Since it is a question of liberty of a person, the Court below ought to have taken the pain of ascertaining as to whether mere description of petitioner No.3 as absconder by the I.O. in the charge sheet was at all justified. The Court below is obviously not supposed to be at the beck Page 20 of 22 and call of the investigating agency so as to mechanically do whatever the investigating agency wants.
20. Having gone through the case record in detail and particularly, the response submitted by one of the Directors to the notices issued by the I.O. under Section 91 of Cr.P.C., this Court wonders as to what further cooperation the I.O. desired from the company and its Directors. That apart, there is some material to show that the petitioner was in U.S.A. at the relevant time and there were restrictions on travel because of Covid-19 pandemic. This is a plausible ground for not appearing personally before the I.O. Sadly, the Court below has been oblivious to all the above facts.
21. Thus, from a conspectus of the analysis made in light of the position of law referred earlier, this Court is persuaded to accept the contention of learned Senior Counsel for the petitioners that the order directing issuance of NBW against the petitioner No.3 cannot be sustained.
22. In the result, the CRLMC is allowed in part. The prayer for quashment of the entire criminal proceeding of Page 21 of 22 the case in the Court below is rejected. However, the impugned order dated 27.12.2022 in so far as it relates to issuance of NBW against accused Indrajit De (petitioner No.3) is hereby quashed. Consequently, orders dated 06.01.2023, 20.01.2023 and 03.02.2023 in so far as they relate to accused Indrajit De are also quashed. It is directed that the Court below shall issue a summons for appearance of the petitioner No.3. It goes without saying that the Court below shall be at liberty to act in accordance with law if petitioner No.3 fails to abide by the summons so issued.
23. Mr. Sarthak Nayak, learned Counsel for the CBI has informed that the investigation by CBI in relation to the letter received by this Court is in progress. Such being the case, list this matter on 28th August, 2023, on which date, Mr. Nayak shall inform the status of such investigation.
..................................
Sashikanta Mishra, Judge Orissa High Court, Cuttack, The 28th July, 2023/ A.K. Rana, P.A. Signature Not Verified Digitally Signed Signed by: AJAYA KUMAR RANA Designation: Personal Assistant Page 22 of 22 Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 31-Jul-2023 15:17:43