Jharkhand High Court
Anand Kumar Singh vs The State Of Jharkhand on 15 April, 2024
Author: Rajesh Kumar
Bench: Rajesh Kumar
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (Cr.) No.1009 of 2023
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Anand Kumar Singh .... .... Petitioner
Versus
1. The State of Jharkhand
2. District Mining Officer, Jamtara .... .... Respondents
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CORAM: HON'BLE MR. JUSTICE RAJESH KUMAR
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For the Petitioner : Mr. Sumeet Gadodia, Adv.
Mr. Prakhar Harit, Adv.
Mr. Nillohit Choubey, Adv.
Ms. Shruti Shekhar, Adv.
Mr. K. Hari, Adv.
For the Respondents : Md. Shahabuddin, S.C.-VII
Mr. Suraj Prakash, A.C. to S.C.-VII
Mr. Anuj Kr. Trivedi, A.C. to S.C.-VII
For the Intervener : Mr. Amit Kr. Das, Adv.
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th
10/Dated: 15 April, 2024
I.A. No.785 of 2024
1. The present interlocutory application has been filed on behalf of the Directorate of Enforcement, through Assistant Director, Ranchi (hereinafter referred to as 'Directorate of Enforcement') as Respondent No.3 for impleading it in the present criminal writ petition for opposing the prayer of the petitioner regarding predicate offence.
2. The present writ petition has been filed for quashing of the order taking cognizance dated 23.04.2022 (Annexure-3) wherein the court below has taken cognizance under Sections 420/34 of the Indian Penal Code, Rule 9 of the Jharkhand Minerals (Prevention of Illegal Mining, Transportation & Storage) Rules, 2017 and Rule 54 of the Jharkhand Minor Mineral Concession Rules, 2004. During pendency of the present writ petition charge has been framed which has been impugned by filing the interlocutory application being I.A. No.512 of 2024 and this interlocutory application has been allowed on 17.01.2024.
3. The argument has been advanced on behalf of the Directorate of Enforcement that the predicate offence as well as the complaint filed by the Directorate of Enforcement has to be heard together before the Special Court. If predicate offence fails then the complaint filed by the Directorate of Enforcement will also fail, and as such, the Directorate of Enforcement is a necessary party and it must be heard.
4. Learned counsel for the petitioner has opposed the prayer of the Enforcement Directorate stating that the predicate offence and the offence under the PMLA Act are different. The prosecuting agency regarding the offence under the PMLA Act is the Enforcement Directorate and it has role only with regard to the offence under the PMLA Act. No role has been assigned to the Enforcement Directorate, so far as the predicate offence is concerned. For this purpose, learned counsel has relied upon the judgment of the Hon'ble Supreme Court reported in 2022 SCC OnLine SC 929 in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India & Ors. Paragraph No.253 of the said judgment is relevant which is quoted herein below:-
"Para-253. Tersely put, it is only such property which is derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money-laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money-laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause "proceeds of crime", as it obtains as of now."
5. Further, the learned counsel has relied upon the judgment of the Delhi High Court reported in 2023 SCC OnLine Del 336 : (2023) 298 DLT 444 in the case of Prakash Industries Limited Vs. Union of India & Anr. with analogous case. Paragraph No.87 of the said judgment is quoted herein below:-
"Para-87. What needs to be emphasised is that the PMLA empowers the ED to investigate Section 3 offences only. Its power to investigate and Page | 2 W.P. (Cr.) No.1009 of 2023 enquire stands confined to the offence of money laundering as defined in that section. However, the same cannot be read as enabling it to assume from the material that it may gather in the course of that investigation that a predicate offence stands committed. The predicate offence has to be necessarily investigated and tried by the authorities empowered by law in that regard. As would be evident from a perusal of the schedule, it enlists offences defined and created under various statutes which independently contemplate investigation and trial. The primary function to investigate and try such offenses remains and vests in authorities constituted under those independent statutes. ED cannot possibly arrogate unto itself the power to investigate or enquire into the alleged commission of those offenses. In any case, it cannot and on its own motion proceed on the surmise that a particular set of facts evidence the commission of a scheduled offence and based on that opinion initiate action under the PMLA."
6. On the strength of above judicial pronouncements and the role assigned to the Enforcement Directorate, it has been submitted that the Enforcement Directorate cannot be allowed to be added as a party in this criminal writ petition.
7. Having heard the learned counsel for the parties and on perusal of the records, it is quite clear that no role has been assigned to the Enforcement Directorate, so far as the predicate offence is concerned. Of course, the offence launched by the Enforcement Directorate is dependent upon the predicate offence but still he has not been assigned any role under the law.
8. Considering the legal position, the present interlocutory application is, hereby, rejected.
W.P.(Cr) No.1009 of 20231. The present criminal writ petition has been filed for quashing/setting aside the entire criminal proceedings, including the order taking cognizance dated 23.04.2022 (Annexure-3) passed by the court of learned Chief Judicial Magistrate, Jamtara in connection with Jamtara P.S. Case No.101 of 2020 corresponding to G.R. No.154 of 2022 for the alleged offences punishable under Sections 420 and 34 of the Indian Penal code read with Rule 9 of Jharkhand Minerals (Prevention of Illegal Mining, Transportation & Storage) Rules, 2017 (hereinafter to be referred as 'the Rules, 2017') and Rule 54 of the Jharkhand Minor Mineral Concession Rules, 2004 (hereinafter to be referred as 'the Rules, 2004'), the case is now pending in the court of learned Chief Judicial Magistrate, Jamtara.
Page | 3 W.P. (Cr.) No.1009 of 2023
2. It has been submitted by the learned counsel for the petitioner that no offence under Section 420 IPC is made out as there is allegation of discrepancy in the Stock Register and at best it is an offence under the Rules 2017 or the Rules 2004.
For this, the learned counsel has relied upon the judgment of the Supreme Court reported in (2018) 14 SCC 233 in the case of Samir Sahay @ Sameer Sahay Versus State of Uttar Pradesh & Anr. Paragraph Nos.16 to 20 are relevant which are quoted herein below:-
"16. Before we proceed further to examine the contentions of the learned counsel for the parties, it is necessary to notice the ingredients for establishing a charge under Section 420 IPC. Section 415 IPC defines "cheating" which is to the following effect:
"415. Cheating.--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat"."
17. Section 420 IPC is with regard to the cheating and dishonestly inducing delivery of property which is to the following effect:
"420. Cheating and dishonestly inducing delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
18. According to Section 415 IPC, the inducement must be fraudulent and dishonest which depends upon the intention of the accused at the time of inducement. This Court had occasion to consider Sections 415 and 420 IPC in Hridaya Ranjan Prasad Verma v. State of Bihar2. This Court after noticing the provisions of Sections 415 and 420 IPC stated the following in paras 14 and 15: (SCC pp. 176-77) "14. On a reading of the section it is manifest that in the definition there are set forth two separate classes of acts which the person deceived may be induced to do. In the first place he may be induced fraudulently or dishonestly to deliver any property to any person. The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In the first class of cases the inducing must be fraudulent or dishonest. In the second class of acts, the Page | 4 W.P. (Cr.) No.1009 of 2023 inducing must be intentional but not fraudulent or dishonest.
15. In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. Therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed."
19. Again in Dalip Kaur v. Jagnar Singh3, this Court noticed the ingredients of Section 420 IPC. In paras 9 to 11 the following was stated:
(SCC pp. 699-700) "9. The ingredients of Section 420 of the Penal Code are:
'(i) Deception of any persons;
(ii) Fraudulently or dishonestly inducing any person to deliver any property; or
(iii) To consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.'
10. The High Court, therefore, should have posed a question as to whether any act of inducement on the part of the appellant has been raised by the second respondent and whether the appellant had an intention to cheat him from the very inception. If the dispute between the parties was essentially a civil dispute resulting from a breach of contract on the part of the appellants by non-refunding the amount of advance the same would not constitute an offence of cheating.
Similar is the legal position in respect of an offence of criminal breach of trust having regard to its definition contained in Section 405 of the Penal Code. (See Ajay Mitra v. State of M.P.4)
11. There cannot furthermore be any doubt that the High Court would exercise its inherent jurisdiction only when one or the other propositions of law, as laid down in R. Kalyani v. Janak C. Mehta5 is attracted, which are as under:
(SCC p. 523, para 15) '(1) The High Court ordinarily would not exercise its inherent jurisdiction to quash a criminal proceeding and, in particular, a first information report unless the allegations contained therein, even if given face value and taken to be Page | 5 W.P. (Cr.) No.1009 of 2023 correct in their entirety, disclosed no cognizable offence.
(2) For the said purpose the Court, save and except in very exceptional circumstances, would not look to any document relied upon by the defence.
(3) Such a power should be exercised very sparingly. If the allegations made in the FIR disclose commission of an offence, the Court shall not go beyond the same and pass an order in favour of the accused to hold absence of any mens rea or actus reus.
(4) If the allegation discloses a civil dispute, the same by itself may not be a ground to hold that the criminal proceedings should not be allowed to continue.'"
20. Applying the ratio laid down by this Court as noted above, it is clear that ingredients of Section 420 IPC are not made out in the present case, either from the first information report or from any other material. From the first information report as extracted above only allegation made against the appellant was that he accompanied his father Major P.C. Sahay (Retd.) when he assured that the money of the applicants will not be lost and it shall be the responsibility of his father (late P.C. Sahay). The following allegations made in the first information report need to be specially noticed:
"Along with him his son Samir Sahay, Advocate who was already acquainted with the applicant also accompanied his father. Major P.C. Sahay gave the abovesaid assurance, and the applicant and his wife Smt Uma Devi deposited rupees one lakh with Major P.C. Sahay in this regard and he gave the receipt of the same to the applicant of which the applicant is enclosing the photocopy. Like this Major P.C. Sahay(retired) has got deposited total amount of Rs 86,000 from me and my wife. But after some days it came to be known that the said Company has run away along with the lakhs of rupees of the depositors after closing its office."
3. Further, learned counsel for the petitioner has relied upon the judgment of the Supreme Court reported in (2012) 13 SCC 614 in the case of Satish Mehra v. State (NCT) of Delhi & Anr. Paragraph No.14 is quoted herein below:-
"14. The power to interdict a proceeding either at the threshold or at an intermediate stage of the trial is inherent in a High Court on the broad principle that in case the allegations made in the FIR or the criminal complaint, as may be, prima facie do not disclose a triable offence, there can be reason as to why the accused should be made to suffer the agony of a legal proceeding that more often than not gets protracted. A prosecution which is bound to become lame or a sham ought to be interdicted in the interest of justice as continuance thereof will amount to an abuse of the process of the law. This is the core basis on which the power to interfere with a pending criminal proceeding has been recognised to be inherent in every High Court. The power, though available, being extraordinary in nature has to be exercised sparingly and only if the attending facts and circumstances satisfy the narrow test Page | 6 W.P. (Cr.) No.1009 of 2023 indicated above, namely, that even accepting all the allegations levelled by the prosecution, no offence is disclosed. However, if so warranted, such power would be available for exercise not only at the threshold of a criminal proceeding but also at a relatively advanced stage thereof, namely, after framing of the charge against the accused. In fact the power to quash a proceeding after framing of charge would appear to be somewhat wider as, at that stage, the materials revealed by the investigation carried out usually come on record and such materials can be looked into, not for the purpose of determining the guilt or innocence of the accused but for the purpose of drawing satisfaction that such materials, even if accepted in their entirety, do not, in any manner, disclose the commission of the offence alleged against the accused."
4. It has further been submitted that similar issue was pending before the Division Bench i.e. W.P.(C) Nos.3103/3111/3113 of 2022 wherein the issue was, "whether Rule 54(5) of the JMMC Rules, 2004 is applicable in such circumstances or not?" The Division Bench has clearly held that Rule 54(5) of the JMMC Rules, 2004 is not applicable where the stockist is involved. In the case of stock licensee, Rule 54(5) of the JMMC Rules does not get attracted.
5. On the strength of above judicial pronouncement and the allegation made in the present proceeding, it has been submitted by the learned counsel for the petitioner that the ingredients of cheating is missing. It has been submitted that only discrepancy in the Stock Register cannot constitute the ingredients of cheating.
6. Learned counsel for the State has opposed the prayer of the petitioner and it has been submitted that the petitioner has approached this Court earlier by filing a petition being Cr.M.P. No.2400 of 2020 with Cr.M.P. No.2402 of 2020 which have been disposed of vide order dated 07.12.2020. Paragraph Nos.8 and 9 of the same are relevant which are quoted herein below:-
"8. The allegation aforesaid definitely makes out offence. The Hon'ble Supreme Court in the case of Rupan Deol Bajaj & Another versus K.P.S. Gill & Another, reported in (1995) 6 SCC 194, Rajesh Bajaj versus State NCT of Delhi & Others, reported in (1999) 3 SCC 259 and Medchl Chemicals & Pharma (P) Ltd. versus Biological E Ltd. & Ors, reported in (2000) 3 SCC 269 has held that if prima facie case is made out disclosing the ingredients of the offence, Court should not quash the complaint/FIR. The note of caution was reiterated that while considering such petitions the Courts should be very circumspect, conscious and careful. Thus, there is no controversy about the legal proposition that if in a case prima facie an offence is made out, the FIR or the proceedings in consequence thereof cannot be quashed.
9. Considering the above proposition of law, I have gone through the First Information Reports. From perusal of the allegations in the First Information Reports, I find that the offence is definitely made out. So far as the defence of the petitioner is concerned, the same can only be seen after proper investigation. At this stage, when offence is made out, I am not inclined to quash the First Information Report."
Page | 7 W.P. (Cr.) No.1009 of 2023
7. On the above judgement, it has been argued by the learned counsel for the State that once the Court has held that the allegation constitutes the offence, subsequently the same plea cannot be taken at the stage of taking cognizance or framing of the charge. It has been further submitted that the collected material clearly suggests that the transaction of sand has been done contrary to the authorisation under the law and in such manner the state authorities have been cheated and further there was loss of revenue to the State.
8. Having heard the parties and from perusal of the record, it appears that the petitioner is stock licensee having Form 'B' [Rule-4] dated 03.06.2020. Inspection has been made in the premises of the petitioner on 15.07.2020 and on that strength FIR has been lodged. The contents of the FIR is quoted hereinbelow:-
"सेवा म, पुिलस िनरी क सह थाना भारी जागताड़ा।
िवषयः-
ाथिमक दज करने के संबंध म।
महाशय, उपरो िवषय के संबंध म सूिचत करना है क म राजा राम साद उ लगभग 54 वष, पे०- व० चौबा पंिडत, ाम-कम रया, थाना-कु था, िजला-अरवल (िबहार) का िनवासी ।ँ वतमान म िजला खनन पदािधकारी जामताड़ा के पद पर पद थािपत ।ँ आज दनांक 15.07.2020 को वरीय पदािधकारी के आदेशानुसार अ तर हसनैन का दरी बी०सी०ई०ओ० जामताड़ा ख ड, पदीप कु मार संह अवर िनरी क जमताड़ा थाना एवं सश पुिलस बल जामताड़ा थाना के साथ समय लगभग 14.30 बजे मौजा सतसाल अवि थत मेसस आन द ेडस पाटनर ी आन द कु मार, िपता- व० िव यांचल संह, सा०-अ बेडकर नगर िमिहजाम, थाना-िमिहजाम, िजला- जामताड़ा के ारा धा रत बालू भ डारण अनु ि े पर औचक छापामारी क गयी। छापामारी के दौरान थल पर उपल ध बालू खिनज क गापी थल पर कायरत कमचारी रिव कु मार संह एवं आ दनाथ मंडल के सम कया गया। थल पर मापी अनुसार लगभग एक लाख तीन हजार पाँच सौ छः घनफ ट बालू का भ डार पाया गया। जब क अनु ि धारी के ारा संधा रत पंजी के अनुसार छापामारी समय तक चार लाख ब ीस हजार दो सो घनफ ट बालू का भ डार है। दनांक-27.06.2020 को उपायु जामताड़ा के आदेश के अनुपालन म उ े पर भ डा रत मा ा क भौितक स यापन कया गया था। िजस दौरान थल पर लगभग दो लाख पचास हजार घनफ ट बालू उपल ध पाया गया था। िजसक सूचना कायालय प ांक- 398/एम०, दनांक-27.06.2020 ारा उपायु जामताड़ा को दी गयी थी। चूं क अनु ि धारी ारा संधा रत पंजी के अनुसार दनांक-15.07.2020 छापामारी अविध तक अंितम शेष चार लाख ब ीस हजार दो सौ घनफ ट बालू का भ डार है। इस कार गणना अनुसार अनु ि धारी के ारा लगभग तीन लाख अठाईस हजार छः सौ चौरानवे घनफ ट बालू का ेषण िबना खिनज प रवहन चालान के कर दया गया है। जो The Jharkhkand Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules 2017 के िनयम 9 का उ लंघन है एवं झारख ड लघु खिनज समानुदान िनयमावली 2004 (यथा संसोिधत 2017) के िनयम 54 के तहत दंडनीय अपराध है। इस कार अनु ि धारी ारा खिनज का ेषण फज त रके से कया गया है। अतएव थल पर उपल ध भ डारण पंजी को सा य हेतु ज कया गया।
अतः अनुरोध है, क अनु ि धारी ी अखलेश संह, िप ा- ी तेगबहादुर संह. सा०-ओ ड चेक पो ट कु म पाड़ा पो०+थाना-िमिहजाम, िजला-जामताड़ा एवं इस काय म संिल अ य ि य के िव उपरो अं कत िनयम एवं अ य सुसंगत धारा के तहत ाथिमक दज करते ए कारवाई करने क कृ पा क जाय।"
Page | 8 W.P. (Cr.) No.1009 of 2023
9. It further appears that thereafter cognizance has been taken and the charge has also been framed. The format of framing of charge (Annexure-12 in I.A. No.512 of 2024) is re-produced hereinbelow:-
Typed format of Annexure-12 "Schedule XLIII-High Court (M) 61 (Old Criminal Process No.35) CHARGES (Form No.12 (II), SCHEDULE II, Act 2, 1974) (Sections 211, 212, 213, Code of Criminal Procedure) (1) Name and Office Page | 9 W.P. (Cr.) No.1009 of 2023 of Magistrate, etc. 1, (I) Kusheshwar Sinku, C.J.M., Jamtara Hereby charge you, (2) (2) Name of accused Persons 1. Anand Kumar Singh As follows -
First - That you, on or about the 15th day of July, 2020 at 02:00 PM at near Satsal, M/S Anand Traders PS- +District - Jamtara You were cheated to authority by dishonestly stock sand as per complaint.
and thereby committed an offence punishable under Section 420 of the Indian Penal Code, and within my cognizance.
Secondly, That you, on or about the same day at same place You were excavated and carry sand as per complaint without any challan and permission of authority. and thereby committed an offence punishable under Section 54 of the MMCR act, and within my cognizance. Thirdly, That you, on or about the same day of same at same Place You were found in possession illegal stock of sand as per complaint without any licence and permission of lawful authority.
and thereby committed an offence punishable under Section 9 of the Jharkhand Minerals (Prevention of Illegal Mining Transportation and Storage) Rules, 2017 and within my cognizance.
The content of charge read over and explained in Hindi to the accused person to which he pleaded not guilty and claimed to be tried.
And I hereby direct that you be tried by me on the said charge."
10. Thus, there is neither inducement nor delivery of property nor concealment of fact. Merely discrepancy in stocking or in record will not constitute offence under Section 420 of Indian Penal Code.
11. In the framing of charge there is allegation of excavation of sand beyond authorisation. Thus, excavation of the sand without authorization may constitute the offence under Section 379 of IPC but certainly not under Section 420 of IPC.
12. Since, ingredients of Section 420 IPC is absent. Further, Rule 9 of the Jharkhand Minerals (Prevention of Illegal Mining, Transportation & Storage) Rules, 2017 and Rule 54 of Jharkhand Minor Mineral Concession Rules, 2004 is not present as per the issue settled by this Court in W.P.(C) No.3103 of 2022, the order taking cognizance dated 23.04.2022 is hereby is quashed and set aside and Page | 10 W.P. (Cr.) No.1009 of 2023 the matter is remitted back to the court below for framing charge under other Section, if any offence is made out.
13. The parties are at liberty to work out their remedy in accordance with law.
(Rajesh Kumar, J.) Shahid-Amar/-
Uploaded Page | 11 W.P. (Cr.) No.1009 of 2023