Delhi High Court
Sunil Mehdiratta vs Union Of India on 26 September, 2001
Equivalent citations: 94(2001)DLT537, 2002(61)DRJ545, 2002(79)ECC767, 2002(146)ELT281(DEL)
Author: Arijit Pasayat
Bench: Arijit Pasayat, D.K. Jain
JUDGMENT Arijit Pasayat, C.J.
1. All these five cases involve identical issues and are, therefore, taken up for disposal together. Seagram Manufacturing Limited, the petitioner in Crl. Writ Petition No. 58/2001, is a company incorporated under the Companies Act, 1956. Sunil Mehdiratta, petitioner in Crl. Writ No. 870/2001 is the Head of the Management System of the Companies. Param Uberoi, petitioner in Crl Writ No. 57/2001 is the Chief Executive Officer of the Company. Harvinder Singh Bhatia, petitioner in Crl. Writ No. 58/2001 is the Controller-Finance of the Company. Akram Fahami, petitioner in Crl. Writ 870/2001 is the Chairman of the company.
2. In each of the writ petitions, prayer is made to quash the criminal complaint instituted by Shri Kamal Kumar, Intelligence Officer, Directorate of Revenue Intelligence (DRI) in the court of the Additional Chief Metropolitan Magistrate (ACMM),Delhi on 22.12.2000. Process has been directed to be issued after cognizance was taken of several offences. In some cases non-bailable warrants have been issued against the concerned petitioner for non-appearance before the learned ACMM on the date fixed. Petitioners' stand in essence is that on 19.12.2000, show cause notice was issued by the authorities under the Customs Act, 1962 (in short, the Act) Earlier notices were issued under Section 28 of 111 of the Act. Same was subject matter of challenge in Crl Writ No. 1348/2001. The said writ petition was disposed of on 27.8.2001 taking note of the submission of learned Solicitor General that the notice was to be treated as one for finalisation of the assessment in terms of Section 18(2) of the Act. It was further stated that if it was so thought proper notice in terms of Section 111 read with Section 24 may be issued. Petitioner in that case had taken the stand that stage had not arrived for such action. It was observed by this Court that petitioner had the liberty to approach the appropriate forum in case any notice in terms of Sections 111 and 24 of the Act was issued.
3. Though a prayer has been made for quashing the proceedings in these cases, at the time of hearing of the writ petitions, it was submitted by learned counsel for the petitioners that proceedings before learned ACMM may be kept in abeyance because of the pendency of proceedings before the adjudicating authority. According to him, decision in the adjudication proceedings will have relevance and bearing on the criminal cases and therefore the said proceedings deserve to be stayed. A case of mala fides is also sought to be proved by making a reference to the fact that show cause notice was issued in the adjudication proceedings on 19.12.2000 and the criminal complaint was filed on 22.2.2000, and overwhelming portions of the complaint are almost identical to overwhelming portion of the show-cause notices. Out of 63 pages 59 pages are identical. It is also submitted that in order to prove bonafides, petitioners have made request for early finalisation of the adjudication proceedings, but to no avail.
4. In reply, learned counsel for the respondents submitted that there is no principle of invariable nature that in every case where adjudication proceedings are pending, the criminal case has to be stayed. With reference to the show cause notice it was highlighted that there has been massive defrauding of revenue and this is not a case where discretionary jurisdiction has to be exercised in favor of the petitioners. It is pointed out that though there is no legal bar in lodging criminal complaint while adjudication proceeding is pending and merely because the criminal complaint was lodged three days after the issue of show cause notice in the adjudication proceedings, that cannot be said to be in any manner invalid. It is also submitted that though a long period has elapsed, there is no response to show cause notice. The adjudicating authority is ready and willing to dispose of the proceedings early but it is possible only if the petitioners co-operate. It is alleged that on the one hand, the petitioners have not responde to the show cause notice and on the other hand, they make a grievance that criminal complaint was lodged three days after the show cause notice was issued. As regards, similarity in major portion of the complaint and the show cause notice it was submitted that the fact situation relevant for both the proceedings was almost similar and therefore there is no infirmity in major portion of the complaint and the show cause notice being similar. It is submitted that as some of the petitioners have not so far appeared before the learned ACMM, and if they do so and satisfy the Court that there is a justification for keeping the proceedings in abeyance for some time, it can be considered by the trial court in its proper perspective. It is pointed out that there is also no application before the concerned court seeking exemption from appearance. In this background, it is submitted, the petitioners are not entitled to relief, having rushed to this Court without availing the remedies.
5. We may take note of some of the decisions referred to by the parties in support of their respective stands about the desirability of keeping the criminal proceedings in hold during pendency of adjudication proceedings. The decisions are: Uttam Chand & Ors v., Income-tax Officer, Central Circle Amritsar, (1982) 133 ITR 909, P. Jayappan v. S.K. Perumal, AIR 1984 SC 1963, G.L. Didwania vs ITO and Anr. 1995 SCC Supp2, 724, Commissioner of Income-tax Mumbai v. Bhupen Champak Lal Dalal & Anr, (2001) 3 SCC 459 and Tukaram Annaba Chavan v. Machindra Yeshwant Patil, (2001) 3 SCC 33. It is to be noted that in almost all these decisions what has been indicated is the proper course to be adopted in case it is brought to the notice of the Court that a decision in any adjudicating proceedings would have relevance and bearing on the pending issues involved in the criminal case. It is not the view expressed in any of the cases that whenever there is an adjudicating proceedings, pending a criminal case per force has to be stayed. Some of the observations in this regard are as follows:
In P. Jayappan's case (supra) the Apex Court held as under:
"6. It may be that in an appropriate case the criminal Court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under Section 309 of the Code of Criminal Procedure if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that it may take also into consideration the order to be passed therein. Even here the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings. There is not rigid rule which makes it necessary for a criminal Court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceedings which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one."
6. In Bhupen Champak Lal Dalal's case (supra) the Apex Court held as under:
"3, The prosecution in criminal law and proceedings arising under the Act are, undoubtedly, independent proceedings and therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the appellate authorities have a relevance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other.
4.....In P. Jayappan v. S.K. Perumal, First ITO, 1984 Supp SCC 437, this Court observed that the pendency of the reassessment proceedings under the Act cannot act as a bar to the institution of the criminal proceedings and postponement or adjournment of a proceedings for unduly long period on the ground that another proceedings have a bearing on the decision was not proper."
5. In the present case, there is no claim of quashing of the proceedings. When ultimately the result to come out of the proceedings before the Appellate Authorities have a definite bearing on the cases alleged against the respondents, we find that the High Court is justified in granting the interim order it did and we do not think that such an interim order calls for interference at our hands. The learned counsel on either side relied on several decisions, but in the view we have taken it is unnecessary to refer to those decisions."
7. In Tukaram Annaba Chavan's case, it was held:
"10. The controversy raised in the case relates to the election of the Board of Directors of the Modern Education Society, Atpadi which is registered under the provisions of the Bombay Public Trusts Act, 1950. We were informed by the learned counsel for the parties that the matter is pending before the Assistant Charity Commissioner, Sangli, who is to determine the validity or otherwise of the change report submitted by the appellants. On a perusal of the record we find that a contention that in the proceeding relating to the confirmation or otherwise of the change report a contention has been raised that the documents on the basis of which the report has been submitted have been forged and fabricated by the appellants. In all probability that question will also arise for consideration by the authority.
11. In the facts and circumstances of the case, it is our considered view that in the interest of justice and for a fair trial the proceedings in the criminal case should remain suspended till the proceeding pending before the Assistant Charity Commissioner, Sangli is disposed of by him. Accordingly, it is ordered that further proceedings in regular Criminal case No. 82 of 1994 pending in the Court of Judicial Magistrate, 1st Class, Atpadi shall remain stayed till disposal of the proceeding in CR (changed report) No. 385 of 1991 by the Assistant Charity Commissioner, Sangli, The appeal is disposed of on the terms aforesaid."
8. As noted above, there is not rigid rule which makes it necessary for a criminal case to be adjourned indefinitely or for unduly long period only because some proceedings which may have some bearing on it is pending elsewhere, but this certainly is a relevant factor while considering the motion for adjournment of a criminal case in exercise of a discretionary power under section 309 Code of Criminal Procedure, 1973 (in short, Code). This Section provides that it from a short absence of a witness or any other reasonable cause it becomes necessary to postpone the commencement or to adjourn any enquiry or trial the court may if it thinks fit, by an order in writing stating reasons therefore from time to time postpone or adjourn the same on such terms as it thinks fit. The terms must be those which are relevant to the question of postponement or adjournment. The policy of criminal law is to bring the accused persons to justice as speedily as possible so that if they are found guilty they may be punished or if they are found innocent they may be acquitted or discharged. It is, therefore, of utmost importance that criminal proceedings should be brought to speedy termination. Provision of sub-section (1) gives statutory recognition of the avowed policy of criminal law i.e. to bring the accused to justice as expeditiously as possible. This Section does not in terms provide for staying the proceedings indefinitely but it is open to a party for stay of the criminal case pending adjudication of the adjudication proceedings or suit on related issue between the same parties. The discretionary power is to be exercised keeping in view that legislature has used the expression reasonable cause. Though the expression has not been defined in the statute and is also not subjected to specific definition. The nature of criminal proceedings, policy of criminal law and spirit of the Section must be kept in view in Judging the circumstances of the case. Section 205 deals with the power of the Magistrate to dispense with the personal attendance of the accused. It is an essential principle of criminal law that trial of indictable offence has to be conducted in the presence of the accused. This principle is laid down in Section 273 of the Code. Power is given to the Magistrate when issuing summons for appearance to the accused whether the accused to appear before him either in person or through a pleader. This Section in term refers to power of the Magistrate to issue summons. He under sub-section (1) may dispense with the personal appearance of the accused and permit him to appear through his pleader. Sub-section (2) empowers the Magistrate enquiring into and trying the case to direct personal attendance of the accused when an exemption has been granted by him. The manner in which such attendance is to be enforced is also indicated. The discretion in the Section has to be exercised in a judicial manner and keeping in view the circumstances of the case.
9. Discretion means use of private and independent thought. When anything is left to be done according to one's discretion, the law intends it to be done with sound discretion and according to law. Discretion is discerning between right and wrong and one who has power to act at discretion is bound by rule or reason. Discretion must not be arbitrary. Discretion must be exercised honestly and in the spirit of the statute. It is the power given by a statute to make choice among competing considerations. It implies power to choose between alternative courses of action. It is not unconfined and vagrant. It is canalized within banks that keep it from overflowing.
10. Distrection is a science of understanding to discern between falsity and truth, between right and wrong, between shadows and substance, between equity and colourable glosses and pretences, and not to act according to one's wills and private affections. Discretion necessarily implies good faith in discharging public duty. There is always a perspective within which a statute is intended to separate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Several principles can conveniently be grouped in two main categories: (i) failure to exercise discretion; and (ii) excess or abuse of discretionary power. The two classes are not, however mutually exclusive. Thus, discretion may be improperly fettered, because irrelevant considerations have been taken into account. Discretion of a statutory body is never unfettered. It is discretion which is to be exercised according to law. That means at least this that the statutory body must be guided by law. It must be governed by rule, not by humour; it must be arbitrary, vague and fanciful. (Per Lord Mansfield in John Wilkes (1770) 4, Burr 2528). In the words of Lord Cairns L.C. in Julius v. Bishop of Oxford: (1880) 5 AC 214" there may be something in the nature of the thing empowered to be done, something in the title of person or persons for whose benefit the power is to be exercised which may couple the power with a duty and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so." In Halsbury's Laws of England, 4th Edition, Vol I, it has been observed:
"A statutory discretion is not, however, necessarily or indeed usually absolute; it may be qualified by express and implied legal duties to comply with substantive and procedural requirements before a decision is taken whether to act and how to act. Moreover, there may be a discretion whether to exercise, or a duty to act when some conditions are present, but a discretion how to act. Discretion may thus be coupled with duties."
11. In view of what has been noted above we dispose of the petition with the following directions/observations:-
(a) The petitioners shall appear before the ACMM on 18-10-2001 without further notice and on filing appropriate application in terms of Section 205 of the Code. Learned ACMM will pass necessary orders directing their presence through counsel on such terms and conditions as he may consider proper.
(b) On an application in terms of Section 309 of the Code being filed, learned ACMM shall adjourn the case to such date, as deemed proper and expedient taking into account all relevant aspects, like pendency of the adjudication proceedings, its relevance, if any, to the criminal trial.
While fixing the date, the ACMM shall keep in mind the guidelines indicates in para 6 of decisions in P. Jayappan's case (supra). We make it clear that question whether the adjudication proceedings have any relevance or bearing has to be judged by the trial Court dealing with the application under Section 309 of the Code. We do not think it proper to record any finding on that aspect.
12. The petitions are disposed of.