Rajasthan High Court - Jaipur
Subrata Ray & Anr vs Union Of India on 4 July, 2015
Author: M.N. Bhandari
Bench: M.N. Bhandari
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH JAIPUR S.B. Criminal Misc. Petition No.296/2006 Subrata Ray & Anr. Versus Union of India DATE OF ORDER : 4th July, 2015 HON'BLE MR. JUSTICE M.N. BHANDARI Mr. S.C. Gupta ] for petitioners
Mr. V.R. Bajwa ] Mr. Tej Prakash Sharma, for respondent-UOI *** By this petition, a prayer is made for quashing of proceedings of Case No.06/2005, pending before Additional Chief Judicial Magistrate, SPE Cases, Jaipur.
Learned counsel for petitioners submits that an FIR bearing No.RC/JAI/2003A/0012 was registered with Police Station S.P.E., CBI, District Jaipur. The allegation therein was that Shri Kamlesh Kumar, the then General Manager & Shri C.P. Pandey, the then Manager, National Highways Authority of India, New Delhi, while working as public servant during the year 1996, misused their official position. They entered into criminal conspiracy with Shri Subrata Ray, President of M/s. Birla GTM and cheated National Highways Authority of India. It was for award of contract for construction of 126 km. four lane road from Gurgaon to Kotputli in Rajasthan.
On the invitation of tender, 13 bids were received and out of which, M/s. Birla GTM stood second lowest bidder. The lowest bidder, M/s. Gammon India Ltd. was disqualified. It is alleged that as per condition of contract, the tenderer was required to have a joint venture with a foreign renowned road construction company. M/s.Birla GTM had submitted forged joint venture agreement with M/s. Enterprises Jean Lefebvre (EJL) of France. The joint venture agreement, dated 26.06.1996, was allegedly signed by Shri Subrata Ray for EJL though stamps for it were purchased on 03.07.1996. The EJL, France reported that they had not entered into joint venture agreement with M/s. Birla GTM. In view of the aforesaid report, case was registered for offence under Sections 120B, 420, 468 & 471 IPC apart from Section 13(2) and Section 13(1)(d) of Prevention of Corruption Act, 1988 (in short Act of 1988).
It is stated that a case under the Act of 1988 was not found in the investigation by the CBI, thus charge sheet was filed against M/s. Birla GTM through P.C. Agrawal and Subrata Ray, for offences under IPC. It was in ignorance of various facts and even the dates relevant to the case. After opening the bid on 5th January, 1986, the contract was awarded to the company on 01.07.1996. It was based on the documents submitted with the bid. The agreement was then rescinded on 09.06.1997. It was by alleging submission of forged joint venture agreement. A settlement between the parties entered on 28.08.1998 wherein M/s. Birla GTM had paid a sum of Rs.5 crore, approx. In view of settlement between the parties, nothing remained to register the FIR. The FIR was yet registered followed by charge sheet and the order of cognizance.
The impugned FIR and consequential proceedings are not legally sustainable as the FIR was registered for an incidence or alleged offence, which did not occur in the territorial jurisdiction of the court. The tender was invited at Delhi followed by its opening and award of contract at the same place. In view of above, the Investigating Agency at Jaipur, so as the court, were not having territorial jurisdiction.
It is further stated that CBI had no authority to register and investigate the case for offence under Sections 420, 468, 471 & 120B IPC. A reference of Sections 3, 5 & 6 of the Delhi Special Police Establishment Act, 1946 (in short Act of 1946) was given. It is submitted that notification does not exist to include aforesaid offences within purview of the CBI. It was also urged that if notification exists to include the offences, referred above, the CBI can register the case with the consent of the State. In the instant case, the State Government has not given consent for registration and investigation of case by the CBI. In view of the above also, the CBI had no authority to register and investigate the case.
Learned counsel for petitioner submitted that case for offence under Section 415-420 IPC is not made out and otherwise, the party alleged to have been cheated, did not lodge the FIR. The petitioner-company had no intention to cheat any one and further no loss was sustained by the National Highways Authority of India so as to make out a case for offence under Section 415-420 IPC. The reference of various judgments were given. In the similar manner, the offence under Sections 468 & 471 is also not made out. The ingredients to make out an offence under those provisions do not exist so as to take cognizance of offence. It is moreso when a case under the Act of 1988 was not found in the investigation itself.
The court below committed grave illegality in passing order of cognizance of offence. It is without proper appreciation of the facts and law. The evidence does not exist to make out an offence. If facts of the case are considered, award of contract is on 01.07.1996, whereas purchase of the stamp for joint venture agreement is of 03.07.1996 i.e. subsequent to the award of contract. The allegation for giving draft agreement of joint venture is on 26.06.1996 i.e. prior to purchase of the stamp. All these facts were ignored by the court below. It goes in route of the case because petitioner-company did not submit joint venture agreement and original copy of the alleged joint venture agreement is not part of the charge sheet. In absence of original document, cognizance of the offence could not have been taken.
The FIR discloses joint venture agreement with a foreign company as a pre-condition of bid, whereas there was no such condition in the tender. The bidder was having option to apply in one category out of three. It could be as an individual bidder. The other category was of joint venture and thereupon third category. The aforesaid shows that joint venture agreement was not a pre-condition, hence the FIR was registered with incorrect facts alleging submission of forged joint venture agreement.
The dispute is otherwise of civil nature. It is essentially arising out of a contract, which was awarded to the petitioners and thereupon rescinded, followed by settlement between the parties. If at all National Highways Authority would have been aggrieved, a civil litigation could have been initiated.
It is lastly submitted that initially when case was registered, it was for the offence under the Prevention of Corruption Act. The trial of which can be made by the Special Court alone. The charge sheet has now been submitted before the Magistrate having no authority to try a case under Prevention of Corruption Act. It may be that after progress of the case, even a case for Prevention of Corruption Act is made out, then the case cannot be tried by the court below. It cannot transfer the case to the Special Court, which can alone try cases under Prevention of Corruption Act. The charge sheet should have been submitted to the court having jurisdiction to try case of Prevention of Corruption Act. In view of the above also, submission of charge sheet to the court below is illegal, thus entire proceedings deserve to be quashed.
Learned counsel had given reference of various judgments on different issues. This court can invoke jurisdiction under Section 482 Cr.P.C. to quash the proceedings on the grounds laid down by the Apex Court in the case of State of Haryana & Ors. Vs. Ch. Bhajan Lal & Ors., reported in 1992 Supp (1) SCC 335 and M/s. Pepsi Foods Ltd. & Anr. Vs. Special Judicial Magistrate & Ors., reported in AIR 1998 SC 128.
Learned counsel appearing for petitioner No.2 further added that P.C. Agrawal had no role in submission of tender or for process, till award of contract. He has been made accused in an illegal manner. A reference of the charge sheet was given to show that P.C. Agrawal has not been named anywhere with assignment of role, thus proceedings against P.C. Agrawal have wrongly been initiated by the respondents. The prayer is accordingly made to quash the proceedings pending before the Court of Additional Chief Judicial Magistrate, SPE Cases.
Per contra, learned counsel appearing for CBI submitted that after registration of case, proper investigation was made. The offence under Sections 420, 468, 471 & 120B IPC is made out, thus charge sheet was filed. The court took cognizance of the offence after finding prima facie case. The challenge to the FIR and the proceedings has been made on various grounds, but none is made out.
The issue of jurisdiction of the court as well as of the CBI has been raised. The challenge to the proceedings on the ground of territorial jurisdiction is in ignorance of Section 179 Cr.P.C. Therein, jurisdiction of the court is not only where occurrence took place but consequence ensues. In the instant case, the tender followed by award of contract was at Delhi but it was in relation to the work to be performed in Haryana and Rajasthan. On account of fraud played by the petitioners, contract was rescinded. The consequences ensued in the State of Rajasthan. A reference of judgment of this court in the case of State of M.P. Vs. Suresh Kaushal & Anr., reported in (2003 ) 11 SCC 126 has been given.
The authority of the CBI to register the FIR and undertake the investigation has been challenged in reference to Sections 3, 5, 6 of the Act of 1946. It is in ignorance of Notifications issued from time to time. A Notification was issued on 6th November, 1956 by invoking Section 3 of the Act of 1946. Therein, Sections 420, 467 & 468 IPC were notified, thereby, jurisdiction was given to the CBI. On 6th November, 1956, another Notification was issued under Section 5 of the Act of 1946 enabling the Central Government to extend powers and jurisdiction of the members of the force to any area of State. The State Government was asked to accord consent as per Section 6 of the Act of 1946. It was due to re-organization of various States. An order was then issued on 2nd May, 1973 extending the jurisdiction of the Act of 1946 throughout India. The another order was issued on 6th April, 1989 wherein jurisdiction of the State of Rajasthan in reference to Sections 5 & 6 of the Act of 1946 was given. It is apart from other States mentioned therein. Therein, again reference of various offences of IPC was given which include offences involved herein. The power and jurisdiction to CBI was given with the consent of the State of Rajasthan and reference of the orders issued by the State of Rajasthan has also been given. A further Notification was issued on 7th September, 1989 wherein Section 120B IPC was also added apart from offence under Sections 420, 467, 468 & 471 IPC. In view of notifications and orders, referred to above, it is incorrect to state that CBI had no authority to register and investigate the case for the offence for which cognizance of offence has been taken. The argument aforesaid has been raised after suppressing the notifications and orders issued from time to time.
Coming to the facts of this case, it is submitted that allegations against the petitioners are for furnishing joint venture agreement with forged signature of joint venture company EJL. Mr.Bernard Marchant was called when work of widening of National Highways was delayed. He refused about joint venture agreement with M/s. Birla GTM. Learned counsel for petitioners tried to mislead the court by alleging that there was no requirement of joint venture. It is true that there were various categories in which one could have applied in pursuance to the tender. So far as petitioners are concerned, they applied in the category of joint venture, thus submission of joint venture agreement was a pre-condition. Before award of contract on 1st July, 1996, they were asked to submit joint venture agreement. It was submitted on 26th June, 1996. This is to fulfil the condition of the tender. A reference of MOU, dated 2nd April, 1995 for joint venture, was also given. Based on the said representation and the joint venture agreement, work was assigned to the petitioner-company. If stamp papers were purchased subsequent to the date of draft joint venture agreement, then aforesaid is sufficient to show as to how things were manipulated. It was by an accommodation that work was awarded to the company even on assurance. The fact aforesaid has been reflected by the National Highways Authority in its letter dated 9th June, 1997. The petitioner-company is now trying to twist the facts by referring dates though they have admitted their application in the category of joint venture, during the course of argument. The petitioner-company cleverly referred to a joint venture agreement of technical know how with EJL, whereas joint venture was required for the contract and not for technical know how only. In view of above, a case of cheating and forgery was made out because joint venture agreement was signed by Mr. Subrato Ray in the name of EJL in a fraudulent manner. The work was given to the company based on it. When facts came in the knowledge of the National Highways Authority, the agreement was rescinded in the year 1997. It caused loss to them, thus petitioner-company alleged to have paid a sum of Rs.5 crore aprox. as a consequence of settlement.
The argument in reference to settlement has been raised in ignorance of delay in execution of work on account of fraudulent act of the petitioners and payment of Rs.5 crore in settlement. The work was then executed by other company. The offences under Sections 420, 468, 471 & 120B IPC are made out and it cannot be considered to be a dispute of civil nature. The allegation of fraudulent act and cheating by Mr. Subrata Ray and company exist.
The issue of lack of evidence to prove the charge has been raised. It is mainly in absence of original agreement of joint venture. The argument aforesaid has been raised in ignorance of evidence collected by the CBI during the course of investigation. The material exist to show submission of joint venture agreement dated 26.06.1996 and award of work on 01.07.1996. The joint venture agreement was submitted to become eligible for award of work. In absence of it, work could not have been awarded to the petitioner-company. They have raised an issue about original joint venture agreement, though allegations are supported by evidence. The correspondence between the parties collected during the course of investigation is sufficient to show fraudulent act of the petitioners to get the work of widening of road. It is incorrect to say that no evidence exist against the petitioners for taking cognizance of the offence under Sections 120B, 420, 468 & 471 IPC.
It is also incorrect to say that offence under Sections 120B, 420, 468 & 471 IPC is not made out. The material and necessary ingredients of those offences exist and are supported by evidence. The petitioner-company has committed offences from very inception. They had submitted fraudulent document to get the contract and remained successful therein. The fact aforesaid stands proved with rescindment of agreement on the ground of forgery followed by settlement, where the petitioner-company had agreed to pay a sum of Rs.5 crore approx. If no fraud was played, the petitioner-company would have contested the termination of agreement on the ground of fraud but fact given by the petitioners themselves shows payment of a sum of R.5 crore approx., in settlement. It does not absolve the company from the allegation of fraud and cheating. The judgment cited by learned counsel for petitioners has no application to the present case.
It is further added that the complaint was filed against Subrata Ray and the company. The representation of the company is made by Mr. P.C. Agrawal as per Section 305 Cr.P.C. He filed an affidavit before the court below showing himself to be the Chairman and with the consent of party, Mr. P.C. Agrawal was allowed to represent the company. The argument has been raised in ignorance of the affidavit submitted by him before the court below for acceptance of representation of the company through him. The prayer of the non-petitioner-CBI is, thus to dismiss the petition.
I have given thoughtful consideration to the rival submissions of the parties and scanned the matter carefully.
The first ground to challenge the FIR and the proceedings is of territorial jurisdiction. It is a case where bids were invited at Delhi followed by process and award of contract at Delhi, however it is not in dispute that work assigned, as a consequence of it, was to be carried in Haryana and Rajasthan. It was delayed followed by termination of agreement on the ground of fraud. The question for my consideration is as to whether proceedings have been initiated without territorial jurisdiction. A reference of Sections 177 and 179 Cr.P.C. has been given. The aforesaid provisions are quoted hereunder for ready reference:
177. Ordinary place of inquiry and trialEvery offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed.
179. Offence triable where act is done or consequence ensues -
When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a Court within whose local jurisdiction such thing has been done or such consequence has ensued.
Sections 177 and 179 Cr.P.C. refer about territorial jurisdiction. Learned counsel for petitioners has referred only first part of Section 179 Cr.P.C. ignoring second part which has been explained by the Apex Court in the case of State of M.P. Vs. Suresh Kaushal (supra). Paras 3 to 6 of the said judgment are quoted hereunder for ready reference:
3. The marriage between Rinjana Koshal and her husband Suresh Kaushal took place at Jabalpur and thereafter the couple resided in the nuptial home situated at Indore. Most of the actions alleged against the accused took place at Indore. However, the complaint contains the allegation that Smt. Ranjana Koshal was subjected to physical torture when she was in the family way and she had to be taken back to her parental house at Jabalpur. The miscarriage took place while she was at Jabalpur. Section 313 IPC has been included in the charge as the commutative (sic) effect of all the allegations ending with the consequence of the miscarriage which took place at Jabalpur.
4. Learned single Judge found that the offence has been committed at Indore, and therefore, the court at Jabalpur has no jurisdiction at all for trying the case. This is what learned single Judge has observed in connection with the same:
The alleged offence under Section 313 IPC had also been committed outside the city of Jabalpur. The courts at Jabalpur have therefore, no jurisdiction to take cognizance of the above offences against the Petitioners The competency of the Court to take jurisdiction is determined by the place in which the offence is alleged to have been committed. It. is the settled law that the Magistrate, within whose local jurisdiction the offence is alleged to have been committed is authorized to take cognizance, and either to try the case himself or to commit it to the Court of Sessions. Since the alleged offence has not been committed within the local jurisdiction of the Magistrate at Jabalpur, the learned Judge to whom the case has been committed by the learned Magistrate of Jabalpur has no power to try the Petitioners for the alleged offence which were allegedly committed wholly outside the local limits of his jurisdiction.
5. Obviously the learned single Judge has not considered the implication of Section 179 of the Code of Criminal Procedure. It is extracted before 179. Offence triable where act is done or consequence ensues, - When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a court within whose local jurisdiction such thing has been done or such consequence has ensued.
6. The above section contemplates two courts having jurisdiction and the trial is permitted to take place in any one of those two courts. One is the court within whose local jurisdiction the act has been done and the other is the court within whose local jurisdiction the consequence has ensued. When the allegation is that the miscarriage took place at Jabalpur it cannot be contended that the court at Jabalpur could not have acquired jurisdiction as the acts alleged against the accused took place at Indore.
Section 179 Cr.P.C. gives jurisdiction to the courts where act is done and where consequence ensues. In the instant case, an agreement was executed at Delhi for widening of road in Haryana and Rajasthan. In pursuance to the agreement, the work was to be undertaken but when delay was caused, the parties were called by the National Highways Authority. It was then came in the knowledge that joint venture agreement was not signed by the joint venture company. On the aforesaid disclosure, agreement was rescinded. The alleged fraud of joint venture agreement had consequence in the territories where work was to be performed. It was delayed with consequence in the territorial jurisdiction of the court below. Learned counsel for petitioners has given reference of various judgments but therein issue was raised in reference to cause of action. The issue in reference of second part of the provisions of Section 179 Cr.P.C. was not raised and decided. In the case of State of M.P. Vs. Suresh Kaushal (supra), cause of action did not arise in territorial jurisdiction of the court at Jabalplur as incidence took place at Indore but due to consequence of miscarriage at Jabalpur, the Hon'ble Apex Court found jurisdiction of the court. In view of the above, first ground raised by learned counsel for petitioners cannot be accepted.
The second issue is in regard to jurisdiction of CBI. The reference of Section 3, 5, 6 of the Act of 1946 has been given. The aforesaid provisions are quoted hereunder for ready reference:
3. Offences to be investigated by special police establishment.The Central Government may, by notification in the Official Gazette, specify the offences or classes of offences [***] which are to be investigated by the Delhi Special Police Establishment.
5. Extension of powers and jurisdiction of special police establishment to other areas.
(1) The Central Government may by order extend to any area (including Railway areas), in a State, not being a Union territory the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under section 3.
(2) When by an order under sub-section (1) the powers and jurisdiction of members of the said police establishment are extended to any such area, a member thereof may, subject of any orders which the Central Government may make in this behalf, discharge the functions of a police officer in that area and shall, while so discharging such functions, be deemed to be a member of a police force of that area and be vested with the powers, functions and privileges and be subject to the liabilities of a police officer belonging to that police force.
(3) where any such order under sub-section (1) is made in relation to any area, then, without prejudice to the provisions of sub-section (2) any member of the Delhi Special Police Establishment of or above the rank of Sub-Inspector may subject to any orders which the Central Government may make in this behalf, exercise the powers of the officer in charge of a police station in that area and when so exercising such powers, shall be deemed to be an officer in charge of a police station discharging the functions of such an officer within the limits of his station.
6. Consent of State Government to exercise of powers and jurisdiction.Nothing contained in section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union territory or railway area, without the consent of the Government of that State.
According to the learned counsel for petitioners, CBI is not having authority to register and investigate the case for offence under Sections 120B, 420, 468 & 471 IPC. The aforesaid argument has been raised in ignorance of the Notification and the orders issued by the Central Government, apart from the State Government. The detailed reference of the Notifications and orders has been given by the counsel for CBI.
On going through all the Notifications and orders, I find that not only jurisdiction is given to the CBI to register and investigate the case for offence under Sections 420, 468, 471 & 120B IPC but for Prevention of Corruption Act also. It is within State of Rajasthan as well. The Notifications and the orders have been issued by the Central Government and the State Government and were shown during the course of argument. It shows consent of the State Government. The second argument has been raised in a casual manner and without referring to the Notifications and the orders issued from time to time under Sections 3, 5, 6 of the Act of 1946. Looking to the Notifications and orders, the second argument cannot be accepted.
The third argument of the learned counsel for petitioner is in reference to facts of the case. The date of issuance of the tender followed by opening of financial bid and award of contract have been given. The agreement entered on 01.07.1996. During the course of argument, learned counsel for petitioners admitted that the company had given bid in the category of joint venture. In view of the above, there was pre-condition to have joint venture agreement to qualify in the tender. Learned counsel for petitioners initially referred joint venture of technically know how, however a letter written by National Highways Authority on 9th June, 1997 and referred by the petitioners reveals facts otherwise. Therein, all the facts relevant to the case have been narrated. The said letter is quoted hereunder for ready reference:
No.11015/1/96 Tech/PU 9th June, 1997 To Joint Venture of M/s. Birla GTM-Entrepose Ltd. (India) and Enterprise Jean Lefebvre, France 230 Ansal Chambers-II 6 Bhikaji Cama Place New Delhi 110 066 (Fax : 6196618) (Kind Attention: Mr. Sunil Bhandari, Authorised Representative) Sub: Four laning and strengthening of NH-8 from Gurgaon in Haryana (KM36.63 to Kotputli in Rajasthan (KM 162.50) Civil Work Contract I under loan assistance of ADB (Loan No.1274-IND) Sir, Please refer to your letter number nil dated 6th May, 1997 on the above subject requesting us to release you from further performance and discharge of the contract in accordance with Clause 66.1 of the contract.
As you are aware you were pre-qualified as Joint Venture of M/s Birla-GTM Entrepose Ltd (India) (BGE) & Entreprise Jean Lefebvre (France) (EJL) with EJL as Most Experience Partner (MEP) on the basis of the Memorandum of Understanding (MOU) submitted by you as part of the pre-qualification documents for bidding any combination of contracts of ADB-III Project (Loan No.1274-IND). You had furnished the bid for Civil Work Contract I of the above project and had made representation regarding your said joint venture. Birla GTM-Entrepose purporting to the Partner-in-Charge of the Joint Venture also submitted a purported Birla GTM-Entrepose-EJL (Joint Venture) Agreement dated 26.6.1996 which showed the following:
i) The Joint Venture agreement dated 26.6.96 is between Birla GTM-Entrepose having its registered office at 230, Ansal Chambers-II, 6, Bhikaji Cama Place, New Delhi 110 066 and Entreprise Jean Lefebvre (EJL) a corporation registered in France;
ii) BGE-EJL had earlier entered into a MOU on 2.4.1995 for jointly submitting the pre-qualification document as Joint Venture applicant for National Highway works under loan assistance of ADB (Loan No.1274-IND);
iii) The Joint Venture has submitted a bid to the NHAI for Civil Work Contract-I;
iv) The Joint Venture had accepted that, if the Contract is awarded to them they would be jointly and severally liable for the performance of the Contract;
v) EJL is the Most Experienced Partner (MEP) and BGE the Partner In-Charge (PIC). The PIC was authorised to incur liabilities etc. on behalf of the Joint Venture;
vi) The default by Most Experienced Partner will be considered as a default of the Contract.
vii) The Joint Venture Agreement has been signed by the partners of the Joint Venture i.e. Birla GTM Entrepose Ltd & Entreprise Jean Lefebvre.
2. Based on your said representations the work was awarded to the Joint Venture and an agreement for execution of the work was also entered into between NHAI and the purported Joint Venture for the said purpose.
3. During the review meeting held on 25th January, 97 at New Delhi it transpired that the assertion of the BGE-EJL (JV) that it has a JV Agreement and that both partners are jointly and severally liable for the execution of the work was incorrect. At the said meeting EJL had stated that they had undertaken to provide only technical assistance to BGE and denied existence of any Joint Venture with BGE. EJL has now furnished an affidavit to NHAI in which it has been stated that the EJL has not entered into, signed, executed, ratified or approved whether in writing, verbally or by any other means any JV agreement with the BGE relating to bid for Contract I and they have not signed any deed or document or done anything or omitted to do anything to give power or authority to BGE to include any liability and / or to enter into any Contract or agreement of any nature on behalf of EJL in respect of Contract-I. This position was also confirmed by BGE's representative Shri P.C. Agarwala during the meeting with you taken by Chairman, NHAI on 23.4.97 at New Delhi.
4. In view of the above it is obvious that you had secured pre-qualification as also the contract by misrepresentation.
5. In view of the above, the Contract is voidable at the opinion of NHAI and NHAI therefore hereby rescinds the same with immediate effect without prejudice to its other legal rights and remedies. NHAI is also accordingly taking over the complete possession of the site.
Yours faithfully, Sd/-
(G. Sharan) General Manager (PU) The perusal of letter reveals as to how the alleged offence was committed by the petitioners and fraud came in the knowledge of NHAI. The argument that there was no condition to have joint venture, cannot be accepted, qua the petitioners. The petitioners have tried to take benefit of language used in the FIR without realizing that notice quoted above shows pre-condition of joint venture. The condition of joint venture was admitted later on by the counsel for the petitioners.
The fact further remains as to whether joint venture agreement was given by the petitioners or not. The stamp paper for it alleged to have been purchased on 03.07.1996, whereas joint venture agreement was given on 26.06.1996 i.e. prior to the purchase of stamp. The fact aforesaid goes against the petitioners, if stamp was purchased later than submission of joint venture agreement. Their intention to cheat would come out, if agreement was given prior to purchase of the stamp. It is based on their representation and acceptance to submit joint venture agreement that the contract was awarded on 01.07.1996. This itself shows as to how contract was awarded. An elaborate discussion of the issue may affect either side in the trial and at the stage of cognizance of offence, where only prima facie case is to be seen.
It is also submitted that original joint venture agreement is not part of the charge sheet, thus the prosecution would fail to prove its case, if trial commences. I have considered the aforesaid argument and perused the evidence collected during the course of investigation. The sufficient material is available to show a prima facie case for taking cognizance of the offence. It is not only that various letters were exchanged by the parties but an order to rescind agreement on the ground of fraud exists. It is not a case where agreement was rescinded due to delay but on account of submission of forged joint venture agreement. The parties then entered into settlement and the petitioner-company paid a sum of Rs.5 crore aprox. If there was no fraudulent act on the part of the petitioner-company, the question of payment of Rs.5 crore aprox. even on rescinment of agreement by the National Highways Authority on the ground of fraud, would not have been. I am not deliberately referring to other offences as it may affect either of the parties at the time of argument for framing of charges, only prima facie case is to be seen by the court below for cognizance of the offence and I do not find any error in the impugned order.
The argument in regard to settlement has also been raised. A reference of judgment has been given where proceedings were dropped on settlement of the dispute. The argument aforesaid has been raised without realizing that settlement between the parties was not in reference to the criminal case. It was not for dropping the criminal proceedings. A case can have civil element as well as criminal. The civil element, if any, has been settled by the parties. The fraudulent act in the shape of filing of forged joint venture agreement gave rise to crime and has not been settled by the parties. In the facts of the case, settlement does not affect pending proceedings. It is settled law that civil and criminal proceedings can go simultaneously, if there exist criminal element therein. The judgment of the Apex Court in the case of Rumi Dhar (Smt.) Vs. State of West Bengal & Anr., reported in (2009) 6 SCC 364 gives complete answer to the issue. Paras 2, 3, 10 13 to 16, 20 and 23 are quoted hereunder for ready reference:
2. The said question arises in the following factual matrix:
The appellant and her husband (A-4) along with various other persons including the officers of the Oriental Bank of Commerce Khidirpur Branch, Calcutta (hereinafter called `the Bank') were prosecuted for alleged commission of offences under Sections 120-B/ 420/467/468 and 471 of the Indian Penal Code. The officers of the Bank had also been prosecuted under Sections 13(2) read with Section 13(1)(d) of the Prevention and Corruption Act, 1988. A charge sheet was filed against the appellant and seven others. She was inter alia charged for taking the benefit of overdrafts between the period 8th February, 1993 to 5th March, 1993 without furnishing any security.
3. For the purpose of realisation of the said amount, indisputably the Bank filed an application for recovery thereof before the Debt Recovery Tribunal. It is not in dispute that before the said Tribunal, appellant and the Bank had entered into a settlement pursuant whereto or in furtherance a sum of Rs.25.51 lacs was paid. It is also not in dispute that for the said purpose, the C.B.I. had returned the title deeds in respect of the property which were kept as security for obtaining the loan from the bank.
10. Mr. Nagendra Rai, learned senior counsel appearing on behalf of the appellant, would submit :
(1) Considering the fact that the Bank had filed a suit to recover money before the DRT and the dispute between the parties having been settled and the amount in question having been repayed, continuation of the criminal proceeding would be nothing but an abuse of the process of law.
(2) Settlement having been arrived at by and between the parties and, particularly having regard to the nature of allegations made against the appellant herein, the High Court committed a serious error in refusing to record the settlement and quashing the criminal proceedings against her.
13. Appellant is said to have taken part in conspiracy in defrauding the bank. Serious charges of falsification of accounts and forgery of records have also been alleged. Although no charge against the appellant under the Prevention of Corruption Act has been framed, indisputably, the officers of the bank are facing the said charges.
14. It is now a well settled principle of law that in a given case, a civil proceeding and a criminal proceeding can proceed simultaneously. Bank is entitled to recover the amount of loan given to the debtor. If in connection with obtaining the said loan, criminal offences have been committed by the persons accused thereof including the officers of the bank, criminal proceedings would also indisputably be maintainable.
15. When a settlement is arrived at by and between the creditor and the debtor, the offence committed as such does not come to an end. The judgment of a tribunal in a civil proceeding and that too when it is rendered on the basis of settlement entered into by and between the parties, would not be of much relevance in a criminal proceeding having regard to the provisions contained in Section 43 of the Indian Evidence Act, 1872. The judgment in the civil proceedings will be admissibile in evidence only for a limited purpose.
16. It is not a case where the parties have entered into a compromise in relation to the criminal charges. In fact, the offence alleged against the accused being an offence against the society and the allegations contained in the first information report having been investigated by the Central Bureau of Investigation, the bank could not have entered into any settlement at all. The CBI has not filed any application for withdrawal of the case. Not only a charge sheet has been filed, charges have also been framed.
20. A prima facie case has been found out against the appellant. There is no error apparent on the face of the record warranting interference therewith.
23. Our attention has also been drawn to a recent decision of this Court in Nikhil Merchant v. Central Bureau of Investigation & Anr. [(2008) 9 SCC 677], wherein this Court refused to refer the matter to a larger Bench, stating:
"30. In the instant case, the disputes between the Company and the Bank have been set at rest on the basis of the compromise arrived at by them whereunder the dues of the Bank have been cleared and the Bank does not appear to have any further claim against the Company. What, however, remains is the fact that certain documents were alleged to have been created by the appellant herein in order to avail of credit facilities beyond the limit to which the Company was entitled. The dispute involved herein has overtones of a civil dispute with certain criminal facets. The question which is required to be answered in this case is whether the power which independently lies with this Court to quash the criminal proceedings pursuant to the compromise arrived at, should at all be exercised?
31. On an overall view of the facts as indicated hereinabove and keeping in mind the decision of this Court in B.S. Joshi's case (supra) and the compromise arrived at between the Company and the Bank as also Clause 11 of the consent terms filed in the suit filed by the Bank, we are satisfied that this is a fit case where technicality should not be allowed to stand in the way in the quashing of the criminal proceedings, since, in our view, the continuance of the same after the compromise arrived at between the parties would be a futile exercise."
Learned counsel for petitioners submitted that material available on record does not make out a case under Sections 120B, 420, 468 & 471 IPC. After going through the provisions and material on record, I find prima facie ingredients of those offences in the evidence collected by the CBI during the course of investigation, thus the court had taken cognizance of the offence. At the stage of taking cognizance of the offence, only prima facie case is to be seen and is made out herein. The argument raised by the counsel for the CBI prima facie shows that how offence is made out and was from the inception. The reference of various judgments on the issue have been given to show when offences under Sections 120B, 420, 468 & 471 IPC would be made out and those judgments are as follows: (1) Parminder Kaur Vs. State of Uttar Pradesh & Anr., reported in (2010) 1 SCC 322, (2) Ganesh Dan Vs. State of Rajasthan & Anr., reported in 2012 (4) WLC (Raj.) 710 & (3) Joseph Salvaraj A. Vs. State of Gujarat & Ors., reported in (2011) 7 SCC 59.
I respectfully agree to the propositions laid down by the Apex Court but considering the material on record, I find prima facie evidence for the offence under Sections 120B, 420, 468, 471 IPC.
The FIR in the instant case has not been registered by the National Highways Authority. It is not necessary that FIR has to be lodged by the National Highways Authority i.e one of the party of contract. If the FIR is to be lodged always by one of the party of contract or affected party, then in a case of bribe, making out offence of Prevention of Corruption Act, the Police would never be in a position to register the case, if party giving bribe does not make a complaint.
The argument was raised even in reference to signature on the joint venture agreement alleging it to be not fraudulent. The argument aforesaid is in ignorance to the correspondence between the parties and more specifically affidavit given by Mr. Bernard Marchant . In his affidavit, he has denied joint venture agreement between M/s. Birla GTM and EJL, France.
It is lastly submitted that no role is assigned to P.C. Agrawal for the offence, thus he should not have been implicated. The aforesaid argument has been raised in ignorance of affidavit submitted by Mr. P.C. Agrawal showing himself to be Chairman and Representative of the Company. As per Section 305 Cr.P.C., Mr. P.C. Agrawal is representing the petitioner-company with the consequences, as provided under law. Hence last argument raised by learned counsel for petitioners also could not find favour.
In view of the discussion made above, I do not find any substance in any of the arguments raised by learned counsel for petitioners. The criminal misc. petition is accordingly dismissed.
[M.N.BHANDARI], J.
FRBOHRA/296CMP2006.doc Certificate:
All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.
FATEH RAJ BOHRA, Sr. P.A