Gauhati High Court
Ghanshyam Sarda vs The State Of Assam And Anr on 19 March, 2019
Equivalent citations: AIRONLINE 2019 GAU 229
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GAHC010156242017
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Crl.Pet. 1052/2017
1:GHANSHYAM SARDA
S/O LT. SHIVLALL SARDA RESIDING AT 14/1, JUDGES COURT ROAD,
KOLKATA, WEST BENGAL- 700027.
VERSUS
1:THE STATE OF ASSAM and ANR.
Add
2:ABHYUDYA TRADING LTD.
HAVING ITS OFFICE AT MILANPUR
REHABARI
GUWAHATI- 781008 BEING REP. BY ONE OF ITS DIRECTOR TEJ NARAYAN
THAKUR
Advocate for the Petitioner : MR. D. DAS, MR. A.M. BORA, MR.H NATH
Advocate for the Respondent : MR. K N CHOUDHURY (OP2)
BEFORE HONOURABLE MR. JUSTICE MIR ALFAZ ALI JUDGMENT & ORDER (CAV) Date : 19-03-2019 This petition u/s 482 Cr.P.C. has been filed by the petitioner praying for quashing the FIR No. 868 dated 24/09/2014 registered as Paltan Bazar P.S. Case No. 868/2014 under Sections 120-B/420/468/471/379 IPC and the proceeding arising out of such FIR.
2. The respondent lodged the aforementioned FIR alleging commission of offences under Page No.# 2/12 Sections 120-B/420/468/471/379 I.P.C. against the present petitioner and some others. The case of the petitioner is that the FIR was lodged only to wreck vengeance and harass the petitioner maliciously with some baseless allegations It has been stated that the allegations made in the FIR even if accepted to be true, do make out any offence under Sections 420/460/471/379 I.P.C. At best, it can make out a dispute amongst the members of the family regarding the management and control of the Company and the respondent No. 2 already instituted several litigations including filling of perjury application before the Company Law Board. The present FIR also contains the similar allegations made in the perjury application filed before the Company Law Board. The petitioner further stated, that no part of the alleged occurrence took place within the jurisdiction of the Paltan Bazar Police Station, except the respondent having an office at Milanpur, Rehabari and the parties are also residents of Kolkata and as such, the Paltan Bazar Police Station has no jurisdiction to investigate the case.
3. Learned Senior Counsels, Mr. D. Das and Mr. A.M. Bora for the petitioner and the learned Senior Counsel, Mr. K.N. Choudhury for the respondent No. 2/informant were heard.
4. The contention of the learned Senior Counsels, Mr. D.Das and Mr. A.M. Bora for the petitioner is that the Paltan Bazar Police Station has no jurisdiction to register the FIR and investigate the case, as no part of the cause of action for the offence arose within the jurisdiction of Paltan Bazar Police Station and that the FIR did not disclose the offence under any of the provisions of the Indian Penal Code as alleged in the FIR. It was also submitted that even if the allegations made in the FIR are taken in its face value, the same at best, can make an offence under the Companies Act, for which no court can take cognizance unless a complaint is filed by the competent persons, as laid down in subsection (2) of Section 439 of the Companies Act. Mr. K.N. Choudhury, learned senior counsel, placing reliance on the decision of the Apex Court in Satvinder Kaur-Vs.- State (Govt. of NCT, Delhi) & Anr. reported in (1999) 8 SCC 728 submitted, that investigation of a criminal case by police cannot be challenged or quashed on the plea of lack of territorial jurisdiction in view of the statutory provision laid down in Section 156(2) Cr.P.C. Further submission of Mr. Choudhury is that the allegations of fraudulent transfer of the shares and forging of documents for such transfer for wrongful gain by the petitioner clearly make out a cognizable offence under the Indian Penal Page No.# 3/12 Code, and as such, the FIR cannot be quashed in the exercise of inherent power.
5. Section 156 of the Cr.P.C. provides the power of the officer-in-charge of a police station to investigate a cognizable offence, which reads as under : -
6. The sub-section (1) of Section 156 Cr.P.C. provides that the officer-in-charge of a police station may investigate a cognizable offence without the order of a Magistrate. Sub- section (2) of Section 156 Cr.P.C. makes it abundantly clear that the investigation of a criminal case by the officer-in-charge of the police station under subsection (1) of Section 156 Cr.P.C. cannot be challenged at any stage on the ground of jurisdiction. The Apex Court, in Rasiklal Dalpatram Thakkar-Vs- State of Gujarat reported in (2010) 1 SCC 1 relied by Mr. K.N. Choudhury, held that "it is not within the jurisdiction of the investigating agency to refrain itself from holding a proper and complete investigation merely upon arriving at a conclusion that the offence had been committed beyond its territorial jurisdiction. We are of the firm view that the powers vested in the investigating authorities under Section 156 (1) Cr.P.C., did not restrict the jurisdiction of the investigating agency to investigate into a complain even if it did not have territorial jurisdiction to do so."
7. The Apex Court in Satvindar Kaur (supra) dealing with the power of the police officer to investigate an offence held in paragraph 8, 10 & 15 as under :-
"8. In our view, the submission made by the learned counsel for the appellant requires to be accepted. The limited question is whether the High Court was justified in quashing the FIR on the ground that Delhi Police Station did not have territorial jurisdiction to investigate the offence. From the discussions made by the learned Judge, it appears that learned Judge has considered the provisions applicable for criminal trial. The High Court arrived at the conclusion by appreciating the allegations made by the parties that the SHO, Police Station PachimVihar, New Delhi was not having territorial jurisdiction to entertain and investigate the FIR lodged by the appellant because the alleged dowry items were entrusted to the respondent at Patiala and that the alleged cause of action for the offence punishable under Section 498-A IPC arose at Patiala. In our view, the findings given by the High court are, on the face of it, illegal and erroneous because :
(1) The SHO has statutory authority under Section 156 of the CrPCto investigate any cognizable case for which an FIR is lodged. (2) At the stage of investigation, there is no question of interference under Section 482 CrPC on the ground that the investigating officer has Page No.# 4/12 no territorial jurisdiction.
(3) After investigation is over, if the investigating officer arrives at the conclusion that the cause of action for lodging the FIR has not arisen within its territorial jurisdiction, then he is required to submit a report accordingly under Section 170 of the CrPC and to forward the case to the Magistrate empowered to take cognizance of the offence.
10. It is true that territorial jurisdiction also is prescribed under subsection (1) to the extent that the officer can investigate any cognizable case which a court having jurisdiction over the local area within the limits of such police station would have power to enquire into or try under the provisions of Chapter XIII. However, sub-section (2) makes the position clear by providing that no proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered to investigate. After investigation is completed, the result of such investigation is required to be submitted as provided under Sections 168, 169 and 170. Section 170 specifically provides that if, upon an investigation, it appears to be the officer in charge of the police station that there is sufficient evidence or reasonable ground of suspicion to justify the forwarding of the accused to a Magistrate, such officer shall forward the accused under the custody to a Magistrate empowered to take cognizance of the offence upon a police report and to try the accused or commit for trial. Further, it the investigating officer arrives at the conclusion that the crime was not committed within the territorial jurisdiction of the police station, then FIR can be forwarded to the police station having jurisdiction over the area in which the crime is committed. But this would not mean that in a case which requires investigation, the police officer can refuse to record the FIR and/or investigate it.
15. Hence, in the present case, the High Court committed a graver error in accepting the contention of the respondent that the investigating officer had no jurisdiction to investigate the matters on the alleged ground that no part of the offence was committed within the territorial jurisdiction of the police station at Delhi. The appreciation of the evidence is the function of the courts when seized of the matter. At the stage of investigation, the material collected by the investigating officer cannot be judicially scrutinized for arriving at a conclusion that the police officer of a particular a police station would not have territorial jurisdiction. In any case, it has to be stated that in view of Section 178 © of the Cr.P.C., when it is uncertain in which of the several local areas an offence was committed, or where it consists of several acts done in different local areas, the said offence can be enquired into or tried by a court having jurisdiction over any of such local areas. Therefore, to say at the stage of investigation that the SHO, Police Station PachimVihar, New Delhi was not having territorial jurisdiction, is on the face of it, illegal and erroneous. That apart, Section 156 (2) contains an embargo that no proceeding of a police officer shall be challenged on the ground that he has no territorial power to investigate. The High Court has completely overlooked the said embargo when it entertained the petition of Respondent 2 on the ground of want of territorial jurisdiction."
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8. What therefore, follows from the mandate of sub-section (2) of Section 156 Cr.P.C. and the ratio laid down by the Apex Court in Satvindar Kaur case (supra) and Rasiklal Dalpatram Thakkar is that the investigation of a cognizable offence undertaken by the police u/s 156 (1) Cr.P.C. cannot be challenged at any stage of investigation, on the ground of lack of territorial jurisdiction. Therefore, there is no question of interference with the investigation u/s 482 of the Cr.P.C. on the ground, that the investigating officer did not have territorial jurisdiction, inasmuch as, the inherent power cannot be exercised to negate or subvert the statutory provision. In view of the above legal provision elucidated by the Apex Court and the statutory provision of Section 156 (2) Cr.P.C., submission of the learned counsel for the petitioner for quashing the proceeding on ground of lack of territorial jurisdiction of the investigating agency is not acceptable.
9. It is the settled position as laid down by the Apex Court in a long line of decisions, that when a criminal proceeding is sought to be quashed at the initial stage, u/s 482 Cr.P.C., the primary test to be applied is whether the allegations made in the FIR or the complaint, in its face value makes out any offence. If the answer is in affirmative, there is no question of quashing the proceeding at the threshold. As a corollary, when the answer is in negative, the court should not hesitate to exercise the inherent power, if it is necessary to secure the ends of justice or to prevent the process of abuse of the court. In order to trace, as to whether the allegations in the FIR, made out any cognizable offence, it would apposite to have a look at the allegations made in the FIR. Though the FIR is lengthy and descriptive one, basic allegation of offence can be traced in the following paragraphs--
"11. The complainant immediately filed an application being C.A. No. 359 of 2012 challenging the said order dated 13th July'2012, The matter was heard at length and finally by a judgment and order dated 15 th October, 2012, the said order dated 13th July'2012 was in effect set aside. A copy of the order dated 15th October, 2012 passed by the Hon'ble Board is enclosed. In course of hearing of C.A. No. 359 of 2012, a dispute had been raised as to the complainant's shareholding company. The Hon'ble Bench thereupon directed all the parties (which included Ghanashyam Sarda who was a party to the earlier round of proceeding) to produce share certificates of the company. The share certificates could however be produced only by the complainant in respect of 11,410 shares and Sajjan Kumar Agarwala in respect of 24,370 shares. In the affidavit in replies to C.A. No. 359 of 2012, it was falsely contended by the Page No.# 6/12 accused that the complainants had transferred their shares in the company to the Saurabh Benerjee herein. This contention was, however, strongly denied by the complainants and the Hon'ble Board by the said order dated 15 th October, 2012 held in favour of the complainants. It was held that the complainants between themselves held 28% of the total paid up share capital of the company.
13. From both the orders dated 15 th October' 2012 appeals were filed by Sajjan Kumar Agarwala and Ghanashyam Sarda before the Hon'ble High Court at Calcutta and the appeals were dismissed by the judgment and order of the Hon'ble High Court dated 3rd January, 2013.
14. The complainant have filed a perjury application being C.A. No. 551 of 2012 before this Hon'ble Board and the complainants reasonably hope to establish before this Hon'ble Board the blatant acts of perjury that Ghanshyam Sarda concerned have indulged in fabrication of records of court and lawyers' letters. The complainants crave leave to refer to C.A. No. 551 of 2012 and also all the pleadings filed in connection with C.A. No. 359 of 2012.
15. In the perjury application being C.A. No. 551 of 2012 a reply affidavit of Ghanashyam Sarda was served on the complainants on 4 th January, 2013. In this reply affidavit the complainants were surprised to find the statement that meeting of shareholders of the company have been convened for the purpose of implementing the order of the Hon'ble Calcutta High Court dated 29 th November, 2012 under Section 560 (6) of the Companies Act. It has also been stated in the said affidavit that one Saurabh Banerjee has received notice of such meeting of the shareholders of the company.
16. The complainants immediately became suspicious and caused enquiries to be made in the records of the Registrar of Companies. Such enquiries revealed the existence of annual returns of the Company for the year 2001- 2002 to 2010-2011, all filed on 3rd January, 2013.
10. In the annual returns of the company for the year 2001 to 2006 the complainants shareholdings as above remained unchanged. However, in the annual returns of the company for the year 2007 and the subsequent years the complainants' shareholdings is shown to have been transferred to Saurabh Banerjee. The date of transfer is shown to be 26 th March 2007. In all the said annual returns mechanically the date of the Annual General Meetings of the company is stated to be the 30 th of September of each year. The shares which were standing in the name of Ramswarup Poddar are also shown to have been transferred in the annual returns of the company for the year 2001 of 2007 in favour of the respondent No. 2. The date of transfer is dated 21 st November, 2006.
18 (a) The complainants have never transferred their shareholding to Saurab Banerjee. No share transfer deed has been executed by the complainants in favour of Saurab Banerjee as alleged or at all.
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22. The complainant therefore state that the purported annual returns of the company have been created by the accused persons in collusion with each other with the intention to cheat and deceive the complainant. That immediately after coming to know about these fake and forged annual returns and the other forged documents created by all the accused persons conjointly in a criminal conspiracy, the complainant first took all possible steps to understand the fraud committed by the accused persons and when the complainant was satisfied about the fraud which has been committed by the accused persons intentionally to deceive the complainant and to transfer the so called share certificates in their names so that they can take charge of the company, they decided to file this case and hence a little delay has been caused. The documents have been forged and have been created to cause wrongful gain to the accused persons and to cause wrongful loss to the complainant. That by such acts and deeds the accused persons intentionally and deliberately with common intention has thereby committed the offence punishable under sections 420/406/468/467/471 of the Indian Penal Code and should be punished accordingly. The said returns have also not been filed by any person authorized to do so. The said returns are also false and based on fictitious Annual General Meetings. Even otherwise the contents of the said returns to the following extent are false :-
(i) Transfer of the complainant shareholding in the company to Saurabh Banerjee;
(ii) The convening of board meeting of the company on 3 rd December, 2012 authorizing filing of such returns;
iii) The Annual General Meetings of the company dated 3 rd September of each year from 2001 to 2011."
10. The above averments made in the FIR basically disclose two sets of allegations, i.e., false and fraudulent transfer of the shareholdings of the complainants in favour of the FIR named accused and making of forged transfer documents as well as the submissions of false return.
11. Learned counsel for the petitioner referring to Sections 447 and 448 of the Companies Act, contended that submission of false return is an offence, defined under Section 448, which is punishable under Section 447 of the Companies Act. It was also contended by Mr. A.M. Bora, referring to subsection (2) of Section 439 of the Companies Act, that no court can take cognizance of any offence under the Companies Act, except on the complaint in writing of the Registrar, a shareholder of the company, or of a person authorized by the Central Government in that behalf. Learned counsel for the petitioner further submitted, placing reliance on a decision of the Apex Court in Basir-ul-Haq-Vs- State of West Bengal reported in Page No.# 8/12 AIR 1953 (SC) 293, that when the facts alleged, disclose a distinct offence under a particular statute (here the Companies Act) and the statute provides a particular mode of lodging a complaint, such provision of the statute cannot be evaded by resorting to devices of camouflages. Contention of Mr. Bora that the allegations made in the FIR could at best make out offence under the Companies Act. However, the informant lodged the FIR putting certain penal provisions of the Indian Penal Code, only in order to avoid the requirement of Section 439 (2) of the Companies Act, which creates a bar against taking cognizance of any offence under the Companies Act, unless complaint is lodged by the particular persons authorized in that behalf, by resorting to the device of camouflage. The Apex Court in Basir-ul-Haq case observed in para 14 as under --
"14. Though, in our judgment, Section 195 does not bar the trial of an accused person for a distinct offence disclosed by the same facts and which is not included within the ambit of that section, it has also to be borne in mind that the provisions of that section cannot be evaded by resorting to devices or camouflages. The test whether there is evasion of the section or not is whether the facts disclose primarily and essentially an offence for which a complaint of the court or of the public servant is required. In other words, the provisions of the Section cannot be evaded by the device or charging a person with an offence to which that section does not apply and then convicting him of an offence to which it does, upon the ground that such latter offence is a minor offence of the same character, or by describing the offence as being one punishable under some other section or by Indian Penal Code, though in truth and substance of the offence falls in the category of sections mentioned in section 195 of the Cr.P.C. Merely by changing the garb or label of an offence which is essentially an offence covered by the provisions of Section 195 prosecution for such an offence cannot be taken cognizance of by misdescribing it or by putting a wrong label on it ."
12. The Apex Court in the aforementioned decision clearly held that when two distinct offences are disclosed by the same set of facts, one of which, is within the ambit of Section 195 Cr.P.C. and other is not included within the ambit of said Section, there is no bar in trial of a person for the offence which is not included in Section 195 Cr.P.C. However, in such situation court is required to see, that provision of Section 195 is not tried to be evaded by resorting to devices of camouflages. Whether the same set of facts, discloses two distinct offences or devices of camouflages is resorted to for evading the hassle of certain legal provision, would obviously depend on the facts and circumstances of a particular case.
13. For convenience, let me reproduce the provisions of Sections 447, 448 and 439 of the Companies Act.
"447. Punishment for fraud - Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in Page No.# 9/12 force, any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud :
Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years.
448. Punishment for false statement--Save as otherwise provided in this Act, if any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement.
439. Offences to be non-cognizable ----(1) Notwithstanding anything in the Code of Criminal Procedure, 1972 (2 of 1974), every offence under this Act except the offences referred to in sub-section (6) of Section 212 shall be deemed to be non-cognizable within the meaning of the said Code.
(2) No court shall take cognizance of any offence under this Act which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, a shareholder of the company, or of a person authorized by the Central Government in that behalf :
Provided that the court may take cognizance of offences relating to issue and transfer of securities and non-payment of dividend, on a complainant in writing, by a person authorized by the Securities and Exchange Board of India :
Provided further that noting in this sub-section shall apply to a prosecution by a company of any of its officers.
(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974) where the complainant under sub-section (2) is the Registrar or a person authorized by the Central Government, the presence of such officer before the Court trying the offences shall not be necessary unless the court requires his personal attendance at the trial.
(4) The provisions of sub-section (2) shall not apply to any action taken by the liquidator of a company in respect of any offence alleged to have been committed in respect of any of the matters in Chapter XX or in any other provision of this Act relating to winding up of companies."
14. From the above provisions of the Companies Act, it is apparent that submission of false return or making any false statement in a return with the knowledge, that such statement is false, constitute an offence under Section 448 of the Companies Act, which is considered to be a fraud and is punishable under Section 447 of the Companies Act. Subsection (2) of Section 439 of the Act provides that no court shall take cognizance of any offence under the Companies Act, which is alleged to have been committed by the company or any officer Page No.# 10/12 thereof, except on the complaint in writing of the registrar, a shareholder of the company or a person authorized by the Central Government in that behalf. Apparently in the instant case, allegations of fraudulent transfer of share of the complainants and forging transfer documents to effect such transfer of shares have been brought against the accused persons named in the FIR including the present petitioner and not against the company or its officer. Although submission of false return itself may not come within the definition of "making false document" as defined in section 464 IPC, it is hard to say that allegation of fraudulent transfer of share and making of forged transfer document to effect such purported transfer shall not constitute a distinct offence under the Indian Penal Code. Therefore, on factual matrix of the present case, the decision of Basir-ul-Haq's case (supra) is distinguishable.
15. Even the offence of fraud u/s 447/448 of the Companies Act are cognizable offence in view of sub-section (6) of Section 212 of the Companies Act. Therefore, when an FIR is lodged alleging a distinct cognizable offence under the Indian Penal Code, police is not only competent, rather obliged to register the FIR and carry out the investigation. Unless the investigation is concluded and the stage of taking cognizance arrives, it would be inappropriate, in my considered view, to preempt the investigating agency from taking the investigation to its logical conclusion.
16. As indicated above, the FIR broadly discloses the ingredients of two offences, one being the fraudulent transfer of shares and making of forged transfer documents to give effect to such fraudulent transfer of shares and submission of return with false statement. Even if it is assumed for the sake of argument, that submission of return with false statement shall be an offence u/s 447/448 of the Companies Act, the allegation of fraudulent transfer of the share by the petitioner in collusion with the other persons named in the FIR and allegation making forged document to effect such transfer prima facie makes out a distinct offence under the Indian Penal Code. It is no doubt true, that though, various penal provisions have been inserted in the FIR, it is not necessary that the FIR must disclose ingredients of all the offences mentioned therein. If the allegation makes out even a single offence cognizable by police, investigation cannot be shut. Thus, having regard to the allegations made in the FIR, it cannot be said that the FIR has not made out any offence under the Indian Penal Code.
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17. The Apex Court in Dinesh Bhai Chandu Patel and Ors.-VS- State of Gujarat reported in (2018) Cr LR (SC) 54 held that "once the court finds that the FIR discloses prima facie commission of any cognizable offence, it should stay its hand and allow the investigating machinery to step into to unearth the crime in accordance with the procedure prescribed in the Code." Therefore, when the allegations made in the FIR prima facie makes out a distinct cognizable offence, throttling the investigation of the criminal proceeding at the threshold, before it reaches its logical conclusion, in my considered view, may run counter to the object of "securing ends of justice" being the ultimate purpose of exercising the inherent power u/s 482 Cr.P.C.
18. It is to be borne in mind that quashing of a criminal proceeding u/s 482 Cr.P.C. is not a routine exercise and it should be exercised in exceptional circumstances and in rarest of the rare case, to secure the ends of justice or to prevent the abuse of process of the court. Paragraph 103 of the celebrated judgment of the Apex Court in State of Haryana -VS- Bhajanlal, 1992 (Supp) 1 SCC 335 can be profitably referred to here. the Apex Court held as under :-
"103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice ."
19. Thus, having regard to the allegations made in the FIR, as indicated above, and also the provisions of the Companies Act and the scope of interference with the criminal proceeding at the threshold in exercise of inherent power, I am unable to persuade myself to concur with the submission of the learned counsel for the petitioners to quash the proceeding in the present case in the exercise of inherent power. Accordingly, the criminal petition stands dismissed.
Page No.# 12/12 JUDGE Comparing Assistant