Calcutta High Court (Appellete Side)
Vinay Sureka vs Unknown on 8 October, 2021
Author: Kausik Chanda
Bench: Kausik Chanda
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08.10.2021
Ct.35 AKG CRR 2157 OF 2021 With CRR 2158 OF 2021 With CRR 2160 OF 2021 (Through Video Conference) In Re: - An application under Section 397 read with Sections 401 and 482 of the Code of Criminal Procedure, 1973.
And In the matter of: Vinay Sureka .... Petitioner Mr. Mahesh Jethmalani, Sr. Adv., Mr. Gunjan Mangla., Adv., Mr. Sabyasachi Banerjee, Adv., Mr. Rajarshee Dutta, Adv., Mr. Mayukh Mukherjee, Adv., Ms. Debjani Chatterjee, Adv., Mr. Shwetaank Nigam, Adv., Mr. Akash Agarwal, Adv., Ms. Pritha Basu, Adv., Mr. Aryaa Chatterjee, Adv.
...For the petitioner in item no. 13.
Mr. Ravi Shankar Prasad, Sr. Adv., Mr. Siddharth Luthra, Sr. Adv., Mr. Sabyasachi Banerjee, Adv., Mr. Asif Ahmed, Adv., Mr. Aditya Raju, Adv., Mr. Rajarshee Dutta, Adv., Mr. Mayukh Mukherjee, Adv., Ms. Debjani Chatterjee, Adv., Mr. Shwetaank Nigam, Adv., Ms. Pritha Basu, Adv., Mr. Aryaa Chatterjee, Adv.
...For the petitioner in item no. 14.
Mr. Amit Desai, Sr. Adv., Mr. Sabyasachi Banerjee, Adv., Mr. Rajarshee Dutta, Adv., Mr. Mayukh Mukherjee, Adv., Ms. Debjani Chatterjee, Adv., Mr. Shwetaank Nigam, Adv., Mr. Akash Agarwal, Adv., Ms. Pritha Basu, Adv., Mr. Aryaa Chatterjee, Adv.
...For the petitioner in item no. 15.
2Mr. Vikas Singh, Sr. Adv., Mr. Saubhik Chowdhury, Adv., Mr. Dripto Majumdar, Adv.
...For the complainant in August Agents Limited. Mr. Ranjan Bachawat, Sr. Adv., Mr. Sayan Roychowdhury, Adv., Mr. Satyaki Mukherjee, Adv.
Mr. Saubhik Chowdhury, Adv., Mr. Dripto Majumdar, Adv.
...For the complainant in Insilco Agents Limited. Mr. Sekhar Basu, Sr. Adv., Mr. Sandipan Ganguli, Adv., Ms. Somapriya Chowdhury, Adv.
Mr. Sourav Chatterjee, Adv., Mr. Saubhik Chowdhury, Adv., Mr. Dripto Majumdar, Adv.
...For the complainant in Laneseda Agents Limited. Since similar facts and law points are involved in all the three applications, they are heard together.
The petitioner has filed the applications for quashing of proceedings being complaint case no. C-2049 of 2021, C-2050 of 2021 and C-2026 of 2021, under Section 406 of the Indian Penal Code, 1860, pending before the learned Judicial Magistrate, 2nd Court at Alipore.
The complainants in all three cases are wholly owned subsidiaries of Vindhya Telelinks Limited a public listed company. The said complaint suggests that the accused persons are directors or erstwhile directors of the complainants.
The petitioner/accused has also challenged the identical orders dated October 1, 2021 and October 4, 2021, passed by the learned Magistrate in the said complaint cases whereby the learned Magistrate 3 has issued process against the accused person/petitioner under Section 406 of the Indian Penal Code, 1860 and also issued search warrants with a direction upon the police to return the seized documents to the complainant after verification.
Mr. Ravi Shankar Prasad, learned senior advocate appearing for the petitioner in CRR No. 2158 of 2021, submits that order of the learned Magistrate is ex-facie bad in law. The complainant has suppressed the fact that the committee of administrator pendente-lite for the estate of late Priyamvada Devi Birla approached the National Company Law Tribunal, Kolkata Bench, against the complainants and said Vindhya Telelinks Limited praying, inter alia, for an injunction restraining them from shifting the registered office of the complainant company from Birla Building, 9/1, R.N. Mukherjee Road, Kolkata to any other premises.
In view of the conflicting opinion of the two learned members of the said Tribunal, the matter was referred to a third learned member and the said Tribunal is in seisin of the matter.
He, further, points out that the order of the learned Magistrate is a non-speaking order. The order of the learned Magistrate does not reflect that there was any inquiry or there was a recording of satisfaction that the learned Magistrate had reason to believe that in the facts of the case, issuance of a search warrant was necessary.
Mr. Jethmalani, learned senior advocate, appears for the petitioner in CRR No. 2157 of 2021. By referring to the paragraphs 22 to 26 of the complaint, he submits that even if the said allegations are accepted on its face value, the same do not disclose the ingredients of offence under Section 406 of the Indian Penal Code, 1860. He relies upon a judgment of the Supreme Court reported at (1977) 1 SCC 163 4 (Sardar Singh v. State of Haryana) to suggest that Section 406 of the Indian Penal Code, 1860, can be invoked only if it can be shown that the accused being in any manner entrusted with the property, committed breach of trust in respect of that property. In the present case the complaint case does not suggest that the petitioner dishonestly misappropriated or converted the property to his own use or dishonest use or disposed it of. Therefore, the learned Magistrate was not justified in issuing the process under Section 406 of the Indian Penal Code, 1860 and the search warrant under Section 94 of the Code of Criminal Procedure, 1973.
Mr. Amit Desai, learned senior advocate appearing for the petitioner in CRR No. 2160 of 2021, submits that issuance of search warrant is a serious matter and a search warrant cannot be issued in a mechanical manner or by a laconic order. Since the order of issuance of search warrant is discretionary, the learned Magistrate should give reason which swayed his discretion in favour of issuance of the search warrant.
Mr. Desai, further, submits that to issue a search warrant under Section 94 of the Code of Criminal Procedure, 1973 the learned Magistrate should first conduct an inquiry before, he can have reasons to believe that the property in respect of which the search warrant is sought to be issued is a stolen or objectionable property/article. In this regard he relies upon a judgment reported at (1998) 1 CHN 185 (Dr. Satya Narayan Chowdhuri v. State of W.B.).
By referring to Section 457 of the Code of Criminal Procedure, 1973, Mr. Desai submits that the learned Magistrate has committed a grave error in issuing the search warrant simultaneously with an order to return the seized articles to the complainant. 5
Mr. Desai submits that a reading of Section 457 of the Code of Criminal Procedure, 1973, makes it clear that the police should report to the Magistrate after the seizure is made and only thereafter the Magistrate may make such order for disposal of such property or for delivery of such property to the person entitled to the possession of such property.
Mr. Siddharth Luthra, learned senior advocate appearing in CRR No. 2158 of 2021, submits that it is obligatory on the part of the Magistrate that before summoning the accused residing beyond his jurisdiction, the learned Magistrate shall inquire into the case himself or direct the investigation for finding out whether there are sufficient grounds for proceeding against the accused. The purpose of the inquiry under Section 202 is to determine whether a prima facie case is made out, and whether there is a sufficient ground for proceeding against the accused.
In this case admittedly some of the accused persons are residing outside the jurisdiction of the Court of the learned Magistrate and therefore, the learned Magistrate ought to have conducted a preliminary inquiry before issuance of process.
Mr. Ranjan Bachawat, learned senior advocate appearing in CRR 2157 of 2021 for the complainant/Insilco Agents Limited, submits that admittedly the registered office of the company has been shifted at 27- B, Camac Street, 5th Floor, Kolkata-16.
Section 128 of the Companies Act, 2013 provides that every company shall prepare and keep its registered books of account and other relevant books and papers at the registered office and its branches. He submits that the petitioner has failed to obtain any injunction order from the National Company Law Tribunal, Kolkata 6 and, therefore, it was obligatory to ensure that the relevant documents are kept and maintained at the present registered office of the company. By referring to Sub-section 6 of Section 128 of the Companies Act, 2013, Mr. Bachawat submits that contravention of the provisions of Section 128 of the Companies Act, 2013 is a punishable offence.
Mr. Bachawat, further, submits that Section 405 of the Indian Penal Code, 1860 is attracted in case of disposal of a property in violation of any direction of law prescribing the mode in which the trust is to be discharged. He, further, submits that the order of the learned Magistrate may not contain sufficient reasons, but the order has been rightly passed, particularly when it is apparent that the accused persons are duty bound to ensure that the relevant documents are kept at the present registered office of the company. The order of the learned Magistrate in effect has not occasioned any failure of justice warranting immediate intervention of this Court. The matters should be heard on merit after granting adequate opportunity of hearing to the complainants.
Mr. Vikas Singh, learned senior advocate appearing in CRR No. 2158 of 2021, on behalf of the complainant also makes similar submissions. Mr. Singh also suggests that there is no justification to grant an ex-parte stay against the order of the learned Magistrate. He submits that the learned Magistrate has directed that only after proper verification, the seized articles are to be returned. The learned Magistrate has also ensured that the nature and character of those documents are not changed till the disposal of the case. He submits that the applications should be heard finally on merit without any interference at this stage.
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I have duly considered the arguments advanced by the respective parties and I am of the, prima facie, opinion that the orders dated October 1, 2021 and October 4, 2021 are not sustainable in the eye of law.
The relevant part of the complaint is reproduced below:-
"On several occasions, the complainant company called upon the accused No. 1 and 2 to hand over all records of the complainant company including all Minutes Books, books of accounts, cheque books, common seal and all other assets and properties of the complainant company including the computer(s) containing data of the complainant company and all other assets and properties of the complainant company lying in their power, possession, custody or control and entrusted to them to one Dipankar Chatterjee who has been duly authorised by the complainant company in terms of the resolution passed by the Board of Directors at their meeting held on 10th May, 2021 for shifting/transferring of the records/documents etc. from the erstwhile registered office of the complainant company to the present registered office of the complainant company. There was no authority left for the said accused persons to withhold the records of the complainant company at the office of 9/1 R.N. Mukherjee Road, Kolkata- 700 001 and at other places."
The plain reading of the complaint does not disclose ingredients of the offences under Section 405 of the Indian Penal Code, 1860 since it is not the case of the complainant that the accused persons being entrusted with the relevant documents dishonestly misappropriated or converted to their own use or dishonestly used or disposed of the said documents. The allegation is of withholding the documents.
Section 94 of the Code of Criminal Procedure, 1973, mandates that a search warrant should be preceded by an inquiry conducted by the Magistrate to arrive at a satisfaction that the property in respect of which the search warrant is sought to be issued is a stolen property or 8 an objectionable article. The orders impugned are non-speaking orders and do not reflect that any such satisfaction has been recorded by the learned Magistrate.
I am also of the view that without receiving the search report from the police and without ascertaining the entitlement of the possession of the documents, the learned Magistrate ought not to have directed the return of the seized documents to the complainant. The orders of the learned Magistrate appear to have been passed in violation of Section 457 of the Code of Criminal Procedure, 1973.
I am also of the opinion that the learned Magistrate was not justified in issuing the process without embarking upon a preliminary inquiry against the accused persons who admittedly reside beyond the jurisdiction of the learned Magistrate.
In view of the aforesaid reasons, all further proceedings in respect of complaint case nos. C-2049 of 2021, C-2050 of 2021 and C- 2026 of 2021, pending before the learned Judicial Magistrate, 2nd Court, Alipore, shall remain stayed till three weeks after the ensuing Puja vacation. The matters will appear one week after the Puja vacation under the heading "For Orders." The petitioner is directed to serve a copy of the application upon the opposite parties within a week from date and file an affidavit-of-service to that effect on the next date of hearing.
The complainants/investigating agency shall hand over the seized documents to the Joint Commissioner of Crime, Kolkata Police within 48 hours from date.
Learned Public Prosecutor shall produce the said seized documents before this Court on the next date of hearing. 9
List all three applications one week after the ensuing Puja vacation under the heading "For Orders."
(Kausik Chanda, J.)