Telangana High Court
T.V. Vijay Kumar vs The State Of Telangana on 13 October, 2020
Author: K. Lakshman
Bench: K. Lakshman
THE HONOURABLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION Nos.15284, 15285 AND 15286 OF 2020
COMMON ORDER:
Mr. Kadmicherla Seethayya, petitioner in W.P. No.15284 of 2020 and Accused No.3 in Crime No.451 of 2020, filed the writ petition under Article - 226 of the Constitution of India, to declare the action of respondent No.2 in registering FIR in Crime No.451 of 2020 on the complaint given by respondent No.3, which is purely civil / commercial in nature in contravention of the conclusions/directions in Lalita Kumari v. Government of Uttar Pradesh1, more particularly, paragraph No.111 (vi), as illegal and to quash the proceedings against him in the said Crime.
2. Mr. T. V. Vijay Kumar, petitioner in W.P. No.15285 of 2020, accused No.1 in the said Crime, filed the writ petition with similar relief and to quash the proceedings against him.
3. Mr. M.S. Ramakrishna, petitioner in W.P. No.15286 of 2020, accused No.2 in the said Crime, filed the writ petition seeking the very same relief and to quash the proceedings against him in the said Crime.
4. Heard Mr. S. Niranjan Reddy, learned Senior Counsel representing Mr. D. Narendar Naik, learned counsel for the petitioner in W.P. No.15285 of 2020, Mr. S. Nagesh Reddy, learned counsel 1 . (2014) 2 SCC 1 KL,J W.P. No.15284 of 2020 & batch 2 representing Ms. Rao Vishwaja, learned counsel for the petitioner in W.P. No.15284 of 2020, Mr. T. Bala Mohan Reddy, learned counsel for the petitioner in W.P. No.15286 of 2020, and Mr. S. Ravi, learned Senior Counsel, representing Mr. Sama Sandeep Reddy, learned counsel for respondent No.3 in W.P. Nos.15284 and 15285 of 2020, Mr. Vinod Kumar Deshpande, learned Senior Counsel representing Mr. A. Purushotham Reddy, learned counsel for respondent No.3 in W.P. No.15286 of 2020 and also the learned Government Pleader for Home appearing on behalf of respondent Nos.1 and 2 - State.
5. Perused the entire material available on record. The offences alleged against the petitioners in all the writ petitions are under Sections 406, 417, 420 and 120B read with 34 of the Indian Penal Code, 1860 (for short 'IPC'). In these writ petitions, they sought to quash the proceedings in Crime No.451 of 2020, pending on the file of Jubilee Hills Police Station, Hyderabad City Commissionerate.
6. Mr. S. Niranjan Reddy, learned senior counsel, would submit that the contents of complaint dated 05.09.2020 lodged by respondent No.3 - de facto complainant is lacking the ingredients of the offences alleged against the petitioners and the nature of allegations made in the complaint are civil in nature. He would further submit that proceedings before the National Company Law Tribunal (NCLT), Delhi vide C.P. No.57/Chd/Hry/2020 and NCLT, Amaravathi Bench at Hyderabad vide C.P. No.59/241/AMR/2020, are KL,J W.P. No.15284 of 2020 & batch 3 pending. The said petitions were filed by respondent No.3 himself. There is no cause of action within the territorial jurisdiction of Jubilee Hills Police Station and, therefore, the proceedings in Crime No.451 of 2020 pending on the file of the said P.S. Jubilee Hills have to be quashed on the ground of lack of jurisdiction.
7. The learned senior counsel would further submit that there is delay in lodging the complaint. The contents of complaint would reveal that the same are vague; the ingredients are lacking and there are no specific overt acts against the petitioner - accused No.1. He would further submit that accused No.1 is not having any shares in M/s. Everest Power Private Limited and is not even a Director of the said Company. There is no entrustment of any property to attract the ingredients of Sections 420 and 406 IPC. There is no deception by the petitioner in respect of M/s. Baypark Hotel & Resorts Private Limited, Visakhapatnam, and there is no entrustment of any shares. Therefore, the question of breach of trust by the petitioner - accused No.1 does not arise. To attract the ingredients of cheating, as defined under Section 420 IPC, there should be deception from the beginning itself. The company was established about 12 years ago. The present complaint was lodged after elapse of 11 years. The transaction between the petitioners and respondent No.3 is a commercial transaction and, therefore, the police have to conduct a preliminary inquiry as per the guidelines / directives issued by the Hon'ble Supreme Court in Lalita Kumari1. In the present case, the police KL,J W.P. No.15284 of 2020 & batch 4 without conducting any preliminary inquiry, without considering the contents of complaint, registered the above crime, and conducting investigation in violation of principle / guidelines laid down by the Hon'ble Supreme Court in Lalita Kumari1.
8. The learned senior counsel has referred to several proceedings which are pending before the NCLT, Delhi, Chandigarh and Amaravathi Bench at Hyderabad. By referring to the said proceedings, the learned senior counsel would submit that respondent No.3, who is having a mere share, filed the above complaint. He would further submit that the petitioners - accused are nothing to do with the said company. The issue is with regard to M/s. Everest Power Private Limited and M/s. Baypark Hotel & Resorts Private Limited, Visakhapatnam. He would further submit that the Court can examine certain documents while considering a petition under Section 482 of the Code of Criminal Procedure, 1973 (for short 'Cr.P.C.'). Respondent No.3 has attended two General Body Meetings. The share capital is of Rs.33.00 Crores.
9. In support of his contention, the learned senior counsel has also placed reliance on the principle laid down by the Hon'ble Apex Court in M/s. Indian Oil Corporation v. M/s. NEPC India Ltd.2 and Rajiv Thapar v. Madan Lal Kapoor3, and sought to quash the 2 . (2006) 6 SCC 736 3 . (2013) 3 SCC 330 KL,J W.P. No.15284 of 2020 & batch 5 proceedings in Crime No.451 of 2020 against the petitioner - accused No.1.
10. Mr. S. Nagesh Reddy, learned counsel representing Ms. Rao Vishwaja, learned counsel for the petitioner in W.P. No.15284 of 2020, adopted the arguments of Mr. S. Niranjan Reddy, learned senior counsel, and would supplement that the police failed to follow the guidelines issued by the Hon'ble Supreme Court in Lalita Kumari1. The police have to form an opinion which they have not done. The shares were not sold. The proceedings were pending before NCLT and he has referred to several proceedings that are pending before the NCLT, Delhi. Accused No.3 is neither a Director, nor a Share-holder of the above said two companies. He would further submit that the Jubilee Hills Police Station lacks territorial jurisdiction.
11. Mr. T. Bala Mohan Reddy, learned counsel for the petitioner in W.P. No.15286 of 2020, would submit that the allegations are against the companies, to which the proceedings are pending before the NCLT. He has referred to various contentions raised by respondent No.3 and also the police in their counters. He would further submit that petitioner - accused No.2 has received a notice under Section 41-A of Cr.P.C. dated 06.06.2020 and accused No.2 has submitted reply to it. The police without considering the said reply, under the guise of investigation, are trying to apprehend him. Accused No.2 is neither a Director, nor a Share-holder of any of the companies.
KL,J W.P. No.15284 of 2020 & batch 6
12. The learned Government Pleader for Home appearing on behalf of respondent Nos.1 and 2 - State would submit that the Jubilee Hills Police Station have received a complaint on 05.09.2020 from respondent No.3. As per the contents of the said complaint, there is a prima facie case and cognizance offence and, therefore, they have registered the same by following the guidelines issued by the Hon'ble Supreme Court in Lalita Kumari1. He has relied upon paragraph Nos.120.1 and 120.5 of the very same judgment, and would submit that the police after going through the contents of the complaint and on satisfying that there is a prima facie case and the same would disclose cognizable offence, registered the case. There are several disputed facts which are to be investigated by the Investigating Officer. Since punishment for the offences alleged against the petitioners is seven years or below seven years, the police have initiated the procedure laid down under Section 41-A of Cr.P.C, and accordingly served the notice on accused No.2, and he has submitted his reply. The police are trying to serve similar notices on accused Nos.1 and 3, and since they are not available, therefore, the police could not serve the same on them. However, the police will follow the principle laid down under Section - 41-A of Cr.P.C. and also the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar v. State of Bihar4. He has placed reliance on the decision rendered by the Hon'ble Supreme Court in Sau. Kamal Shivaji Pokarnekar v. 4 (2014) 8 SCC 273 KL,J W.P. No.15284 of 2020 & batch 7 State of Maharashtra5. By referring to the said judgment, the learned Government Pleader for Home would submit that jurisdiction can be decided during inquiry and he has referred to Section 154 of Cr.P.C.
13. With the above said submissions, the learned Government Pleader for Home sought to dismiss all the writ petitions.
14. Mr. S. Ravi, learned Senior Counsel representing Mr. Sama Sandeep Reddy, learned counsel for respondent No.3 in W.P. Nos.15284 and 15285 of 2020, would submit that there are many factual aspects which are to be investigated into by the police. For registration of a crime, police have to satisfy themselves that there is a prima facie case and the contents of the complaint disclose cognizable offence. They have to follow the guidelines laid down by the Hon'ble Apex Court in Lalita Kumari1. In the present case, the police have followed the same and registered the above crime. This Court is not having power to examine several factual aspects in an application under Section 482 of Cr.P.C., and to quash the FIR at the threshold. He would further submit that it is not necessary for a meticulous analysis of case should be done before trial to find out whether the case would end in conviction or acquittal. If ingredients of offence alleged against Accused were prima facie made out in a complaint, criminal proceeding may not be interdicted. He has also referred to several other proceedings pending before the NCLT. He would 5 . AIR 2019 SC 847 KL,J W.P. No.15284 of 2020 & batch 8 further submit that accused No.3 has signed the counter filed before the NCLT as an Authorized Signatory.
15. The learned senior counsel would further submit that in the complaint dated 05.09.2020, respondent No.3 has specifically mentioned about the establishment of M/s. Everest Power Private Limited and M/s. Baypark Hotel & Resorts Private Limited, and it is specifically mentioned that originally M/s. Everest Power Private Limited was promoted by respondent No.3 to set up a Hydel Project. The company established a Power Project at Manali, Himachal Pradesh during the year 2001. M/s. Everest Power Private Limited was promoted by their group, M/s. Athena Infra Projects Private Limited as holding company and M/s. Chiron Infratech Private Limited as the ultimate holding company. As per their understanding, they have to control one third share by each member. Accused No.1 asked them to invest in Hydel Power Projects and induced them from the very beginning itself that they would get considerable profits in power projects and made them to invest in M/s. Everest Power Private Limited through various entities. He would further submit that the contents of the complaint would disclose that there are several factual matrix which are to be investigated by the Investigating Officer. The petitioners are at liberty to co-operate with the Investigating Officer by producing the documents and also by raising all the contentions. The petitioners instead of doing so, filed the present writ petitions seeking to quash the FIR against them.
KL,J W.P. No.15284 of 2020 & batch 9
16. With the above said contentions, the learned senior counsel sought to dismiss all the writ petitions.
17. Mr. Vinod Kumar Deshpande, learned Senior Counsel representing Mr. A. Purushotham Reddy, learned counsel for respondent No.3 in W.P. No.15286 of 2020, has drawn the attention of this Court to Section - 2 (g) of Cr.P.C., which deals with "inquiry", and would submit that police should conduct the said inquiry. He would further submit that 'inquiry' as mentioned in Lalita Kumari1 is the inquiry under Section - 2 (g) of Cr.P.C., and the police have been conducting the said inquiry. He would further submit that the principle laid down by the Hon'ble in Lalita Kumari1 have to be read in conjuncture, but not in isolation. The police are bound to register a case if they come to a conclusion that there is a prima facie case and cognizable offence is made out as per the principle in Lalita Kumari1 and as per the procedure laid down under the Cr.P.C. He would further submit that jurisdictional aspect can be inquired by the Investigating Officer while conducting investigation. There is no need of conducting any preliminary inquiry with regard to cognizable offence under Sections - 420 and 406 IPC. Since punishment for the offences alleged against the petitioners is seven years or below seven years, police have to initiate the proceedings under Section 41-A of Cr.P.C. and the police have already initiated the same. Therefore, there is no threat of arrest of the petitioners immediately. The petitioners herein instead of submitting reply to the said notice and to KL,J W.P. No.15284 of 2020 & batch 10 cooperate with the Investigating Officer filed the present writ petitions seeking to quash the FIR at the threshold and, therefore, the same is liable to be dismissed. He has also referred to exceptions to the guidelines issued by the Hon'ble Apex Court in State of Haryana v. Bhajan Lal6.
18. With the above said contentions, the learned senior counsel sought to dismiss the writ petitions.
19. The above stated submissions would reveal that there are disputes between the petitioners in all the above three writ petitions and respondent No.3 with regard to share pattern of the above said two companies i.e., M/s. Everest Power Private Limited and M/s. Baypark Hotel & Resorts Private Limited.
20. In the complaint dated 05.09.2020, it is specifically alleged by respondent No.3 that originally M/s. Everest Power Private Limited was promoted by them to set up a Hydel Project. The company has established a Power Project at Manali, Himachal Pradesh during the year 2001. M/s. Everest Power Private Limited was promoted by their group, M/s. Athena Infra Projects Private Limited as holding company and M/s. Chiron Infratech Private Limited as the ultimate holding company. As per their understanding, they have to control 1/3rd share by each member. Accused No.1 asked them to invest in Hydel Power Projects and induced them from the 6 . 1992 Supp. (1) SCC 335 KL,J W.P. No.15284 of 2020 & batch 11 very beginning itself that they would get considerable profits in power projects and made them to believe and invest in M/s. Everest Power Private Limited through various entities.
21. As discussed supra, the learned senior counsel appearing for the petitioners would submit that there should be deception right from the beginning itself, whereas as per the contents of the complaint dated 05.09.2020, the same is lacking. But, in the complaint, respondent No.3 has specifically mentioned that accused No.1 has induced the complainant from the very beginning itself. The said aspect is a factual aspect which has to be investigated by the Investigating Officer.
22. In the complaint, it is also specifically mentioned that respondent No.3 and accused No.2 are controlling 33% each in M/s. Chiron Infratech Private Limited, and accused No.3 is controlling 33% on behalf of accused No.1. Through M/s. Chiron Infratech Private Limited, they have invested in M/s. Athena Infra Projects Private Limited, through which they are controlling 63% of M/s. Everest Power Private Limited, apart from controlling the equity through Corporates, they have made investments in equity on his individual name to an extent of 2000 shares. Accused No.2 is controlling through M/s. Chiron Infratech Private Limited and M/s. VIZ Projects Private Limited certain equity in M/s. Everest Power Private Limited. Accused No.1 is controlling through M/s. Asian Genco Private Limited apart through accused No.3.
KL,J W.P. No.15284 of 2020 & batch 12
23. It is also specifically alleged in the complaint that respondent No.3 is an equity holder, having an understanding of 33% in the company. All the accused, by breach of trust and conspiracy, they have cheated respondent No.3 by selling the equity of M/s. Everest Power Private Limited to M/s. Greenko and their related companies. All the accused collectively conspired with each other and made respondent No.3 part with his money to invest in the above said companies with an intention to cheat and deceive him of the monies. Thus, there are specific allegations made by respondent No.3 against the petitioners herein.
24. On perusal of the Memorandum of Articles of M/s. Everest Power Private Limited, accused No.1 and respondent No.3 are founder Directors. Therefore, it cannot be said that accused No.1 is nothing to do with M/s. Everest Power Private Limited. Both accused No.1 and respondent No.3 are Directors of the said company. Thus, there are several aspects, which are to be investigated by the police during the course of investigation.
25. The learned counsel for the petitioner in W.P. No.15284 of 2020 placed a reliance on the judgment of Hon'ble Supreme Court in Anand Kumar Mohatta v. State (Govt. of NCT of Delhi), Department of Home7. In the said decision, the Hon'ble Apex Court by referring to various other judgments including the judgment in M/s. NEPC India Ltd2, and also the guidelines issued in Bhajan Lal6 7 . (2019) 11 SCC 706 KL,J W.P. No.15284 of 2020 & batch 13 and also the principle laid down in State of Karnataka v. L. Muniswamy8, held in paragraph No.28, which is as under:
"28. It is necessary here to remember the words of this Court in State of Karnataka v. L. Muniswamy and others which read as follows: -
'7. .....In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving of the High Court's inherent powers, both in civil and criminal matters, is 6 1977 (2) SCC 699 designed to achieve a salutary public purpose which is that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a lame prosecution, the very nature of the material on which the structure of the prosecution rests and the like would justify the High Court in quashing the proceeding in the interest of justice.....'
26. Mr. S. Niranjan Reddy, learned senior counsel, has also placed reliance on the judgment rendered by the High Court of Judicature at Hyderabad for the States of Telangana and Andhra Pradesh in P. Bhaskara Rao v. Kusumanchi Surekha9, wherein after referring to several judgments held that in a case where the prosecution/complainant has levelled allegations bringing out all ingredients of the charge (s) levelled, and have placed material before the Court, prima facie evidencing the truthfulness of the allegations levelled, trial must be held. Having observed so, and having held that the Supreme Court rendered endless list of judgments to the effect that the material produced by the accused cannot be considered in a case 8 . (1977) 2 SCC 699 9 . 2018 (1) ALD (Crl.) 839 KL,J W.P. No.15284 of 2020 & batch 14 where the complainant levelled allegations bringing out all the ingredients of the charges levelled, and the Apex Court went on to observe as follows:
"To invoke its inherent jurisdiction under Section 482 Cr.P.C. the High Court has to be fully satisfied that the material produced by the accused is such that would lead to the conclusion that his/their defence is based on sound, reasonable, and indubitable facts; the material produced is such as would rule out and displace the assertions contained in the charges levelled against the accused; and the material produced is such as would clearly reject and overrule the veracity of the allegations contained in the accusations levelled by the prosecution/complainant. It should be sufficient to rule out, reject and discard the accusations levelled by the prosecution/ complainant, without the necessity of recording any evidence. For this the material 10 relied upon by the defence should not have been refuted, or alternatively, cannot be justifiably refuted, being material of sterling and impeccable quality. The material relied upon by the accused should be such as would persuade a reasonable person to dismiss and condemn the actual basis of the accusations as false. In such a situation, the judicial conscience of the High Court would persuade it to exercise its power under Section 482 Cr.P.C. to quash such criminal proceedings, for that would prevent abuse of process of the court, and secure the ends of justice."
27. By relying upon several judgments in the above decision, four steps were mentioned to determine the veracity of a prayer for KL,J W.P. No.15284 of 2020 & batch 15 quashing, raised by an accused by invoking the power vested in the High Court under Section 482 of Cr.P.C. (i) Step one, whether the material relied upon by the accused is sound, reasonable, and indubitable, i.e., the material is of sterling and impeccable quality?;
(ii) Step two, whether the material relied upon by the accused, would rule out the assertions contained in the charges levelled against the accused, i.e., the material is sufficient to reject and overrule the factual assertions contained in the complaint, i.e., the material is such, as would persuade a reasonable person to dismiss and condemn the factual basis of the accusations as false; (iii) Step three, whether the material relied upon by the accused, has not been refuted by the prosecution/complainant; and/or the material is such, that it cannot be justifiably refuted by the prosecution/complainant?; and (iv) Step four, whether proceeding with the trial would result in an abuse of process of the court, and would not serve the ends of justice?
28. In the above judgment, it was also held that by following such steps, the High Court has to analyze, more particularly, to the facts of that particular case.
29. By referring to the above judgment, Mr. S. Niranjan Reddy, learned senior counsel, would submit that this Court can examine the documents filed by the parties by invoking the jurisdiction under Section 482 of Cr.P.C. He would further submit that the accused have filed several proceedings which are pending before NCLT, Delhi, Chandigarh and Amaravathi Bench at Hyderabad and the same can be KL,J W.P. No.15284 of 2020 & batch 16 looked into, to come to a conclusion that there is no prima facie case and the contents of complaint do not disclose any cognizable offence.
30. The learned senior counsel has also placed on the principle held by the Hon'ble Supreme Court in Anita Malhotra v. Apparel Export Promotion Council10, wherein it was held that though it is not proper for the High Court to consider the defence of the accused or conduct a roving enquiry in respect of merit of the accusation, but if on the face of the document which is beyond suspicion or doubt placed by the accused and if it is considered the accusation against the accused cannot stand, in such a matter, in order to prevent injustice or abuse of process, it is incumbent on the High Court to look into those document / documents which have a bearing on the matter even at the initial stage and grant relief to the person concerned by exercising jurisdiction under Section 482 of the Code. By referring to the said judgment, the learned senior counsel would submit that this Court is having power under Section 482 of Cr.P.C. to look into the documents filed by the petitioners including the proceedings pending before the NCLT, Delhi, Chandigarh and Amaravathi Bench at Hyderabad to come to a conclusion that there is no prima facie case and there is no cognizable offence that is made out against the petitioners.
31. The learned senior counsel has also placed reliance on the principle held by the Hon'ble Apex Court in Ramdev Food Products 10 . (2012) 1 SCC 520 KL,J W.P. No.15284 of 2020 & batch 17 Private Limited v. State of Gujarat11. In the said judgment, after referring to the guidelines laid down by the Apex Court in Lalita Kumari1, held that the Hon'ble Apex Court has laid down that while prompt registration of FIR is mandatory, checks and balances on power of police are equally important. Power of arrest or of investigation is not mechanical. It requires application of mind in the manner provided. Existence of power and its exercise are different. Delicate balance had to be maintained between the interest of society and liberty of an individual. Commercial offences have been put in the category of cases where FIR may not be warranted without enquiry. In the said judgment, the Hon'ble Apex Court has also relied upon its earlier judgment in M/s. NEPC India Limited2 and also M/s. Pepsi Foods Ltd., v. Special Judicial Magistrate12 and finally held that the High Courts are having power to quash the FIR by exercising power under Section 482 of Cr.P.C. and also by considering the documents filed by the petitioners.
32. Mr. Vinod Kumar Deshpande, learned senior counsel, relied upon the principle held by the Hon'ble Apex Court in Satvinder Kaur v. State (Govt. of N.C.T. of Delhi)13. In the said judgment, the Hon'ble Apex Court by referring to various provisions of Cr.P.C., has held that Section 177 provides for `ordinary' place of inquiry or trial. Section 178, inter alia, provides for place of inquiry or trial when it is uncertain in which of several local areas an offence 11 . (2015) 6 SCC 439 12 . (1998) 5 SCC 749 13 . (1999) 8 SCC 728 KL,J W.P. No.15284 of 2020 & batch 18 was committed or where the offence was committed partly in one local area and partly in other and where it consisted of several acts done in different local areas, it could be inquired into or tried by a court having jurisdiction over any of such local areas. Hence, at the stage of investigation, it cannot be held that S.H.O. does not have territorial jurisdiction to investigate the crime. The learned senior counsel has also placed reliance on the decision rendered by the Hon'ble Supreme Court in Social Action Forum for Manav Adhikar v. Union of India, Ministry of Law and Justice14. In paragraph No.33 of the said judgment, the Hon'ble Apex court by referring to the principles laid down in Lalita Kumari1, held that eventually, the Court opined that the scope of preliminary enquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence. The learned senior counsel would contend that the scope of preliminary inquiry is not verified, the veracity or otherwise of the information received only to ascertain whether the information reveals any cognizable offence. On perusal of the complaint dated 05.09.2020, there is prima facie case and that the police have verified and have come to a conclusion that the information reveals cognizable offence and, therefore, registered the crime.
33. The learned Government Pleader for Home relied upon the principle laid down by the Hon'ble Apex Court in Sau. Kamal 14 . (2018) 10 SCC 443 KL,J W.P. No.15284 of 2020 & batch 19 Shivaji Pokarnekar5. In the said judgment, the Hon'ble Apex court has categorically held that quashing criminal proceedings was called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If allegations set out in complaint did not constitute offence of which cognizance had been taken by Magistrate, it was open to High Court to quash same. It was not necessary that, a meticulous analysis of case should be done before trial to find out whether case would end in conviction or acquittal. If it appeared on a reading of complaint and consideration of allegations therein, in light of the statement made on oath that the ingredients of the offence are disclosed, there would be no justification for High Court to interfere. The defences that might be available, or facts/aspects which when established during trial, might lead to acquittal, were not grounds for quashing complaint at threshold. At that stage, only question relevant was whether averments in complaint spell out ingredients of a criminal offence or not. The Court has to consider whether complaint discloses that prima facie, offences that were alleged against Respondents. Correctness or otherwise of said allegations had to be decided only in trial. At initial stage of issuance of process, it was not open to Courts to stifle proceedings by entering into merits of the contentions made on behalf of Accused. Criminal complaints could not be quashed only on ground that, allegations made therein appear to be of a civil nature. If ingredients of offence alleged against Accused were prima facie made out in complaint, criminal proceeding shall not be interdicted.
KL,J W.P. No.15284 of 2020 & batch 20
34. In view of the above said legal position, coming to the case on hand, as already discussed above, there are several factual matrix including the share pattern, promotion of M/s. Everest Power Private Limited by the group led by respondent No.3 through M/s. Athena Infra Projects Private Limited as a holding company and M/s. Chiron Infratech Private Limited as the ultimate holding company. The understanding with regard to control of 1/3rd share by each member and also the inducement of respondent No.3 by the accused as alleged in the complaint requires investigation by the Investigating Officer. The learned counsel for the petitioner in W.P. No.15286 of 2020 filed a memo by placing the share holding pattern of M/s. Everest Power Private Limited and M/s. Baypark Hotels and Resorts Private Limited 15.09.2020 and 10.09.2020 respectively, and also copy certified by the Company Secretary, list filed by the complainant before the NCLT, Amaravathi Bench in respect of M/s. Baypark Hotels and Resorts Private Limited. The said documents and the said share pattern are the matters to be looked into and investigated by the Investigating Officer. As rightly contended by the learned senior counsel that, jurisdiction aspect can also be gone into by the police during the course of investigation, but not by invoking the inherent powers of this Court under Section 482 of Cr.P.C. The jurisdiction aspect can be decided by the police during the course of investigation.
KL,J W.P. No.15284 of 2020 & batch 21
35. In B. Sudhakar Reddy v. The S.H.O., RGIA, Cyberabad15 held that the allegations in the complaint, on the premise that they are true, disclose that members of the Scheduled Castes were insulted and intimidated. Whether such an insult or intimidation was intentional; and whether they were intended to humiliate the complainant; are again matters of investigation by the investigating officer, and not for this Court to examine in writ proceedings under Article 226 of the Constitution of India. The allegations mentioned in the complaint including the factual aspects are all the matters for investigation and should not, ordinarily, be examined in proceedings under Article 226 of the Constitution of India, more so, in case where the jurisdiction of this Court is invoked for the FIR to be quashed.
36. The learned counsel for the petitioner in W.P. No.15284 of 2020 placed reliance on the principle laid down by the Gujarat High Court in Suresh Fakirchand Parmar v. State of Gujarat16, wherein it was held that the case of cheating and dishonest intention starts with the very inception of the transaction. But, in the case of criminal breach of trust, a person who comes into possession of the movable property and receives it legally, but illegally retains it or converts it to his own use against the terms of the contract, then the question is, in a case like the said case, whether the retention is with dishonest intention or not, whether the retention involves criminal breach of 15 . W.P. No.13577 of 2012, dated 26.04.2013 16 . Special Criminal Application No.980 of 2011, dt.12.05.2011 KL,J W.P. No.15284 of 2020 & batch 22 trust or only a civil liability it depend upon the facts of the case. As discussed above, in the complaint dated 05.09.2020, there is specific allegation that the accused have induced respondent No.3 right from the inception. Thus, the said aspect is a factual aspect which has to be invested by the Investigating Officer.
37. The Hon'ble Apex Court in Sau. Kamal Shivaji Pokarnekar5 held that quashing criminal proceedings is called for only in a case where complaint did not disclose any offence, or was frivolous, vexatious, or oppressive. If the ingredients of offence alleged against the accused are prima facie made out, criminal proceedings shall not be interdicted.
38. As discussed supra, there are several factual matrix which are to be investigated by the police. The contents of the complaint would prima facie make out a cognizable offence and, therefore, in view of the law laid down by the Honble Apex Court that criminal proceedings shall not be interdicted by this Court by invoking the power under Section 226 of the Constitution of India.
39. As discussed supra, punishment for the offences alleged against the petitioners is seven years or below seven years, and the police have already invoked the procedure under Section 41-A of Cr.P.C and served notice on accused No.2, who in turn, submitted his reply.
KL,J W.P. No.15284 of 2020 & batch 23
40. This Court vide order dated 18.09.2020, directed the police not to arrest the petitioners till passing of orders in the present writ petitions. However, it is made clear that the said order will not preclude the police in following the procedure laid down under Section 41-A of Cr.P.C. and also the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar4.
41. In view of the above discussion and the settled position of law and also considering the aspect that the police have already initiated the proceedings under Section 41-A of Cr.P.C., these writ petitions are disposed of, directing the Jubilee Hills Police Station, Hyderabad City Commissionerate, to follow the procedure laid down under Section 41-A of Cr.P.C. and the guidelines issued by the Hon'ble Apex Court in Arnesh Kumar4. Till completion of investigation and filing of final report, the police are directed not to arrest the petitioners - accused Nos.1 to 3.
42. The learned senior counsel appearing for the petitioners would submit that the police are trying to apprehend the petitioners without following the procedure under Section 41-A of Cr.P.C. and harassing the accused under the guise of investigation. In view of the same, the police are directed not to harass the accused Nos.1 to 3 under the guise of investigation. However, at the same time, the accused Nos.1 and 3 shall co-operate with the Investigating Officer by receiving the notices under Section 41-A of Cr.P.C. and also for concluding the investigation. Accused are at liberty to submit their KL,J W.P. No.15284 of 2020 & batch 24 replies to the notice under Section 41-A of Cr.P.C. and also the documents, if any, in support of their contentions. However, there shall be no order as to costs.
As a sequel, miscellaneous petitions, if any, pending in the Writ Petitions, shall stand closed.
_________________ K. LAKSHMAN, J 13th October, 2020 Mgr