Allahabad High Court
J.K. Srivastava & Others vs State Of U.P. & Another on 27 April, 2017
Author: Amar Singh Chauhan
Bench: Amar Singh Chauhan
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR RESERVED Court No. - 22 1. Case :- APPLICATION U/S 482 No. - 7242 of 2002 Applicant :- J.K. Srivastava & Others Opposite Party :- State Of U.P. & Another Counsel for Applicant :- B.N. Rai,Adarsh Kumar,Manu Khare Counsel for Opposite Party :- Govt. Advocate,Anoop Trivedi,Bishram Tiwari,Govind Saran Hajela,Shushil Shukla Connected with 2. Case :- APPLICATION U/S 482 No. - 12983 of 2008 Applicant :- Vijay Srivastava Opposite Party :- State Of U.P. & Another Counsel for Applicant :- Manu Khare Counsel for Opposite Party :- Govt. Advocate,Priyanka Midha,Sushil Shukla 3. Case :- APPLICATION U/S 482 No. - 35346 of 2008 Applicant :- Vijay Srivastava Opposite Party :- State Of U.P.And Another Counsel for Applicant :- Manu Khare Counsel for Opposite Party :- Govt. Advocate,Shushil Shukla Hon'ble Amar Singh Chauhan,J.
Heard Sri R.P. Agarwal alongwith Sri Manu Khare, learned counsel appearing for the applicants, learned Additional Government Advocate for the State and Sri Manish Goyal alongwith Priyanka Midha, learned counsel appeared on behalf of opposite party no. 2 and perused the material on record.
The applicants, J.K. Srivastava and three others, through the Criminal Misc. Application No. 7242 of 2002 moved under section 482 Cr.P.C. have invoked the inherent jurisdiction of this Court with a prayer to quash the further proceedings of Case No. 2788 of 2000 (Anand Srivastava vs. J.K. Srivastava and others), pending in the court of Metropolitan Magistrate-Ist, Kanpur Nagar and also prayed that the aforesaid proceeding against the applicants be stayed. It is further prayed that the court below be directed to decide the objections raised by the applicants under Section 204 Cr.P.C.
In Criminal Misc. Application No. 12983 of 2008 (Vijay Srivastava vs. State of U.P. and others), the applicant, Vijay Srivastava, through this application moved under Section 482 Cr.P.C., has invoked the inherent jurisdiction of this Court with a prayer to quash the order dated 05.05.2008, passed by learned Special Chief Judicial Magistrate, Kanpur Nagar in Case No. 909 of 2006 (Anand Srivastava vs. J.K. Srivastava and others) under sections 255, 256, 257, 408, 466, 467, 468, 471 and 420 IPC, Police Station Kotwali, District Kanpur Nagar and further prayed to stay the aforesaid proceeding against the applicant.
In Criminal Misc. Application No. 35346 of 2008 (Vijay Srivastava vs. State of U.P. and another), the applicant, Vijay Srivastava, through this application moved under Section 482 Cr.P.C., has invoked the inherent jurisdiction of this Court with a prayer to quash the complaint dated 21.3.2002 bearing Case No. 909 of 2006 (Old No. 4096/2005), (Anand Srivastava vs. J.K. Srivastava and others) under sections 255, 256, 257, 408, 466, 467, 468, 471 and 420 IPC, Police Station Kotwali, District Kanpur Nagar and further prayed to stay the aforesaid proceeding against the applicant.
Since the controversy and facts involved in the aforesaid connected applications are the same, therefore, they are being heard and decided together by a common judgement with the consent of the parties.
Brief facts which are requisite to be stated for adjudication of this application are that the Complaint Case No. 2788 of 2000 under sections 255, 259, 260, 406, 420, 467, 468 and 471 IPC, Police Station Nawabganj, District Kanpur Nagar was filed with the allegation that the accused persons have fabricated an amendment deed prepared in respect of amendment carried out in 'J.K Srivastava Family Trust' on a Stamp Paper. Likewise the accused have also fabricated another document allegedly bought on a Stamp Paper of Rs. 10/- purchased allegedly in the name of a Trust whereas the said Stamp Paper has not been sold to the trust by the concerned Stamp Vendor. The statement of the complainant and witnesses under sections 200 and 202 Cr.P.C. were recorded and accused persons were summoned in the above mentioned sections. The second complaint was filed before the A.C.M.M., Kanpur Nagar.
It is alleged that applicants in order to conceal their offences colluded with the record keeper, Sri Laxmi Tiwari and certain cuttings were made in the Register No. 2801 of 94-95 and Register No. 2910 of 95-96 in the record room on 26.12.1994. Similarly, on 08.06.1995, at Serial No. 956 Rs. 20/- as mentioned was cut and Rs. 10/- was written on its place. The complainant as well as witnesses were examined under sections 200 and 202 Cr.P.C. The court of A.C.M.M., after hearing and perusal of the material, passed the the summoning order against applicants. The applicants moved an application dated 07.12.2006 whereby the accused-applicants have desired that the proceeding of the second complaint case against the applicant shall also be stayed by the learned Magistrate as the proceeding of the first complaint case has been stayed by the High Court which was rejected by learned Magistrate. Both the complaints arose between the same parties and same to be connected with each other.
Submission of learned counsel for the applicants is that a complaint on behalf of M/s. Gwalior Sugar Company Limited, Dabra, District Gwalior has been filed by respondent no. 2 on behalf of one Vikram Srivastava and the Gwalior Sugar Company, without annexing any authority like Power of Attorney or any such resolution by Board of Directors, Gwalior Sugar Company Limited and hence the complaint is still being incompetent and filed in representative capacity by an unauthorised person is liable to be dismissed. There is a family dispute going on between the brothers in Company Law Board regarding J.K. Srivastava Family Trust Settlement Deed dated 11.4.1979 which is a private trust and has no concern with the Gwalior Sugar Company Limited or its Board of Directors. The alleged documents are part of proceedings in a petition before the Company Law Board, New Delhi which were filed in original in the company proceedings. The Company Law Board dismissed the said petition containing all the allegations of the present complaint and hence appeal was filed before the High Court of Judicature at Madhya Pradesh in its Bench at Gwalior being L.P.A. No. 171 of 2000 in which an identical application was moved on behalf of Gwalior Sugar Company Limited against the applicants for taking and initiating action against them under section 340 Cr.P.C. on identical ground. In the above company, appeal pending before the Madhya Pradesh High Court at Gwalior, the same issues which have been raised in the present complaint, were also raised in the above appeal in the Madhya Pradesh High Court and Company Law Board and in spite of their best efforts respondent could not get any relief. It is further submitted that an application to initiate action against the applicants under section 340 Cr.P.C. was filed before the Hon'ble M.P. High Court, hence the court at Kanpur has no jurisdiction to entertain the present complaint on the identical set of facts and, therefore, the same is liable to be quashed. Besides this, the cause of action had arisen at a place where these documents were used as forged documents and hence the court below has no jurisdiction to entertain the present complaint in Kanpur. The complainant has concealed all the material facts in his complaint and has also not disclosed as to on whose behalf he is filing the present complaint nor has annexed any Power of Attorney or any authority letter on behalf of the Company and hence the above complaint must have been dismissed. No case under sections 255, 259, 260, 406, 420, 467, 468, 471 IPC is made out against the applicants since there is no such allegations that the alleged stamp was counterfeit stamp but only allegation is that the said stamp was not issued by specific Stamp Vendor and hence as per the allegation raised before the Company Law Board which has been concealed by the present complainant in his complaint. The court below by its order dated 17.11.2000 summoned the applicants under sections 255, 259, 260, 406, 420, 467, 468, 471 IPC. The court below permitted the applicants to raise their objections through counsel by order dated 20.4.2001 and the said application is still pending before the trial court. It is also pertinent to mention that the court below had recalled its orders of non-bailable warrants against the applicants till disposal of the above applications under section 204 Cr.P.C. and had permitted to agitate the objections through counsel. Surprisingly enough, the court below by its order dated 07.07.2002 has fixed a date for arguments only on a condition that the applicants may present themselves in person before the court. This order amounts to recall the earlier order passed by the trial court exempting the personal appearance of the applicants till disposal of the objections of the applicants through their counsel. Therefore, it is in the interest of justice that the court below may be directed to hear the objections of the applicants through their counsel without insisting their personal presence.
Further submission is that Anand Srivastava is not empowered to file impugned complaint under the alleged Power of Attorney because it gives power to institute new cases but exercise of such power is subject to "previous sanction of the management in writing" and that this power is confined only to "to institute and contest suits, cases, appeals, revisions and all miscellaneous legal proceedings". There is a marked distinction between "sanction" and "direction". While "direction" is a command to a definite person and leaves with no choice with him to act or not to act, a "sanction" on the other hand is for doing some act and leaves the person free to exercise his own decision to proceed or not. Section 291 of the Companies Act authorises the Board of Directors to exercise such powers of the company. The Chairman of the Company or any Director acting individually has no power to act on behalf of the company.
Learned counsel for the applicants relied upon a case law in Shubh Shanti Services Ltd. vs. Manjula S. Agarwalla, 2005(5) ACC 30 in which it has been held that Section 291 of the Companies Act authorised the Board of Director to exercise such powers of the Company. The Chairman of the Company or any director individually has no power to act on behalf of the Company. Further submitted that the appeals filed by JKS Group against CLB Order were dismissed by Madhya Pradesh High Court both by single Judge as well as DB stage. JKS Group filed SLP in Supreme Court which was entertained and ultimately, vide judgment dated 26.10.2004, appeal was allowed, petition before CLB held maintainable and impugned orders set aside.
Hon'ble Supreme Court rejected the contention of HKS Group about forgery of documents by observing as under:
"It is true that criminal proceedings have been instituted by the respondents on the allegation that the Stamp Papers on which the affidavits have been affirmed were purchased subsequently. But we are not prepared to reject the documents as forged ones not only because the executants have hotly contested the allegations but also because there is no finding to that effect by any of the three courts below or by criminal court. Indeed as matters now stand the criminal proceedings have been stayed by the High Court. Furthermore, Vijay Srivastava and Raj Mohini's continuous support is also apparent from the fact that both of them are parties to the appeal before us albeit in the capacity of heirs of late J.K. Srivastava."
Again submitted that a purely family/civil dispute has been given a colour of criminal case. As the Madhya Pradesh High Court did not take cognizance of the prayer made by HKS Group in their Application u/s 340 Cr.P.C.. So far as the allegation in the complaint case is concerned that documents were written on a fake Stamp Paper, the offences alleged by the HKS Group fall within the ambit of Section 61(1) and 69 of the Stamp Act. Section 70 of the Act provides that "no prosecution in respect of any offence punishable under this Act shall be instituted without the sanction of the Collector". It is alleged in complaint that accused persons have tampered the entries in the vendor's register which is based on hearsay evidence and cannot be relied on.
Per contra learned counsel for the opposite party no. 2 stated that complainant has been authorised by way of a general Power of Attorney to exercise all the powers stipulated in the said general Power of Attorney. The Gwalior Sugar Company (hereinafter referred to as 'Company') is a registered company under the Companies Act. The authorised share capital of the Company is Rs. 5 crores and the subscribed and paid up share capital is Rs. 27,68,900/-. The company raised an objection in respect of the maintainability of the petition. After the objections were raised by the company the applicants herein hatched a conspiracy and concocted false Stamp Papers with a view to illegally incorporate an amendment in the said Trust Deed. The applicants herein forged and fabricated document purported to have been an amendment to clause 7 of the "J.K. Srivastava Family Trust Deed". The said document was allegedly executed on 28.12.1994 incorporating the amended clause 7 in place of the existing clause 7 of the said deed. From a bare perusal of the said document, which is purported to have been amendment to clause 7 of the said Family Trust Deed, it is evident that the said document has been fabricated with a view to meet the objections raised by the company in CP No. 27 of 1995. By the said document what was sought to be incorporated was to the effect that until the beneficiary writes/instructs the trust to settle their share in their favour, the trust would be deemed to continue to hold the share of the beneficiary even after their attaining the age of majority. This mindset permitted the accused-applicants to usurp the share of the beneficiary in order to damage company and to show its own share holding at a point of time when it had lost its existence. It was also incorporated that the trust will come to an end only after the settlement of all the trust funds and properties in favour of the beneficiaries. So far as the objection in respect of the consent authorization by the trusties, the applicants herein tried to forge document on a Stamp Paper of 10 rupee to show that the consent for filing the petitioner in Company Law Board was given to Ms. Nini Srivastava. It is apparent on the face of record that the said documents are forged and fabricated by the applicants only with a view to get the illegal benefit of the same in the proceedings before the Company Law Board. A questionnaire in respect of the Stamp Paper which was used in fabricating the document dated 9.6.1995 was applied by the Advocate, Sri U.S. Ahuja in the English Record Room, Collectorate, Kanpur Nagar. The record room has given a reply that the Stamp Paper at serial no. 3686 is shown to have been sold to one Sri Gopal Das s/o Sri Manmohan on 12.9.1995. It was also replied by the record room that the name of the J.K. Srivfastava Family Trust has not been recorded in the relevant paper. It is submitted that document authorising Ms. Nini Srivastava is alleged to have been executed on 9.6.1995 on a Stamp Paper of the value of Rs. 10/- allegedly purchased from Sri Madan Gopal, Stamp Vendor on 8.6.1995 in the name of J.K. Srivastava Family Trust at serial no. 3686. However, from the questionnaire obtained from the English Record Room, it is evident that no such Stamp Paper was either issued by the said Stamp Vendor or has been registered in the record room. In these circumstances, the only irresistible conclusion is that the said Stamp Paper on which the consent is allegedly shown to have been granted is nothing but manufactured and fabricated. Another questionnaire was applied in respect of the Stamp Paper on which the alleged amendment dated 28.12.1994 has been shown to have been executed. The concerned record room has replied that no such Stamp Paper has been sold by the said Stamp Vendor at serial no. 9493 on 26.12.1994. It is also submitted that the document purported to have been amend is alleged to have been executed on 28.12.1994 on a Stamp Paper of the value of Rs. 5/- each allegedly purchased from Sri Madan Gopal, Stamp Vendor on 26.12.1994 in the name of J.K. Srivastava Family Trust at serial No. 9493. However, from the questionnaire obtained from the English Record Room, it is evident that no such Stamp Paper was sold in the name of said Family Trust on the said date by the said Stamp Vendor. When the said fraud and forgery came to the knowledge of the Management of the Company the deponent was authorised to institute a criminal complaint case against the applicants. It is submitted that the statement of the Stamp Vendor from whom the alleged stamps have been purchased, recorded in the court below. It is further contended that the observation of the Hon'ble Supreme Court in its judgement dated 26.10.2004 does not prejudice the proceedings of the criminal case or the complaint case. The Hon'ble Supreme Court was mindful of the fact that observations, if made, will prejudice the trial of the case. Accordingly, it decided not to comment upon such proceedings that are pending and yet to be tried.
The whole purpose was to bargain from the Company a better deal by showing the capacity to challenge the Management of the Company by moving petition under section 397/398 of the Companies Act, 1956 for which there is a requirement of holding of 10 per cent shares to maintain such petition under section 399 of the said Act. Since the said requirement was not being fulfilled by the individual holding of the settlors of the Trust they hatched the conspiracy to show the Trust itself as a shareholder so that total number of shares of their group may come to 10 per cent. It was again contended that sanction is by one of the signatories to the Power of Attorney who is the Joint Managing Director of the Company and has issued the sanction to file criminal complaint on behalf of the Company and has further sanctioned the authority to engage an Advocate accordingly for contesting the proceedings as named in the sanction.
The scope and ambit of power under section 482 Cr.P.C. has been examined by Hon'ble Apex Court in Union of India vs. Prakash P. Hinduja and another, AIR 2003 SC 2612 and observed as follows:
"The grounds on which power under Section 482 Cr.P.C. can be exercised to quash the criminal proceedings basically are (1) where the allegations made in the FIR or complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused (2) where the uncontraverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused, (3) where there is an express legal bar engrafted in any of the provisions of Code of Criminal Procedure or the concerned Act to the institution and continuance of the proceedings. But this power has to be exercised in a rare case and with great circumspection".
In the case in hand, the Family Trust namely J.K. Srivastava Family Trust was said to be formed in the year 1978 for benefit of the grandsons of the settler, namely K.K. Srivastava and Y.K. Srivastava. At the time the deed was executed, K.K. Srivastava was ten years old and Y.K. Srivastava was one month old as stated in the Trust Deed itself. As per clause 7 of the Trust Deed 50% of the properties of the trust would absolutely vest in K.K. Srivastava and rest of the 50% would vest in Y.K Srivastava respectively on their attaining the age of majority.
The applicants amended the Trust Deed at a point of time when the Trust had ceased to exit and by such amendment has sought usurp the right in the shareholding of Company M.s. Gwalior Sugar Company Limited, even though the shares belonged to and vested with Sri K.K. Srivastava and Sri Y.K. Srivastava, who had attained majority on the date. These offences are alleged to have been committed in not only counterfeiting the Stamp Paper but also by showing a wrong valuation of the Stamp Paper and showing it to be purchased through Stamp Vendor who never sold that paper. The verification was done in the office of Additional District Magistrate (Finance) who upon enquiry found and stated that the said forgery has been committed.
So far as argument of learned counsel for the applicants regarding the proceeding under section 340 Cr.P.C. is concerned the scope of inquiry is limited and confined only to the forgery committed before the Court. The Court will not go into the issue as to whether fraud was committed upon the Company or its shareholders and its limited only to such document which have been filed in that Court. The question whether the complaint was filed with various previous sanction of the management can only be decided during trial. This Court should not assume the role of a trial court and embark upon an enquiry as to reliability of evidence and sustainability of accusation on a reasonable appreciation of such evidence. If on consideration of the allegations in the light of the statement made on oath of the complainant it appears that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, the proceedings cannot be quashed.
The Hon'ble Supreme Court in case of State of Tamil Nadu vs. Thirukkural Perumal, 1995 SCC (Cri) 387 held that "the High Court's power to quash FIR and criminal proceedings should be exercised sparingly. The High Court is not justified to evaluate the genuineness and reliability of allegations made in the FIR or complaint on the basis of evidence collected during the investigation."
In case of State of Tamil Nadu vs. R. Vasanthi Stanley and another, (2016) 1 SCC 376, further the Hon'ble Apex Court observed that "the inherent power of the High Court under Section 482 Code of Criminal Procedure should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is a well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy." The Hon'ble Apex Court has heavily come down of the matter related economic offences and also corporate crimes wherein it has been held that such crimes are against the society at large and even if there is a compromise at later stage between parties, the complaint is not to be quashed and trial must go on.
The same view was reiterated by the Hon'ble Apex Court in case of Central Bureau of Investigation vs. Maninder Singh, (2016) 1 SCC 389 by observing that "High Court while exercising its inherent power should inquire the all facts viz - the impact of offence, use of the State machinery to keep the matter pending for so many years coupled with the fraudulent conduct of the other side.
From perusal of the complaint, it cannot be said that no offence is made out against the applicants. Most of the submissions made at the bar relate to the disputed questions of fact, which cannot be adjudicated upon by this Court under Section 482 Cr.P.C. Only in cases where the Court finds that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order was not correct, this power may be exercised to prevent the abuse of process or miscarriage of justice.
In view of the above discussion, I find no reason to interfere in the aforesaid proceedings and, therefore, refuse to quash the proceedings of above mentioned complaint cases and the summoning order passed therein. No illegality or demerit is found in the impugned orders.
Accordingly, the applications moved under section 482 Cr.P.C., are rejected as being of devoid of merit.
Interim orders stand vacated in all the applications.
Office to communicate this order to the court concerned.
Order Date :- 27.4.2017 Puspendra