Case BriefsHigh Courts

Madras High Court: G.R. Swaminathan, J., held that irrespective of whether the proceedings under Central Act 43 of 2005 are of civil or criminal nature, the power under Article 227 of the Constitution would always lie to quash the proceedings if a case is really made out.

Instant petition was filed under Article 227 of the Constitution of India for quashing the proceedings on the file of the Judicial Magistrate.

It was stated that the petitioners were the parents-in law of the respondent. Marital life of the respondent came under strain leading to filing of D.V.O.P No. 11 of 2021. In the said petition respondent had arrayed her husband as the first respondent, petitioners as respondents 2 and 3 and her brother-in-law and wife of brother-in-law as respondents 4 and 5.

It was contended that the above petition was an abuse of legal process, hence the present petition was filed.

Adding to the above it was stated that the petition was filed on 17-03-2021 but the Registry did not number the petition.

Hesitation of the Registry was on the account of divergent views expressed in some of the earlier orders of the Madras High Court.

Earlier, to quash the proceedings filed under the Protection of Women from Domestic Violence Act, 2005, petitions used to be filed under 482 of CrPC. This was put an end to by a Judge of this Court vide order in Dr. P. Pathmanathan v. V. Monica (2021 (2) CTC 57)

In the above decision, Court had expressed that:

“..the proceedings instituted under the Central Act 43 of 2005 are civil in nature and therefore, petition under Section 482 of Cr.P.C. will not lie to quash them. Even while laying down a set of directions indicating the remedies available to the aggrieved parties, it was also held that a petition under Article 227 of the Constitution may still be maintainable if it is shown that the proceedings before the magistrate suffer from a patent lack of jurisdiction. The jurisdiction under Article 227 is one of superintendence and is visitorial in nature and will not be exercised unless there exists a clear jurisdictional error and that manifest or substantial injustice would be caused if the power is not exercised in favour of the petitioner.”

Whereas a contrary view was adopted by Justice S.M. Subramaniam in P. Arun Prakash v. S. Sudhamary,2021 SCC OnLine Mad 1954, it was held that the proceedings filed under the Central Act 43 of 2005 before the Criminal Court can only be termed as criminal proceedings. Such proceedings cannot be transferred from a criminal Court to a civil Court by exercising the supervisory power under Article 227 of the Constitution of India.

In the present matter Court decided on the question,

Whether the impugned proceedings instituted under Central Act 43 of 2005 are civil or criminal in nature?

Bench opined that the Registry should not have kept the petition unnumbered for so long. When in view of the statutory bar set out in Section 18-A of the SC/ST (Prevention of Atrocities) Act, a petition for anticipatory bail was not numbered by the Registry of the Madras High Court, matter was taken up by the Supreme Court. In P. Surendran v. State, (2019) 9 SCC 154, it was held that:

“…act of numbering a petition is purely administrative…”

 “…In this context, we accept the statement of the Attorney General, that the determination in this case is a judicial function and the High Court Registry could not have rejected the numbering…”

Hence, following the above decision, Court held that the Registry ought to have placed the papers before the Court, if it had any doubt regarding the maintainability.

Further, Court expressed that Article 227 of the Constitution of India is to the effect that every High Court shall have the superintendence over all the Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. The text of the provision is forum-neutral. It makes no distinction between civil court and criminal court. In other words, the power under Article 227 can be exercised both over civil Courts as well as the criminal Courts. While the power under Section 482 of CrPC, can be exercised only with reference to criminal proceedings before the criminal Courts, the power under Article 227 of Constitution of India is much wider and comprehensive.

High Court directed the Registry to number the petition and list the matter for admission. [Muthulakshmi v. Vijitha, 2021 SCC OnLine Mad 2183, decided on 11-06-2021]

Case BriefsHigh Courts

Chhattisgarh High Court: Sanjay K Agrawal J., dismissed the petition being devoid of merits.

The facts of the case are such that the respondent 1 / accused was discharged on 6-6-2011 against which the petitioner filed application for grant of leave to appeal with a delay of approximately 2 years, but that application was dismissed as withdrawn with liberty to file appropriate petition, on 26-8-2013 against which the petitioner preferred revision on 12-11-2013 with an application for condonation of delay under Section 5 read with Section 14 of the Limitation Act, 1963 which has been dismissed by the revisional Court finding that the application for grant of leave to appeal was filed before this Court with a delay of approximately 2 years and Section 14 of the Limitation Act, 1963 has no application. Hence the instant petition was filed challenging the impugned order dated 18-7-2014 passed by the 2nd Additional Sessions Judge, Raipur in an unregistered criminal revision matter.

Counsel for the petitioners submitted that the revisional Court is absolutely unjustified in not condoning the delay by taking liberal view of the matter and also went wrong in not extending the benefit of Section 14 of the Limitation Act, 1963.

Counsel for the respondents submitted that application of Section 14 of the Limitation Act, 1963 is restricted only to a civil proceeding and that principle can be applied to appeal or revision arising from civil proceeding, but in no case, it can be extended to the criminal proceeding, as such, the application for condonation of delay has rightly been rejected.

Section 14 (1) and (2) of the Limitation Act, 1963 provides as under: –

“14. Exclusion of time of proceeding bona fide in court without jurisdiction. — (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.”

The Court relied on judgment J. Kumaradasan Nair v. IRIC Sohan, (2009) 12 SCC 175 wherein it was observed that “Section 14(1) of the Limitation Act, 1963 is applicable only in suits in view of the definition of suit contained in Section 2(l) of the Limitation Act, 1963, but the principle thereof would be applicable for the purpose of condonation of delay in filing revision application in terms of Section 5 thereof.”

The Court thus observed that Section 14(1) of the Limitation Act, 1963, is only applicable to suits and by virtue of the principle of law laid down in J. Kumaradasan Nair (supra), it has been made applicable to revision or appeal arising out of the said proceeding, but its application is restricted only to civil proceeding, it does not apply to the criminal proceeding stretching beyond the civil proceeding and by virtue of Section 14(1), appeal or revision (civil), by virtue of the decision of the Supreme Court in J. Kumaradasan Nair (supra), it would be stretching too much to hold that it should also be applicable in criminal proceeding. However, Section 470(1) of the Code of Criminal Procedure, 1973 provides that in computing the period of limitation, the time during which any person has been prosecuting with due diligence another prosecution, whether in a Court of first instance or in a Court of appeal or revision, against the offender, shall be excluded.

The Court thus held that in the instant case there is delay of approximately two years from 6-6-2011 to 2-5-2013 in filing the application for grant of leave to appeal before this Court filed under Section 378(4) of the Code of Criminal Procedure, 1973 for which there is no satisfactory explanation offered before the revisional Court in revision and secondly, the provisions of Section 14 of the Limitation Act, 1963 are not applicable to a criminal proceeding like revision and the provision contained in Section 470(1) of the CrPC would be applicable.

In view of the above, petition was dismissed.[Devmati Khemka v. Raju Yadav, Criminal Misc. Petition No.744 of 2014, decided on 19-11-2020]

Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Orissa High Court: S. K. Panigrahi J., granted bail and directed the petitioner company to pay the amount in accordance with the manner indicated.

The facts of the case as per the FIR lodged alleging charges under Sections 406/420/120-B of Penal Code, 1860 read with Section 6 of the Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011 (O.P.I.D.) are that, one Biswa Bhushan Biswal husband of the petitioner herein, 6-7 years back approached the informant and introduced himself as a land broker doing business in plotting, land development, construction of buildings and flats through his company B. N. Infra Services Pvt. Ltd. where petitioner is the Managing Director. Br. Biswal insisted the informant to invest in the company and promised him assured returns vide agreement dated 19-5-2014, pursuant to which disbursal of Rs 1,89,00,000 was made by the informant. Biswas defaulted with return payments and consented to give one of his plots having Plot No. 3/441 to the informant in case of further default in payment vide a written letter. The said plot was later revealed to be already sold to someone else, subsequent to which another agreement dated 25-01-2017, wherein Biswas committed to pay Rs 1,76,00,000 out of which Rs 1 Lac was paid at the time of signing. The petitioner issued 10 cheques each amounting to Rs 1,50,00,000 which were dishonored by the bank due to insufficient funds. Thereafter FIR was lodged and during the investigation, Mr. Biswal and petitioner were arrested and later filed for bail which was rejected by Trial Court. Aggrieved by the same, an instant bail petition has been filed for seeking regular bail under Section 439 CrPC, 1973.

Counsel for the petitioner D.P. Dhal submitted that the petitioner is a housewife and Biswas is responsible for managing the day to day affairs of the company. It was further submitted that the company is a real estate company and hence comes within the ambit of Real Estate Regulation & Development Act, 2016 and Odisha Real Estate (Regulation and Development) Rule, 2017, hence Section 6 of the O.P.I.D. Act will not be attracted. He also prayed for the relief of bail to be granted.

Counsel for the respondent opposed all the arguments and stated that the instant case makes out for a clear offence of cheating and fraud and provisions of the O.P.I.D Act will squarely apply in the present case.

The Court after hearing both sides observed that characteristics of the agreement entered into between the parties is in the nature of an “agreement to sale” of a flat that was to be constructed by the defaulting petitioners company and hence is a simple flat buyer agreement. It was also observed that the defaulting company is registered under the Companies Act, 1956 and its MOA and AOA clearly states that it is not a “Financial Establishment” instead comes under the purview of the Real Estate (Regulation and Development) Act, 2016.

The Court also observed that it is imperative that the background of the Act needs to be understood before dealing with the legislation.

Whether the instant case falls under O.P.I.D Act or not?

Section 2 (d) of O.P.I.D Act defines “Financial Establishment” as a company registered under the Companies Act carrying on the business of receiving deposits under any scheme or arrangement or in any other manner.

It clearly states that in MOA and AOA it has to be mentioned that the primary business is receiving “deposits” pursuant to any “scheme or arrangement”. On a conjoint reading of Sections 2(d), 3 and 5 of O.P.I.D Act it is clear that the business should be in the nature of accepting or receiving “deposits”.
Section 10 of O.P.I.D Act provides for attachment of the Financial Establishments in case of default payment. Hence the operation of Section 10 of the Act would result in a piquant situation where one lone buyer while claiming refund of his deposit would cause the attachment of the other flats so constructed, irrespective of the fact as to whether such flats have been transferred to other transferees by the builder and corresponding rights thereupon have been created or not.

In case of flat buyer agreement, it provides for the consideration to be paid for the flat/apartment purchased which are sale transactions and are mandatorily registerable under the relevant laws wherein the question of the return of deposit or payment of interest on such deposits does not arise.

The Court relied on various judgments titled Viswapriya [India] Limited v. Government of T.N, 2015 SCC OnLine Mad 10349 and Prasan Kumar Patra v. State of Odisha, 2019 SCC OnLine Ori 93 and held that an inevitable situation will invariably arise when the provisions of the O.P.I.D Act are invoked in real estate transactions especially where a builder has constructed multiple flats/apartments. This kind of situation could not have been the intention of the legislature considering the practices, problems and complexities involved in the real estate sector. Hence the instant case is a classic example of a transaction gone awry which has been strenuously given the color of a criminal offence.

The Court also relied on a judgment titled Tetra Pak India (P) Ltd. v. Tristar Beverages (P) Ltd., 2015 SCC OnLine Bom 4707 and held that though a case of breach of trust may be both a civil wrong and a criminal offence there would be certain situations where it would predominantly be a civil wrong and may or may not amount to a criminal offence and giving colour of criminal case to dispute which is otherwise purely civil and commercial in nature would tantamount to an abuse of the process of court.

The Court further directed the State Government to give wide publicity to the provisions of the said RERA Act, 2016 in order to injunct any such unnecessary litigations arising out of builder-buyer relations.

In view of the facts and overall circumstances, the bail was granted.[Mahasweta Biswal v. State of Odisha, 2020 SCC OnLine Ori 633, decided on 25-08-2020]

Arunima Bose, Editorial Assistant has put this story together

Case BriefsCOVID 19High Courts

Gujarat High Court: Paresh Upadhyay, J., while addressing a matter with regard to granting bail to the migrant workers who were locked in jails, stated that,

“instead of sending these labourers back to their hometown when they wished to go back due to no money, work and food, they were locked in jails.”

“These migrants are more the victims certainly not criminals.”

Present application was filed for regular bail. He was punishable for the offences under Sections 143, 144, 147, 148, 149, 186, 332, 333, 336, 337, 427 and 188 of Penal Code, 1860 and Section 135(1) of the Gujarat Police Act, Section 3 of Epidemic Act, 1897, Section 51(b) of the Disaster Management Act and Section 3(1) and 3(2)(e) of the Prevention of Damage to Public Property Act.

Advocates on behalf of the applicants submitted that  of the total 33 applicants, 32 are from the State of Jharkhand and one is from the State of West Bengal.

The stated applicants were migrant workers and in the new lockdown they were all without any work, money and food, thus under the said circumstances they wished to go back to their home which led to an untoward incident.

Since 18-05-2020, applicants are in jail.

“…fit case to exercise the discretion to release the applicants on bail, in exercise of powers under Section 439 of the Code of Criminal Procedure, 1973.”

-High Court

Court noted that instead of sending the above-stated labourers back to their home towns when they were out of money, food and work, they were locked up in the jails.

In view of the above, bench said that,

Applicants are more the victims, certainly not the criminals. Thus, the said applicants immediately needs to be set free on furnishing person bond without any conditions.

Thus, the application has been allowed. [Ravi v. State of Gujarat, 2020 SCC OnLine Guj 930, decided on 23-06-2020]

Case BriefsHigh Courts

Chhattisgarh High Court: Sanjay K. Agarwal, J., quashed the criminal proceedings against the petitioner, an Advocate, who was arraigned in a criminal case registered under Sections 420, 467, 468, 471 and 120-B IPC.

The petitioner, an Advocate empanelled with the Dena Bank, had provided a non-encumbrance certificate regarding the property of 10 borrowers who had applied for a loan with the Bank under the Kisan Credit Card Scheme. The loan was granted to the said 10 borrowers, who, however, failed to repay the loan. Upon enquiry, it was revealed that the documents submitted by the borrowers were found to be false and fabricated. Consequently, the FIR was registered by the Bank against the said 10 borrowers. However, subsequently, the petitioner was also arraigned as an accused, alleging that she has given a non-encumbrance certificate of legal scrutiny and she had certified documents concerned and, thereby, she had also committed the offence. The petitioner challenged the validity and correctness of the chargesheet.

The High Court, after perusing the record and discussing the law on point, observed: “It is well-settled law that extending of a legal opinion for granting loan has become an integral component of an advocate’s work in banking sector. A lawyer, on his part, has a responsibility to act to the best of his knowledge and skills and to exhibit an unending loyalty to the interest of his clients. He has to exercise his knowledge in a manner that would advance the interest of his clients. However, while acting so the advocate does not assure to his client that the opinion so rendered by him is flawless and must in all possibility act to his gains. Just like in any other profession, the only assurance which can be given and may even be implied from an advocate so acting in his professional capacity is that he possesses the requisite skills in his field of practice and while undertaking the performance of task entrusted to him, he would exercise his skills with reasonable competence. The only liability that may be imputed on an advocate while so acting in his professional capacity is that of negligence in application of legal skills or due exercise of such skills.”

Reliance was also placed on the decision in CBI v. K. Narayana Rao, (2012) 9 SCC 512, wherein the Supreme Court considered the question as to whether a legal professional can be rendered criminally liable for negligence or improper legal advise and held that the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank.

In absence of any allegation against the petitioner as to her active participants in the scheme of defrauding the Bank, the Court was of the opinion that the criminal proceedings against her were liable to be quashed Order were made accordingly. [Subha Jakkanwar v. State of Chhattisgarh, 2019 SCC OnLine Chh 136, decided on 26-11-2019]