Section 340
Case BriefsSupreme Court

   

Supreme Court: While answering the reference questions arising from a reference order of a Division Bench, the 3-judges Bench of Sanjay Kishan Kaul, Abhay S. Oka and Vikram Nath, JJ., held that Section 340 of the CrPC does not mandate a preliminary inquiry and an opportunity of hearing to the would-be accused before a complaint is made under Section 195 of the CrPC.

Questions Referred

The instant matter arose from a reference made to a three Judges Bench by an order passed in State of Punjab v. Jasbir Singh, (2020) 12 SCC 96, seeking the following questions to be answered:

“(i) Whether Section 340 of the Code of Criminal Procedure, 1973 mandates a preliminary inquiry and an opportunity of hearing to the would-be accused before a complaint is made under Section 195 of the Code by a Court?

(ii) what is the scope and ambit of such preliminary inquiry?”

Background

The High Court, by the impugned judgment in Jasbir Singh v. State of Punjab, 2019 SCC OnLine P&H 2965, granted relief to the respondent while dealing with an aspect of forgery in a civil case, on the reasoning that the FIR registered against the respondent-accused did not comply with the mandatory requirements of Section 340 which provides for the procedure in cases mentioned in section 195, particularly because the FIR was filed without any inquiry and without giving any opportunity to the respondent to be heard.

The Reference Order

By the reference order in State of Punjab v. Jasbir Singh, (2020) 12 SCC 96, the Division Bench of the Supreme Court noted that a three Judges Bench in Pritish v. State of Maharashtra, (2002) 1 SCC 253, had held that the purpose of a preliminary inquiry under Section 340(1), CrPC was not to find whether a person is guilty or not but only to decide whether it was expedient in the interest of justice to inquire into the offence. It was thus observed that the Court is not obliged to make a preliminary inquiry on a complaint but if the Court decides to do so, it should make a final set of the facts which is expedient in the interest of justice that offence should be further probed into.

The Division Bench noted that the views of the Court in Pritish’s case (supra) were conflicting with the views of the other 3-judges’ Bench in Sharad Pawar v. Jagmohan Dalmiya, (2010) 15 SCC 290, to the extent that in para 7, it was observed that it was necessary to conduct a preliminary inquiry as contemplated under Section 340 CrPC. and also, to afford an opportunity of being heard to the defendants.

The Division Bench, in the reference order simultaneously noted the observations of the Constitution Bench in Iqbal Singh Marwah v. Meenakshi Marwah, (2005) 4 SCC 370, which was post the judgment in Pritish’s case (supra) but prior to the judgment in Sharad Pawar’s case (supra). In the said case, the Constitution Bench had opined:

“In view of the language used in Section 340 CrPC the Court is not bound to make a complaint regarding commission of an offence referred to in Section 195(1)(b), as the Section is conditioned by the words ‘Court is of opinion that it is expedient in the interest of justice.’ This shows that such a course will be adopted only if the interest of justice requires and not in every case. Before filing of the complaint, the Court may hold a preliminary enquiry and record a finding to the effect that it is expedient in the interests of justice that enquiry should be made into any of the offences referred to in Section 195(i)(b). This expediency will normally be judged by the Court by weighing not the magnitude of injury suffered by the person affected by such forgery or forged document, but having regard to the effect or impact, such commission of offence has upon administration of justice.”

Analysis and Conclusion

In the view of the above, the Court held that the Constitution Bench’s view would naturally prevail which makes the legal position quite abundantly clear. Additionally, the Court noted that what is reported in Sharad Pawar’s case (supra) is only an order giving factual scenario and not a judgment that lays down the principles of law. As a matter of caution, the Court remarked,

“The scenario is that any order or judgment passed by this Court becomes a reportable exercise to create more volumes of reported cases! This thus has a possibility at times of causing some confusion on the legal principles prevalent. The observations in the quoted paragraph extracted aforesaid apparently came out of the flow of the order rather than pronouncing any principles of law and that is why the Bench itself categorized what is observed as an order i.e, in the given factual scenario.”

Hence, the Court concluded that there is no question of opportunity of hearing in a scenario of this nature and the law as enunciated by the Constitution Bench in Iqbal Singh Marwah’s case (supra) is in line with what was observed in Pritish’ case (supra). Further, the Bench noted that interestingly both the aforesaid judgments had not been noted in order passed in Sharad Pawar’s Case (supra).

Consequently, the Court answered the first question negatively. Insofar as the second question is concerned, the Court held that scope and ambit of such a preliminary inquiry already stands resolved in terms of the Constitution Bench judgment in the Iqbal Singh Marwah’s case (supra). The matter is directed to be placed before the regular Bench for consideration on merits.

[State of Punjab v. Jasbir Singh, 2022 SCC OnLine SC 1240, decided on 15-09-2022]


Advocates who appeared in this case :

For Appellant(s): AOR Rooh-e-hina Dua, Advocates Harshit Khanduja, Kanishak Bunderwal, and Ananya Sikri

For Respondent(s): AOR Shubham Bhalla and Advocates Sumeir Ahuja, Akansha Gulati, and Deepak Samota


*Kamini Sharma, Editorial Assistant has put this report together.

Case BriefsDistrict Court

Court of Additional Sessions Judge, Thane: Noting the fact that a man suppressed the material fact of his private life before marriage i.e., about him being a homosexual, Rajesh S. Gupta, J., found that, the whole life of a young girl had been spoiled due to the material suppression, if the same would have been shared prior to the marriage then the consequence would be different.

In the present matter, the applicant/accused had preferred anticipatory bail for the offences punishable under Sections 420, 465, 467, 468, and 506 of IPC.

Advocate for applicant/accused submitted that de facto complainant and applicant/accused were husband and wife, and their marriage was solemnized.

During the period of marriage, the applicant/accused was working and earning around Rs 8 lakh per annum and as there were bright chances of increments in near future, de facto complainant accepted and agreed to the job profile of the applicant/accused and marriage was performed by mutual consent.

It was submitted that only with the intent to put the applicant/accused behind the bar, a false complaint was lodged.

On the other hand, APP submitted that there were specific allegations that the applicant/accused suppressed the material facts before the marriage as he being gay and indulged in homosexuality and thereby committed cheating and played fraud in the complainant and had ruined the life and future of the complainant and was not interested in the opposite sex.

IO submitted that there were chat messages between the applicant/accused and his other male partners which clearly indicated that the accused/applicant was interested in same-sex.

Original complainant submitted that the applicant by suppressing the incriminating facts before the marriage was only interested in financial assistance from the parent of the de facto complainant.

Analysis and Decision

“It is consciously taken note Hindu Marriage is a religious sacrament in which a man and a woman are bound in permanent relationship for a physical, social and spiritual purpose of Dharma, procreation and sexual pleasure.”

Court noted the allegation regarding the bogus job offer of the applicant/accused, further, it was also noted that the accused/applicant was indulging in telephonic sex with his male partners, which revealed that he was gay and interested in homosexuality, hence till date, he did not consummate a marriage with the de facto complainant and disinterested in the opposite sex.

Prima Facie it appeared that the applicant/accused had suppressed the material fact of his private life before marriage and thereby caused a wrongful loss to the parent and the complainant.

Bench expressed that,

No doubt, every individual has its dignity to live in the society. No other person can interfere into lifestyle but that does not mean that a person gets liberty to spoil the life of either of spouse.

Additionally, the Court remarked that the damage caused to the de facto complainant was irreparable and could not be compensated in money.

Prima facie, the Court opined that fraudulent intention by suppressing material fact was noted. Court also stated that prima facie, the applicant committed cheating by causing wrongful financial loss to the parent of the complainant and as well as irreparable damage to the life of the complainant.

Lastly, concluding the matter, Court observed that if released on bail, the applicant/accused will tamper with the evidence, hence no case of pre-arrest bail was made out. [Rohan Pradeep Shinde v. State of Maharashtra, 2022 SCC OnLine Dis Crt (Bom) 7, decided on 5-4-2022]


Advocates before the Court:

Shri. Valinjkar, Advocate for the applicant/accused.

Shri. V. A. Kulkarni for the respondent.

De facto complainant present in-person.

Shri. Sagar Kadam Ld. Advocate for the intervener.

Case BriefsSupreme Court

Supreme Court: The Division Bench of Sanjay Kishan Kaul and M.M. Sundresh, JJ., held that a generally worded clause of a contract or Deed of Settlement cannot be said to constitute an agreement to change the course of law that the Section 34 proceedings are subject to. The Bench expressed,

“The general phraseology of a clause which seeks to include any amendment to the Act would not be able to be availed of to expand the scope of scrutiny as it would appear to run contrary to the legislative intent of Section 26 of the Amendment Act.”

The appellant and respondent were shareholders of Atlas Equifin Private Limited, India (Atlas) which held 11,05,829 equity shares of Rs.10 each in Multi Screen Media Pvt. Ltd. (MSM). Evidently, the appellant had attempted to sell the shares in MSM by forging the signatures of the respondent, pursuant to which a complaint was lodged against the appellant with the Economic Offences Wing, Mumbai Police.

However, the parties entered into a Deed of Settlement dated 03-01-2011 according to which the respondent agreed to withdraw all complaints and proceedings against the appellant. The respondent was further forbidden from writing letters, communications, or complaints to any person about the subject matter of the Deed. In return an amount of US$ 1.5 million was to be paid to the respondent which was kept in escrow till the withdrawal of complaints. Further, as per the deed, US$ 2 million was to be paid to the respondent within seven (7) days of the receipt of the proceeds from the sale of MSM’s shares.

Trigger for arbitration

The appellant claimed breach of the aforesaid Deed of Settlement by an e-mail from the wife of the respondent informing the appellant that “I have no wish to continue to fraternise with a forger.” The appellant, on being asked to complete the sale of shares for release of the second escrow cheque of US$ 2 million, stated that the respondent could not push him to sell. Therefore, the conduct of the parties triggered the arbitration clause of the deed.

Meanwhile, MSM’s shares were sold in March, 2013, and the appellant immediately filed an application seeking to attach an amount of US$ 1.5 million which the respondent was to receive as his share of the said proceeds which was rejected by the Arbitrator. The Arbitrator awarded a claim for liquidated damages of US$ 1.5 million in favour of the appellant and held that the respondent would not be entitled to the second cheque of US$ 2 million held in escrow, on account of the respondent’s breach of the Deed of Settlement.

In appeal, the award was set aside by the Single Bench or the High Court which was further affirmed by the Division Bench.

The nature of arbitral proceedings

The appellant sought for a distinction to be carved out between a domestic award arising from an international commercial arbitration and a purely domestic award; by claiming that since he was based in Singapore, it was an award arising out of an international commercial arbitration. The appellant argued that the award had to be scrutinised in the post amendment scenario and, thus, the High Court had fell into error by applying the test applicable in the pre-amendment scenario.

The contention of the appellant solely rested on the wording of clause 9 of the Deed of Settlement, which provides that “the Arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996 of India or any amendment thereto.” The appellant contended that the phraseology of clause 9 included the possibility of any future amendments to the said Act being made applicable to the arbitration in question.

In other words, the appellant claimed that the plea of the award being vitiated by patent illegality was available against the award, as the same is not available for an award which arises from international commercial arbitration post the Amendment, 2015 of the Arbitration and Conciliation Act, 1996.

Noticeably, the Single Judge and the Division Bench had decided the challenge to the award on the plea of patent illegality without noticing the distinction.

Whether the amendment would apply in the facts of the present case

It was not in dispute that Section 34 proceedings commenced prior to 23-10-2015, which was the crucial date. The applicability of Section 34(2A) was elucidated in Ssangyong Engineering and Construction Company Ltd. v. National Highways Authority of India, 4 (2019) 15 SCC 131, where the Court had categorically opined that Section 34 as amended will apply only to Section 34 applications that have been made to the Court on or after 23-10-2015, irrespective of the fact that the arbitration proceedings may have commenced prior to that date. The Court had opined that to prevent any uncertainty in law, while seeking to fine tune the law to restrict the scope of interference in awards the legislature took a conscious decision to make applicable the amendments only from the date it came into force.

Reliance was placed by the Court on S.P. Singla Constructions Pvt. Ltd. v. State of Himachal Pradesh, (2019) 2 SCC 488, wherein the arbitration clause provided that the arbitration would be subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof. A plea was raised that the amended provisions would apply in accordance with Section 26 of the 2015 Amendment Act. This contention was repelled by the Court which opined that such general conditions of the contract cannot be taken to be an agreement between the parties to apply the provisions of the 2015 Amendment Act. As a result, the Court held that provisions of the 2015 Amendment Act would apply only in relation to arbitral proceedings commenced on or after the date of commencement of the 2015 amendment.

In the backdrop of above, the Bench opined that a generally worded clause such as Clause 9 of the Deed of Settlement could not be said to constitute an agreement to change the course of law that the Section 34 proceedings were subject to.  Accordingly, the Bench held that the pre-2015 legal position would prevail and the general phraseology of a clause which seeks to include any amendment to the Act would not be able to be availed of to expand the scope of scrutiny as it would appear to run contrary to the legislative intent of Section 26 of the Amendment Act.

Factual Analysis

Noticing that the respondent complied with the deed and all such proceedings were brought to an end and that though there was some delay in the sale of shares, the sale did take place, the Bench opined that the necessary conditions of the Deed of Settlement stood satisfied.

Evidently, though the wife was initially impleaded in the proceedings under Section 9 of the said Act, she was later dropped from the arbitration proceedings as she was not a party to the agreement, therefore the Bench opined that in a sense the agreement accepted that the wife of the respondent had no role to play and the respondent could not be penalised for her conduct. The Bench added,

“Even if we turn to the complaints of the wife, at best they would fall in the category of some indiscreet language…certainly, the sentence “I have no wish to fraternise with a forger.” must be called wholly inappropriate. But then, that by itself cannot deny the respondent of his dues merely because of such an indiscreet e-mail by his wife, who was not even party to the proceedings nor party to the Deed of Settlement which contained the arbitration clause.”

Conclusion

In the light of the above, the Bench held that clause 6 of the Deed of Settlement could not have been relied on to award liquidated damages in favour of the appellant. Further, opining that the effect of the award would be to deprive the respondent of the due valuation of the shares and what was paid to him to bring his complaints to an end, the Bench held that the arbitrator’s conclusions were not in accordance with the fundamental policy of Indian law, and could thus be set aside under the pre-2015 interpretation of S. 34 of the said Act. The views taken by the High Court were upheld. [Ratnam Sudesh Iyer v. Jackie Kakubhai Shroff, 2021 SCC OnLine SC 1032, decided on 10-11-2021]


Kamini Sharma, Editorial Assistant has put this report together 


*Judgment by:  Justice Sanjay Kishan Kaul

Know Thy Judge| Justice Sanjay Kishan Kaul

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Bureau of Investigation, Ghaziabad (CBI)-Shivank Singh, Special Judicial Magistrate (CBI) while taking cognizance under Sections 420, 467, 468 & 471 IPC, made a seething remark in the order where it stated,

“This court fails to understand as to why the substantive offence of forgery was not imposed against the accused by the CBI when it is in consonance with their version only”.

In the pertinent matter, it was alleged that Catmoss Retail Ltd. through its Director (A1) and Ashwani Kumar, Director (A2) procured a loan from SIDBI by submitting forged balance sheets, net worth statements, bills and minutes of the board meetings. And further alleged that various shell firms were also opened by A2 in the names of the employees of the company for raising the fund by using the same firms without any valid business and transactions. Resultantly, the CBI charge sheeted A1 under Section 420 IPC and A2 under Sections 420, 468 r/w 109 and 471 IPC.

The Court after considering the purported act, witnesses, documentary evidences and the “dubious” charges framed by the CBI, took cognizance of the offences under Sections 420, 467, 468 & 471 IPC, and was of the opinion, that when the act was of committing forgery, then only abetment to forgery was not sufficient especially when the CBI itself had set the grounds with no contradictions. The Court was of the opinion, “Ld. PP for CBI and IO has failed to reply as to why the offence of abetment for forgery is implicated against the accused and not the substantive offence of forgery. At this stage, prosecution has also not established that as to who was abetted for the offence of forgery”. Therefore, summoned both A1 and A2 under relevant Sections.[CBI  v. Catmoss Retail Ltd., Misc. Case No. 06/21, decided on 14-09-2021]


Agatha Shukla, Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Delhi High Court: Yogesh Khanna, J., remarked that,

Once the Parliament steps in and cures the defect pointed out by a Constitutional Court, the defect appears to be cured and the presumption of constitutionality is to apply to such provision.

Instant petitions were for grant of bail to the applicants.

Factual Matrix

An enquiry under FEMA, 1999 was commenced on 1-07-2017 by the respondent at various places against Naresh Jain and others, it was alleged that the petitioners and others had appeared on numerous occasions before the Enforcement Directorate and the enquiry was conducted for 2 years under Section 47 of the FEMA.

Further, the ED registered FIR with EOW Cell for Scheduled Offences under the Prevention of the Money Laundering Act, 2002. Thereafter, the petitioners appeared before the ED on several occasions. Searches were conducted by the ED under PMLA at the residential premises of the petitioner Bimal Jain also.

Prosecution complaint was filed before the Special Judge, PMLA against eight accused persons, including the petitioners herein. Petitioner Bimal Kumar Jain also joined the investigation of FEMA as also PMLA on various occasions.

Senior Counsel for the petitioner submitted that:

a) while arresting Bimal Jain, the procedure under Section 19 PMLA was not followed.

b) the Enforcement Directorate cannot be the complainant and the Investigating Officer at the same time; and

c) effect of declaration of twin conditions under Section 45 of the PMLA have been declared unconstitutional and ultra vires in view of decision in Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC 1.

Analysis, Law and Decision

Non-Compliance under Section 19 of the PMLA

High Court stated that since the arrest of accused Bimal Jain was in execution of the NBWs therefore, the provision under Section 19 of the PMLA could not be adhered to.

Admittedly, Bimal Jain was arrested in execution of the NBW by the Special Judge, PMLA while taking cognizance of prosecution complaint filed by the Enforcement Directorate and thus there was no occasion to comply with the requirement of Section 19 of the PMLA.

Bench stated that, the very fact the complaint was filed by the Enforcement Directorate arraying petitioner Bimal Jain as accused 2, prima facie shows there were reasons to believe the person was guilty of offence punishable under PMLA as the complaint was filed only against a person who was presumed to be guilty.

The Complainant and the Investigating Agency cannot be the same

Court referred to the decision of Mukesh Singh v. State (NCT) of Delhi, (2020) 10 SCC 120.

Twin conditions of Section 45 of the PMLA

Supreme Court in Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC 1 declared Section 45 of the PMLA as it stood then, as unconstitutional and violative of Articles 14 and 21 of the Constitution of India, but the defects pointed out were cured by the legislature and an amendment to Section 45(1) was made vide Finance Act, 2018.

Supreme Court’s decision in P. Chidambaram v. E.D., (2019) 9 SCC 24 took judicial note of the above amendment.

High Court stated that the legislature has the power to cure the underlying defect pointed out by a Court, while striking down a provision of law and pass a suitable amendment. Bench referred to the decision of Supreme Court in State of Karnataka v. Karnataka Pawn Brokers Association, (2018) 6 SCC 363 it was held:-

“24. On analysis of the aforesaid judgments it can be said that the Legislature has the power to enact validating laws including the power to amend laws with retrospective effect. However, this can be done to remove causes of invalidity. When such a law is passed, the Legislature basically corrects the errors which have been pointed out in a judicial pronouncement. Resultantly, it amends the law, by removing the mistakes committed in the earlier legislation, the effect of which is to remove the basis and foundation of the judgment. If this is done, the same does not amount to statutory overruling.”

Adding to the above analysis, Court remarked that merely because the entire section was not re-enacted would be of no consequence since the provision even after being declared unconstitutional, does not get repealed or wiped out from the statute book and it only becomes unenforceable.

Therefore, High Court held that there is a presumption in favour of constitutionality since the amended Section 45(1) of the PMLA has not been struck down, Court referred to the decision of the Supreme Court in Nagaland Senior Govt. Employees Welfare Assn. v. State of Nagaland, (2010) 7 SCC 643.

If Section 45(1) of the PMLA is ignored, whether the petitioners are entitled to bail per parameter of Section 439 CrPC?

The investigation by EG revealed that Naresh Jain and Bimal Jain along with other accomplices hatched a criminal conspiracy to cause loss to the exchequer and banks by indulging in illegal foreign exchange transaction on the basis of forged/fabricated documents.

Naresh Jain also facilitated parking of funds abroad by Indian nationals through his international Hawala transaction structure created in India and in various other jurisdictions. Naresh Jain conducted international Hawala operation and domestic operation of providing accommodation entries to co-conspirators.

Investigation so far, revealed that Naresh Jain incorporated and operated 450 Indian entities and 104 foreign entities. These entities were incorporated by using original identity proofs and documents of dummy shareholders and directors as well by fabricating identity proofs and documents of these shareholders and directors. Fabricated documents were used to open bank accounts as well.

Further, it was alleged that the petitioners were well connected in India and abroad and there was an apprehension that they will flee from the country to evade trial in case they were enlarged on bail. It was also alleged that Bimal Jain had evaded the summons issued by the department and had refused to join investigation.

ED alleged that the petitioners were involved in various criminal cases and even two Red Corner Notices were issued by Interpol against Naresh Kumar Jain.

Even the allegations were that the petitioners forged their medical certificates and Naresh Jain continues the criminal activities while in Jail and the investigation in the case is still going on and a large number of activities/fact accounts/witnesses /employees and beneficiaries are involved.

Adding to the above allegations, it was stated that if enlarged on bail there was every likelihood the petitioners may flee to Dubai or elsewhere to avoid the process of law and they were flight risks.

Hence, bail was not granted to the petitioners and the petitions were dismissed. [Bimal Kumar Jain and Naresh Jain v. Directorate of Enforcement, 2021 SCC OnLine Del 3847, decided on 30-07-2021]


Advocates before the Court:

For the Petitioner/s: Vikram Chaudhri, Sr. Advocate with Naveen Malhotra, and Harshit Sethi, Advocates.

For the Respondent: S.V.Raju, ASG, .Zoheb Hossain, Special Counsel, Amit Mahajan, CGSC, Aarushi Singh, Mallika Hiremath, Vivek Gurnani, and Agni Sen, Advocates

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Bureau of Investigation (CBI): The Court of Shivank Singh, Special Judicial Magistrate (CBI) while convicting the accused of the offences under Sections 120B, 420 of Penal Code, 1860 acquitted the accused of the offences under Sections 467, 468, 471 of Penal Code, 1860.

In the present matter, Alishan Khan with Asad Ali (accused in the present matter) were accused of criminal conspiracy with each other for dishonestly and fraudulently availing the benefit of wrongful gains to themselves and subsequently causing wrongful loss to the Department of Customs. In that process, evasion of the payment of customs duty, act of falsely claiming themselves as Manufacturer Exports with the support of forged documentation was carried out. Further the facilities otherwise available to firms were availed, again with forged documents, to waive off the condition to deposit bank guarantee. Subsequently, they again approached the office of Jt. Directorate General of Foreign Trade (DGFT) for issue of an advance import licence for a Cost Insurance and Freight (CIF) value of Rs. 2.02 Crores which was almost 20 times the value of the earlier licence. It was during investigation, that the exports claims so made were also found to be false. Interestingly, the firm or the unit from where they supposedly functioned was also found to be non-existent.

Therefore, the substantial question was of the role of the accused in the entire criminal transaction and involvement in the affairs of the non-existent firm.

The prosecution examined 25 witnesses, and intriguingly, the defence had no witness in support.

The Court while taking note of the testimonies of the witnesses so put forth, arguments advanced and charges levied, considered it appropriate to deal with the provisions of all substantive offences one by one.

While acquitting under Section 467 of IPC, the Court referred to, Sheila Sebastian v. R. Jawaharaj, (2018) 7 SCC 3, wherein it was held that the charge of forgery cannot be imposed on a person who is not the maker of the same. For Section 468 of IPC, the court was firm that use of the forged shipping bills, rent receipts, etc. were not proved beyond reasonable doubt. And further for Section 471 read with 467 of IPC, was of the opinion that, the evidence on record revealed that the accused was the beneficiary of the forged documents “…but it is not established by the prosecution that accused had used the very ‘forged documents’ in question as genuine. Law is settled on this point, that however strong the suspicion maybe, it cannot take place of proof…”.

For conviction under Section 420 of IPC, after a conjoint reading of the testimonies of the witnesses and the corroborating evidences, the Court very firmly stated that, “the prosecution has very clearly manifested Asad Ali’s role in the entire chain of transaction and has proved that it was Asad Ali who had acted upon, manoeuvered and operated the affairs of M/s United Exports sub rosa…”. For Section 120-B, the Court mightily opined that, “…it is settled law that in the case of conspiracy there cannot be any direct evidence. Privacy and secrecy are more characteristics of a conspiracy, than of a loud discussion in an elevated place open to public view…”. “…the circumstances proved before, during and after the concurrence have to be considered to decide about the complicity of the accused…”. “…It would have been difficult for any of the accused, to execute alone such conspiracy or cheating. But with the combined efforts they were able to do the same…”.

Therefore, the Court after considering the entire facts and circumstances, convicted the accused for the offence under Section 120-B of IPC, to undergo rigorous imprisonment of 3 years and pay fine of Rs. 10,000/- and for the offence under Section 420 of IPC, to undergo rigorous imprisonment for 03 years and pay fine of Rs. 10,000/- which shall run concurrently. Also, the accused was entitled to set off under Section 428 of the Criminal Procedure Code, 1973 for the period already undergone in judicial custody, if any.[CBI v. Asad Ali, 5103092/2005 decided on 01-04-2021]

Case BriefsHigh Courts

Madras High Court: N. Anand Venkatesh, J., while addressing a matter expressed that:

“…a transaction hit by lis pendens would not result in the same being rendered void or illegal or of no effect. It will only be subject to the result of the litigation and the purchaser would be bound by the same.”

The instant case was with regard to the property originally belonging to a partnership firm which was subsequently dissolved and the same was said to have been vested on the de facto complainant by virtue of decree. Thereafter the building in the property was demolished to put up new construction and a joint venture agreement was also entered into with a developer.

But since the agreement did not go through the property continued to be vacant.

Prosecution’s case was that the petitioner’s vendor had trespassed into the property and had created documents and managed to obtain a patta.

Petitioner knew about the dispute between the parties and the pending criminal case against the vendor, yet they entered into the sale agreements and agreed to purchase properties including the property belonging to respondent 2. Ultimately, a registered sale Deed was executed in favour of the petitioners by undervaluing the property, after which the petitioners started taking steps to take possession of the property and on coming to know of the same, respondent 2 gave a complaint on the basis of which an FIR was registered against the vendor and petitioners.

Analysis and Decision

Bench noted that the petitioners came into the scene in 2016 when they entered into a sale agreement with the vendor Mr Iqbal. On agreeing to purchase certain items of properties which also included the subject property for a total sale consideration of Rs 4 crores.

Further, it was seen that out of the total sale consideration of Rs 4 crores, more than ninety percent of the sale consideration has been paid by way of RTGS transfer from the bank account maintained by the Petitioners. Thereafter, the patta has also been transferred in favour of the Petitioners. That apart, there was also a name transfer by the Corporation in the property tax records from the name of Mr Iqbal to the names of the Petitioners, respectively.

FIR was registered for the offences of making a false document and cheating. Without undertaking the exercise of a mini investigation, it had to be seen whether the offence was made out against the petitioners or not?

Dispute was with regard to the right and title over the subject property between respondent 2 and the vendor of the petitioners.

Vendor of the petitioners was positively claiming a right and title over the subject property and he believed that he was the owner of the property.

Further, it was observed that at the time when the sale deed was executed, in favour of the

Petitioners, and at the time when the parties entered into an agreement of sale, the suit filed by the 2nd Respondent had been dismissed for default, hence no compelling material was available that could have prevented the petitioners from purchasing the subject property.

Property was free from any encumbrance after it was purchased by Mr Iqbal in the year 2010.

It is now a well-settled position of law that even when a document is executed by a person claiming a property which is not his, that does not by itself satisfy the requirements of a false document as defined under Section 464 IPC. If it does not satisfy the requirements of Section 464 IPC, there is no forgery and if there is no forgery, automatically neither Section 467 nor Section 471 IPC will be attracted. 

For the above position of law, Supreme Court referred to the decision in Mohd. Ibrahim v. State of Bihar, (2009) 8 SCC 751, Sheila Sebastian v. R. Jawaharaj, 2018 (3) MLJ (Crl) 39.

Even in the extreme case of branding the Petitioners as speculative buyers of the subject property, knowing fully well about the dispute in title over the subject property, that by itself does not amount to an offence of cheating, forgery and making of false document.

Allegations made by respondent 2 did not make out any offence against the petitioners and the continuation of investigation against the petitioners would be an abuse of process of law, which requires interference of the Court.

Hence in view of the above discussion, present petition was allowed.[Dr Subba Somu v. Inspector of Police, 2021 SCC OnLine Mad 877, decided on 01-03-2021]


Advocates who appeared before the Court:

For Petitioners: Mr ARL. Sundaresan, Senior Counsel and Mr R. Umasuthan

For 1st Respondent: Mr A. Natarajan, State Public Prosecutor for R1

Asstd: by Mr M/Mohamed Riyaz Additional Public Prosecutor

Mr G. Mohanakrishnan Mr S. Janarthanan for R 2

Case BriefsHigh Courts

Delhi High Court: Subramonium Prasad, J., with regard to the settlement of disputes stated that:

“In crimes which seriously endangers the well being of the society, it is not safe to leave the crime doer only because he and the victim have settled the dispute amicably. “

The instant petition was filed under Section 482 CrPC for offence under Sections 419, 467, 471, 474, 376, 354, 506 read with Section 34 of the Penal Code, 1860.

Petitioner/Accused had met respondent 2 and revealed that his name to be Shiva and promised the complainant to marry her. Complainant and the Petitioner became intimate and had a physical relationship she had been promised marriage by the petitioner.

Later the respondent 2/complainant came to know that the petitioner had concealed his identity and his real name as ‘Akhtar’.

Respondent 2/Complainant stated in the FIR that the petitioner took her to Arya Samaj Mandir wherein they got married and in the marriage certificate he gave his name as Akhtar. After the marriage, the petitioner started demanding money and when respondent 2 visited his parents, she was driven away with them.

The instant petition was filed as the parties amicably settled their dispute.

A Status Report was also filed wherein it was stated that Akhtar/Shiva hid his identity and was sexually exploiting the respondent 2 for five years. It was also stated that the petitioner forged Aadhaar Cards and has got two Aadhaar Cards, one in the name of Akhtar and the second in the name of Shiva. On further investigation, it was also found that the marriage certificate was also fake.

Analysis and Decision

Bench stated that the power of the High Court under Section 482 CrPC to quash proceedings is those offences which are non-compoundable is recognized.

Court noted that the Supreme Court time and again held that the High Court has to keep in mind the subtle distinction between the power of compounding offences given to the Court under Section 320 CrPC and the quashing of criminal proceedings and the jurisdiction conferred upon it under Section 482 CrPC.

For the above purpose, Court cited the Supreme Court’s decision in Shiji v. Radhika, (2011) 10 SCC 705.

Further, the Bench added that:

“While exercising its power under Section 482 CrPC, High Court is guided by the material on record as to whether the ends of justice would justify such exercise of power.”

 Court referred to the Supreme Court decision in Gian Singh v. State of Punjab, (2012) 10 SCC 303, wherein it has been elaborated under what circumstances, criminal proceedings in a non-compoundable case could be quashed when there is a settlement between the parties.

In the case of Narinder Singh v. State of Punjab, (2014) 6 SCC 466, the Supreme Court laid down principles by which the High Courts should be guided in giving adequate treatment to the settlement between the parties.

Court expressed that:

An offence of rape is an offence against the society at large and apart from offence under Section 376, the petitioner is also accused of committing offences under Sections 419,467,468,471,474,506 and 34 IPC.

In view of the facts and circumstances of the case, Bench opined that it is not in a position to quash the FIR on the basis of compromise entered into between the parties and wherein it was stated that the petitioner/accused and the respondent 2 decide to stay as husband and wife and lead their peaceful marital life.

Supreme Court has repeatedly stated that when parties reach a settlement and on that basis a petition is filed for quashing criminal proceedings, the guiding factor for the High Court before quashing the complaint in such cases would be to secure; a) ends of justice, b) to prevent abuse of process of any court.

In view of the FIR and Status Report, Bench held that it’s evident that the petitioner has been accused of serious offences like rape and forgery having a bearing on vital societal interest and these offences cannot be construed to be merely private or civil disputes but rather will have an effect on the society at large.[Akhtar v. GNCTD,  2021 SCC OnLine Del 260 , decided on 01-02-2021]


Advocates for the parties:

Petitioner: Haraprasad Sahu, Advocate

Respondents: Kusum Dhalla, APP for State

Patna High Court
Case BriefsHigh Courts

Patna High Court: Ahsanuddin Amanullah, J., rejected the bail application of the applicant-accused in connection with the FIR registered for offence punishable under Sections 420, 467, 468 and 471 of the Penal Code, 1860.

The present case arises from the allegations that have been levelled against the applicant that she had bagged the job of a panchayat teacher on the basis of a forged TET certificate. Consequent to this an FIR was registered and the applicant, apprehending arrest has now filed an application for anticipatory bail.

Counsel for the petitioner, Umesh Chandra Verma has submitted that the applicant is not a party to any forgery and even if it was done, the certificate wasn’t created by the applicant. In this situation, only Section 471 of the IPC would be attracted as no offence other than the act of producing a certificate for obtaining employment can be attributed to the applicant. The offence under Section 471 IPC is bailable. It has been mentioned that the applicant was not aware that the certificate being produced by her is forged and fabricated and that the applicant has no criminal history.

Counsel for the respondent, Ajay Mishra has vehemently objected to the present application contending that upon verification of the applicant’s TET certificate from the Bihar School Examination Board it was revealed that the applicant had not even cleared the exam but has still obtained a certificate through illegal means saying otherwise. The applicant cannot escape liability as to the act of producing the fake certificate also raises the presumption that she was also party to the process of creation of the same. Since the applicant obtained the job of a teacher being fully aware that a TET certificate was the basic requirement and that she had not cleared the examination, the most obvious presumption would be that the applicant is accountable for all the acts that were committed including the creation of the forged document.

In view of the above, the Court rejected the application for anticipatory bail finding the applicant’s arguments unconvincing.[Pallavi Priyadarshani v. State of Bihar, 2020 SCC OnLine Pat 1319, decided on 09-09-2020]

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: Lok Pal Singh, J., addressed an application that sought to quash criminal proceedings under Sections 420, 468, 471 of Penal Code, 1860 and Section 66(D) of Information Technology Act pending in Judicial Magistrate Court.

In the present matter, a complaint was lodged against the applicant that he committed forgery for purpose of cheating by using as genuine the forged and fraudulent document with the intention to cause damage to the Trust and hacked the information stored in the computer.

A charge-sheet was submitted by against the applicant in respect of selfsame offences. Further, Magistrate took cognizance and summoned the applicant to face the trial in respect to the mentioned offences.

Siddhartha Singh, applicant for the counsel submitted that the applicant was an old trustee and was appointed as the President of Kailashanand Mission Trust. He submitted that proceedings against the applicant are nothing but the outcome of the revengeful activity of the complainant and his associates. Complainant concealed the fact of the applicant being the President of the Trust and went on to lodging an FIR against him in the name of him being an “Unknown Hacker”.

According to the applicant’s counsel, the entire proceedings are nothing but an abuse of process of law and Court.

Senior Advocate, Rakesh Thapliyal on behalf of the complainant due to nefarious activities of the applicant, Swami Kailashanand was annoyed with him and by way of a resolution of trust, he cancelled all rights of the applicant and even removed him from the post of Manager of Trust.

He further submitted that various complaints were filed against the applicant for forging Trust’s letter pad, seals and receipt book and resolutions.

Applicant’s Counsel while relying on the Supreme Court case in, International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) v Nimra Cerglass Technics (P) Ltd., (2016) 1 SCC 348, argued that in order to bring a case for offence of cheating, it is not merely sufficient to prove that a false representation was made, but it is further necessary to prove that the representation was false to the knowledge of accused and was made in order to deceive complainant.

According to the ruling in Supreme Court case of Amit Kapoor v. Ramesh Chander, (2012) 9 SCC 460, in which certain principles in respect of exercise of jurisdiction under Section 482 CrPC are laid down, one of the principles which hold significance in the present matter is following:

“…Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not.”

Thus, in the present matter, High Court stated that in view of the above, a bare perusal of FIR as well as the charge sheet, it is apparent that foundation of criminal offence is laid against the applicant. Jurisdiction under Section 482 CrPC should not be exercised to stifle or scuttle the legitimate prosecution. Court stated that in the present case, this is not the stage to quash the charge sheet.

Hence, Since, prima facie case is made out against the applicant, the Magistrate has rightly taken cognizance and summoned the applicant to face the trial in respect of the offences complained of against him. [Vijay Kumar Gupta v. State of Uttarakhand, Criminal Misc. Application No. (C-482) No. 1087 of 2016, decided on 18-12-2019]

Kerala High Court
Case BriefsHigh Courts

Kerala High Court: R. Narayana Pisharadi, J.  allowed a petition filed under Section 482 of Code of Criminal Procedure, 1973 (hereinafter ‘CrPC’) by the accused who were charged with the offences of criminal breach of trust, forgery and criminal conspiracy under Sections 406, 466, 467, 471 and 120B of Penal Code, 1860 (hereinafter ‘IPC’).

In the instant case, the partition of a family property took place and a part of the common property was set aside for conducting certain divine and charitable acts. This property was to be managed by the eldest member of the family as a trustee. First petitioner, who was the member of the family managed the aforementioned property as a trustee for the other members of the family since 1970. In order to grab this property, the first petitioner entered into a conspiracy with the Village Officer and forged the public register substituted his name as the owner of the property. Thereafter, the first petitioner gifted the aforesaid property to the second petitioner, his daughter. Execution of this settlement deed was in violation of the provisions contained in the partition deed. Thus, petitioners had committed the offences punishable under Sections 406, 466, 467, 471 and 120B of IPC.

K. Gopalakrishna Kurup, learned counsel for the petitioners argued that it was doubtful that immovable property can be the subject matter of the offence of criminal breach of trust. He also contended that the affirmations in the complaint did not clarify the offences alleged against the petitioners.

The learned counsel for complainants, Alex M. Scaria contended that the court must take into consideration each of the allegations made in the complaint as accurate to determine if the ingredients of the offences alleged were made out or not.

Reliance was laid upon R.K. Dalmia v. Delhi Admn., AIR 1962 SC 1821 to observe that the term ‘Property’ under Section 405 of IPC was not restricted to ‘movable’ property. Therefore, the immovable property can also be the subject matter of commission of an offence of criminal breach of trust. The Court noted that there was an absence of any averment in the complaint regarding entrustment of property in question. With such absence, one of the basic ingredients of the offence of criminal breach of trust was not made out against the accused.

Moreover, the Court cited Ramesh Dutt v. State of Punjab, (2009) 15 SCC 429 to observe that the execution of the settlement deed by the first petitioner in favor of his daughter did not constitute the offence of forgery. Furthermore, the Court held that an attempt was made by the complainant to showcase a matter of civil nature, as a matter of criminal nature. In these circumstances, the first information report, which was based on the complaint, was liable to be quashed. Consequently, the petition was allowed.[Damodara Panicker v. State Of Kerala, 2019 SCC OnLine Ker 1789, decided on 06-06-2019]

Uttarakhand High Court
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Uttaranchal High Court: R. C. Khulbe, J. refused to grant a bail where the applicant was charged under Sections 420, 467, 468 and 471 of Penal Code, 1860.

The prosecution stated that a complaint was lodged against the applicant mentioning that he was posted as Deputy Manager in Kalawati Nyas Dharamshala, Dehradun. The applicant used to stay in Dharamshala of the complainant every month for a few days. Applicant disclosed to the colleague of the complainant that there were vacancies in Secretariat of Government of India, Delhi for the post of Junior Clerk. The son of the complainant was unemployed and applicant demanded Rs 3 lakhs for getting employed the son of the complainant and demanded Rs 50,000 as advance. Further, it was alleged by the prosecution that the said complainant gave the advance money on the very same day. In the same way, other relatives of the complainant believed the complainant and gave money to the applicant. The complainant was accused of the fraudulently received amount of Rs 20 lakhs from the complainant and his relatives on the pretext of providing job to the son of the complainant and other relatives of the complainant.

The applicant alleged that he was falsely implicated in the crime and hence bail should be granted to him.

The Court found that, FIR stated the commission of a heinous crime and hence no bail was granted to the applicant.[Shambhu Nath v. State of Uttarakhand, 2019 SCC OnLine Utt 541, decided on 27-06-2019]

Case BriefsHigh Courts

Delhi High Court: The Bench of Mukta Gupta, J. dismissed a petition filed against the judgment of Metropolitan Magistrate acquitting the respondent for the offence punishable under Sections 468 and 471 IPC.

Petitioner and respondent were real brothers involved in a dispute over the subject property. Respondent had filed a suit for permanent injunction in capacity of his mother’s attorney. He filed a copy of Power of Attorney purportedly executed by his mother by which he was authorised to file the suit and also a Sale Agreement to show ownership of his mother. However, this suit was dismissed. Subsequently, respondent filed another suit, this time claiming the subject property was owned by his father.

The petitioner submitted that by taking contradictory stands in two suits, respondent demonstrated that he filed forged and fabricated documents before the Court. Per Contra, respondent contended that there was nothing on record to show that the documents were forged.

The High Court held that the trial court was right in acquitting respondent of the charges of forgery for purpose of cheating. It was stated, “taking two contradictory stands in two separate suits regarding ownership of the same property does raise a presumption that the averments in one of the suits are false but, mere presumption is not sufficient for convicting the respondent for an offence of forgery.” It was observed that mere non-production of original documents or not producing the mother in Court would not lead to proof beyond reasonable doubt of the alleged forgery. In such view of the matter, the petition was dismissed. [Harish Chander Verma v. Mohinder Kumar Verma, 2019 SCC OnLine Del 6752, decided on 09-01-2019]