HON’BLE Dr. JUSTICE K.G.SHANKAR
Criminal Petition No.6889 of 2014
Date: 20-10-2014 Between M/s. Asian Genco Pvt. Ltd., A Company incorporated under the laws of Singapore and having its office at 9 Raffles Place, 58th Floor, Republic Plaza, Singapore-048619, Rep. by Mr. Abhilash Gupta, President … Petitioner/ Accused No.1 and The State of Telangana, Rep. by Police Sanjeeva Reddy Nagar, Through Public Prosecutor, High Court at Hyderabad … Respondent M/s. Cobalt Power Pvt. Ltd., Having its Registered Office At M.NO.7-1-22/14, Pingle Venkat, Rambagh, Begumpet, Hyderabad, Rep. by its Director, Sri M.Prabhu … Respondent/ De facto Complainant HON’BLE Dr. JUSTICE K.G.SHANKAR
Criminal Petition No.6889 of 2014
Order:
The petitioner seeks for quashment of First Information Report (FIR) in Crime No.48 of 2014 on the file of Sanjeeva Reddy Nagar Police Station, Hyderabad.
2. The 2nd respondent lodged a complaint under Section 200 Cr.P.C before the learned III Additional Chief Metropolitan Magistrate, Hyderabad, alleging that as many as 8 persons committed offences under Sections 420 and 120-B, IPC. The learned III Additional Chief Metropolitan Magistrate, Hyderabad, referred the same to Police under Section 156(3) Cr.P.C. On receipt of the complaint from the Court, the Station House Officer, Sanjeeva Reddy Nagar Police Station registered the same as FIR in Crime No.48 of 2014 on 17-01-2014 for the offences under Sections 420 and 120-B, IPC. It is this complaint which is sought to be quashed by the petitioner.
3. The petitioner-accused No.1 is M/s. Asian Genco Private Limited, Singapore. The 2nd respondent-de facto complainant is M/s. Cobalt Power Private Limited, Hyderabad.
4. The 2nd respondent is engaged in the execution of Infrastructure Power Projects in India. Navayuga Engineering Company Limited, Hyderabad (NEC, for short) allegedly was approached by the petitioner and claimed that it has 51% stake in M/s. East Coast Energy Private Limited, Hyderabad (ECEPL, for short).
The petitioner also allegedly represented to the 2nd respondent that the petitioner was developing a 1320 MW Thermal Power Project at Kakarapalli, Srikakulam District, Andhra Pradesh and that when they approached Power Finance Corporation (PFC, for short) for funding the project, PFC imposed a condition that there should be a proven track record and balance sheet support to consider the case of ECEPL to be outside the category of 100% upfront equity. The petitioner allegedly approached the 2nd respondent for balance sheet support with proven track record with a view to avoid investing Rs.838 Crores in the form of equity contribution at the first instance.
5. The 2nd respondent claimed that had the petitioner represented to PFC that it has 51% stake only in ECEPL, PFC would have insisted that the petitioner should invest the entire 51% of the equity share capital to a tune of Rs.838 Crores. The 2nd respondent claimed that the petitioner had invested only Rs.270 Crores by the time it approached PFC. On the representation of the petitioner, the 2nd respondent invested Rs.200 Crores on the assurance of the complainant that the investment would be funded by a back to back investment by the petitioner. It is alleged by the 2nd respondent that between August, 2000 and 2012, there were various deliberations between the petitioner and the 2nd respondent and that the issue could not be resolved despite the deliberations. The 2nd respondent claimed that the petitioner and the 2nd respondent met at Dubai on 28-4-2012 to resolve the controversy and that although the petitioner made a promise to resolve the issue within a week, the petitioner never attempted to pay back the money to the 2nd respondent and also had committed fraud upon the 2nd respondent inducing the 2nd respondent to sign Amended Shareholders Agreement on 07-9-2009.
6. The primary contention of Sri Sidhardh Luthra, learned Senior Counsel for the petitioner, is that the dispute is purely a civil dispute and does not attract penal consequences. He submitted that assuming that the whole of the contents of the complaint are true, no case is made out against the petitioner.
It is contended by the learned Senior Counsel for the petitioner that apart from using standard phrases such as fraudulent, misrepresentation and dishonest intention, the whole of the complaint did not make out a case for investigation by Police.
7. De hors the particulars and details, the case of the 2nd respondent is that the petitioner induced the 2nd respondent to invest Rs.200 Crores in the petitioner company promising to repay the same and has failed to do so. It is the further contention of the 2nd respondent that the inducement and various misrepresentations by the petitioner about the state of affairs and about the details of the transactions constitute the offences under Section 420 IPC as well as under Section 120-B, IPC. Section 120-B, IPC has no relevance so far as the petitioner is concerned. The other accused in accused 2 to 8 are said to be in conspiracy with the petitioner. Therefore, I do not propose to consider the parameters of the offence under Section 120-B, IPC so far as the present petition is concerned.
8. So far as the offence under Section 420 IPC is concerned, it is the case of the 2nd respondent that the petitioner made several false representations with an intention to dupe the 2nd respondent right from the beginning and that such false representations coupled with the payment of Rs.200 Crores by the 2nd respondent would constitute the offence under Section 420 IPC.
9. As already noticed, the learned Senior Counsel for the petitioner primarily raised a two-fold contention. First of his contentions is that the learned III Additional Chief Metropolitan Magistrate, Hyderabad, has not referred the complaint under Section 156(3) Cr.P.C to Police by applying his mind and that the consequent FIR therefore is bad. He also raised a contention that the dispute is a civil and contractual dispute without any involvement of criminality in the controversy.
10. The learned Senior Counsel for the petitioner submitted that the learned III Additional Chief Metropolitan Magistrate, Hyderabad, who referred the case under Section 156(3) Cr.P.C., did not apply his mind while making over the case to Police under Section 156(3) Cr.P.C. The learned Senior Counsel referred to Section 154(3) Cr.P.C. Section 154 Cr.P.C reads as under:
“154. (1) Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf.
(2) A copy of the information as recorded under sub-section (1) shall be given forthwith, free of cost, to the informant.
(3) Any person aggrieved by a refusal on the part of an officer in charge of a police station to record the information referred to in sub-section (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this Code, and such officer shall have all the powers of an officer in charge of the police station in relation to that offence.”
Section 154(3) Cr.P.C envisages that a complainant may submit information to the Superintendent of Police in the event the Station House Officer of a Police Station refused to record the information furnished by the complainant regarding the commission of a cognizable offence. On the other hand, Section 156(3) Cr.P.C empowers a Magistrate to refer a complaint to Police for investigation. It is convenient to extract Section 156 Cr.P.C., which is as under:
“156. (1) Any officer in charge of a police station may, without the order of a Magistrate investigate any cognizable case which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII.
(2) No proceeding of a police-officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate.
(3) Any Magistrate empowered under section 190 may order such an investigation as abovementioned.”
11. The learned Senior Counsel for the petitioner submitted that unless a Magistrate duly applied his mind, a reference under Section 156(3) Cr.P.C is not proper.
One of the early cases by the Supreme Court in this
[1]
regard is Gopal Das Sindhi v. State of Assam .
It was observed by the Supreme Court:
“… … … If the Magistrate had not taken cognizance of the offence on the complaint filed before him, he was not obliged to examine the complainant on oath and the witnesses present at the time of the filing of the complaint. We cannot read the provisions of Section 190 to mean that once a complaint is filed, a Magistrate is bound to take cognizance if the facts stated in the complaint disclose the commission of any offence. We are unable to construe the word ‘may’ in Section 190 to mean ‘must’. The reason is obvious.
A complaint disclosing cognizable offences may well justify a Magistrate in sending the complaint, under Section 156(3) to the police for investigation. There is no reason why the time of the Magistrate should be wasted when primarily the duty to investigate in cases involving cognizable offences is with the police. On the other hand, there may be occasions when the Magistrate may exercise his discretion and take cognizance of a cognizable offence. If he does so then he would have to proceed in the manner provided by Chapter XVI of the Code ”
Be it noted that the reference to the Cr.P.C was with reference to the old Code in this case.
[2]
12. In SAKIRI VASU v. STATE OF U.P. , it was stated:
“13 We would further clarify that even if an FIR has been registered and even if the police has made the investigation, or is actually making the investigation, which the aggrieved person feels is not proper, such a person can approach the Magistrate under Section 156(3), Cr.P.C., and if the Magistrate is satisfied he can order a proper investigation and take other suitable steps and pass such order as he thinks necessary for ensuring a proper investigation. All these powers a Magistrate enjoys under Section 156(3), Cr.P.C.”
13. The question of the investigation under Section 154(3) Cr.P.C and under Section 156(3) Cr.P.C were examined by this very Court in Jadhav Seshu Rao Patel v. Station House Officer, Police Station Bhainsa,
[3]
Adilabad District . In that case, the petitioners prayed to entrust the investigation to a different Investigating Agency vis-à-vis the Investigating Agency which conducted the investigation, on the ground that albeit the FIR and the complaint were registered, the investigation was conducted in a wholly inappropriate and improper manner without proper care by the Investigating Agency. The Court held that if the complainant is dissatisfied with the progress of the investigation, the complainant may approach the Superintendent of Police under Section 154(3) Cr.P.C for appropriate direction regarding the registration of the crime and regarding the investigation.
14. The Delhi High Court had an occasion to issue guidelines to its Subordinate Courts regarding the application of Section 156(3) Cr.P.C in Subhkaran
[4]
Luharuka v. State (Govt. of NCT of Delhi) . It would be appropriate to quote the directions in the language of the Delhi High Court itself.
“51A. For the guidance of subordinate courts, the procedure to be followed while dealing with an application under Section 156(3) of the Code is summarized as under:-
(i) Whenever a Magistrate is called upon to pass orders under Section 156(3) of the Code, at the outset, the Magistrate should ensure that before coming to the Court, the Complainant did approach the police officer in charge of the Police Station having jurisdiction over the area for recording the information available with him disclosing the commission of a cognizable offence by the person/persons arrayed as an accused in the Complaint. It should also be examined what action was taken by the SHO, or even by the senior officer of the Police, when approached by the Complainant under Section 156(3) of the Code.
(ii) The Magistrate should then form his own opinion whether the facts mentioned in the complaint disclose commission of cognizable offences by the accused persons arrayed in the Complaint which can be tried in his jurisdiction. He should also satisfy himself about the need for investigation by the Police in the matter. A preliminary enquiry as this is permissible even by an SHO and if no such enquiry has been done by the SHO, then it is all the more necessary for the Magistrate to consider all these factors. For that purpose, the Magistrate must apply his mind and such application of mind should be reflected in the Order passed by him.
Upon a preliminary satisfaction, unless there are exceptional circumstances to be recorded in writing, a status report by the police is to be called for before passing final orders.
(iii) The Magistrate, when approached with a Complaint under Section 200 of the Code, should invariably proceed under Chapter XV by taking cognizance of the Complaint, recording evidence and then deciding the question of issuance of process to the accused. In that case also, the Magistrate is fully entitled to postpone the process if it is felt that there is a necessity to call for a police report under Section 202 of the Code.
(iv) Of course, it is open to the Magistrate to proceed under Chapter XII of the Code when an application under Section 156(3) of the Code is also filed along with a Complaint under Section 200 of the Code if the Magistrate decided not to take cognizance of the Complaint. However, in that case, the Magistrate, before passing any order to proceed under Chapter XII, should not only satisfy himself about the pre-requisites as aforesaid, but, additionally, he should also be satisfied that it is necessary to direct Police investigation in the matter for collection of evidence which is neither in the possession of the complainant nor can be produced by the witnesses on being summoned by the Court at the instance of complainant, and the matter is such which calls for investigation by a State agency. The Magistrate must pass an order giving cogent reasons as to why he intends to proceed under Chapter XII instead of Chapter XV of the Code.”
[5]
15. In Anju Chaudhary v. State of U.P.
question for consideration was the registration of the 2nd FIR regarding the same incident.
, the Swatanter Kumar, J. held that it is not permissible for the registration of the 2nd FIR in respect of the same incident by the Investigating Agency and that the Investigating Agency has a right to investigate in accordance of the provisions of the Code only.
16. In Criminal Petition No.12527 of 2013 (S.Purnachandra Rao v. State of A.P.), C.Praveen Kumar, J. of the Andhra Pradesh High Court examined various aspects of this issue and noticed:
“From the above, it is clear that the Magistrate while either referring the case to the police under Section 156(3) Cr.P.C., or while ordering investigation into a non-cognizable offence under Section 155(2) Cr.P.C., has to show application of mind to the facts of the case. It may not be necessary for the Magistrate to pass a reasoned order. The order under reference or order directing registration of a non-cognizable offence should contain some information showing application of mind to the case on hand.”
17. Thus, it would appear that a conjoint reading of Section 154(3) Cr.P.C and Section 156(3) Cr.P.C shows that the Magistrate referring the case under Section 156(3) Cr.P.C should indeed apply his mind albeit it is not necessary for the Magistrate to pass a reasoned order. I am afraid that the petitioner has failed t o prima facie show that the learned III Additional Chief Metropolitan Magistrate, Hyderabad has not applied his mind while referring the case to Police under Section 156(3) Cr.P.C. Indeed, the learned Magistrate has simply referred the matter to Police without stating anything regarding the application of his mind.
As noticed in S.Purnachandra Rao v. State of A.P.
(supra), it is not necessary for the Magistrate to state a reasoned or a detailed order showing the application of his mind. The onus would be on the accused to show that the learned Magistrate has not applied his mind while forwarding a complaint to Police under Section 156(3) Cr.P.C. Further, the learned Public Prosecutor has pointed out that the investigation is at the concluding stages. The learned Public Prosecutor pointed out that as many as 185 documents were collected and 12 witnesses were already examined by the Investigating Agency and contended that as the investigation is at the state of culmination, it would not be appropriate to stifle the investigation.
18. Where it is not shown that the learned Magistrate has not applied his mind while referring the matter under Section 156(3) Cr.P.C and where the investigation is more or less in the concluding stages, it may not be appropriate to scuttle the investigation.
19. The learned Senior Counsel for the petitioner placed reliance upon S.N. SHARMA v. BIPEN KUMAR
[6]
TIWARI . The Supreme Court noticed that the old Code did not provide any power to stop the investigation. However, Section 482 Cr.P.C is quite clear. Where the Court considered that the investigation is unjust and improper, Court is entitled to stop the progress of the investigation by invoking its inherent powers.
20. In MAHESH CHAUDHARY v. STATE OF
[7]
RAJASTHAN , it was noticed:
“The Court shall ordinary exercise the said jurisdiction (under Section 482 Cr.P.C), inter alia, in the event the allegations contained in the FIR or the complaint petition even if on face value are taken to the correct in their entirety, does not disclose commission of an offence.”
21. The learned Senior Counsel for the petitioner submitted that no offence under Section 420 IPC was made out against the petitioner, so much so, the continuation of the investigation is abuse of the process of law.
22. In ALL CARGO MOVERS (INDIA) (P) LTD. v.
[8]
DHANESH BADARMAL JAIN , the ingredients of the offences of criminal breach of trust and cheating were not averred in the criminal complaint. The complaint was lodged one year after the institution of a civil suit which was for negligence and for breach of contractual obligations. The Court held that mere breach of contract would not constitute criminal breach of trust or cheating.
23. In the present case, as already noticed, the ingredients of cheating are prima facie made out. It is alleged that the petitioner induced the 2nd respondent to part with Rs.200 Crores on the basis of a false promise made by the petitioner. It is further alleged that the 2nd respondent accordingly made payment of Rs.200 Crores and is not able to recover the same. It is also claimed that the signature of the representative of the 2nd respondent was obtained on documents with false representation. All these allegations constitute offences triable under Criminal Law. Be it noted that whether the 2nd respondent would ultimately be able to prove these offences against the petitioner or not is not the concern in this petition.
2 4 . Inter alia, the learned Senior Counsel for the petitioner submitted that the offences are civil disputes. There is no doubt about the civil nature of the controversy between the petitioner and the 2nd respondent. I however have no doubt that an incident can both lead to a civil litigation and a criminal activity. Again, I have no hesitation to hold that a party is entitled to proceed against the aggressor both under the Civil Law and under the Criminal Law at one and the same time, as the object for the two legal activities is quite distinct. The victim seeks punishment to the accused under the Criminal Law. He seeks compensation or undoing of the act already done by the aggressor through the Civil litigation. In that view of the matter, I am not able to agree with the contention of the learned Senior Counsel for the petitioner that as the dispute is a civil dispute, the very complaint is not maintainable.
2 5 . Inter alia, the learned Public Prosecutor submitted that an order was passed by this Court permitting the Police to investigate into the case and any order quashing the FIR would go in the way of the orders of the Court. When the 2nd respondent filed W.P.No.17162 of 2014, the Court held that the Investigating Officer was proceeding fairly in the matter. As rightly noticed by the learned Senior Counsel for the petitioner, there was no order from the Court directing the State to proceed with the investigation of Crime No.48 of 2014. However, in the present case, I am fairly satisfied that a prima facie case is made out against the petitioner, so much so, it would not be appropriate to obstruct the investigation. Added to it, the investigation more or less is at the concluding and culminating stages. As a detailed examination of the case at this stage is not permissible, in view of the existence of the prima facie case, I consider it appropriate to permit Police to proceed with the investigation. I therefore see no merits in this petition. This criminal petition accordingly is dismissed. The miscellaneous petitions, if any, pending in this petition shall stand closed.
Dr. K.G.SHANKAR, J.
20th October, 2014. Ak HON’BLE Dr. JUSTICE K.G.SHANKAR
Criminal Petition No.6889 of 2014
20th October, 2014. (Ak)
[1] AIR 1961 SC 986
[2] AIR 2008 SC 907
[3] 2012(2) ALT 495
[4] 2010(6) ILR Delhi 595
[5] 2013 CRI. L. J. 776
[6] (1970) 1 SCC 653
[7] (2009) 4 SCC 443
[8] (2007) 14 SCC 776