1 (Cr. WP 745/10 with Cr. WP 16/10) IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.745 OF 2010 Mr. Amarshi Manshi Nisar .... Petitioner. V/s Shri I.G. Korbu Inspector of Police M.R.A. Marg Police Station and others ..... Respondents. Mr. A.H.H. Ponda i/b Pravina Kanani & Vidya Dongre for the Petitioner. Mr. I.A. Bagaria for Respondent No. 6 – original complainant. Mrs. M.R. Tidake, APP for the State. ALONGWITH CRIMINAL WRIT PETITION NO.16 OF 2010 Mr. Hemant Mangilal Jain .... Petitioner. V/s Shri I.G. Korbu & Ors .... Respondents. Mr. A.H.H. Ponda with Pravina Kanani i/b Ms. Neeta Parulekar for the Petitioner. Mr. I.A. Bagaria for Respondent No. 5 – original complainant. Mrs. P.P. Bhosale, APP for the State. 2 (Cr. WP 745/10 with Cr. WP 16/10) CORAM: V. M. KANADE, J. DATE : 20th July, 2010 P.C.:- 1. Heard. 2. Both these Petitions can be disposed by a common judgment and order since the Petitioners are challenging the order passed by the learned Magistrate on a complaint filed by Vinod Faria who is a respondent No.6 in Criminal Writ Petition No.745 of 2010 and Respondent No.5 in Criminal Writ Petition No.16 of 2010. 3. By the said order the learned Magistrate was pleased to direct the police to investigate the offence under section 156(3) of the Criminal Procedure Code. 4. Brief facts are as under:- 5. Mr. Vinod Faria (hereinafter referred to as “complainant”) was one of the Directors of a Company called M/s Genelec Limited, a Company incorporated under the provisions of the Companies Act. Petitioner – Amarshi Nisar also was inducted as a Director of the said Company. The 3 (Cr. WP 745/10 with Cr. WP 16/10) said Company was registered as a sick unit with BIFR, New Delhi since 1992 and the Company had stopped its manufacturing activity and business since 1992. A provisional liquidator was also appointed by this Court and a direction was given to take charge of all assets of the company. There is a dispute between two factions of Directors of the Company and criminal complaints have been filed by one group against the another in which allegations and counter-allegations of fraud, misappropriation & criminal breach of trust have been levelled against each other. In the present case, the complainant has made various allegations against the Petitioners in the complaint. It is alleged by the complainant in his complaint that the accused had conspired together with an intention to cheat and defraud the Company and its shareholders and had ousted the complainant and had taken full control of the Company and had inducted two new persons as additional Directors. The registered office of the Company was transferred. It is further alleged that the bank account with the Syndicate Bank, Kalbadevi Branch was opened fraudulently without any Board Resolution, documents or other formalities. It is also alleged that the Company had valuable immovable property situated at Jogeshwari (East), Mumbai and the Petitioners had issued bogus allotment letters to various persons and collected large sums of money running into few crores. It is alleged that this amount was deposited in their personal account. It 4 (Cr. WP 745/10 with Cr. WP 16/10) is further alleged that these allotments letters were issued without Board Resolution and large amounts were systematically and in a preplanned manner siphoned away causing wrongful gain to the accused and wrongful loss to the Company. 6. Mr. Abad Ponda, the learned Counsel appearing on behalf of the Petitioners firstly submitted that the complainant had filed a private complaint before the learned Magistrate without complying with the procedure laid down under section 154. It is urged that the complainant was not entitled to invoke jurisdiction of the learned Magistrate under section 156(3) of the Criminal Procedure Code without exhausting legal remedies available to him under section 154(1) and section 154(3) and, therefore, the learned Magistrate could not have exercised his jurisdiction under section 156(3) of the Criminal Procedure Code in view of the law laid down by the Full Bench of this Court in its judgment in Mr. Panchabhai Popotbhai Butani vs. The State of Maharasthra & others dated 10th December 2009 in Criminal Writ Petition No.270 of 2009 along with connected Writ Petitions. 7. The complainant has filed his affidavit in reply in which he has stated that before filing the complaint in the court of the Additional Chief Metropolitan Magistrate, 38th Court at Ballard Estate, Mumbai being CC 56/SW/2009, the 5 (Cr. WP 745/10 with Cr. WP 16/10) complainant had filed a complaint dated 23/06/2008 with the Deputy Commissioner of Police and further on 17/11/2009 a complaint was filed against both the Petitioners with MRA Marg Police Station. It is further stated that a copy of the complaint dated 17/11/2009 was produced on his behalf before the learned trial magistrate by his advocate and, thereafter, the impugned order has been passed. A copy of the complaint filed with MRA Marg Police Station alongwith the acknowledgment from MRA Marg Police Station is annexed to the affidavit in reply. 8. It is submitted by Mr. Abad Ponda, the learned Counsel appearing on behalf of the Petitioner that no reference has been made by the learned Magistrate in his order dated 05/12/2009 in C.C. No.56/SW/2009 about advocate of the complainant showing the said complaint to him. It is submitted that roznama of the case also does not disclose that these documents were either shown or kept on the file of the learned Magistrate. It is urged that only after the Petitions were filed, the said police complaint had surfaced and, therefore, no reliance could be placed on the said documents. 9. Perusal of the said complaint which is annexed to the affidavit-in-reply filed by the complainant does disclose that there is a stamp affixed by the MRA Marg Police Station acknowledging receipt of the said complaint. It is signed by 6 (Cr. WP 745/10 with Cr. WP 16/10) a dispatch writer whose number is also mentioned as 12635. The date of receipt and time also is mentioned. This being the position, the submission made by the learned Counsel appearing on behalf of the Petitioners cannot be accepted and, therefore, the judgment of the Full Bench of this Court in the case of Mr. Panchabhai Popotbhai Butani (supra) will not apply to the facts of the present case. 10. It is then urged by the learned Counsel appearing on behalf of the Petitioners that the complainant himself had sold the property at Jogeshwari and that being the position there was no question of there being another sale of the said property. He invited my attention to the copy of the conveyance deed dated 13/12/2007 signed by the complainant before the Sub-Registrar of Assurances transferring the property owned by M/s Genelec Limited in favour of NV’s New Ground Technologies Pvt. Ltd. He also invited my attention to the copy of the irrevocable general power of attorney executed on the same day before the Sub- Registrar of Assurances. He also invited my attention to the copy of the Bank Statement of M/s Genelec Limited maintained with Syndicate Bank, Kalbadevi Branch and also to the copy of the memorandum of understanding between the complainant and the Petitioner in Writ Petition No.16 of 2010. It is, therefore, urged that the averments made in the complaint are palpably false. 7 (Cr. WP 745/10 with Cr. WP 16/10) 11. On the other hand Mr. Bagaria, the learned Counsel appearing on behalf of the complainant submitted that the Petitioner – Amarshi Manshi Nisar had issued allotment letters in respect of the property at Jogeshwari and had collected huge sums of money which was deposited in the bank account. It is submitted that it is not alleged in the complaint that the property at Jogeshwari was sold by the Petitioners herein. 12. I have perused the complaint. In the complaint, there is a specific averment that allotment letters had been issued by the accused and a copy of sample allotment letter was annexed to the complaint. The averments in paragraph 7 of the complaint clearly reveal that the allegation is not that the accused had sold the property at Jogeshwari. On the contrary, specific allegation is made that the accused had issued bogus allotment letters to various persons and the amounts were collected in cash, running into crores of rupees. Similarly, it is also alleged that the accused had also received cheque payments and these cheques were deposited in their personal account and or their Company’s bank account. It is further alleged that the said allotment letters were issued without any Board Resolution. The submissions made by the learned Counsel appearing on behalf of the Petitioners, therefore, cannot be accepted. 13. It is then urged by the learned Counsel for the 8 (Cr. WP 745/10 with Cr. WP 16/10) Petitioners that the complainant had suppressed material facts from the learned Magistrate viz the complaint which was filed against him and the fact that he was arrested and later on released on bail. It is submitted that, in the complaint, none of these facts were mentioned and, therefore, fraud was committed on the court and the court was, therefore misled in issuing the impugned order. It is submitted that, therefore, on this ground alone, the complaint is liable to be quashed in view of the judgments of the Supreme Court in S.P. Chengalvaraya Naidu (dead) by L.Rs v. Jagannath (dead) by L.Rs and others1 and in A.V. Papayya Sastry and others v. Govt. of A.P and others2 and other judgments of the Supreme Court on the same issue. Reliance is also placed on the judgment of the Supreme Court in Priya Vrat Singh and others v. Shyamji Sahai3 14. Mr. Bagaria the learned Counsel appearing on behalf of the complainant submitted that there is no question of suppression of material facts and the relevant material facts had been averred in the complaint and, as such, there was no occasion for mentioning the earlier proceedings instituted against the complainant. He submitted that in S.P. Chengalvaraya Naidu (supra) and in Priya Vrat Singh (supra), the Apex Court had made the said observations in view of the peculiar facts and circumstances of the said case 1 AIR 1994 SC 853 2 (2007) 4 SCC 221 3 (2008) 3 SCC (Cri) 463 9 (Cr. WP 745/10 with Cr. WP 16/10) and, therefore, observations made in the said judgments would not apply to the facts of the present case. 15. In my view, the submission made by the learned Counsel for the Petitioners that the complaint lodged by the complainant was liable to be dismissed on the ground of suppression of material facts cannot be accepted. By filing the complaint, the complainant seeks to initiate criminal proceedings against the accused. The criminal complaint, therefore, has to state the facts which constitute the criminal offence, a cognizance of which has to be taken by the court or by the police. If the court is satisfied, it can either direct the police to investigate into the offence or may issue process against the accused if prima facie case is made out against him. The ratio of the said judgments, therefore, in my view, would not apply to the facts of the present case. Number of judgments have been cited by the learned Counsel appearing on behalf of the Petitioners in support of his submission that this is a fit case where this Court can exercise its inherent power under section 482 of the Criminal Procedure Code for quashing the complaint. In my view, the said position is quite well settled. It has been consistently held that the inherent power of the court should be exercised with caution and circumspection and, ordinarily, the FIR or the private complaint which is filed in which averments are made which disclose the commission of cognizable offence, the High Court should not exercise its 10 (Cr. WP 745/10 with Cr. WP 16/10) inherent power to quash such FIR or complaint before the Magistrate. 16. In the present case, perusal of the complaint clearly discloses that there are sufficient averments made in the complaint which disclose commission of cognizable offence. A direction is given by the learned Magistrate to the police to investigate the offence under section 156(3). Therefore, at this stage, it is not possible to interfere with the said order directing the police to investigate into the matter as it would not be proper to stay the investigation of cognizable offence. Hence, there is no substance in the submissions made by the learned Counsel appearing on behalf of the Petitioners. No case is made out for interfering with the said impugned order passed by the learned Magistrate while exercising inherent power of this Court under section 482 of the Criminal Procedure Code or jurisdiction under Article 227 of the Constitution of India. It is always open for the Petitioners to file an application for discharge at an appropriate stage. Hence, both these Writ Petitions are dismissed. (V.M. KANADE, J.) 11 (Cr. WP 745/10 with Cr. WP 16/10)