WP.1672-10 - 1 - VPH IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION No. 1672 OF 2010 Arun Gandhi & Ors. ...Petitioners Vs. State of Maharashtra & Ors. ...Respondents *** Mr. Mahesh Jethmalani, Sr. counsel with Mr. Pranav Budheka i/b Gaurav Belosay & Mr. Prashant Pawar, for the Petitioners. Mrs. R. V. Newton, for Respondent No.1. Mr. S. V. Marwadi & Mr. K. N. Bhatia, for Respondent No.2. *** CORAM: V. M. KANADE J. DATE : AUGUST 13, 2010 P.C. 1. Rule. Heard, with consent of parties rule made returnable forth with. 2. By this petition, which is filed under Art. 227 of the Constitution of India and under S. 482 of the Code of Criminal Procedure, the petitioner is challenging the judgment and order passed WP.1672-10 - 2 - by the learned Magistrate, 51st Court Kurla, Mumbai in an application under S. 245(2) of the Code of Criminal Procedure. By the said order, the learned Magistrate was pleased to dismiss the application for discharge. 2. The brief facts are as under - . The petitioners are partners of a partnership firm known as M/s. N. M. Raiji & Co. (hereinafter referred to as the “NMR”). The petitioner Nos. 1 to 7 are Chartered Accountants and they are partners of a firm of Chartered Accounts of the said firm NMR. Respondent No.2 is also a partner of said NMR. 3. The partners of NMR and partners of another reputed firm of Chartered Accountants namely M/s. Dalal & Shah (hereinafter referred to as the ‘DS’) contemplating a merger of the two firms for the purpose of starting the Management and Consultancy practice and for that purpose forming a partnership firm by name M/s. Gandhi Dalal & Shah (hereinafter referred to as the ‘GDS’) on 2-12-2000. A partnership deed was prepared and it was executed by those who were available and others subsequently executed the said document. On 7-2-2001 respondent No.2 sent a letter to the petitioners, informing them about the WP.1672-10 - 3 - objection to the proposed arrangement with GDS. After the said letter was received, the petitioners along with Mr. Mahendra Thakkar, who is the elder brother of respondent No.2 discussed the matter and he assured the petitioner that the matter would be resolved and accordingly on 10th February, 2001 five persons signed the Deed. Mr. Mahendra Thakkar and Anish Amin signed the Deed. Respondent No.2 expressed his reservation about the arrangement of GDS by writing the letters dated 12th February, 2001 and 13th February, 2001. It is an admitted position that on 20th February, 2001 eight days after final execution of the said Deed, it was decided to cancel the said GDS by entering into a cancellation Deed. An Institute of Chartered Accounts of India was also informed about the cancellation of GDS. On 20th February, 2001 respondent No.2 conveyed his charter of demands in writing to the Senior Partners and demanded an increase of share in profits from 5% to 20%. 4. In June, 2001 respondent No.2 filed a complaint with Sion Police Station against six persons of GDS and one employee of NMR and six partners of NMR, except his elder brother. On 18th January, 2003 a private complaint was filed by respondent No.2 against the petitioners and also the partners of GDS for the offences punishable under S. 420, WP.1672-10 - 4 - 406, 465, 467, 380 read with 120(b), read with S. 34 of the I.P. Code and process was issued against all the petitioners. Against the said order of issuance of process, passed by the learned Magistrate, petitioners filed writ petition in this Court, being Cri. Writ Petition No. 542 of 2003 for quashing the order of “issuance of process”. This writ petition was heard and dismissed by this Court. The petitioners filed the Special Leave Petition in the Hon’ble Supreme Court, challenging the order passed by the High Court dated 22nd June, 2005. The partners of DS also filed a writ petition in the High Court, being Cri. Writ Petition No. 315 of 2004, which was also dismissed by this Court by an order dated 13th October, 2006. The Special Leave Petition filed by the petitioners, was however, dismissed on the ground of delay, caused in filing the said SLP. The SLP however, filed by accused Nos. 8 to 13 who were partners of DS, was allowed by an order dated 16th May, 2008 and the process was recalled. The petitioners thereafter filed an application before the learned Magistrate for seeking discharge. The said application, however, was dismissed and against the said order, the present petition has been filed by the petitioners. 5. A preliminary objection is raised by the learned counsel appearing on behalf of respondent No.2 about maintainability of the WP.1672-10 - 5 - second writ petition in this Court. It was submitted that first writ petition was dismissed by this Court on 22nd June, 2005 and therefore, the second writ petition was not maintainable. In my view, there is no substance in the said submission made by the learned counsel for respondent No.2. It is an admitted position that the first writ petition was filed, challenging the order of issuance of process of the learned Magistrate. The second writ petition, however, has been filed, challenging the order of rejection of the discharge application, filed by the petitioners in the trial Court. That being the position, it cannot be said that the second writ petition filed by the petitioners is not maintainable, since cause of action for filing both the petitions are different. 6. Mr. Mahesh Jethmalani, learned senior counsel appearing on behalf of the petitioners submitted that in view of the judgment of the Apex Court in the SLP filed by the original accused Nos. 8 to 13, the petitioners herein, ought to have been acquitted by the learned Magistrate. He invited my attention to the judgment of the Apex Court in the case of – V. R. Dalal & Ors. Vs. Yougendra Naranji Thakkar & Anr [in Criminal Appeal No. 925 of 2008 dated 6th May 2008], and pointed out that since the petitioner and the said accused Nos. 8 to 13 were made WP.1672-10 - 6 - accused on the same set of allegations, on account of dismissal of the complaint against accused Nos. 8 to 13, the present petitioners/original accused Nos. 1 to 7 also, therefore, are entitled to be acquitted. On the other hand, learned counsel appearing appearing on behalf of respondent No.2 submitted that before the Apex Court it was contended by the Company for the petitioners that the case of the petitioners and that said accused Nos. 8 to 13, was different. 7. I have heard both the counsel at length. I have perused judgment and order of the Apex Court and the complaint filed by respondent No.2. In the complaint, there is a specific allegation that all the accused had conspired together and had executed a partnership-deed for the purpose of causing wrongful loss to respondent No.2 and wrongful gain to the petitioners and other accused. The Apex Court in its judgment and order has observed that since the partnership-deed was not acted upon and the said Deed was cancelled within seven days and since the said firm has not started functioning, no wrongful gain was caused to the accused and no wrongful loss was caused to the complainant, and therefore, the Supreme Court held that order of issuance of process was illegal. In my view, in view of the clear finding given by the Apex Court, WP.1672-10 - 7 - the same will equally be applicable to the present petitioners, who were mentioned as the co-conspirators. Apart from that, the learned Single Judge of this Court [ Coram : S. C. Dharmadhikari, J.] was pleased to dismiss the petition, filed by the said accused Nos. 8 to 13, has clearly observed that bifurcation of pleas of the petitioners and other accused would not be permissible, since it was alleged that the petitioners were in conspiracy with other accused, and that is how benefits of the new firm were denied to the complainant. That being the position, the Apex Court having dismissed the complaint as against the other accused namely accused Nos. 8 to 13, the complaint qua the petitioners herein also would automatically fail. 8. It was then submitted by the learned counsel appearing on behalf of respondent No.2 that while exercising its inherent powers under S. 482 Cr.P.C., this Court would not go into the disputed questions of fact. He submitted that one of the allegation in the complaint was regarding the forgery made by the accused in respect of the partnership- deed. He submits that there was a clear allegation that the deed of partnership of the new firm was allegedly signed on 1st February, 2000 whereas the stamp paper was purchased on 2-12-2000 and the deed was actually signed on 10th and 12th February, 2001. The learned senior WP.1672-10 - 8 - counsel appearing for the petitioners invited my attention to the said partnership-deed and submitted that since it was a document, on which a reliance is placed by the complainant, this Court can look into the said document. He submitted that there was no fabrication or forgery of the said document. He submitted that initially the date of the partnership- deed was wrongly typed as 1st day of December, Two Thousand. The said typographical error was corrected and the figure “2nd ” was mentioned in ink and this alteration was signed by all the partners. He submitted that some of the partners have signed on 2nd December, 2000 and other partners have signed on 10th and 12th February, 2001. It was therefore, submitted that the questions of fabrication and/or forgery did not arise. In my opinion, there is substance in the submission made by the learned senior counsel appearing on behalf of the petitioners. Perusal of the said deed of partnership clearly reveals that a type-written date “1st” is scored and in its place figure “2nd” is mentioned. This alteration is signed by all the partners of the said firm. In these circumstances, therefore, in my view, the judgment of the Apex Court, the observations made therein would also squarely apply to the petitioners herein, and therefore, the learned Magistrate erred in rejecting the application for discharge, filed by the petitioners herein. Apart from that, it would be WP.1672-10 - 9 - relevant to take into consideration the finding recorded by the Apex Court in the case of – V. R. Dalal & Ors. Vs. Yougendra Naranji Thakkar & Anr [in Criminal Appeal No. 925 of 2008 dated 6th May 2008], in paragraph 9, 13, 14 and 15 which reads thus- “9. The short question which arises for consideration is as to whether the complaint petition given its face value and taken to be correct in its entirety constitutes an offence. M/s. Gandhi Dalal and Shah admittedly was constituted as a partnership firm on 1.12.2000. The said partnership firm was constituted on the premise that four partners of M/s. N. M. Raiji and Company were representing the firm Dalal and Shah. As indicated hereinbefore, an outsider was also included therein. Once the said partnership did not take off and the partnership deed was cancelled as it had never been acted upon, the question of any wrongful act on the part of the appellants did not arise. It is one thing to say that there exists a dispute amongst the partners inter se but it is another thing to say that by constituting another firm wherein two firms would be represented by their respective nominees together with an outsider would itself indicate an act of conspiracy. Once it has been accepted as of fact that the said partnership has been cancelled, the question of relying thereupon for any purpose would not arise. ...... WP.1672-10 - 10 - 13. We, however, in this case are satisfied that the appellants by no stretch of imagination can be said to have committed an offence particularly when admittedly the new firm has been cancelled from its very inception. If the new firm has not derived any income, the question of depriving the claimant therefrom does not arise. Whether the constitution of the said firm was illegal or mala fide, thus, need not be gone into as by reason thereof the respondent No.1 cannot be said to have suffered any loss. 14. We may notice that as regards commission of an offence in terms of Section 405 of Indian Penal Code, this Court in Indian Oil Corpn. v. NEPC India Ltd. and Others [(2006) 6 SCC 736] held that where the first ingredient of criminal breach of trust, that is, entrustment is missing, the same would not constitute a criminal breach of trust. As regards essential ingredients of the offence of cheating, it was stated: “(i) deception of a person either by making a false or misleading representation or by other action or commission (ii) fraudulent or dishonest inducement of that person to either delivery any proper or to consent to the retention thereof by any person or to intentionally induce that person to do or omit to do anything which he would not do or omit if he were not so deceived and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property.” WP.1672-10 - 11 - 15. The aforementioned ingredients of Section 420 of Indian Penal Code are also absent in the instant case [See also Suryalakshmi Cotton Mills Ltd. v. Rajvir Industries Ltd. and Ors. 2008(1) SCALE 331].” 9. In my view, the observations of the Apex Court would squarely apply to the petitioners herein and therefore, the writ petition is allowed in terms of prayer clause (a). Rule is made absolute in the aforesaid terms. Sd/- [ V. M. KANADE J.]