1 WP.1261-2011 acd IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO. 1261 OF 2011 1. Upanagar Shikshan Mandal ] 2. Shriram D. Mantri ] 3. Padmanabh B. Acharya ] 4. Neelkanth Jukar ] 5. Jayanti Shah ] 6. Gopal Kelkar ] 7. Satyanarayan Kabra ] ... Petitioners. Vs. 1. The State of Maharashtra ] 2. The Commissioner of Police, ] Mumbai ] 3. The Senior Inspector of Police ] 4. Mr. Himanshu Roy ] 5. Mr. Trusha Shivram Bhatt ] ...Respondents. ----- Mr. S.R. Borulkar i/b Mr. Manoj S. Bhambrey, for the Petitioners. Mr. A.S. Gadkari, APP for the State. Mr. Mahesh Jethmalani, Sr. Advocate a/w Mr. Pranav Badeka i/b M/s Wadia Ghandy & Co., for Respondent No.5. ---- 2 WP.1261-2011 Coram: B.H. Marlapalle & U.D. Salvi, JJ. June 14, 2011. Oral Judgment ( Per B.H. Marlapalle, J.): 1. Heard Shri Borulkar, learned counsel for the Petitioners. 2. Rule. 3. Shri Gadkari, the learned APP waives services for respondent nos. 1 to 3. Respondent No.4 is a formal party and Mr. Pravin Badeka i/b M/s Wadia Ghandy & Co waives service for respondent no.5. 4. Affidavit-in-reply has been filed by respondent no.5 who is the complainant in CR No.31 of 2011 registered with the EOW, Unit No.3, Crime Branch, Mumbai. Hence, the Petition is heard finally. 5 The Petitioners pray for quashing of CR No.31/2011 registered for the offence punishable under section 420 read section 34 of IPC. At the outset, Mr. Gadkari, submitted on instructions that the investigation is almost completed and the statements of two persons remain to be recorded for filing the final report. 3 WP.1261-2011 6 Petitioner No.1 is a Public Trust registered under the Bombay Public Trusts Act, 1950, and the petitioner nos.3,6 and 7 are the present members whereas the petitioner nos.2,4 and 5 are the former members of the Managing Committee of Petitioner No.1.. Respondent No.5 is the authorised signatory of Smt. Kamala Raheja Foundation [for short “the Foundation”]. The association of the Foundation with the Trust admittedly started as per the letter dated 3.3.1990 addressed by the Foundation to the Trust and the Foundation donated an amount of Rs.20,00,000/- for the construction of the vocational institute by the Trust and on the condition that the institute would be named as “Smt. Kamala Raheja Vidyanidhi Vocational Institute. It was agreed that at all times one Vice-President would be nominated by the Foundation. Subsequently, according to the Foundation, there were representations between the parties by addressing letters viz (a) letter dated. 3.3.1990 by the Foundation to the Trust; (b) letter dated 23.8.1991 by the Foundation to the Trust; (c) letter dated 1.10.1991 by the Trust to the Foundation; (d) letter dated.3.10.1991 by the Foundation to the Trust; (e) general undertaking dated 1.6.1992 given by the Trust to the AICTE; (f) Specific undertaking dated 1.6.1992 given by the Trust to the AICTE; (g) approval of AICTE dated 1.7.1992; (h) 4 WP.1261-2011 Guidelines issued by the AICTE at the relevant time; and (i) the agreement dated 4.10.1997 between the Foundation and the Trust. 7. The clause (d) of the agreement dated 4th October, 1997 reads as under: “(d) Over the years, sums totaling Rs.1,20,00,000/- (Rupees One Crore Twenty Lakhs) have been made available to the Mandal by/through the Foundation and the same has substantially helped the Mandal in raising the Vocational Institute and the Vidyanidhi Institute for Architecture and both have been successfully functioning and the name of Smt. Kamla Raheja Foundation has been associated with both these Institutes and 2 (two) nominees of the Foundation have been taken on the Managing Committee of the Mandal (i.e. Mr. Gopal Narang and Mr. Sharad Shah) and one nominee has been appointed as a Vice President of the Mandal (i.e. Mr. Rajan Raheja) and 2(two) nominees of the Foundation have been taken on the Governing Council of SMT. KAMLA RAHEJA VIDYANIDHI INSTITUTE OF ARCHITECTURE AND ENVIRONMENTAL STUDIES.” 5 WP.1261-2011 8. Thus, the Mandal donated an amount of Rs.1,20,00,000/- for the Vocational Institute and the Vidyanidhi Institute for Architecture. In turn two nominees of the Foundation have been taken on the Managing Committee of the Mandal, one nominee of the Foundation has been appointed as Vice President of the Trust and two nominees of the Foundation have been taken on the Governing Council for Smt. Kamala Raheja Vidyanidhi Institute of Architecture and Environmental Studies (KRVIA). The donations of the Foundation continued even after the agreement was signed and the total donation amount till the dispute arose between the parties is about Rs.2,20,00,000/- in addition to Rs.83,00,000/- by way of scholarships. However, as per the letter dated 17.5.2010 addressed by the Trust, some disputes arose mainly on account of the rights and obligations of both the parties flowing from the agreement dated 4th October, 1997 and on the basis of the letters exchanged between the parties. 9. SC Suit No.878 of 2010 came to be filed in the City Civil Court of Gr. Mumbai by Shri Gopal Narang who is one of the nominees of the Foundation on the Managing Committee of the Trust. When the Notice of Motion filed separately in the said suit came up for ad-interim relief 6 WP.1261-2011 before the City Civil Court, a written undertaking was submitted by the Trust, not to transact any business in furtherance of the draft Minutes dated 21.2.2010 and not to give effect in any manner to the Resolution Nos.1 to 4 passed in the said meeting. On account of this undertaking the prayer for ad-interim relief was declined by the City Civil Court on 16.4.2010. 10. It is also clear from the records that the Foundation along with other Plaintiffs filed a suit being Suit No.1785 of 2010 on the Original Side of this Court, and Notice of Motion No.1784 of 2010 was taken out for interim relief regarding nomination to the post of the Chairman of the Governing Council of KRVIA.S. However, it appears that the court declined to issue an injunction order restraining the defendants from nominating the Chairman of the Governing Council of KRVIA, except with the consent of plaintiff no.1 and at the same time observed that such an appointment, if made, would be subject to the further orders which would be passed in the Notice of Motion. It appears that on 29.1.2011, respondent no.5 as the authorised signatory of the Foundation submitted a complaint to the Joint Commissioner of Police (Crime) for the offences punishable under Section 420 read with Section 120-B and Section 406 read with Section 120-B of IPC. The Juhu Police Station registered CR No. 7 WP.1261-2011 147/2011 on the basis of the letter dated 29.1.2011. The said crime was then transferred to the EOW and registered as CR No.31/2011 and the statement of respondent no.5 came to be recorded on 12.4.2011 in the said CR. 11. Mr. Borulkar submitted before us that having regard to the agreement signed between the parties on 4th October, 1997, and the earlier correspondence, the disputes, if any, between the Trust and the Foundation are clearly of civil in nature and the Foundation may have recourse to the remedy available under the Bombay Public Trusts Act, 1950 and certainly there is no material, even prima facie, to register the offence punishable under Section 420 read with Section 34 of IPC. He has relied upon the decision in the case of Mohammed Ibrahim & Ors. Vs. State of Bihar & Anr. [(2009) 3 Supreme Court Cases (Cri) 929. 12. On the other hand, Shri Jethmalani, the learned Senior Counsel for respondent no.5 referred to the correspondence between the parties, the agreement dated 4th October, 1997 and the written statement filed in Suit No.878 of 2010 before the City Civil Court of Gr. Mumbai and Suit No.1785 of 2010 on the Original Side of this Court. He has also 8 WP.1261-2011 placed before us a copy of the draft Minutes of the Managing Committee Meeting held on 21.2.2010. Our attention has been invited also to the letters issued by the AICTE (All India Council For Technical Education) while granting the permission to start the college of Architecture, and more particularly condition that the plot of land in possession of the Trust admeasuring 3871 sq. mtrs. would be reserved exclusively for the College of Architecture (KRVIA). 13. Mr. Gadkari, the learned APP submitted that the letter dated 29.1.2011 and the statement of respondent no.5 recorded on 12.4.2011 made out a case for the offence of cheating calling for investigation and therefore, the CR was registered and investigation has been undertaken. 14. We have given our anxious considerations to the arguments advanced by the respective parties. The relevant portion of the statement recorded by the Inspector of Police, EOW on 12.4.2011 is reproduced herein below: “Mr. Padmanabh B. Acharya, Mr. Sanjeev Mantri, Mr. Neelkanth Juke, and Mr. Jayanti Shah, were Members of the Managing Committee in the year 1990. Mr. Padmanabh B. Acharya, Mr. Sanjeev Mantri, Mr. S.N. Kabra, Dr. Mrs. 9 WP.1261-2011 Kirtida Mehta, Mr. Gopal Kelkar and Mr. Neelkanth Juker were present in the Annual General Body meeting held on 17th December,1995. Mr. Padmanabh B. Acharya, Mr. Shriram Mantri, Mr. S. N. Kabra, Dr. Mrs. Krtida Mehata, and Mr. Neelkanth Juker were Members of the Managing Committee of the Mandal during the year 1997 when the Agreement dated 4th October, 1997 was executed. Therefore, they were well aware of the decisions taken in the Managing Committee meeting and the General Body Meeting of the Mandal. They knew that if they had not agreed to this condition the Foundation would not have made any donations. Hence, they dishonestly concealed this material fact from us and made false representations which induced us to part with substantial monies and thereby caused loss of more than Rs.2.30 Crores to us and the gain of the same for the Mandal. I am submitting the copies of the letters from Mandal, copy of Agreement dated 4th October, 1997, copy of Norms dated 12th April, 2010 for admission of new members in the Mandal and the statement showing the funds transferred to the Mandal and the Architectural College. In view of the above the aforementioned persons have jointly conspired and made us believe all along since 1991 that our nominees are the members of the Managing Committee of the Upanagar Shikshan Mandal and the 10 WP.1261-2011 consitution of the Mandal was amended as also the General Body had passed the resolution on 17th December, 1995 and induced us to give substantial donations as mentioned above and thereby they cheated our foundation. Therefore it is requested that, the legal action against the above mentioned persons may please be initiated.” 15. We have considered the case of the Petitioners on the crux of the said observations. We have also perused the affidavit-in-reply filed by respondent no.5 and it appears that the dispute between the parties are mainly about the rights of the Foundation arising from the agreement dated 4th October, 1997 and the draft Minutes of the Managing Committee Meeting held on 21.2.2010. The Foundation apprehends that there is a deliberate move by the Trust to enroll more members and sideline the Foundation. Shri Jethmalani also submitted that the prime concern of the Foundation is the management of the institutes for which substantial donations have been given by the Foundation and it is alleged that if the Trust is allowed to have its way, the quality of education in these institutes will be deteriorated. 11 WP.1261-2011 16. In its complaint dated 29.1.2011 addressed to the Joint Commissioner of Police, the Foundation has alleged against the Trust and the Trustees as under: “The Accused have therefore dishonestly used the monies entrusted by the Complainant in violation of the directions contained in the Legal Contract/Agreement dated 4th October, 1997. The terms on which the trust was to discharged by the Accused as per the Legal Contract/Agreement dated 4th October 1997 had been subsequently confirmed by several correspondence and conduct of the accused. The Accused have therefore committee an offence under section 406 r/w 120-B of IPC or under section 406 r/w 34/114 of IPC. The Accused have committed serious offence against a Public Charitable Trust. Further, the amounts involved are huge and public interest is at stake and the modus operandi of commission of the offences by the Accused is complex and the role played by each Accused is required to be investigated and hence the Economic Offences Wing would be the only appropriate Agency to unearth and investigate the fraud committed by the Accused.” 12 WP.1261-2011 17. We are satisfied that the disputes / differences between the parties are related to the management of the two institutes financed by the Foundation and the Trust. Civil Suit being SC No.878 of 2010 is pending before the City Civil Court of Gr. Mumbai and Suit No.1785 of 2010 is pending on the Original Side of this Court. At the same time as per Section 41D of the Bombay Public Trusts Act the Charity Commissioner may suspend, remove or dismiss any trustee if he misappropriates or deals improperly with the properties of the trust and as per Section 41E of the said Act, the Charity Commissioner is empowered to act for the protection of the trust. We, therefore, do not find any case for the Police to intervene at this stage on registration of the crime i.e. CR No.147 of 2011 which was subsequently registered as CR No.31 of 2011 against the petitioners and to undertake investigations. The disputes between the parties, in some or the other form, are pending in two different suits and in addition the remedy under the Bombay Public Trusts Act, 1950 is also available so as to ensure that the management of the Trust continues as per the bye-laws. On the face of the allegations made in the letter dated 29/1/2011 and the statement recorded on 12/4/2011, there is no case of an offence of cheating made out and, therefore, no crime could have been registered against the petitioners. 13 WP.1261-2011 Even prima facie, there is no case of the offence of cheating. The offence of cheating has been defined under Section 415 of IPC. In the instant case complaint of Respondent no.5 does not make out a case of deceiving fraudulently or dishonestly so as to induce the foundation to donate or any omission to do anything caused intentionally and hence there is no material to register the crime for offence punishable under Section 420 read with Section 34 of IPC. We have also noted that Respondent no.4 did not approach the Juhu Police Station with a complaint at the first instance and instead the C.R. has been registered on the basis of letter dated 29/1/2011 directly addressed to the Joint Commissioner of Police. Section 154 of Cr.P.C. does not envisage such a course. For all these reasons, we are satisfied that the petitioners have made out a case to quash the C.R. Registered against them with the Economic Offences Wing and the investigation undertaken against them is required to be brought to an end. 18. Hence, the Petition is allowed and Rule is made absolute in terms of prayer clauses (a) and (b). 14 WP.1261-2011 19. We make it clear that this order will not have any bearing on the rights and contentions of the parties as being agitated in the aforesaid two suits pending before the City Civil Court of Gr. Mumbai and on the Original Side of this Court. (U.D. SALVI, J.) (B. H. MARLAPALLE, J.)