IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Civil Writ Petition No.294 of 2007. Judgment Reserved on: 11.09.2009. Date of decision:06.10.2009 Hem Chand Sharma & Another ….Petitioners Versus State of H.P. & Others. ….Respondents Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 Yes. For the Petitioners: Mr.Ajay Mohan Goel, Advocate. For the Respondents: Mr.R.K. Bawa, Advocate General with Ms.Ruma Kaushik, Additional Advocate General. Dev Darshan Sud,J. The petitioner has prayed herein for quashing First Information Report (Annexure P-3) registered under Sections 406, 415, 420, 467, 468 read with Section 120B of the Indian Penal Code instituted by respondent No.4 with the Police Station Connaught Place, New Delhi. In brief the allegations made are that the petitioners herein, who are father and son, entered into an agreement to sell for land with respondent No.4 and they came to know that this respondent has lodged an FIR against them with the Police Station, Connaught Place, New Delhi. The complaint filed 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes. 2 narrated that respondent No.4 has its office at 1004/1005, New Delhi House, 27, Barakhamba Road, New Delhi, was cheated by the two petitioners herein. The complainant was in need of some land for setting up a Textile Factory in Himachal Pradesh and the accused (petitioners) met the Director of the complainant and promised that they would transfer 61 Bighas 5 Biswas of land in Himachal Pradesh. They held themselves out to be influential persons who could get all the necessary permissions from the State Government for transfer of land more especially permission under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act which is a sine qua non for a valid transfer. An agreement dated 28th September, 2006 was entered into between the petitioners and respondent No.4 when the total sale consideration agreed to was Rs.7.35 crores, out of which an amount of Rs.2,20,50,000/- was paid to the petitioner herein by cheque No.297051, dated 28.09.2006 drawn on the HDFC Bank, New Delhi. The receipt evidencing the payment (Annexure P-2) has been filed alongwith the complaint. The complaint then proceeds to state that a supplementary agreement was entered into between them wherein all the rights of respondent No.4 were assigned to one Grafax Cotton Private Limited. The date and place where this agreement has been entered have not been mentioned. 3 The petitioners approached this Court praying for quashing the First Information Report on the ground that no offence is made out and that they were being unnecessarily harassed by respondent No.4; criminal proceedings initiated are an abuse of the process of law. Notice was issued to the respondents on 12th March, 2007 and further proceedings were stayed. The order passed reads:- “12.3.2007 Present: Mr.Rajiv Sharma,Senior Advocate with Mr.Surinder Sharma, Advocate. Mr.M.S. Chandel, Advocate General with Mr.R.M. Bisht, DAG, for respondent No.1. CMP No.509 of 2007 Allowed. CWP No.294 of 2007. Issue notice to the respondents. Mr.M.S. Chandel, learned Advocate General, on instructions received from Mr.R.M. Bisht, DAG, waives service of notice on behalf of State-respondent No.1 and submits that no reply is to be filled on behalf of the State-respondent. Notice be issued to respondents No.2 to 4 returnable for 24th April, 2007. Notice be sent through registered post as well as by ordinary process of the court. Steps for service be taken within four days from today. 4 CMP No.508 of 2007. Notice in the aforesaid terms. A perusal of the F.I.R. (Annexure P-3)filed with the Police Station, Cannaught Place, New Delhi, prima facie, shows that no part of the cause of action has arisen at Delhi. The criminal offence, if any, was committed within the State of Himachal Pradesh. Therefore, we are, prima facie, of the opinion that this Court would have jurisdiction to entertain the present writ petiton and to pass appropriate orders under Article 226(2) of the Constituion of India. In the meanwhile, further proceedings in FIR No.108/2007 dated 25.2.2007 registered with Police Station, Cannaught Place, New Delhi, under Section 420 IPC are stayed. Dasti copy. Sd/- (Deepak Gupta),J. Sd/- March 12, 2007 (Surinder Singh),J.” Subsequently, on 17.5.2007 this order was confirmed by a Division Bench of this Court in the following terms:- “17.5.2007 Present: Mr.Ajay Mohan Goel, Advocate, for the petitioners. Mr.M.S. Chandel, Advocate General with Mr.R.M. Bisht, 5 Dy.Advocate General, for respondents No.1 to 3. Mr.B.C. Negi, Advocate, for respondent No.4. CMP No.508 of 2007. Heard learned counsel for the parties. After going through the pleadings and hearing the counsel, we are prima-facie of the opinion that the investigating agency at Delhi has no jurisdiction, to investigate the matter especially qua petitioner No.2. No act of cheating is alleged to have been committed by petitioner No.2 at New Delhi. As regard petitioner No.1, the case of the respondents is that the petitioner cheated them by misrepresenting that the property was free from all encumbrances. Even if this be accepted as the gospel truth, the cheating, if any, took place when the first agreement was entered into. This agreement admittedly was not entered at Delhi. Only the second agreement was allegedly executed at Delhi, whereby the respondent was given authority to assign its rights under the previous agreement to M/s Grafax Cotton Pvt.Ltd. We are prima-facie of the opinion that even if this second agreement was executed at Delhi which fact is not accepted by the petitioner, the offence of cheating, if any, had already been committed when the first agreement was entered which admittedly was entered in Himachal Pradesh. Keeping 6 all these facts into consideration, we are prima-facie of the opinion that the police at Delhi had no jurisdiction to investigate the matter and that we have the jurisdiction to hear and decide the matter. (emphasis supplied) We therefore, direct that the interim order dated March 12, 2007 shall stand confirmed and further proceedings in FIR No.108/2007 dated 25.2.2007, registered in Police Station Connaught Place, New Delhi, under Section 420 of the Indian Penal Code shall remain stayed pending disposal of the writ petition. C.W.P. No.294/2007. Keeping in view the nature of the dispute, the petition is admitted for hearing. Respondent No.4 shall be at liberty to apply for early hearing. Sd/- (Deepak Gupta),J. Sd/- May 17, 2007 (Surinder Singh),J.” Respondent No.4 approached the Supreme Court of India which vide its order dated 23.3.2009 directed this Court to dispose of the petition as expeditiously as possible and preferably within a period of three months from the date of passing of the order. 7 I have heard learned counsel appearing for the parties and have perused the pleadings on record of the case. The proceedings show that a number of adjournments have been taken by the parties. On the first aspect of the matter as to whether the First Information Report is required to be quashed, the law is now well settled that criminal proceedings cannot be put to an end in the initial stage or at the investigation stage. I do not wish to express my opinion on the merits of the case as to whether an offence is made out or not. All that need be said is that a reading of Annexure P-3 would go to show that the allegations made in the complaint do require investigation. I am not convinced with the submissions made by the learned counsel appearing for the petitioners that no offence is made out or that the FIR is an abuse of the process of law. Learned counsel appearing for the petitioners states that the First Information Report deserves to be quashed as it is frivolous and is not based on any facts. The factors to be considered by this Court in exercising its power to quash a First Information Report, are now well settled. The ratio laid down in R.P. Kapur Vs. State of Punjab, AIR 1960 SC 866, has been followed and applied in a number of subsequent cases. Second submission made by the learned counsel appearing for the petitioners is that the police at Delhi has no jurisdiction to inquire into 8 the matter. Learned counsel has taken me through the two agreements Annexure P-1 and Annexure R4/1 as also the receipt Annexure P2 which are the foundational documents/facts necessary for setting the criminal law in motion. It is undisputed before me that the first agreement to sell (Annexure P-1) entered into between the petitioners and respondent No.4 has been executed on 28th September, 2006 at Nalagarh in District Solan of Himachal Pradesh. The receipt Annexure P-2 evidencing the payment has been issued and executed at Panchkula. These facts are made out from a prima facie reading of these documents. The subsequent agreement Annexure R-4/1 entered into between respondent No.4 and the petitioner Hem Chand does not state where it has been executed or entered into. Only the addresses of the witnesses have been given in the agreement as residents of Chandigarh. Learned counsel Shri B.C. Negi appearing for respondent No.4 submits that the powers of this Court to quash a First Information Report are not un-limited and are circumscribed by precedent settled by the Supreme Court of India. He refers in particular to the decisions in State of Punjab vs. Dharam Singh and Others, 1987 (Supp) SCC 89, State of W.B. vs. Narayan K. Patodia, (2000)4 SCC 447, where the Court inter alia held: “19. That apart, how could the FIR be quashed if the investigating agency 9 should have been different? By lodging FIR alone no investigation is conducted by the police. It is the first step towards starting investigation by the police. If the High Court was of the opinion that investigation had to be conducted by the Bureau then also there was no need to quash the FIR. Anyway, we take the view that as offences under the Indian Penal Code are also involved, efficacious investigation can be conducted by entrusting it to the police investigating agency. The inherent powers of the High Court as recognized in Section 482 of the Code are reserved to be used “to give effect to any orders under the Code, or to prevent abuse of the process of any court or otherwise to secure the ends of justice”. It is quite unfortunate that learned Single Judge overlooked the reality that by quashing the FIR in the case the High Court did not achieve any one of the above factors. On the contrary, the result of quashing the FIR had rendered the allegations of offences made against a person to remain consigned in stupor perennially. Hence, instead of achieving the ends of criminal justice, the impugned order would achieve the reverse of it.” In Trisuns Chemical Industry vs. Rajesh Agarwal and Others, (1999)8 SCC 686 the Court reiterated these principles: 10 “7. Time and again this Court has been pointing out that quashing of FIR or a complaint in exercise of the inherent powers of the High Court should be limited to very extreme exceptions (vide State of Haryana V. Bhajan Lal, 1992 Supp(1) SCC 335 and Rajesh Bajaj vs. State NCT of Delhi, (1999)3 SCC 259). 9. We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as 11 indicated in State of Haryana v. Bhajan Lal, 1992 Supp(1) SCC 335.” In other words submission made is that merely because a civil liability is made out that by itself could not be a ground for quashing the First Information Report. He also places reliance on the judgments in Rajinder Singh Katoch vs. Chadigarh Admn.and Others, (2007)10 SCC 69, State of Punjab through Secretary, Home vs. Subhash Kumar and Others, (2004)13 SCC 437 to urge that the criminal justice machinery should not be thwarted in its initial stage. In R.P. Kapur’s case supra, the Supreme Court laid down that the inherent powers of the Court can and should be exercised to quash the proceedings:- “6. … … … … … … … … … … It is well established that the inherent jurisdiction of the High Court can be exercised to quash proceedings in a proper case either to prevent the abuse of the process of any court or otherwise to secure the ends of justice. Ordinarily criminal proceedings instituted against an accused person must be tried under the provisions of the Code, and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. It is not possible, desirable or expedient to lay down any inflexible rule which would govern the exercise of this inherent 12 jurisdiction. However, we may indicate some categories of cases where the inherent jurisdiction can and should be exercised for quashing the proceedings. There may be cases where it may be possible for the High Court to take the view that the institution or continuance of criminal proceedings against an accused person may amount to the abuse of the process of the court or that the quashing of the impugned proceedings would secure the ends of justice. If the criminal proceeding in question is in respect of an offence alleged to have been committed by an accused person and it manifestly appears that there is a legal bar against the institution or continuance of the said proceeding the High Court would be justified in quashing the proceeding on that ground. Absence of the requisite sanction may, for instance, furnish cases under this category. Cases may also arise where the allegations in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety, do not constitute the offence alleged; in such cases no question of appreciating evidence arises; it is a matter merely of looking at the complaint or the First Information Report to decide whether the offence alleged is disclosed or not. In such cases it would be legitimate for the High Court to hold that it would be 13 manifestly unjust to allow the process of the criminal court to be issued against the accused person. A third category of cases in which the inherent jurisdiction of the High Court can be successfully invoked may also arise. In cases falling under this category the allegations made against the accused person do constitute an offence alleged but there is either no legal evidence adduced in support of the case or evidence adduced clearly or manifestly fails to prove the charge. In dealing with this class of cases it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is manifestly and clearly inconsistent with the accusation made and cases where there is legal evidence which on its appreciation may or may not support the accusation in question. In exercising its jurisdiction under S.561-A the High Court would not embark upon an enquiry as to whether the evidence in question is reliable or not. That is the function of the trial magistrate, and ordinarily it would not be open to any party to invoke the High Court’s inherent jurisdiction and contend that on a reasonable appreciation of the evidence the accusation made against the accused would not be sustained. Broadly stated that is the nature and scope of the inherent jurisdiction of the High Court under S.561-A in the 14 matter of quashing criminal proceedings, and that is the effect of the judical decisions on the point (Vide: In Re: Shripad G.Chandavarkar, AIR 1928 Bom 184, Jagat Chandra Mozumdar v. Queen Empress, ILR 26 Cal 786, Dr.Shankar Singh v. State of Punjab, 56 Pun LR 54: (AIR 1954 Punj 193), Nripendra Bhusan Roy v. Gobinda Bandhu Majumdar, AIR 1924 Cal 1018 and Ramanathan Chettiyar v. Sivarama Subramania, ILR 47 Mad 722: (AIR 1925 Mad 39).” This principle was again reiterated by the Supreme Court in State of Haryana vs. Bhajan Lal, AIR 1992 SC 604 in para-108 holding:- "108. (1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156 (1) of the Code except under an order of a Magistrate within the purview of Section 155 (2) of the Code. 15 (3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused. (4) Where the allegations in the FIR do not constitute a cognizable offence but constitute only a non- cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155 (2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused. (6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party. 16 (7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge. " These principles were reaffirmed by the Supreme Court in Central Bureau of Investigation vs. Ravi Shankar Srivastava, IAS & Anr. 2006 Crl.L.J.4050 holding:- “7. Exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The Section does not confer any new powers on the High Court. It only saves the inherent power which the Court possessed before the enactment of the Code. It envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of the process of court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all 17 cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognizes and preserves inherent powers of the High Courts. All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle "quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest" (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the section itself. It is to be exercised ex debito justitiae to do real and substantial justice 18 for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto. 8. … … … … … … … … … … … … … … … … … 9. … … … … … … … … … … … AS noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its 19 exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. The High Court being the highest court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard-and-fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage. (See: Janata Dal v. H. S. Chowdhary (1992 (4) SCC 305), and Raghubir Saran (Dr.) v. State of Bihar (AIR 1964 SC 1). It would not be proper for the High Court to analyse the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises arrive at a conclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and 20 conclude that the complaint cannot be proceeded with. In a proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. … … … … … … …”. These principles of law