Crl. Misc. No.M-27995 of 2008 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Crl. Misc. No. M-27995 of 2008 Date of Decision: December 24, 2010 Sh. R. Narayana and others …..Petitioners Vs. State of Punjab and others …..Respondents CORAM: HON’BLE MR. JUSTICE M.M.S. BEDI. -.- Present:- Mr.K.T.S. Tulsi, Sr. Advocate with Mr. Ashish Kapoor, Advocate for the petitioners. Mr.K.S. Pannu, DAG, Punjab. Mr.T.S. Sangha, Sr. Advocate with Mr. J.S. Lalli, Advocate for respondent No.3. -.- M.M.S. BEDI, J. Indian Oil Corporation Limited (for short ‘the IOCL’) is a Government Company under Section 617 of the Companies Act and petitioner No.1 is the Executive Director (Corporate Affairs), petitioner No.2 is Director (Pipelines), petitioner No.3 is Director (Marketing), Crl. Misc. No.M-27995 of 2008 [2] petitioner No.4 is General Manager, Punjab State Office, petitioner No.5 is Senior Terminal Manager, Mathura Terminal, petitioner No.6 is Chief Manager (Operations), petitioner No.7 is Chief Manager (Finance) and petitioner No.8 is Sales Officer (LPG-S), Noida of the IOCL. Petitioners have invoked the inherent jurisdiction of this Court under Section 482 Cr.P.C. for quashing of FIR No.211 dated October 7, 2008 registered at Police Station Sadar Rajpura, District Patiala under Sections 420, 120-B IPC. The FIR has been registered against the petitioners on the compliant of Brij Mohan Mahajan, Director, M/s Nimitaya Properties Limited, (for short ‘the NPL’), alleging that the IOCL has sold land measuring 13 bigha 6 biswa at Rajpura vide sale deed date March 27, 2006 to the complainant- respondent No.3 through their agent M//s Metal and Scrap Trading Corporation Limited (for short ‘the MSTC’) keeping the complainant in dark concealed the oil pipe line running beneath the land, thereby playing fraud on the complainant and cheating him. The grievance of the complainant is that he was induced to pay a price of ` 2.11 crores which is 2.5 times of the market price. When the complainant pointed out the defects to the IOCL, they had offered to buy back the land under which the pipeline is going. The complainant Brij Mohan Mahajan had submitted a complaint in the office of S.S.P., Police Station Sadar, Patiala which was sent for investigation to the Inspector SHO of Police Station Sadar, Rajpura. On the basis of his investigation and report submitted through DSP, Rajpura after obtaining opinion of DA (Legal), FIR was registered against the petitioners. Crl. Misc. No.M-27995 of 2008 [3] The contents of the compliant on the basis of which the FIR has been registered reads as follows:- “To The Senior Superintendent of Police, SSP office, Patiala, Punjab. Complaint for the acts, offences of cheating and fraud. Respected Sir, I, Brij Mohan Mahajan S/o Late Janak Raj Mahajan, R/o Farm No.2, Avenue Cassia Westend Greens Rajokri, New Delhi-110038 request you as I that M/s Indian Oil Corporation Limited Punjab State Office Chandigarh had written to M/s MSTC Ltd. New Delhi authorizing them to invite tenders for the disposal of IOC owned land at Rajpura measuring 134676 square yards for an approximate cost of 79.79 lacs vide their office letter dated 6.12.2005 which states nothing about the concealed oil pipe line running through the land. Copy of the same attached for kind perusal. 2. That M/s M.S.T.C. Ltd. on behalf of the letter issued tender notice us with all its special and conditions and layout of the plan of the land which also nowhere mentions about the concealed oil pipe line running through its vide tender No.MST (DJT- 295/IOCL-CHD05-06 furnishing all the details including Crl. Misc. No.M-27995 of 2008 [4] opening dated as 10th Jan. 2006 at 2.30 p.m. copy of the same being enclosed here for your kind perusal. 3. That M/s Nimitaya Properties Ltd. purchased the tender form and field as other side. In the presence of officers from IOCL and MSTC all tenders were ----- and found that M/s Nimitaya properties as the highest bidders of a sum of ` 2,11,00,000.00. Even this point of time the matter of the conceal oil pipe line running through the land was not disclosed neither by IOCL-the owner of the land nor by MSTC Ltd. the selling agency. 4. That as being the highest bidder M/s MSTC Ltd. New Delhi asked M/s Nimitaya Properties Ltd. to go ahead with completion of formalities as per sale order. This M/s Nimitaya Properties Ltd. completed all the necessary formalities up to paying the stamp duty of ` 18,99,000.00 to arrive at Sale deed. Now even till this stage we were kept in dark about the concealed oil pipe line running through the same land for which have completed all the above formalities. 5. That as being the hest M/s MSTC Ltd., New Delhi on completion of all the formalities a sale to this effect had been made between M/s Indian Oil Corporation Ltd. Chandigarh Marketing Division Head Crl. Misc. No.M-27995 of 2008 [5] Office Mumbai Indian, Oil Bhawan, Plot No.3-A, Sector 19-A, Madhya Marg, Chandigarh and M/s Nimitaya Properties Ltd., New Delhi in the presence of Tehsildar, before the Sub Registrar Office Rajpura, on 27th March 2006. Even pipeline running through the land was hidden even from the Tehsildar and Sub Registrar. The sale was completed in this language. The said land is free from all encumbrances herein before in. The event of any bar or technically or legally any draft the property ownership is found defective or is cancelled on account of any cause and suit the vendee’s sale consideration sustains any loss the vender will be liable to make that loss good from any other property of the vender alongwith all incidental expenses. The vendee will be the owner in physical possession like us. Copy of the sale deed being enclosed for your kind perusal. 6. That as per the sale deed M/s Nimitaya Properties Ltd. was conferred with all rights the ownership in whatsoever manner on 8.8.2007 Indian Oil Corporation has issued us letter stating that we have no right to exercise any power as owners on our land as an oil pipe line running through the land. A copy of the same is being enclosed for your kind perusal. Crl. Misc. No.M-27995 of 2008 [6] 7. That on receipt of this letter M/s Nimitaya Properties Ltd. was shocked to know that they have been cheated in large scale by using fraudulent measures. That now it is crystal clear from the above facts that M/s Indian Oil Corporation Ltd. through officers and through its selling agent M/s MSTC Ltd., Jeewan Vikas Building, Ist Floor, 30/31A, Asaf Ali Road, New Delhi-110002 have committed the crime. 8. That at this state of helplessness M/s Nimitaya Properties Ltd. has written to the Tehsildar the office of the Sub Registrar, Tehsil Complex, Rajpura Distt. Patiala on 17.9.2007 and reminded on 1.1.2007 about the above and the respected officer was kind enough to hear our plea and by verifying all his office records advised M/s IOCL to remove the Oil Pipeline through his office letter dated 8.11.2007 and addressed to IOCL and a copy of the same was also sent to M/s Nimitaya Properties Ltd.. The letter further reads by way of open tender the sale deed of which was registered in my office on 27.3.2006 vide registration No.12079, now they are being pressurized by you not to construct any building/ tank wall reservoir or dam or plant any tree etc. it does not seen to be justified on your part at this stage it is hereby advised to remove the oil pipeline running Crl. Misc. No.M-27995 of 2008 [7] through the land with immediate effect to avoid any litigation in future failure to abide by this verdict would land legal complications as per the provisions of the law, it is suggested copy of the same being enclosed for your kind perusal. (9) That on the advice of M/s IOCL by the Tehsil Office IOCL has neither initiated any action to remove the oil pipe line nor has informed us about any action being taken about to remove the oil pipeline we have again written to the tehsil office on 19th Sept. 2007 as to what steps we should adopt to tackle this situation. The Tehsil Office has informed us in writing that as they have also written to IOCL to abide by the terms and conditions of the sale deed since they have not heard any than we are at liberty to take civil or criminal action against the vendor vide his letter dated 30.11.2007. A copy of the same is being enclosed for your kind perusal. 10. That from the above, it shall be clear that the officials of Indian Oil and MSTC deliberately knowingly fully well concealed the material defect in the land in question and induced us to believe that the land being on the main road is fit for construction and induced us to pay them the price nearly 2.5 times of the market price on the false pretext. Thus they have Crl. Misc. No.M-27995 of 2008 [8] cheated us by making wrongful gain which is in an offence under law. 11. That we pointed these defects to the Indian Oil Ltd. They have offered to buy back only that small area under which the pipeline is going through. However, under the law even the land appurtenant are not be used for construction of dwelling House the purpose for which it was proposed. 12. The persons officials involved in aforesaid conspiracy of fraud and cheating are (1) The General Manager, Indian Oil Corporation Ltd., Marketing Division, Plot No.3-A, Sector 19-A, Madhya Marg, Chandigarh. At the time of inspection of land on 27.12.2005 by the Director of the company Mr.Brij Mohan the concerned officers of the OIC ltd. including General Manager of Punjab State advised to bid more than Rs.2 crores as the land is situated in the brink of National Highway and very much suitable for development of commercial complexes/ residential houses etc. 2. The Managing Director, Indian Oil Corporation Ltd., G-9, Ali Yavar Jungmarg Bandra East Mumbai-400051C who approved the knowing fully well the defect and misrepresented the board of Directors IOC as well. 3. Shri Rajat Juneja, Sales Officers, Indian Oil Crl. Misc. No.M-27995 of 2008 [9] Corporation Ltd., R.S. Patiala Sales Area, Khewatdar Village Pahar Khurd, Tehsil Rajpura (who executed the sale knowing fully well the defect in the land). 4. The Director Pipe Lines, Indian Oil Corporation Ltd., Corporate Office, 3079/3, JB Tite Marg, Sadiq Nagar, New Delhi-110049 (who had also approved the land for sale knowing fully well defect in the land metal scrap trade Corporation Ltd through its Regional Manager, Deewan Vikas Building Ist floor, 30/31-A, Asaf Ali Road, New Delhi-110002 (They approved and initiated the sale and thus entered into the criminal conspiracy for fraud and (6). The Chairman, Indian Oil Corporation Ltd., Corporate Office, 3079/3, JB Tito Marg, Sadiq Nagar, New Delhi-110049 (who had also approved the land for sale). Now on considering our pathetic situation how we have been cheated and be fooled and not adhering to the advice suggestion given by the Tehsil Office of M/s IOCL, I Brij Mohan Mahajan (Director of M/s Nimitaya Properties Ltd., New Delhi) with utmost sincerity and profound respect would like to request you to kindly initiate necessary action and direct the concerned officer to lodge an FIR against all who are involved in the above fraudulent deal of cheating under various section of IPC. Looking for word to your kind Crl. Misc. No.M-27995 of 2008 [10] cooperation in this regard I remain with folded hands at your mercy.” It is not out of place to mention here that at the initial stage when the petition came up for preliminary hearing, a Coordinate Bench of this Court had stayed the further proceedings vide order dated October 24, 2008. The Bench hearing the petition was informed by the complainant that steps for compromise were being taken, as is apparent from the interim orders. On February 18, 2010, when the matter came up for motion hearing and an adjournment was prayed for by counsel for the petitioners, the case was adjourned to March 5, 2010, however, the interim order dated October 24, 2008 was modified to the extent that the prosecution agency will be entitled to continue with the investigation, however, observing that in case the prosecution agency opts to present challan sheet under Section 173 (2) Cr.P.C., the Court concerned will not frame charges against the petitioners. It was also directed that the guidelines of Apex Court in Joginder Kumar Vs. State of U.P., (1994) 4 SCC 260 regarding arrest of the petitioners would be kept in view before taking any decision to arrest any of the petitioners,giving liberty to the petitioners to avail the legal remedy available to them in accordance with law. On April 8, 2010, with the consent of the petitioners and the complainant, matter was taken up for reconciliation. The land which was sold by IOCI to the complainant for ` 2.11 crores was offered to be re-purchased for a sum of ` 4.03 crores as per the estimate of the valuer but the said amount was not acceptable to the complainant. Offer to the extent of ` 5 crores was also made by IOCL to Crl. Misc. No.M-27995 of 2008 [11] the complainant for re-purchase of the land. As per the interim order dated May 18, 2010, it is apparent that the complainant disputed the valuation of the property as `4.03 crores but contended that the value of the property was ` 45 crores. In view of the difference of the valuation in the estimation of both the parties, the proceedings for re-conciliation were dropped and the matter was taken up on merits. On July 27, 2010, State Government informed that the investigating agency would complete the investigation within a period of one month. On October 15, 2010, it was informed that the charge-sheet was being filed against only four persons. Copy of the report under Section 173 (2) Cr.P.C. was also made available to the Court for appreciation of the matter on merits. Few undisputed facts relevant for the adjudication of the present petition and mentioned in the petition for quashing are relevant for the adjudication of this petition:- “The IOCL is stated to have four major divisions, namely, Refinery, Pipeline, Marketing and Research and Development (R&D). The said divisions of the Corporation were independent of each other. The pipeline Division of Corporation through its Regional Office took steps for acquiring right to use for laying pipeline from Mathura to Jalandhar. A notification under Section 3 of the Petroleum and Mineral Pipeline (Acquisition of Right of User in Land) Act, 1962 was issued on May 20, 1981. On November 8, 1982, award Crl. Misc. No.M-27995 of 2008 [12] was made by the competent authority and compensation amount was disbursed. The Mathura-Jalandhar pipe passes through Rajpura. The land was not owned by Corporation when the pipelines were laid by the pipeline Division of the Corporation which is a separate Division from Marketing Division. The IOCL through its Regional office of Marketing Division at New Delhi purchased land measuring 13 bigha 6 biswa at Rajpura from the original owner Shahbeg Singh for a consideration of ` 9.59 lacs vide sale deed dated December 31, 1990 for the purposes of construction of a Depot for sale and distribution of petroleum products. A copy of the sale deed and layout plan has been placed on records as annexure P-1 to show that sale deed does not indicate that pipeline is passing through one corner of the plot of the land in dispute. Even the revenue record did not reflect the said position. The Engineering Department of Northern Region of Marketing Division of IOCL which was located at Delhi built the Rajpura Depot in 1991-92 after obtaining permission from Explosives Department. Thereafter Marketing Division of the Corporation decided to close the Rajpura Depot during the year 1997 and supply products from other locations. All the licenses/ approvals were surrendered Crl. Misc. No.M-27995 of 2008 [13] and the Rajpura Depot was closed w.e.f. 1997. In the year 1999, Punjab State Office of Marketing Division was created where under the activities of the State of Punjab, H.P., and J&K came under its jurisdiction. As at the time of creation of Punjab State Office, the Rajpura land was vacant with a boundary wall thereof, the sale deed dated December 31, 1990 was maintained as a title document of the Rajpura land in the title records of the office. As the Rajpura Depot had been de-commissioned in the year 1997, the land having been rendered vacant and unutilized, the Marketing Division of Corporation decided to dispose of the same. The process of sale of the land in controversy was taken up by the Punjab State office of the IOCL during the year 2005 and MSTC, a Government of India undertaking was appointed as an agent of the Corporation to dispose of the said land to the highest bidder. MSTC issued an open tender with an opening date of January 10, 2006. Complainant- NPL being the highest bidder having offered ` 2.11 crores was sold the land vide sale deed dated march 27, 2006 to respondent No.3. The sale proceeds were deposited with the IOCL. A copy of the sale deed has been appended with the petition as annexure P-2. Petitioners Crl. Misc. No.M-27995 of 2008 [14] claim that the lay out plan which was forwarded by the IOCL to MSTC was same as received by the Corporation from the original vender Shahbeg Singh alongwith the sale deed vide which the land in controversy was purchased by the Corporation on December 31, 1990. After the complainant had been transferred the title and possessions of the land, the pipeline Division issued a letter dated August 8, 2007 about the pipeline passing through the corner of the land. The complainant- respondent No.3 sent a legal notice to the Corporation expressing his grievances. The IOCL claims that it was at that stage the Corporation realized that pipeline was going beneath the land in controversy. In order to resolve the issue, a team of three officers was constituted which held series of discussion with the complainant. The complainant was not satisfied, therefore, the high powered committee was constituted by the Corporation and the matter was re-deliberated with the complainant Company. The process of amicably resolving the inconvenience caused to the complainant was carried out by the Corporation realizing that since with the closure of the Depot from 1997 onward and thereafter creation of Punjab State Office at Chandigarh, had created a considerable gap resulting in Crl. Misc. No.M-27995 of 2008 [15] inadvertently, without any mala fide on part of the Corporation. Corporation had conveyed its willingness to respondent No.3 to refund the amount of ` 2.11 crores paid as sale consideration of the said land alongwith interest at par with the prime lending rate of State Bank of India, for the corresponding period. The following options emerge from the meeting with the complainant:- “a) IOCL buys back the land for the same consideration, bears expenses incurred for registration and pays interest as per PLR of SBI from such date of sale till re-purchase; b) the parties appoint a Government approved valuer with mutual consent. The price of land he values is the price of land IOCL pays to NPL. c) IOCL helps NPL to sell the land through MSTC and also bears expenses for registration etc.” It is also an admitted fact that thought he process of negotiation was on, the complainant Company filed a writ petition in Delhi High Court on February 19, 2008 seeking a direction to the IOCL to remove oil pipeline trespassing the land of the complainant or to compensate him for the loss caused to him. The IOCL has filed a written statement in the Delhi High Court. Copy of the Crl. Misc. No.M-27995 of 2008 [16] writ petition and the reply of the IOCL have been appended as annexures P-3 and P-4, respectively. During the pendency of the writ petition, the complainant lodged a complaint against the petitioners under Section 420 IPC before the SSP, Patiala, alleging that the petitioners at the time of sale had not informed the complainant regarding the underlying pipeline, as such he had been cheated by the fraudulent act of the petitioners. The petitioners claim that no offence is made out against the petitioners even if the allegations in the complaint are presumed to be correct as no criminal liability can be foisted upon any of the petitioners as there had neither been any intention attributed to the petitioners for playing fraud with the complainant nor there is any oral or documentary evidence collected that the sale had been executed by IOCL through its agent selling the property to the complainant. Liability, if any, arisen out of the breach of contract is “civil liability”. It is claimed that Punjab State Office of the Marketing Division was not aware of the fact about the underground petroleum pipeline passing through a portion of the land nor the vendor Shahbeg Singh had revealed about the said fact to the Punjab State Office of the Marketing Division. Even the revenue record did not reflect the same. The Corporation has offered to re-purchase the land alongwith interest and at a present market price assessed by the valuer. The complainant has not even alleged that the petitioners had fraudulent or dishonest intention at the Crl. Misc. No.M-27995 of 2008 [17] time of making promise or representation. The petitioners have not made any false representation with knowledge that it was false. The complainant was never induced or deceived by the petitioners to purchase the property. The allegations levelled by the complainant are vague and uncertain and do not disclose the necessary ingredients of offence of cheating. A reply was filed by respondents No.1 and 2 on the ground that non-disclosure of the fact of existence of pipeline under the land in question at the time of sale makes out a case of cheating and conspiracy against the petitioners and that the matter has been enquired by S.P. City, Patiala and examined by DA (Legal) who have prima facie found that offence under Sections 420, 120-B IPC are made out against the petitioners. It is claimed by the State that the petitioners had full knowledge regarding the passing of pipeline from the plot of land acquired as it was acquired by IOCL. Respondent NO.3 has also filed reply claiming that the laying of pipeline had been done by IOCL and it was very much in the knowledge at every stage to the officials of the Company. Even in the sale deed executed before Sub-Registrar, Rajpura, the important fact that pipeline as well as the prohibition regarding the right of use was concealed but the purchaser was made to believe that the land is free from all encumbrances. The respondent- complainant was induced by the petitioners to participate in the bid of ` 2.11 crores against the reserve price of ` 79.79 lacs. The petitioners have filed a counter to the reply filed by respondent No.3, contending that at the most it is a case of civil liability. Following Crl. Misc. No.M-27995 of 2008 [18] documents have been placed on record subsequently through Crl.Misc. application:- “i) Annexure P-7, a letter dated February 23, 2008 written by IOCL for repurchase of the land at the same sale consideration with expenses incurred by the complainant or to purchase the land on the basis of the valuation done by the Government approved valuer with the consent of both the parties and offer to sell the entire land through MSTC with a promise that the complainant would be entitled to receive the full value consideration and Corporation will bear the cost of commissions and brokerage fee paid to MSTC. ii) annexure P-8- a notification dated May 25, 1981 under Section 3 (1) of the Petroleum and Minerals Pipelines (Acquisition of Right of User in land) Act, 1962; iii)