1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO. 46 OF 2008 ITC Limited, ) an existing Company within the ) meaning of the Companies Act, 1956 ) and having its registered office at ) Virginia House, 37 J. L. Nehru Road, ) Kolkata – 700 071 and its branch ) office at World Trade Centre, 18th ) Floor, Centre – 1, Cuffe Parade, ) Mumbai – 400 005. ).. ... Petitioner. Versus 1) Mr. Ramesh Nayak, ) Senior Vice President of Canara ) Bank, a principal trustee of Canbank ) Mutual Fund having his office at ) Construction House, 4th Floor, 5, W. ) H. Marg, Ballard Estate, Mumbai ) 400 001. ... ... ).. (Orig.Complainant) 2) Shrenik Jhaveri ) Share Broker, 3, West Wing, 4th ) Floor, Stock Exchange Towers, ) Dalal Street, Bombay – 400 023. ).. (Orig.Accused No.1) 3) Pallav Sheth, ) Share Broker, 3, West Wing, 4th ) Floor, Stock Exchange Towers, ) Dalal Street, Bombay – 400 023. ).. (Orig.Accused No.2) 4) State of Maharashtra. .... )... Respondents. 2 Mr. Shanti Bhushan, Sr. Counsel with Mr. Amit Desai, Mr. Rahul Chitnis, Mr. S. Phatak and Mr. Nimesh K. i/by M/s. Nanu Hormusjee & Co., for the Petitioner. Mr. Ravi Kadam, Advocate General, with Mr. Pradeep, Mr. S. S. Deshmukh and Mr. Nilesh Parkar i/by M/s. Mulla & Mulla & C. B. & Caroe for Respondent No.1. Ms. P. H. Kantharia, Addl. Public Prosecutor, for the State. CORAM : BILAL NAZKI and S. A. BOBDE, JJ. RESERVED ON : 4TH MARCH, 2008. DELIVERED ON: 5TH MAY, 2008. JUDGMENT (Per Bilal Nazki, J.) : Rule. 2. Learned Advocate General appearing for respondent No.1 and the learned Addl. Public Prosecutor appearing for respondent No.4, waive service of Rule. The presence of respondent Nos.2 and 3 is not necessary for deciding the issue involved. Hence, by consent, Rule made returnable and heard forthwith. 3 3. By this petition the petitioner prays for quashing and setting aside of the impugned order dated 3rd May, 2007 passed by the Special Court (Trial of Offences Relating to Transactions in Securities) at Bombay in M. A. No. 67 of 2007 in Special Case No.1 of 2004. 4. The Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, for short “the Special Court Act”, came into force on 6th June, 1992. the Special Court Act created a special mechanism for trial of offences committed under the act and in terms of Section 2(d) the Special Court was to be established under sub-section (1) of Section 5. Section 5 of the Special Court Act lays down that the Central Government shall, by notification in the Official Gazette, establish a court to be called the Special Court. The Special Court shall consist of a sitting Judge of the High Court nominated by the Chief Justice of the High Court within the local limits of whose jurisdiction the Special Court is situated, with the concurrence of the Chief Justice of India. Section 6 lays down that the Special Court shall take cognizance of or try such cases as are instituted before it or transferred to it in terms of the Act. Section 7 defines the jurisdiction of the Special Court and lays down that notwithstanding 4 anything contained in any other law, any prosecution in respect of any offence referred to in sub-section (2) of section 3 shall be instituted only in the Special Court. It further lays down that any prosecution in respect of such offences pending in any court, shall stand transferred to the Special Court. Section 9 lays down that the Special Court shall, in the trial of such cases, follow the procedure prescribed by the Code for the trial of warrant cases before a Magistrate. It also provides that the provisions of the Criminal Procedure Code, in so far as they are not inconsistent with the provisions of the Special Court Act, would apply to the proceedings before the Special Court and for the purposes of the said provisions of the Code, the Special Court shall be deemed to be a court of session, and shall have all powers of a court of session, and the person conducting a prosecution before the Special Court shall be deemed to be a Public Prosecutor. The appeal against the judgment, sentence or order, not being interlocutory order passed by the Special Court, would lie before the Supreme Court both on facts and on law. Except for providing an appeal to the Supreme Court against the judgment, sentence or order (not being an interlocutory order), no appeal or revision shall lie to any court. The case in hand involves mainly the interpretation of Section 5, Section 7 and Section 10 of the Special Court Act and also the extent of powers of this Court under 5 Article 226 of the Constitution of India in the context of the Special Court Act. 5. The Special Court passed an order in M. A. No. 67 of 2007 in Special Case No. 1 of 2004 on 3rd May, 2007, which is reproduced below: “1. Heard learned counsel for the Applicant. 2. This is an application for issuance of process against ITC Ltd., which is filed U/s. 319 of Cr.P.C. 3. Brief facts are that initially complaint was filed against one Pallav Sheth and Shrenik Jhaveri for offences punishable U/s.409 r/w 420 r/w 468 r/w 34 of IPC on 5th July, 1993. The said private complaint was filed before 37th Additional Metropolitan Magistrate, Esplanade Court, Mumbai. After verification of the complaint which was recorded, learned Magistrate was pleased to issue process against the two accused. Thereafter, matter was transferred to this Court. Complainant has examined two witnesses and thereafter, present application has been filed. 4. Taking into consideration the evidence which has come on record, in my view, prima facie, case has been made out by the complainant for issuance of process against ITC Limited and hence, issue process against ITC Limited for the offences punishable U/s. 420, 414, 411, 403, 120-B, 109 r/w 34 of IPC. Issuance of process is made returnable on 27th July, 2007. 5. Miscellaneous Application is disposed of in above terms.” This order is assailed by ITC Limited, mainly on the ground that this was 6 not an order in terms of 319 of the Criminal Procedure Code as no evidence has been discussed by the learned Judge of the Special Court on the basis of which he concluded that there was evidence which warranted arraying of the petitioner as accused in the case. 6. A preliminary objection was taken by the learned Advocate General that a writ petition was not maintainable and if the petitioner was aggrieved of the order passed by the Special Court, the only remedy before him was to file an appeal before the Supreme Court in terms of Section 10 of the Special Court Act. Learned Senior Counsel appearing for the petitioner submitted that an appeal was not available because the appeal would only lie against an order which was not interlocutory order and according to the learned Senior Counsel the impugned order was an interlocutory order. The learned Advocate General also submitted that even if it was an interlocutory order the remedy under Articles 226 and 227 of the Constitution of India was not available to the petitioner because the writ petition would not lie against an order passed by a Judge of the High Court. The contention of the learned senior Counsel for the petitioner is that the learned Judge of the Special Court was working as a High Court Judge but while trying the case under the Special Court Act he was not 7 working as a Judge of the High Court but was a Judge, who had to try the cases under a procedure prescribed by the Criminal Procedure Code for the trial of warrant cases before a Magistrate and the provisions of the Criminal Procedure Code would apply to him as were applicable to the Court of Session and he would have all the powers of a Court of Session and not the powers of the High Court. Therefore, it is contended that under Articles 226 and 227 of the Constitution of India the Special Judge was amenable to the jurisdiction of this Court. We have already pointed out the various provisions of the Special Court Act which will have the bearing on the controversy. Before going into the question whether the order passed by the learned Special Judge could be sustained on merits, it will be necessary to deal with the objection raised by the Advocate General that this Court could not interfere in the matter under Articles 226 and 227 of the Constitution of India. 7. The foremost case the learned Senior Counsel has placed reliance on is in the case re The Special Courts Bill, 1978 reported in AIR 1979 SC 478. This case emanated from the Special Courts Bill, 1978 being Special Reference No.1 of 1978. The reference was heard by 9 Judges Bench of the Supreme Court. The President of India referred the intended “Special 8 Courts Bill, 1978” to the Supreme Court under the advisory jurisdiction to find an answer to question, whether the Bill or any of the provisions of the Bill, if enacted, would be constitutionally invalid. The Bill according to the Government had been necessitated because certain Commissions of Inquiry appointed by the Central Government under the Commissions of Inquiry Act, 1952 had submitted reports indicating that there were reasons to believe that various offences had been committed by persons holding high political and public offices during the period of emergency and they needed to be tried by the Special Courts. Section 7 of the Bill provided that a Special Court would be presided over by a sitting Judge of the High Court in India or a person who had held office as a Judge of the High Court in India and would be nominated by the Central Government in consultation with the Chief Justice of India. Section 9 of the Bill provided that the Special Court would follow, in the trial of cases, the procedure prescribed by the Criminal Procedure Code for the trial of warrant cases before the magistrate. Section 10(1) of the Bill provided that notwithstanding anything contained in the Criminal Procedure Code, an appeal would lie as of right from any judgment or order of a Special Court to the Supreme Court of India both on facts and on law. Sub-Section (2) of Section 10 provided that no appeal or revision would lie to any court from 9 any judgment or order of a Special Court except as provided under sub- section (1) of Section 10. The contention of the learned senior Counsel for the petitioner is that even though the Special Court created by the Special Court Act was headed by a Judge, who was a sitting Judge of the High Court, that Special Court would not become High Court. An argument on same lines was made before the Supreme Court in the reference and it was dealt with by the Supreme Court in the following terms. The Special Court created by the Bill would not be a District Court within the meaning of Article 235 and as a result its control would not vest in any High Court and on the other hand it could also not be a High Court because Constitution envisages one High Court for each of the State. Though two or more States or two or more States and a Union Territory could have a common High Court the Constitution would not envisage two High Courts per State. The Supreme Court dealt with this contention in the following terms. "We do not accept that by reason of these considerations, the creation of Special Courts is calculated to damage or destroy the constitutional safeguards of judicial independence. Our reasons for this view will become clearer after we deal with the questions arising under Arts. 14 and 21 but suffice it to say at this stage that the provision in Cl.10(1) of the Bill for an appeal to the Supreme Court from every judgment and order of a Special Court and the provision for transfer of a case from one Special Court to another (which the Bill does not contain 10 but without which as we will show, the Bill will be invalid) are or will be enough to ensure the independence of Special Courts. Coupled with that will be the consideration, as we will in course of our judgment point out that only sitting Judges of the High Courts shall have to be appointed to the Special Court, will carry with him his constitutional status, rights, privileges and obligations. There is no reason to apprehend that the mere change of venue will affect his sense of independence or lay him open to the influence of the executive. One may also not be unmindful of the benign presence of Art. 226 of the Constitution which may in appropriate cases be invoked to ensure justice.” Learned Senior Counsel submits that the Supreme Court was of the view that a sitting Judge of the High Court though appointed in a Special Court would carry with him his constitutional status, rights, privileges and obligations but benign presence of Art. 226 of the Constitution which may in appropriate cases be invoked cannot be lost sight of. According to the learned senior Counsel for the petitioner, that means that the orders of the Special Court in appropriate cases can be subject to judicial scrutiny by the High Court under Article 226 of the Constitution of India. 8. Reference is also given of L. Chandra Kumar v/s Union of India and Others, reported in (1997) 3 SCC 261. This is a well celebrated case relating to creation of Tribunals. The contention of Shri Shanti Bhushan, learned senior Counsel, is that even in this judgment the Supreme Court 11 acknowledged and recognised the power of judicial review of High Court under Article 226 of the Constitution although by virtue of Article 323-A and Article 323-B of the Constitution of India the jurisdiction of all courts except the jurisdiction of Supreme Court under Article 32 has been excluded. The Court still found that the High Court jurisdiction under Article 226 of the Constitution and Supreme Court jurisdiction under Article 32 of the Constitution could not be excluded even by constitutional amendment. The Supreme Court in para 91 of the judgment said, “We have already emphasised the necessity for ensuring that the High Courts are able to exercise judicial superintendence over the decisions of the Tribunals under Article 227 of the Constitution. In R. K. Jain case, after taking note of these facts, it was suggested that the possibility of an appeal from the Tribunal on questions of law to a Division Bench of a High Court within whose territorial jurisdiction the Tribunal falls, be pursued. It appears that no follow-up action has been taken pursuant to the suggestion. Such a measure would have improved matters considerably. Having regard to both the aforestated contentions, we hold that all decisions of Tribunals, whether created pursuant to Article 323-A or Article 323-B of the Constitution, will be subject to the High Court's writ jurisdiction under Articles 226/227 of the Constitution, before a Division 12 Bench of the High Court within whose territorial jurisdiction the particular Tribunal falls.” According to Mr. Shanti Bhushan, learned Senior Counsel, there remains no scope for further arguments on the point, whether the orders passed by a Special Court, created under an ordinary statute, could be amenable to the writ jurisdiction of this Court. According to him, it is immaterial whether the Special Court was headed by a sitting Judge of a High Court or not. He submits that even a dignity of a Judge of the High Court would not be compromised because even under the Letters Patent an order or judgment passed by the learned single Judge of the High Court in the original jurisdiction of the High Court is subject to an appeal before a Division Bench of the High Court and in the present case the rules of the High Court already provide that such a matter should come before a Division Bench. The learned Advocate General emphasised that the Special Court could not be held to be a Tribunal and as such was not subject to control of this Court and in this connection he relies on the same judgment of the Supreme Court, that is L. Chandra Kumar (supra). Mr. Shanti Bhushan, learned Senior Counsel, submits that this question was also considered by another judgment of the Supreme Court in the case of T. Sudhakar Prasad v/s Government of A.P. And others, reported in (2001) 1 SCC 516. Section 17 of the Administrative Tribunals Act, 1985 confers on 13 the Administrative Tribunal power to punish for contempt. In L. Chandra Kumar' s case (Supra) the Supreme Court held that an order of the Administrative Tribunal can be challenged by way of a writ petition before a Division Bench of the High Court exercising its jurisdiction under Article 226 and Article 227 of the Constitution. According to a judgment of the Andhra Pradesh High Court because of L. Chandra Kumar's case the Administrative Tribunal had become subordinate Tribunal to the High Courts and therefore Section 17 of the Administrative Tribunals Act had become unconstitutional / otiose. The matter was carried to the Supreme Court and the Supreme Court while dealing with the powers of the High Courts under Articles 226 and 227 of the Constitution of India had occasion also to explain some of the observations made in L. Chandra Kumar's case. The Supreme Court was of the view that subordination of Tribunals and courts functioning within the territorial jurisdiction of a High Court can be either judicial or administrative or both. The power of superintendence exercised by the High Court over such Tribunals under Article 227 of the Constitution was judicial superintendence and not administrative superintendence. Article 235 of the Constitution vested the High Court with powers of judicial superintendence and not administrative superintendence. It took note of para 96 of L. Chandra Kumar' s case 14 decided by the Constitutional Bench, to mention that the Constitution Bench did not agree with the suggestion that the Tribunals be made subject to supervisory jurisdiction of the High courts and then explained that what the Constitution Bench meant was that the Tribunals were not subject to administrative control of the High Court but they were subject to judicial control of the High Court. In para 18 the Supreme Court held: 18. Subordination of Tribunals and courts functioning within the territorial jurisdiction of a High Court can be either judicial or administrative or both. The power of superintendence exercised by the High Court under Article 227 of the Constitution is judicial superintendence and not administrative superintendence, such as one which vests in the High Court under Article 235 of the Constitution over subordinate courts. Vide para 96 of L. Chandra Kumar's case the Constitution Bench did not agree with the suggestion that the Tribunals be made subject to the supervisory jurisdiction of the High Courts within whose territorial jurisdiction they fall, as our constitutional scheme does not require that all adjudicatory bodies which fall within the territorial jurisdiction of any High Court should be subject to its supervisory jurisdiction. Obviously, the supervisory jurisdiction referred to by the Constitution Bench in para 96 of the judgment is the supervision of the administrative functioning of the Tribunals as is spelt out by discussion made in paras 96 and 97 of the judgment.” In paragraph 19 also the Supreme Court further explained that the supervisory jurisdiction should not be confused with status and subordination. Therefore, Mr. Shanti Bhushan, learned Senior Counsel, submits that if it is held that the orders which are of interlocutory nature 15 or intermediate nature passed by a Special Court are subject to judicial review by the High Court under the powers of judicial review under Articles 226 and 227 of the Constitution it would not in any way compromise on status of the Judge heading the Special Court and it would also not amount to holding that the Special Court was in any way administratively subordinate to the High Court. 9. Learned Advocate General on the other hand relies on the judgment in M/s. S. B. P. & Co. v/s M/s. Patel Engineering Ltd. and Anr., reported in AIR 2006 SC 450. He submits that in this case the question before the Supreme Court was the correctness of an earlier judgment in relation to Section 11 of the Arbitration and Conciliation Act, 1996. The question framed by the Court was, `What is the nature of the function of the Chief Justice or his designate under Section 11 of the Arbitration and Conciliation Act, 1996'. By majority, the court ultimately held that the power exercised by the Chief Justice or his nominee under Section 11 of the Arbitration and Conciliation Act, 1996 was not an administrative power but it was a judicial power. While analysing the provisions of the Arbitration and Conciliation Act, 1996 viz-a-viz the powers of the High Court under Article 226 or Article 227 of the Constitution of India. The 16 Supreme Court did not hold that the High Courts do not have power to interfere with such orders. What it said was that some High Courts have proceeded on the basis that any order passed by a Tribunal during arbitration was capable of being challenged under Article 226 or Article 227 of the Constitution. But the Supreme Court found that there was warrant for such an approach. This was held in the light of provisions of Sections 32 and 34 of the Arbitration and Conciliation Act. Then the Supreme Court in para 44 of the said judgment held, “We, therefore, disapprove of the stand adopted by some of the High Courts that any order passed by the arbitral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. Such an intervention by the High Courts is not permissible.” The reasons for such an observation were given in para 45, which lays down: "45. The object of minimising judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 of the Constitution of India or under Article 226 of the Constitution of India against every order made by the arbitral tribunal. Therefore, it is necessary to indicate that once the arbitration has commenced in the arbitral tribunal, parties have to wait until the award is pronounced unless, of course, a right of appeal is available to them under Section 37 of the Act even at an earlier stage.” In view of the various judgments of the Supreme Court, we do not find 17 ourselves in agreement with the contention of the learned Advocate General that the orders passed by the Special Court, which are of interlocutory nature, cannot be subjected to judicial review of this Court under Articles 226 and 227 of the Constitution of India. 10. The next contention of the learned Advocate General is that the order passed by the Special Court is subject to appeal before the Supreme Court. This is disputed by Mr. Shanti Bhushan, learned Senior Counsel, appearing for the petitioner. We have already quoted the relevant provision, i.e. Section 10 of the Special Courts Act. This clause starts with non-obstante clause and lays down that an appeal would lie from any judgment, sentence or order not being interlocutory order. So a final order could be subject to an appeal before the Supreme Court but an order being an interlocutory order could not be appealed before the Supreme Court. Therefore, the question which this Court is required