Case: Navinchandra N. Majithia Vs. State Of Maharashtra

The petitioner is the Managing Director of the Company, India Farmers Pvt. Ltd. (IFPL for short), registered under the Companies Act, having its registered office at Mumbai. Out of the 2500 shares of IFPL the petitioner, his family members and friends together hold 2430 shares; the balance 70 shares have remained unallotted till date. In the year 1950 the then Government of Bombay put IFPL in possession of 300 acres of land at Aksa, Marve, Malvani at Malad, Bombay. Thereafter in 1956 the State Government granted a lease in favour of IFPL for 114 acres out of the 300 acres for a period of 999 years. The agreement for the balance area of 186 acres is yet to be executed by the GovernmentOn 7-7-1994 a company known as Chinar Export Ltd. entered into an agreement with the petitioner for purchase of the entire lot of 2430 shares of IFPL at a total price of Rs. 58 crores. A sum of Rs. 2 crores was paid by Chinar Export Ltd. as earnest money and a further of Rs. 25, 00, 000 was paid subsequently. The balance of the purchase price was to be paid on or before 31-10-1995. However, Chinar Export Ltd. was unable to fulfil its commitment as to payment of the balance purchase price, and therefore, the petitioner terminated the agreement Chinar Export Ltd. filed Suit No. 178 of 1995 against the petitioner in the High Court of Bombay for specific performance of the agreement dated 7-7-1994. Two shareholders of Chinar Export Ltd., Mr. Jayaram and Mr. Bareh, took over the management and control of the company. Thereafter they formed another company J.B. Holdings Ltd. at Shillong. On the request of Mr. Jayaram and Mr. Bareh who were the Directors in both the companies J.B. Holdings Ltd. and Chinar Export Ltd. the suit was withdrawn upon the petitioners returning the amount paid by Chinar Export Ltd. which was earlier forfeited by the petitioner. This fact was recorded in the consent terms filed in the suit in September 1995In pursuance of the agreement J.B. Holdings Ltd. paid a sum of Rs. 6, 75, 63, 000 towards purchase price of 170 shares of IFPL and a sum of Rs. 1, 50, 33, 000 as earnest money for the purchase of the balance shares. On 13-10-1995 J.B. Holdings Ltd. paid the petitioner a further sum of Rs. 1 crore. On 31-10-1995 yet another sum of Rs. 1.24 crores was paid by J.B. Holdings Ltd. From the amount received from J.B. Holdings Ltd. the petitioner paid a sum of Rs. 2.25 crores by way of refund of the forfeited amount to Chinar Exports Ltd. as per the terms of the settlement in Suit No. 178 of 1995 filed in the Bombay High Court. Against the payment made by J.B. Holdings Ltd. the petitioner delivered 170 shares of IFPL which were duly transferred in the name of J.B. Holdings Ltd. and delivered to them at MumbaiThe petitioner alleged that at no point of time J.B. Holdings Ltd. offered to make the balance payment or to take delivery of the remaining shares. As J.B. Holdings Ltd. had committed default in making the balance payment and thereby committed breach of the agreement dated 18-9-1995 the said agreement stood terminated and the earnest money stood forfeited as stipulated in the agreementIt was further alleged in the writ petition that after some correspondence between the parties J.B. Holdings Ltd. had tried to pressurise the petitioner to reverse the transaction of sale of shares and recover the money paid in respect thereof, by employing strong-arm tactics, which eventually failed. Having failed to achieve the purpose by such means J.B. Holdings Ltd. filed a false complaint against the petitioner at Shillong in the State of Meghalaya. The petitioner asserted that the complaint is false and it has been deliberately filed at Shillong with the mala fide intention of exerting pressure and causing harassment to him so as to get the transaction relating to transfer of shares reversed. According to the petitioner since the entire transaction upon which the complaint is purportedly based had taken place at Mumbai and not at any other place outside Mumbai, much less at Shillong or any other place in the State of Meghalaya, the complaint could not/ought not to have been entertained by the police at Shillong. It was further averred in the writ petition that the jurisdiction, if any, to investigate/inquire into the contents of the complaint is with the police/courts in Mumbai and the action taken by the Special SP Police, CID, Shillong in entertaining the said complaint and in taking up investigation on the basis of the same is clearly oppressive, discriminatory and mala fide. It was also stated in the writ petition that the petitioner was approaching the High Court under Article 226 of the Constitution of India read with Section 482 of the Criminal Procedure Code for the issuance of a writ of prohibition and mandamus quashing the complaint made by J.B. Holdings Ltd. on the grounds stated in the said paragraphAccording to the petitioner the conduct on the part of the Shillong Police in entertaining the complaint against him and in embarking upon an investigation was clearly in excess of the jurisdiction vested in it under the provisions of the Code of Criminal Procedure. Indeed the Shillong Police had on their own requested the Mumbai Police (Malvani Police Station), to carry out an extensive investigation into the alleged offence which clearly indicates that Shillong Police authorities were very much aware that the entire transaction upon which the complaint is purportedly based had taken place in Mumbai. In such circumstances, according to the petitioner, the subsequent conduct of the Shillong Police in continuing with investigation of the case is clearly mala fide and without sanction of law and procedureIn the writ petition it was contended that in the two letters dated 14-9-1998 and 16-9-1998 addressed by the Assistant Police Inspector, Malvani Police Station to the petitioner, it was stated that the complaint had been received in the police station at Malvani and the petitioner was requested to attend the said police station with documents. Thereafter, on 19-9-1998 the statement of the petitioner was recorded and certain documents were received from him at Malvani Police StationThe petitioner also contended in the writ petition that the allegations made against him in the complaint do not make out any cognizable offence and the dispute, if any, is of a civil natureMr. Melarkode Subramanian Jayaram, who was arrayed as Respondent 4 in the writ petition filed a counter-affidavit generally denying the averments made in the writ petition. The respondent referred to the writ petition filed by the complainant J.B. Holdings Ltd. in the Gauhati High Court challenging the action of the Government of Meghalaya refusing permission to the police officers concerned to go to Mumbai on the ground of paucity of funds. A learned Single Judge by order dated 17-11-1997 directed the complainant to deposit the requisite amount to enable the Senior Police Inspector concerned to proceed to Mumbai for investigation of the case. In appeal a Division Bench of the High Court confirmed the said order taking the view that since the case has been registered in the State of Meghalaya, it is for the police of that State to investigate into the matterThe High Court as noted earlier, dismissed the writ petition holding that it could not entertain the writ petition since the petitioner has prayed for quashing the complaint which was lodged by the complainant at Shillong in the State of Meghalaya

Court's reasoning:
Considering the peculiar fact-situation of the case we are of the view that setting aside the impugned judgment and remitting the case to the High Court for fresh disposal will cause further delay in investigation of the matter and may create other complications. Instead, it will be apt and proper to direct that further investigation relating to complaint filed by J.B. Holdings Ltd. should be made by the Mumbai Police. Accordingly, we allow the appeal, set aside the judgment under challenge and dispose of the writ petition with the direction that the complaint lodged by J.B. Holdings Ltd. at Shillong which is presently being investigated by the Special Superintendent of Police, CID, Shillong shall be transferred to the Mumbai Police for further investigation through its Economic Offences Wing, General Branch, CID, or any other branch as the competent authority of the Mumbai Police may decide in accordance with law