Case: Helios &amp; Matheson Inform.Tech.Ltd.&amp;Ors Vs. Rajeev Sawhney &amp; Anr

Respondent No.1, Rajeev Sawhney filed Criminal Complaint No.20/SW/2007 before Additional Chief Metropolitan Magistrate, 47th Court, Esplanade, Mumbai, alleging commission of offences punishable under Sections 417, 420, 465, 467, 468, 471 read with Section 120B of IPC by the petitioners. The complaint set out the relevant facts in great detail and made specific allegations to the effect that petitioners had entered into a conspiracy to defraud him and for that purpose Shri Pawan Kumar, arrayed as accused No.4 in the complaint, had played an active role apart from fabricating a Board resolution when no such resolution had, in fact, been passed. On receipt of the complaint the Additional Chief Metropolitan Magistrate recorded prima facie satisfaction about the commission of offences punishable under Sections 417, 420, 465, 467, 468, 471, read with Section 120B of IPC, took cognizance and directed issuance of process against the accused persons. Aggrieved by the said order, Revision Petitions No.449, 460, 853 of 2007 were filed by the accused persons before the Additional Sessions Judge, Greater Bombay, challenging the order taking cognizance and the maintainability of the complaint on several grounds. The revision petitions were eventually allowed by the Additional Sessions Judge, Greater Bombay by his order dated 13th August, 2008 and the summoning order set aside. The Additional Sessions Judge came to the conclusion that although the allegations regarding fabrication of a resolution, taken at their face value, made out a prima facie case of fraud against the accused persons yet the minutes of a subsequent meeting allegedly held on 19th July, 2005, a photocopy of which was filed along with Criminal Revision No.460/2007 ratified the resolution allegedly passed on 28th June, 2005. The Court on that premise concluded that no fraud or cheating was made out against the accused persons. The Court observed:The question is only in respect of the incident 28/06/2005 if this incident averred in the complaint is taken as it is without any more facts then certainly leads a prima facie case of playing fraud. However, in this case, it is seen from the record that the complainant had meeting on 19/07/2005, the minutes of the meeting are produced at page No.293 in Criminal Revision No.460/2007. This meeting and its minutes are not disputed. The relevant portion of the minutes on 19/07/2005 relevant for our purposes are as under:Mr. Rajeev Sawhney has agreed to approve and sign the circular resolution for opening the Bank Account of VMoksha Mauritius with State Bank of Mauritius and obtaining the loan facility for the purposes of receiving the purchase consideration and remittance of the subscription money for the issue of preference shares in favour of VMoksha Mauritius with effect from the time of execution and exchange of the above Undertaking and the modification letter for the Escrow ArrangementThis ratifies the act of 28/06/2005, therefore the minutes of the meeting which is signed by the complainant himself and accused No.4. Mr. Pawan Kumar and other directors etc. if perused the act 28/06/2005 is ratified and the complainant thus consented to that act. Therefore, there remained nothing of the cheating to the complainant by the accused3. The Court also found fault with the complainant suppressing the fact of a complaint having been filed before the Additional Chief Metropolitan Magistrate at Bangalore and the alleged non-observance of the provisions of Section 202 of the Cr.P.C4. The above order was then challenged by the complainant, Shri Rajeev Sawhney before the High Court of Bombay in Criminal Revision Application No.441 of 2008. The High Court came to the conclusion that the Additional Sessions Judge had fallen in error on all three counts. The High Court noticed that the complaint filed before the IV Additional Chief Metropolitan Magistrate at Bangalore had been quashed by the Karnataka High Court on account of a more comprehensive complaint having been filed before the Additional Chief Metropolitan Magistrate at Mumbai. Consequently, on the date the Additional Chief Metropolitan Magistrate took cognizance of the offence alleged against the accused persons there was no complaint other than the one pending before the said Court. The complainant could not, therefore, be accused of having suppressed any material information from the trial Court to call for any interference by the Sessions Court on that count5. As regards the alleged non-observance of the provisions of Section 202 Cr.P.C. the High Court came to the conclusion that the provision of Section 202 Cr.P.C. had been complied with by the Magistrate while taking cognizance and issuing process6. On the question of ratification of the resolution allegedly passed on 28th June, 2005, the High Court held that the Sessions Judge was not justified in entertaining a photocopy of the document relied upon by the accused at the revisional stage, placing implicit reliance upon the same and interfering with the on-going proceedings before the Magistrate. The High Court observed:The third ground on which the learned Addl. Sessions Judge had allowed the revision of the accused persons and quashed the process was that the acts in dispute were ratified in the meeting dated 19.7.2001. It appears that during the arguments before the Addl. Sessions Judge, a photocopy of a document purporting to be minutes of the meeting of the advisers of the complainant and accused No.4 Pawan Kumar held on 19.7.2005 was produced to show that the parties had approved the act of opening the account in the name of the Company and securing the loan on 28.6.2005. Firstly, this document was produced for the first time before the Addl. Sessions Judge in the revision application. This document could be treated as a defence of the accused persons. That document was not available before the Addl. C.M.M. when he passed the order. Secondly, this document being the defence could not be taken into consideration for the purpose of deciding whether prima facie case is made out for issuing process. The learned Addl. Sessions Judge observed that signature on the document was not disputed. In fact, the stage of proving that document or admitting signature on that document had never arisen. The original document was not before the Court and only a photocopy of the document purporting to be minutes of the meeting was filed and on the basis of such photocopy produced during the revision application by the accused persons, the learned Addl. Sessions Judge jumped to the conclusion that such a resolution was passed and the acts of 28.6.2005 were ratified. In my opinion, it will not be appropriate for the Addl. Sessions Judge7. The present Special Leave Petitions assail the correctness of the view taken by the High Court.

Court's reasoning:
The fact that the complaint previously filed had been quashed by the High Court on account of filing of a comprehensive complaint out of which these proceedings arise is, in our opinion, a complete answer to the charge of suppression. As on the date the Additional Chief Metropolitan Magistrate, Mumbai, took cognizance of the offences in the complaint filed before him no other complaint was pending in any other Court, the complaint before the Magistrate at Bangalore having had been quashed without a trial on merits. Mere filing of a previous complaint could not in the above circumstances be a bar to the filing of another complaint or for proceedings based on such complaint being taken to their logical conclusion. So also the High Court was, in our opinion, correct in holding that there was no violation of the provision of Section 202 Cr.P.C. to warrant interference in exercise of revisional powers by the Sessions Judge.