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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
Mhi
CRIMINAL REVISION APPLICATION NO. 441 OF 2008
Rajeev Sawhney, Age 55 years, )
Residing Chairman having his address )
in Mumbai at 603A, Basera Co-op. Hsg.Soc.)
Lokhandwala, Andheri (W), )
Mumbai 400 053. ).. Applicant
Versus
1. State Bank of Mauritius Ltd. )
having its corporate office at )
State Bank Tower, I Placed Armes,
ig )
Port Louis, Republic of Mauritius )
and one of the branch offices at )
101, Raheja Centre, Free Press )
Journal Road, Nariman Point, )
Mumbai 400 021. )
2. Mr. Ravi Kumar )
Manager, State Bank of Mauritius Ltd.)
Chennai Branch, Price Arcade, 22A, )
Cathedral Road, Chennai 600 086 )
3. Mr. Pawan Kumar )
205, Casablanca Apartments, )'
Airport Road, Bangalore 560 017. )
4. Helios and Matheson Information )
Technology Ltd., Ganga Griha, 9-D, )
Nungambakkam High Road, )
Chennai 600 034. )
5. Mr. V.Ramachandiran )
Chairman, Helios and Matheson )
Information Technology Ltd., )
Ganga Griha, 9-D, Nungambakkam )
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High Road, Chennai 600 034. )
6. Mr. G.K.Muralikrishna )
Managing Director, )
Helios and Matheson Information )
Technology Ltd., Ganga Griha, 9-D, )
Nungambakkam High Road, )
Chennai 600 034. )
7. State of Maharashtra )
Through office of Public Prosecutor. )..Respondents
Mr. Mahesh Jethmalani, Senior Counsel i/b. Mr. Rahul Moghe, Advocate, for the
applicant.
Mr.Sanjog S.Parab,Advocate for the respondent Bankers( orig. accused Nos. 1 to
3).
Mr. Ashok K.Wanwar, Advocate i/b. Smt. Rita S.Panjwani,Advocates, for
respondent No.3.
Mr. K.G.Menon, Senior Counsel i/b. Mr. J.L.Phoujdar, Advcate, for respondent
Nos. 4, 5 & 6.
Smt. M.R.Tideke, APP, for the respondent No.7 - State.
CORAM: J.H.BHATIA,J.
DATE : 6th May, 2011.
JUDGMENT:
1. Rule. Rule made returnable forthwith. Heard the learned Counsel
for the parties.
2. The Revision Application is filed by the original complainant
challenging the order passed by the learned Additional Sessions Judge, Greater
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Bombay, on 13.8.2008 whereby he allowed the Revision Application Nos.449 of
2007, 460 of 2007 and 853 of 2007 filed by the different accused
persons/respondents and whereby he set aside the order passed by the Additional
Chief Metropolitan Magistrate 47th Court, Esplanade, Mumbai on 18.1.2007 of
issuance of process against all the accused persons for the offences under
Sections 420, 465, 467, 471, 403 read with Sec. 120B of IPC.
3. To appreciate the controversy, it will be useful to state the facts in
brief. For the sake of convenience, the revision applicant may be called as
complainant and the respondents as the accused persons. Respondent Nos. 1 and
2 are original accused Nos. 1 and 3 respectively while accused Nos. 3 to 6 are
original accused Nos. 4 to 7 respectively. The complainant is a Chairman of
Vmoksha Technologies Ltd., a company incorporated in Mauritius (hereinafter
referred to as “the Company”). The Company had certain subsidiaries by name
“Vmoksha Technologies Pvt. Ltd.” registered at Bangalore, “Vmoksha
Technologies Inc. USA” and “Vmoksha Technologies Pvt. Ltd.”, Singapore.
Accused No.5 – Helios and Matheson Information Technology Ltd. is registered
in India and has its head office at Chennai. Accused Nos. 6 and 7 are the
Chairman and Managing Director respectively of the said accused 5 Company.
The complainant had 50% shareholding in Vmoksha Technologies and the
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accused No.4 Pawan Kumar and his family members had also 50% holding in
the said Company. Accused No.4 Pawan Kumar was also the Chief Executive
Officer of the Company. On 28.1.2006, his 50% holdings were transferred to the
complainant. Accused No.1 is State Bank of Mauritius Ltd., while accused No.2
was situated at Mumbai. Accused No.3 was looking after the Chennai Branch of
the accused No.1 Bank. The shareholders of the Company decided to sell the
Company’s subsidiaries in India, USA and Singapore and the task of identifying a
prospective buyer was entrusted to M/s. Price Waterhouse Coopers, a firm of
Chartered Accountants. Said M/s. Price Waterhouse Coopers identified accused
No.5 as a potential buyer. After a series of negotiations, on 11.5.2005, a Share
Purchase Agreement was executed between the Company and various other
confirming parties on one hand and accused Nos.6 and 7 in their respective
capacity as Chairman and Managing Director of accused No.5. As per the said
agreement, accused No.5 acquired Company’s Indian, USA and Singapore
subsidiaries for a consideration of US$ 19 million including an earn out of US$ 4
million to be paid to accused No.4 Pawan Kumar, the then CEO and he was to
continue to work as CEO for the Company’s said subsidiaries even after sale.
The balance amount of US$ 15 million was to be paid to the shareholders of the
Company as a consideration of the said transaction. Out of this consideration
amount, some amount was to be paid to Tapan Garg and Madhuri Garg, son and
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wife of the accused No.4 Pawan Kumar respectively for their holdings and the
amount of US$ 13,395,519.13 was to be paid to the complainant and other
shareholders and as eventually the 50% share of accused No.4 Pawan Kumar was
also taken over by the complainant and his family, whole of that amount was to
come to the complainant. As accused No.5 was not in a position to make
payment of the whole of the consideration amount in cash immediately, it had
agreed to make payment after 18 months. However, it was also agreed that
initially, accused No.5 would make payment of US$ 15 million to the sellers and
the sellers would pay back the said amount to accused No.5 by subscribing to
redeemable preference shares for the equal amount and the said shares would be
redeemed by accused No.5 after 18 months by making payment. Thus, initially,
only the redeemable preference shares of accused No.5 Company were to be
transferred to the sellers of the Company and on redeeming those shares after 18
months, the complainant and other sellers were to receive the consideration
amount in cash. The sellers were to deposit all the original share certificates
representing 100% equity capital of the Company in its USA, Singapore and
India subsidiaries with Price Waterhouse Coopers, who were appointed as
Escrow Agent, till completion of the transaction. In terms of the Escrow
Agreement, accused No.5 was to deposit a sum of Rs.1.2 crore with the Escrow
Agent to be held by them. In terms of the said sale agreement, initially, the
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amount was to be paid by cheque which was to be replaced by Pay Order within
7 working days from the date of execution of the agreement. On conversion of
the consideration into Indian Currency, excluding the share of Tapan Garg and
Madhuri Garg, the sellers were to receive an amount of Rs.58,3775 crore from
accused No.5 as consideration of the transfer of their shares in the said three
subsidiary companies. In a Board Meeting of the Company held on 19.5.2005, it
was resolved to authorise accused No.4 to deposit share certificates of the
subsidiaries of the Company with signed transfer deeds in favour of accused No.5
with the escrow agent.
4. There is no dispute about the aforesaid facts. It is the contention of
the complainant that accused No.5 never deposited the original pay order of Rs.
1.2 crore with the escrow agent nor had delivered the redeemable preference
shares of accused No.5 in favour of the complainant.
5. It is the contention of the complainant that on 28.6.2005, the accused
No.4 sent an E-mail to Price Waterhouse Coopers i.e. Escrow Agent requesting
them to make the complainant agree for securing some loan and opening an
account with respondent No.1 Bank, Port Louis Branch at Mauritius. A copy of
the resolution for the complainant’s signature was annexed with the said E-mail.
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The proposed resolution contained an authority in favour of accused No.4 to open
the account with accused No.1 and to apply for some loan. As the complainant
suspected some foul play, he refused to give his consent. Therefore, Mr. Puneet
Kinra of Price Waterhouse Coopers sent an E-mail dated 29.6.2005 to hold the
process of completion of transaction with accused No.1. Later on, the
complainant came to know that the accused No.5 was claiming that they had
paid the entire consideration for purchase of the shares of all the three
subsidiaries of the Company and was claiming ownership over the same.
According to the complainant, the accused No.5 had not made any payment nor
had transferred the redeemable preference shares to the sellers as per the
agreement. On further enquiry, it was revealed that on 28.6.2005 itself, accused
No.4 had submitted a proposal to accused No.1 Bank for opening an account and
for advancing of loan to the Company. The Bank approved the proposal and
agreed to advance the loan subject to condition that the Board Resolution of the
Company to that effect and the authority in favour of accused No.4 be produced.
As stated above, according to the complainant, he had not given his consent nor
he had signed the above referred resolution sent by accused No.4 for his
signature through the Escrow Agent. Not only this, he had conveyed his
disagreement by sending E-mail through the Escrow Agent to hold the
proceedings of the transaction. Inspite of this, on 28.6.2005 itself, the accused
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Nos. 2 and 3, the officers of the accused No.1 Bank sanctioned the loan
immediately on the same day and immediately the said amount was initially
credited in the newly opened account of the Company with accused No.1 Bank,
Post Louis Branch at Mauritius. n the same day i.e. 28.6.2005, an amount of US$
13,395,519.13 was transmitted from the said account of the Company to the
account of accused No.5 with State Bank of Mauritius, Chennai Branch. Then on
the same day, the said amount was re-transferred from the account of accused No.
5 with the Chennai Branch of State Bank of Mauritius to the account of the
Company with State Bank of Mauritius, Port Louis, Mauritius and on 30.6.2005
again whole of that amount was transferred to State Bank of Mauritius and thus
the loan taken by opening the new account in the name of the Company on
28.6.2005 was shown to have been repaid. According to the complainant, the
above transactions, beginning with opening of the account in the name of the
Company with Bank of Mauritius at Port Louis till the said amount of the loan
was repaid, were a part of great conspiracy hatched and executed by accused
Nos. 1 to 7. This was to defraud the complainant and other shareholders of the
said subsidiaries of the Company. It is contended that for this purpose, accused
No.4 Pawan Kumar had had entered into conspiracy with accused Nos. 1 to 3
and accused Nos. 5 to 7 and had created the forged and fabricated documents to
show that he was authorised to open the account to obtain the loan and to
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transmit that amount to the account of accused No.5 Company.
6. The learned Counsel for the complainant contended that even though
as per the agreement, the accused No.5 was to deliver the redeemable preference
shares of the accused No.5 Company to the sellers. Those shares were never
delivered or transferred to the complainant and other owners of the said Company.
The learned Counsel contended that there was no valid reason to obtain the loan
from the accused No.1 in the name of the said company nor there was any reason
for the Company to transfer that amount to the account of accused No.5 at
Chennai because the complainant or its company was not to make any payment to
the accused No.5 in the said transaction. The complainant’s Company was the
seller and he had to receive consideration of the sale of the said subsidiaries from
accused No.5. As the accused No.5 was not in a position to make payment in cash
immediately, it was agreed that they would hand over the redeemable preference
shares, which would be eventually redeemed after 18 months and thus the price
would be paid to the complainant and other vendors of the Company in cash. The
learned Counsel for the accused persons inspite of his best attempts could not
give any convincing reply as to why and in what circumstances the complainant
Company was required to obtain the loan to make payment to the accused No.5
when in fact the payment was to be made by the accused No.5 Company to the
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company of the complainant and not otherwise. The complainant and the
Company had not purchased anything from the accused No.5 and, therefore, they
were not required to make any payment to the accused No.5. One can understand
if the accused No.5 would have opened an account and had obtained certain loan
in his own account and then that amount was transferred to the account of the
Company of the complainant and then that amount was taken back against
delivery of redeemable preference shares. However, in the present case, it appears
that not only the accused Nos. 5 to 7 secured original shares of the three
subsidiaries of Vmoksha Technologies it secured loan from accused No.1 Bank in
the name of the seller company and then got transfered that money in the account
of accused No.5 and the same was therefore rechanneled to the account of
Vmoksha Technologies and back to the Bank immediately. By this, an attempt
was made to show that accused No.5 had made payment of the consideration
amount by transferring that amount from its account at Chennai Branch of Bank
of Mauritius to the account of Vmoksha Technologies opened with Bank of
Mauritius, Port Louis while in fact not even a rupee was actually paid by accused
No.5 to Vmoksha. This, prima facie, shows a fraudulent transaction.
7. Whole of this fraudulent transaction was completed within a short
span of two days. The proposal was moved on 28.6.2005. On the same day, the
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proposal was accepted by the Company with certain conditions of producing the
resolution of the Company. On that day itself accused No.4 sent the copy of the
resolution by E-mail to the Escrow Agents i.e. Price Waterhouse Coopers with a
request to obtain signature of the complainant. Record reveals that the
complainant did not sign it and through Escrow Agents asked the bank to hold the
process of loan transaction. Inspite of the fact that the resolution duly signed by
the shareholders, and particularly the complainant, was not submitted to the Bank,
the loan was sanctioned and on the same day, amount of US$ 13.5 million was
credited in the newly opened account of Vmoksha Technologies. The shocking
fact is that not only the loan was sanctioned and the amount was credited to the
newly opened account in the name of Vmoksha Technologie on 28.6.2005, on the
same day, the amount of US $ 13,395,519.13 was first transferred to the account
of accused No.5 with Chennai Branch and then that amount was shown to have
been transferred from the account of accused No.5 from Chennai Branch to the
newly opened account of Vmoksha Technologies and within two days after that
the amount was paid back to the Bank of Mauritius. From these facts, prima
facie conclusion can be drawn that whole of this transaction was the result of a
great conspiracy and fraud in which accused Nos. 4, 5, 6 ad 7 had actually
participated.
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8. The learned counsel for the accused Nos. 1 and 2 vehemently
contended that accused Nos. 2 and 3 were stationed in India during the relevant
period. The account of Vmoksha Technologies was opened, loan was sanctioned
and credited to that account at Port Loius Branch of State Bank of Mauritius. The
transaction had taken place at Mauritius and, therefore, the accused Nos. 2 and 3
had no role and they cannot be held responsible. However, the learned Senior
Counsel for the complainant pointed out that the letter dated 28.6.2005 from State
Bank of Mauritius addressed to the Director of Vmoksha Technologies Ltd. was
signed by the accused Nos. 2 and 3. By that letter, they had accepted the proposal
for opening of the account and advancing of the loan subject to the condition that
Vmoksha was to indicate acceptance of the conditions and returned the said
agreement with copy of the shareholders’ resolution confirming the terms and
conditions. As noted above, neither such a resolution was passed by the
shareholders of the Company nor any such resolution was submitted to the Bank.
What was submitted was a draft resolution prepared by accused No.4 and sent by
him alone. He had sent that resolution by E-mail to the complainant who had
refused to sign. Thus, accused Nos. 1 to 3 did not get the said resolution and any
document about the acceptance of the terms and conditions of the loan. According
to the complainant, the loan agreement wassigned by accused Nos. 2 and 3 on
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behalf of the Bank and by accused No.4. It indicated the participation of accused
Nos. 2 and 3 in the whole fraudulent transaction. I hasten to add that at the time
of trial, the accused Nos. 2 and 3 will have an opportunity to show that they were
not parties to the loan agreement and actual transfer of the amount from the
account of Vmoksha Technologies and back. The case is a warrant trial case and
therefore the complainant will be required to lead evidence before framing of
charge. At that time, the accused persons will have right to cross-examine the
witnesses and will get an opportunity to point out that the evidence does not
make out a case for framing of charge against them. At that stage, accused
persons and particularly accused Nos. 2 and 3 may press for discharge, but at this
stage, prima facie case is made out against them also.
9. Taking into consideration the facts and circumstances noted above, it
must be held that prima facie case was made out to issue process against accused
persons, which the trial Court did. The order of the trial Court was set aside by
the learned Addl. Sessions Judge by the impugned order mainly on three grounds.
Firstly, there was suppression of fact that the complainant had earlier filed a
complaint on the basis of same facts before the Magistrate at Bangalore.
Secondly, the mandatory provision of inquiry under Sec. 202 of Cr.P.C. was not
complied with as some of the accused persons were not residing within the
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territorial jurisdiction of the learned Metropolitan Magistrate and thirdly, the
alleged act of 28.6.2005 was ratified by the complainant in the meeting held on
19.7.2005.
10. It is an admitted fact that before complaint was filed by the
complainant against the accused Nos. 1 to 7 in the Court of Chief Metropolitan
Magistrate, 47th Court, Mumbai, the complaint was also filed before the
Magistrate at Bangalore against accused Nos. 4 to 7. When the Metropolitan
Magistrate, Mumbai issued the process, the complaint was pending before the
Magistrate at Bangalore. It is also an admitted fact that the learned Magistrate at
Bangalore had directed the investigation under Section 156(3) of Cr.P.C. That
order was challenged by the accused persons before the Karnataka High Court
and before the Karnataka High Court also the accused persons had contended that
on the same facts and circumstances, the complainant had filed complaint in
Mumbai and when that complaint was pending, the complaint before the
Magistrate at Bangalore was liable to be quashed. The Karnataka High Court
accepted that argument and quashed the said complaint mainly on the ground that
a comprehensive complaint against seven accused persons, including accused Nos.
1 to 3 and 4 to 7 was already filed and was pending before the Magistrate at
Mumbai. The Karnataka High Court passed the order dated 23.7.2007 and as a
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result of that order, the complaint filed before the Magistrate at Bangalore was
quashed and it was no more in existence. The impugned order was passed by the
Additional Sessions Judge on 13.8.2008. On that day, no complaint was pending
before the Magistrate at Bangalore. Therefore, one of the ground given by the
learned Addl. Sessions Judge for allowing the revision application that a similar
complaint was filed before and was pending before the Magistrate at Bangalore
and this fact was suppressed was in fact not available. It is a fact that initially
when this complaint was filed before the Addl. C.M.M. Mumbai, the complaint
was pending before the Magistrate at Bangalore, but the learned Addl. Sessions
Judge, Mumbai, could not ignore the fact that said complaint before the
Magistrate at Bangalore was already quashed and was no more in existence. On
13.8.2008 when the learned Addl. Sessions Judge passed the order, there was no
complaint except the one filed before the Addl. C.M.M. Mumbai. The learned
Senior Counsel for the accused persons contended that when certain facts are
suppressed for getting some relief, on that ground itself the relief can be refused.
Mr. Menon, the learned Senior Counsel for accused Nos. 5, 6 and 7, placed
reliance upon Welcom Hotel and Ors. vs. State of Andhra Pradesh & Ors.
(1983) 4 SCC 575, S.P. Chengal Varaya Naidu vs. Jagannath &Ors. (1994) 1
SCC 1, Motor Incorporated vs. Union of India and Ors. 2004 Cri.L.J.1576
and Bomanji Kavasji Boman Behram and Ors. vs. Mehernosh Minochar
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Mehta & Ors. 1980 Bom.C.R.503. In all these matters, the Supreme Court and
the Bombay High Court had taken a view that if a party has suppressed material
facts while obtaining or attempting to obtain some reliefs from the Court, the
Court would be justified in refusing that relief on the ground that there was
suppression of material facts. There can be no dispute about this legal
proposition. However, the facts of the present case, as noted above, make it clear
that when the learned Addl. Sessions Judge passed the order, there was no second
criminal complaint pending before the Magistrate at Bangalore.
11. It was also contended by the learned Counsel for the accused persons
that when one complaint has been dismissed, the complainant cannot be allowed
to prosecute the accused persons on the basis of same facts and circumstances by
filing second complaint and in support of this reliance was placed upon Poonam
Chand Jain and Anr. vs. FAZRU (2010) 2 SCC 631. In fact, in that case, first
complaint was dismissed on merits and the question was before the Supreme
Court whether second complaint on identical facts would be maintainable,
particularly when the first complaint was dismissed on merits and that dismissal
had attained finality. The Supreme court observed thus in paras 15, 16 and 20 :-
“15. Almost similar questions came up for consideration
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before this Court in Pramatha Nath Talukdar v. Saroj Ranjan
Sarkar. The majority judgment in Pramatha Nath was delivered
by Kapur, J. His Lordship held that an order of dismissal under
Section 203 of the Criminal Procedure Code (for short “the
Code”) is, however, no bar to the entertainment of a second
complaint on the same facts but it can be entertained only in
exceptional circumstances. This Court explained the
exceptional circumstances as :
(a) where the previous order was passed on incomplete
record, or
(b) on a misunderstanding of the nature of the complaint, or
(c) the order which was passed was manifestly absurd, unjust
or foolish, or
(d) where new facts which could not, with reasonable
diligence, have been brought on the record in the previous
proceedings
16. This Court in Pramatha Nath made it very clear
that interest of justice cannot permit that after a decision has
been given on a complaint upon full consideration of the case,
the complainant should be given another opportunity to have
the complaint enquired into again. In para 50 of the judgment
the majority judgment of this Court opined that fresh evidence
or fresh facts must be such which could not with reasonable
diligence have been brought on record. This Court very clearly
held that it cannot be settled law which permits the complainant
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to place some evidence before the Magistrate which are in his
possession and then if the complaint is dismissed adduce some
more evidence. According to this Court, such a course is not
permitted on a correct view of the law. (para 50, p.899).
20. Following the aforesaid principles which are more
or less settled and are holding the field since 1962 and have
been repeatedly followed by this Court, we are of the view that
the second complaint in this case was on almost identical facts
which was raised in the first complaint and which was
dismissed on merits. ig So the second complaint is not
maintainable. This Court finds that the core of both the
complaints is the same. Nothing has been disclosed in the
second complaint which is substantially new and not disclosed
in first complaint. No case is made out that even after the
exercise of due diligence the facts alleged in the second
complaint were not within the knowledge of the first
complainant. In fact, such a case could not be made out since
the facts in both the complaints are almost identical. Therefore,
the second complaint is not covered within exceptional
circumstances explained in Pramatha Nath. In that view of the
matter the second complainant in the facts of this case, cannot
be entertained.”
In the present case, first complaint was not dismissed on merits. The first
complaint was quashed by the Karnataka High Court on the ground that
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complainant had filed another complaint on identical facts at Mumbai against 7
accused persons. The complaint filed before the Magistrate at Bangalore was not
decided on merits nor the Court had dismissed the same on merits. Therefore,
this authority is not attracted to the facts and circumstances of the case and on this
ground the complaint filed before the Addl. C.M.M. Mumbai could not be
dismissed. Even though complainant had filed two complaints, one of them was
already quashed by the Karnatak High Court at Bangalore, the second complaint
pending before the Addl. C.M.M. Mumbai could not have been dismissed on the
same ground. If it would also be quashed, it would amount to denial of justice to
the complainant and providing protection and immunity to the accused persons
who had committed serious offences of fraud, cheating, forgery, conspiracy, etc.
12. The second contention is about non-following the mandatory
provisions of Section 202(1) of Cr.P.C. Out of seven accused persons, accused
Nos. 1 and 2 were situated at Mumbai, accused No.3 was at Chennai, accused No.
4 was at Bangalore and accused Nos. 5, 6 and 7 were also at Chennai. Therefore, it
is clear that accused Nos. 3 to 7 were not residing or situated within the territorial
jurisdiction of the Addl. C.M.M. Mumbai. After the amendment, with effect from
23.6.2006, in Sec. 202(1) of Cr.P.C. it has been made mandatory that any
Magistrate, on receipt of a complaint of an offence against an accused residing at
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a place beyond the area in which he exercises his jurisdiction, he shall postpone
the issue of process against the accused and shall either inquire into the case
himself or direct an investigation to be made by a police officer or by such other
person as he deems fit, before issuing the process. There is no dispute that in
Criminal Application No.2640 of 2009 (Capt. S.C.Mathur & Anr. vs. M/s.
Elektronik Lab & Ors) and companion matters, one of which was between the
parties before this Court, a learned Single Judge of this Court was required to
consider whether the above provision of Sec. 202 is mandatory or not and after
hearing the parties, the learned Judge held that the amendment made in Sec.
202(1) of Cr.P.C. insofar as postponement of issuance of process against the
accused, who are not residing in the area in which the concerned Magistrate
exercises his jurisdiction, is mandatory. This proposition of law is not in dispute
in the present case.
13. The learned Counsel for the accused persons contended that this
mandatory provision was not followed as no such enquiry was made by the
learned Addl. C.M.M. before issuing process. On the other hand, the learned
Senior Counsel for the complainant pointed out from the proceedings of the trial
Court that the said provision was in fact followed . The record reveals that the
complaint was field on 22.11.2006 and on that day, the matter was adjourned to
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11.12.2006 for hearing on the point of taking cognizance on 11.12.2006, the
matter was adjourned to 19.12.2006. On 19.12.2006 after hearing, the learned
Addl. C.M.M. came to conclusion that offence was made out and therefore he
took cognizance and posted it to 5.1.2007 for recording verification statement of
the complainant. On 5.1.2007, verification statement was recorded. Thereafter,
the matter was adjourned to 11.1.2007 and then to 18.1.2007 and finally on
18.1.2007, the learned Addl. C.M.M. passed the order to issue process. In that
order, he gave detailed reasons which show that he had not only gone through the
complaint, verification statement, but also other documents on which the
complainant was relying. From this, it is clear that after taking cognizance of the
complaint on 19.12.2006, the learned Addl. C.M.M. had adjourned the matter and
for recording evidence after verification statement again, he had adjourned for
hearing as to whether process should or should not be issued. It means, he had in
fact postponed issuance of process after taking cognizance of the matter. What
has been held in Capt. S.C.Mathur (supra) is that postponement of issuance of
process is mandatory when the accused is not residing within the territorial
jurisdiction of the Magistrate taking cognizance of the matter, till some enquiry is
held either by the Magistrate himself or through police or some other person, Sec.
202 does not prescribe what enquiry should be held by the Magistrate after
having taken cognizance. If the Magistrate hears the Counsel for the parties and
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peruses the relevant documents is satisfied that prima facie case is made out for
issuance of process, it amounts to making necessary enquiry under Sec. 202
before issuance of process. In my opinion, taking into consideration the facts and
circumstances, it must be held that the learned Addl. C.M.M. had in fact complied
with the mandatory provision of Sec. 202 and had postponed the issuance of
process till he made appropriate enquiry in the given circumstances and then he
came to conclusion that the issuance of process was necessary, for which he
passed a reasoned order. The learned Addl. Sessions Judge committed a serious
error in holding that the learned Magistrate had not complied with the mandatory
provisions of Sec. 202.
14. 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
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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 Judge.
15. In Suryalakshmi Cotton Mills Limted vs. Rajvir Industries
Limited & Ors. (2008) 13 SCC 678, the Supreme Court observed thus in para 22
:-
“22. Ordinarily, a defence of an accused
although appears to be plausible should not be taken into
consideration for exercise of the said jurisdiction. Yet again,
the High Court at that stage would not ordinarily enter into a
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disputed question of fact. It, however, does not mean that
documents of unimpeachable character should not be taken
into consideration at any cost for the purpose of finding out as
to whether continuance of the criminal proceedings would
amount to an abuse of process of court or that the complaint
petition is filed for causing mere harassment to the accused.
While we are not oblivious of the fact that although a large
number of disputes should ordinarily be determined only by the
civil courts, but criminal cases are filed only for achieving the
ultimate goal, namely, to force the accused to pay the amount
due to the complainant immediately. The courts on the one
hand should not encourage such a practice; but, on the other,
cannot also travel beyond its jurisdiction to interfere with the
proceeding which is otherwise genuine. The courts cannot
also lose sight of the fact that in certain matters, both civil
proceedings and criminal proceedings would be maintainable.”
In the present case, it cannot be said that the photocopy of the document
purporting to be minutes of the meeting dated 19.7.2005 was a document of
unimpeachable character. It is material to note that title of the document shows
that it was the minutes of the meeting of the advisers of the complainant Rajeev
Sawhney and accused No.4 Pawan Kumar. If it was so the document would have
been signed by such advisers, but according to the accused persons, the said
document was in fact signed by the complainant himself. If it is so this fact may
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be proved by the accused as and when the parties are put to trial. Thus, the
defence of the accused is based on that document. Therefore, it could not have
been taken into consideration while quashing the order about issuance of process.
16. In view of the facts and circumstances noted above, all the three
reasons given by the Additional Sessions Judge to quash the order passed by the
Addl. C.M.M. had no basis. It is interesting to note that after having stated the
facts of the case, in para 31 of the impugned order, the learned Addl. sessions
Judge himself had observed “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.” It shows that the Addl. Sessions Judge, on the basis of the facts disclosed
in the complaint, had also come to conclusion that prima facie case was made out.
Having come to such a conclusion, the Addl. Sessions Judge embarked upon
consideration of other grounds and quashed the order, which was well-reasoned
and based on the facts disclosed in the complaint. Therefore, in my opinion, it is
a fit case where this Court should, under its inherent power under Sec.482,
interfere and quash the order passed by the Addl. sessions Judge.
17. For the aforesaid reasons, the Revision Application is allowed. The
impugned order passed by the learned Addl. Sessions Judge, Greater Bombay, is
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hereby set aside and the order passed by the Addl. C.M.M. 47th Court, Mumbai,
issuing process against the accused persons is hereby restored.
18. Parties shall appear before the Addl. C.M.M. Mumbai, on 4.7.2011.
It is made clear that the Court below while deciding the matter at the stage of
framing charge or at the time of final judgment after trial, shall not be influenced
by any observations made in this order as those observations are prima facie and
are made for deciding this Revision Application only.
(J.H.BHATIA,J.)
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