MEDHATITHI JHA & ANR. vs STATE OF NCT OF DELHI & ANR.

2024-01-24 Information

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Reserved on: 12.01.2024
Pronounced on: 24.01.2024

+ W.P.(CRL) 3664/2023
MEDHATITHI JHA & ANR. ….. Petitioners
Through: Mr. Siddharth Agarwal, Sr. Advocate along with Mr. Rohit Priya Ranjan, Advocate.

versus

STATE OF NCT OF DELHI & ANR. ….. Respondents
Through: Mr. Sanjeev Bhandari, ASC for the State along with Mr. Kunal Mittal, Mr. Arijit Sharma and Ms. Rishika, Advocates and with SI Rakesh Kumar, P.S. Greater Kailash-I, New Delhi.
Mr. Sudhir Nandrajog, Sr. Advocate along with Mr. Arjun Syal and Mr. Rohit Kumar, Advocates for complainant.

+ W.P.(CRL) 3706/2023
M/S PLATINUM HOTELS AND RESTAURANTS LLP
& ORS. ….. Petitioners
Through: Mr. Vipul Lamba and Mr. Paritosh Dhawan, Advocates

versus

CORAM:
HON’BLE MS. JUSTICE SWARANA KANTA SHARMA
JUDGMENT
SWARANA KANTA SHARMA, J.
CRL.M.A. 34079/2023 (Stay) in W.P.(CRL) 3664/2023
CRL.M.A. 34524/2023 (Stay) in W.P.(CRL) 3706/2023
1. By way of these applications under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.), the petitioners in the above-captioned writ petitions seek stay of investigation and/or stay of arrest of the petitioners in FIR bearing no. 0302, dated 23.11.2023, registered at Police Station Greater Kailash-1, New Delhi, for offences punishable under Sections 420/406/468/471/506/120B/34 of the Indian Penal Code, 1860 (IPC).
2. The aforesaid FIR was registered pursuant to order dated 23.11.2023, passed by learned MM-04, South East, Saket Courts, Delhi in an application filed under Section 156(3) of Cr.P.C. by the complainants, which has been challenged by the petitioners/accused persons by way of aforesaid writ petitions.
3. Briefly stated, the facts of the present case as per the complaint filed by the complainant are that the accused persons had allegedly conspired in a pre-planned manner to grab the property of the complainant and had extorted money from him on several occasions. It was alleged by the complainant that the accused no. 1, 2, 4, and 5 were designated partners in the accused company i.e. accused no. 6, and in addition to this, accused no. 3 worked with the accused no. 6 company i.e. M/s Taurus International Projects Pvt. Ltd., as a freelancer financial consultant, which was complainants company. Thereafter, in 2018, during the financial crisis faced by the complainant’s company, accused no. 3 had suggested to obtain financial help from accused no. 1 and 2, creating an impression of an expeditious and hassle-free loan. Further, accused no. 3 had also blocked other financial aid sources for the complainant. Thereafter, meetings were organized between the complainant and accused no. 1 and 2, leading to the complainant agreeing to a loan of Rs. 25 crores with variable interest rates. The complainant had entered into four Agreements to Sell, securing the loan with properties. Furthermore, the complainant was made to believe that certain suits shall be filed for having consent decrees, which shall be reversed when the loan is repaid. The accused persons had induced the complainant, leading to the filing of a suit for specific performance and consent decrees being drawn before the mediation centre of the Delhi High Court. These agreements were allegedly used to grab the complainant’s properties. The complainant was further induced to allow accused no. 6 to run his hotel through accused no. 3. Lease deeds were executed under the pretext of securing loan transactions, with the complainant being made to believe in the monthly expenditure and profits. However, the accused persons had misappropriated the profit amount of approximately Rs. 19 crores. The complainant was induced to have accused no. 3 look after his business during the pendency of loan, since he had been in employment of the complainant earlier and thus, accused no. 3 had access to confidential information, for misusing it for fraudulent transactions. As alleged, the complainant was forced to fulfil extortion demands, including payment of Rs. 5 crore, 3 kg gold, and foreclosing the loan. Thereafter, the threats, coercion, and extortion continued, with further demands for Rs. 2 crore in cash or equivalent in gold. In January 2022, accused no. 1 had also forced the complainant to part with a Toyota Camry car. The complainant had also reported the threats, extortion, and forced transactions, seeking intervention and recovery of the vehicle. The present FIR was registered under Sections 420/406/468/471/506/120B/34 of IPC pursuant to order dated 23.11.2023 passed by the learned Magistrate.
4. Learned Senior Counsel for the petitioners in W.P.(CRL) 3664/2023 argues that the present FIR is an abuse of process of law and the present dispute is purely of civil nature, which has been given a colour of criminal dispute with a motive of arm twisting the petitioners. It is argued that the registration of present FIR goes against law laid down by Honble Supreme Court and various other courts which directs that a Magistrate while exercising his power under Section 156(3) of Cr.P.C., has to see whether there are prima-facie allegations indicating criminality on the part of the accused persons. It is further argued that the impugned order is bad in law as it has been passed in a mechanical manner without adhering to the said rationale of law. It is further argued by learned Senior Counsel that even if the entire case of the complainant in the FIR is taken on face value, no criminal case is made out, and rather it is only a civil dispute which has been given a colour of criminality. It is argued that the FIR has been registered by concealing the fact that civil litigations are pending between the accused persons and complainant, which clearly demonstrate the motive of the complainant and indicate sheer abuse of process of law. Learned Senior Counsel relies on the case of Indian Oil Corporation v. NEPC India Ltd. 2006 (6) SCC 736, wherein the Honble Supreme Court had held that there is an increasing tendency in business circle to convert purely civil disputes into criminal cases. Thus, it is prayed that the further investigation in the present FIR be stayed till the decision in the present connected writ petitions and stay of arrest of petitioners be also directed.
5. Learned counsel appearing for petitioners in W.P.(CRL) 3706/2023 also argues on similar lines, as argued by learned Senior Counsel, and further submits that petitioner herein have no connection with the present dispute and they have been falsely implicated in the FIR. It is also submitted that petitioner no. 2 was merely a Chartered Accountant in the company and had no role to play in the alleged transactions.
6. On the other hand, learned Senior Counsel appearing for respondent no. 2 argues that the learned Magistrate has passed a detailed and well-reasoned order on the application filed by the complainant filed under Section 156(3) of Cr.P.C. after considering all the facts of the case and that the allegations point out towards the criminal act of the accused persons. It is further argued that the criminal acts of the applicant are of such nature that require investigation by the Police authorities as there are elements of extortion and duping as has been alleged in the complaint. It is argued that while deciding an application under Section 156 (3) of Cr.P.C., the Courts have to see prima-facie existence of criminality and the need for police investigation. It is argued that the complainant and his family has been a victim of pre-planned conspiracy vide which the accused persons have grabbed the valuable properties of the complainant and has also extorted money from the complainant on various occasions. It is further argued that the accused persons are illegally running money-lending business without proper registration and licenses. It is thus argued that the impugned order was passed considering the specific allegations of extortion, fraud, forging of documents and allegations of commission of cognizable offences of cheating and criminal breach of trust coupled with criminal conspiracy, which are clearly criminal in nature and require investigation on the part of investigating agencies. Thus, it is prayed that the present application for stay filed on behalf of the accused persons be dismissed.
7. This Court has heard arguments addressed by learned Senior Counsel for the petitioners and learned Senior Counsel for respondent and has perused material on record.
8. While challenging the order passed by learned Magistrate disposing of application filed under Section 156 (3) of Cr.P.C. and directing the registration of FIR against the accused persons, it has been argued on behalf of petitioners that during the pendency of the writ petition seeking quashing of FIR, this Court should pass an interim order either staying the investigation in the impugned FIR or directing that no coercive steps be taken against the applicants.
9. In light of the relief sought by way of present application, this Court deems it appropriate to refer to the decision of the Hon’ble Apex Court in case of Siddharth Mukesh Bhandari v. The State of Gujarat & Anr. (2022) 10 SCC 525, wherein the Honble Apex Court, while reiterating the ratio laid down in case of Neeharika Infrastructure Pvt. Ltd. 2021 SCC OnLine SC 315, had observed that orders regarding stay of investigation can only be passed in rarest of the rare cases, while exercising powers under Section 482 of Cr.P.C. the relevant observations are as under:
9. It appears from the impugned order passed by the High Court that the learned Single Judge has not properly appreciated and/or considered our earlier judgment and order passed in M/s. Neeharika Infrastructure Pvt. Ltd. (supra). Even the learned Single Judge has also not properly understood the ratio of the decision of this Court in the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra). It appears that the learned Single Judge seems to be of the opinion that after giving reasons, the High Court can grant an interim stay of further investigation in a petition seeking quashing of the criminal complaint filed under Article 226 of the Constitution read with Section 482 Cr.P.C. The High Court has not properly appreciated the principles and the law laid down by this Court in the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra).
10. What is emphasized by this Court in the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra) is that grant of any stay of investigation and/or any interim relief while exercising powers under Section 482 Cr.P.C. would be only in the rarest of rare cases. This Court has also emphasized the right of the Investigating Officer to investigate the criminal proceedings. In our earlier judgment and order, in fact, we abstracted the principles laid down by this Court in the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra) in paragraph 4.
11. Despite the earlier judgment and order passed by this Court in the very criminal proceedings quashing and setting aside the earlier interim orders passed by the High Court, which came to be set aside by this Court, again, the learned Single Judge has granted the very same interim relief, which as observed hereinabove, can be said to be in teeth of and contrary to our earlier judgment and order in the case of M/s. Neeharika Infrastructure Pvt. Ltd. (supra). We are not observing anything further as the learned Senior Advocates appearing on behalf of the original writ petitioners accused have prayed not to pass any further reasoned order.”
(Emphasis supplied)

10. Further, the Hon’ble Apex Court in the case of Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra & Ors. (supra), had observed the following in relation to passing orders of stay of investigation and arrest:
64. We have come across many orders passed by the High Courts passing interim orders of stay of arrest and/or no coercive steps to be taken against the accused in the quashing proceedings under Section 482 Cr. P.C. and/or Article 226 of the Constitution of India with assigning any reasons. We have also come across number of orders passed by the High Courts, while dismissing the quashing petitions, of not to arrest the accused during the investigation or till the chargesheet/final report under Section 173 Cr. P.C. is filed. As observed hereinabove, it is the statutory right and even the duty of the police to investigate into the cognizable offence and collect the evidence during the course of investigation. There may be requirement of a custodial investigation for which the accused is required to be in police custody (popularly known as remand). Therefore, passing such type of blanket interim orders without assigning reasons, of not to arrest and/or no coercive steps would hamper the investigation and may affect the statutory right/duty of the police to investigate the cognizable offence conferred under the provisions of the Cr. P.C. Therefore, such a blanket order is not justified at all. The order of the High Court must disclose reasons why it has passed an ad-interim direction during the pendency of the proceedings under Section 482 Cr. P.C. Such reasons, however brief must disclose an application of mind.
65. The aforesaid is required to be considered from another angle also. Granting of such blanket order would not only adversely affect the investigation but would have far reaching implications for maintaining the Rule of Law. Where the investigation is stayed for a long time, even if the stay is ultimately vacated, the subsequent investigation may not be very fruitful for the simple reason that the evidence may no longer be available. Therefore, in case, the accused named in the FIR/complaint apprehends his arrest, he has a remedy to apply for anticipatory bail under Section 438 Cr. P.C. and on the conditions of grant of anticipatory bail under Section 438 Cr. P.C. being satisfied, he may be released on anticipatory bail by the competent court. Therefore, it cannot be said that the accused is remediless. It cannot be disputed that the anticipatory bail under Section 438 Cr. P.C. can be granted on the conditions prescribed under Section 438 Cr. P.C. are satisfied. At the same time, it is to be noted that arrest is not a must whenever an FIR of a cognizable offence is lodged. Still in case a person is apprehending his arrest in connection with an FIR disclosing cognizable offence, as observed hereinabove, he has a remedy to apply for anticipatory bail under Section 438 Cr. P.C. As observed by this Court in the case of Hema Mishra v. State of Uttar Pradesh, (2014) 4 SCC 453, though the High Courts have very wide powers under Article 226, the powers under Article 226 of the Constitution of India are to be exercised to prevent miscarriage of justice and to prevent abuse of process of law by the authorities indiscriminately making pre-arrest of the accused persons. It is further observed that in entertaining such a petition under Article 226, the High Court is supposed to balance the two interests. On the one hand, the Court is to ensure that such a power under Article 226 is not to be exercised liberally so as to convert it into Section 438 Cr. P.C. proceedings. It is further observed that on the other hand whenever the High Court finds that in a given case if the protection against pre-arrest is not given, it would amount to gross miscarriage of justice and no case, at all, is made for arrest pending trial, the High Court would be free to grant the relief in the nature of anticipatory bail in exercise of its powers under Article 226 of the Constitution of India, keeping in mind that this power has to be exercised sparingly in those cases where it is absolutely warranted and justified. However, such a blanket interim order of not to arrest or no coercive steps cannot be passed mechanically and in a routine manner.
67. This Court in the case of Habib Abdullah Jeelani (supra), as such, deprecated such practice/orders passed by the High Courts, directing police not to arrest, even while declining to interfere with the quashing petition in exercise of powers under Section 482 Cr. P.C. In the aforesaid case before this Court, the High Court dismissed the petition filed under Section 482 Cr. P.C. for quashing the FIR. However, while dismissing the quashing petition, the High Court directed the police not to arrest the petitioners during the pendency of the investigation. While setting aside such order, it is observed by this Court that such direction amounts to an order under Section 438 Cr. P.C., albeit without satisfaction of the conditions of the said provision and the same is legally unacceptable. In the aforesaid decision, it is specifically observed and held by this Court that ?it is absolutely inconceivable and unthinkable to pass an order directing the police not to arrest till the investigation is completed while declining to interfere or expressing opinion that it is not appropriate to stay the investigation. It is further observed that this kind of order is really inappropriate and unseemly and it has no sanction in law. It is further observed that the courts should oust and obstruct unscrupulous litigants from invoking the inherent jurisdiction of the Court on the drop of a hat to file an application for quashing of launching an FIR or investigation and then seek relief by an interim order. It is further observed that it is the obligation of the court to keep such unprincipled and unethical litigants at bay.
***
71. Thus, it has been found that despite absolute proposition of law laid down by this Court in the case of Habib Abdullah Jeelani (supra) that such a blanket order of not to arrest till the investigation is completed and the final report is filed, passed while declining to quash the criminal proceedings in exercise of powers under Section 482 Cr. P.C., as observed hereinabove, the High Courts have continued to pass such orders. Therefore, we again reiterate the law laid down by this Court in the case of Habib Abdullah Jeelani (supra) and we direct all the High Courts to scrupulously follow the law laid down by this Court in the case of Habib Abdullah Jeelani (supra) and the law laid down by this Court in the present case, which otherwise the High Courts are bound to follow. We caution the High Courts again against passing such orders of not to arrest or – no coercive steps to be taken till the investigation is completed and the final report is filed, while not entertaining quashing petitions under Section 482 Cr. P.C. and/or Article 226 of the Constitution of India.”
(Emphasis supplied)

11. This Court after perusing the application filed by the complainant under Section 156(3) of Cr.P.C., notes that there are specific allegations of extortion of money and gold which has been allegedly done by the accused persons in conspiracy to defraud the complainant. It has also been alleged in the said complaint that the employee of the complainant i.e. accused no. 3 had misused his relationship with the complainant to induce him to borrow money from accused persons. The Court thus finds itself confronted with a series of grave allegations, also noted in para no. 3, against the accused persons, suggesting a conspiratorial scheme to defraud the complainant, wherein a trusted employee is purportedly implicated in the misuse of a confidential relationship.
12. This Court further notes that the allegations in the application under Section 156(3) of Cr.P.C. also extend to inducing the complainant into borrowing money from the accused while concurrently executing certain documents, with the ultimate objective being the acquisition of the complainant’s property at undervalued rates and extorting funds from the complainant.
13. In this Courts opinion, prima facie, there is need for investigation into the allegations of extending threats and extortion, as alleged by the complainant. Thus, considering the overall facts and circumstances, and the fact that there are specific allegations of extortion, cheating and forging on the part of accused persons, this Court is of the opinion that the present case cannot be prima-facie categorized in the rarest of the rare cases where this Court would exercise its extraordinary jurisdiction to either stay the ongoing investigation or direct the investigating agencies to not take any coercive steps against the accused persons. While being conscious of the decisions of the Honble Supreme Court, as noted in the preceding paragraphs, this Court notes that the present case is not fit for staying the ongoing investigation. Further, as far as prayer for stay of arrest is concerned, in case the petitioners apprehend any coercive action on the part of the investigating agency, they may avail appropriate remedy, i.e. filing of anticipatory bail application.
14. Accordingly, the present applications stand dismissed.
15. It is, however, clarified that nothing expressed hereinabove shall tantamount to an expression of opinion on the merits of the case.
16. The judgment be uploaded on the website forthwith.

SWARANA KANTA SHARMA, J
JANUARY 24, 2024
Aanchal

W.P.(CRL) 3664/2023 & W.P.(CRL) 3706/2023 Page 12 of 12