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2010 DIGILAW 561 (ORI)

Harihar Mishra v. Republic of India

2010-08-10

C.R.DASH

body2010
JUDGMENT (1) THIS Misc. Case arises out of CRLA No. 61 of 2010. The aforesaid Criminal Appeal arises out of judgment and order of sentence passed by learned Special Judge (C.B.I.), Bhubaneswar in T.R. No. 83/ 56 of 1999-95. Learned trial Court found the appellant-petitioner guilty of the offence under Sections 120-B/419/420/468/471, IPC. and sentenced him to suffer R.I. for one year and to pay a fine of Rs. 1,000/- in, default to suffer further R.I. for seven days on each court and directed that the substantive sentences shall run concurrently. (2) FACTS relevant for disposal of this Misc. Petition is as follows : The appellant-petitioner conspired with his co-convict Prafulla Kumar Dash, who was working as Manager of UCO Bank, Chaualiaganj Branch, Cuttack at the relevant time in the year 1988 and got two Cash Credit Loans sanctioned in the name of M/s. Niladri Motors, Proprietor-Prasanna Kumar Nayak and M/s. Utkal Pustak Bhandar, Proprietor- Abhiram Swain. The cash credit limit in both the loans was Rs. 25,000/- each, the aforesaid loans were later disbursed and the cash credit accounts were operated. Later, it came to light that present appellant-petitioner Harihar Mishra forged the signatures of aforesaid Prasanna Kumar Nayak and Abhiram Swain in the documents of the Bank. Further it came to light that there was none in the aforesaid name of Prasanna Kumar Nayak and Abhiram Swain and both the aforesaid persons were non-existent. In the aforesaid design, the appellant-petitioner cheated the Bank to the tune of Rs. 2,25,000/ - (two lakhs twenty-five thousand) and the Bank Officials including the co-convict Prafulla Kumar Dash were a part of such design. On the basis of such allegation, investigation by the C.B.I, was taken up and the appellant-petitioner and others were charge-sheeted. The defence plea of the appellant-petitioner is that Prasanna Kumar Nayak and Abhiram Swain, who are proprietors of M/s. Niladri Motors and M/s. Utkal Pustak Bhandar respectively are not non-existent persons and loan had been sanctioned by co- convict Prafulla Kumar Dash after necessary enquiry and credit investigation made by one co-accused K.P. Mohapatra and R. N. Das. So far as other allegations are concerned, the defence plea is one of denial. Learned trial Court, on consideration of the evidence on record, returned the finding of guilt, as aforesaid, and recorded the sentence as aforesaid. The trial Court's judgment has been impugned in the appeal on various grounds. So far as other allegations are concerned, the defence plea is one of denial. Learned trial Court, on consideration of the evidence on record, returned the finding of guilt, as aforesaid, and recorded the sentence as aforesaid. The trial Court's judgment has been impugned in the appeal on various grounds. In the appeal, the appellant- petitioner was granted bail and order was passed staying realization of the fine. The present petition for stay - suspension of the order of conviction is moved and pressed on the grounds outlined below. (3) THE petitioner is the Managing Director of M/s. Swostik Stevedores Pvt. Ltd., which is a company registered under the Companies Act, 1956. THE aforesaid company has been incorporated under the Companies Act since 1998. THE yearly turn over of the company for the financial year 2002- 03 till 2008-09 has been filed vide Annexures-l/B series to the additional affidavit, which shows that the turn over of the company in the year 2008-09 was Rs. 14,06,16,586/-. Vide Annexure-l/c the appellant-petitioner has filed the statement regarding number of employees working under the company at different places. It is submitted by learned counsel for the appellant- petitioner that besides the aforesaid permanent employees of the company, the company being involved in stevedoring has employed number of labourers and employees in the Port. By virtue of the conviction of the appellant by the trial Court, the Dumper Owners' Association, vide Annexure-1/e, has conveyed their inability to provide dumpers to the company, of which the petitioner is the Managing Director, for intra-port transportation of cargos. THE Paradeep Port Trust Authority, vide Annexure-1/d, which is the show cause notice dated 23-7-2010, has asked the appellant-petitioner to show cause as to why the stevedoring licence of the petitioner's company shall not be cancelled as per Clause 8(1)(i) of the Paradeep Port Trust (Licensing of Stevedores) Regulation, 2009 consequent upon his conviction by a Court. Vide Annexure-1/f, the Steel Authority of India Ltd. has terminated the contract with M/s. Swostik Stevedores Pvt. Ltd. (of which, the petitioner is the Managing Director), so far as stevedoring, shore clearance, transportation, stacking and wagon loading of imported lime stone at Paradeep is concerned. Vide Annexure-1/f, the Steel Authority of India Ltd. has terminated the contract with M/s. Swostik Stevedores Pvt. Ltd. (of which, the petitioner is the Managing Director), so far as stevedoring, shore clearance, transportation, stacking and wagon loading of imported lime stone at Paradeep is concerned. It is submitted by learned counsel for the appellant-petitioner that the contract with the company of the appellant-petitioner has been cancelled by the Steel Authority of India Ltd. for failure of fulfillment of contractual obligation by the company and it is further strenuously submitted by the learned counsel for the appellant-petitioner that there has been such failure of contractual obligations by the company for non-supply of dumpers by the Dumper Owners' Association apprehending that the stevedoring licence of the petitioner shall be cancelled as per the provisions contained in Paradeep Port Trust (Licensing of Stevedores) Regulations, 2009, As the appellant-petitioner has already been visited with the consequence of the order of conviction passed by the trial Court, even though the appeal is still pending, he has rushed to this Court for protection envisaged under Section 389, Cr. P.C. (4) LEARNED counsel for the appellant-petitioner submits that though an order of conviction in itself is not executable, yet in the present case the petitioner has had to incur disqualification in view of provisions contained in Clause 8(1)(i) of Paradeep Port Trust (Licensing of Stevedores) Regulation, 2009. It is further submitted that on conviction of the appellant-petitioner by the trial Court, the Dumper Owners' Association having already cancelled the contract with the petitioner's company and they having refused to provide dumpers to the petitioner's company for intra-port transportation of cargo, the petitioner's company has failed to fulfill the contractual obligations of the Steel Authority of India Ltd. and the Steel Authority of India Ltd. has already cancelled the contract with the petitioner's company so far as stevedoring etc. is concerned. The loss going to be sustained by the petitioner in the matter of the company, of which he is the Managing Director, is of an irreversible nature and the damage done cannot be undone in the event the appeal preferred by the appellant-petitioner is allowed and he is acquitted of the charge. is concerned. The loss going to be sustained by the petitioner in the matter of the company, of which he is the Managing Director, is of an irreversible nature and the damage done cannot be undone in the event the appeal preferred by the appellant-petitioner is allowed and he is acquitted of the charge. Further it is submitted that for the loss sustained by the company, all the employees thriving on pay/perks given by the company shall have to suffer and their sufferings also cannot be undone in subsequent event of the petitioner's success in the appeal. Lastly it is submitted by the learned counsel for the appellant-petitioner that the appellant-petitioner has otherwise got a good case in the appeal and he has got contentious grounds to raise in the appeal entitling him to an acquittal. LEARNED counsel for the appellant-petitioner relies on the following decisions to impress upon this Court to stay operation of the judgment of conviction - Rama Narang v. Ramesh Narang, (1995) 2 SCC 513 , Dr. Shailendra Kumar Tamotia v. Republic of India, 2010 Cri LJ 196, Navjot Singh Sidhu v. State of Punjab, AIR 2007 SC 1003 , Pravinkumar Paraskumar Gokhroo v. State of Gujarat, 2010 Cri LJ 477. Mr. S. K. Padhi, learned Senior Counsel appearing for the C.B.I, on the other hand submits that if a person has been convicted, he must be visited with the consequence thereof and conviction can only be stayed or suspended in rarest of rare case. He relies on the cases of K. C. Sareen v. C.B.I., Chandigarh, (2001) 6 SCC 584 : ( AIR 2001 SC 3320 ), Navjot Singh Sidhu v. State of Punjab, AIR 2007 SC 1003 , State of Maharashtra v. Gajanan, (2003) 12 SCC 432 : ( AIR 2004 SC 1188 ), Union of India v. Atar Singh, (2003) 12 SCC 434, State of Punjab v. Navraj Singh, AIR 2008 SC 2962 : (2008 Cri LJ 3864 to substantiate his contention. He further submits that the petitioner has been charge-sheeted in SPE Case No. 04/ 2001 in RC. 19(S)/99-BBS for offence under Section 407, IPC for committing criminal breach of trust in respect of 300 metric tonnes of D.A.P. fertilizers entrusted to him as a transporter by the Paradeep Phosphates Ltd. and such of his conduct should also be taken into consideration in the present petition. 19(S)/99-BBS for offence under Section 407, IPC for committing criminal breach of trust in respect of 300 metric tonnes of D.A.P. fertilizers entrusted to him as a transporter by the Paradeep Phosphates Ltd. and such of his conduct should also be taken into consideration in the present petition. (5) Hon’ble Supreme Court in the case of Rama Narang v. Ramesh Narang, (1995) 2 SCC 513 , in paragraph 16 has held thus :- "16. In certain situations the order of conviction can be executable, in the sense, it may incur a disqualification as in the instant case. In such a case the power under Section 389(1) of the Code could be invoked. In such situations the attention of the Appellate Court must be specifically invited to the consequence that is likely to fall to enable it to apply its mind to the issue since under Section 389(1) it is under an obligation to support its order 'for reasons to be recorded by it in writing'. If the attention of the Court is not invited to this specific consequence which is likely to fall upon conviction how can it be expected to assign reasons relevant thereto? No one can be allowed to play hide and seek with the Court; he cannot suppress the precise purpose for which he seeks suspension of the conviction and obtain a general order of stay and then contend that the disqualification ceased to operate." Further in paragraph 19 of the judgment, it has been held - "..........In a fit case if the High Court feels satisfied that the order of conviction needs to be suspended or stayed so that the convicted person does not suffer from a certain disqualification provided for in any other statute, it may exercise the power because otherwise the damage done cannot be undone; the disqualification incurred by Section 267 of the Companies Act and given effect to cannot be undone at a subsequent date if the conviction is set aside by the Appellate Court. But while granting a stay of (sic or) suspension of order of conviction the Court must examine the pros and cons and if it feels satisfied that a case is made out for grant of such an order, it may do so and in so doing it may, if it considers it appropriate, impose such conditions as are considered appropriate to protect the interest of the shareholders and the business of the company." Hon’ble Supreme Court in the aforesaid case was seized with the question as to whether the order of stay of conviction passed by the Delhi High Court in exercise of jurisdiction under Section 389(1), Cr. P.C. without its attention being drawn to the supposed disqualification incurred by the appellant under Section 267 of the Companies Act could have the effect of avoiding such disqualification. In paragraph 18 of the judgment, Hon’ble Supreme Court held thus :- "Be that as it may, we have, on interpretation of the interim order passed by the Delhi High Court in the context of the averments made in the application seeking such an order, come to the conclusion that the Delhi High Court while granting stay of the impugned judgment did not and could not have intended to stay the operation of the disqualification under Section 267 of the Companies Act consequent upon conviction.........It would have been so if the intention of the appellant in obtaining the interim stay was to avoid the disqualification he was likely to incur by the thrust of Section 267 of the Companies Act. If that was his intention he was clearly trying to hoodwink the Court by suppressing it instead of coming clean. If he had frankly and fairly stated in his application that he was seeking interim stay of the conviction order to avoid the disqualification which he was likely to incur by virtue of the language of Section 267 Companies Act, the Delhi High Court would have applied its mind to that question and would have, for reasons to be stated in writing, passed an appropriate order with or without conditions. We are, Therefore, satisfied that the scope of the interim order passed by the Delhi High Court does not extend to staying the operation of Section 267 of the Companies Act." The view of the Hon’ble Supreme Court in the aforesaid case has been reiterated and followed in Ravikant S. Patil v. Sarvabhouma S. Bagali (2007) 1 SCC 673 : (2006 AIR SCW 6365). In the aforesaid case of Ravikant S. Patil Hon’ble Supreme Court has also referred to the cases of K. C. Sareen v. CBI (2001) 6 SCC 584 : ( AIR 2001 SC 3320 ), State of Maharashtra v. Gajanan, (2003) 12 SCC 432 : ( AIR 2004 SC 1188 ) State of Tamil Nadu v. A. Jaganathan, (1996) 5 SCC 329 : ( AIR 1996 SC 2449 ) and B. R. Kapur v. State of Tamil Nadu, (2001) 7 SCC 231 : ( AIR 2001 SC 3435 ), while reaching the following conclusion in paragraph 16.5 of the judgment. "All these decisions, while recognizing the power to stay conviction, have cautioned and clarified that such power should be exercised only in exceptional circumstances where failure to stay conviction, would lead to injustice and irreversible consequences." In paragraph 15 of the judgment, Hon’ble Supreme Court in Ravikant S. Patil's case has held thus :- "It deserves to be clarified that an order granting stay of conviction is not the rule but is an exception to be resorted to in rare cases depending upon the facts of a case. Where the execution of sentence is stayed, the conviction continues to operate. But where the conviction itself is stayed, the effect is that the conviction will not be operative from the date of stay. An order of stay, of course, does not render the conviction non-existent, but only non-operative." Hon’ble Supreme Court, in the case of Navjot Singh Sidhu v. State of Punjab, ( AIR 2007 SC 1003 ) (supra), having referred to all the decisions as aforesaid, settled down the legal position on the point as follows - "6. The legal position is, Therefore, clear that an appellate Court can suspend or grant stay of order of conviction. But the person seeking stay of conviction should specifically draw the attention of the appellate Court to the consequences that may arise if the conviction is not stayed. The legal position is, Therefore, clear that an appellate Court can suspend or grant stay of order of conviction. But the person seeking stay of conviction should specifically draw the attention of the appellate Court to the consequences that may arise if the conviction is not stayed. Unless the attention of the Court is drawn to the specific consequences that would follow on account of the conviction, the person convicted cannot obtain an order of stay of conviction. Further, grant of stay of conviction can be resorted to in rare cases depending upon the special facts of the case." Navjot Singh Sidhu was a Member of Lok Sabha. He had resigned after being convicted and was seeking fresh mandate. Hon’ble Supreme Court took into consideration the high standards in public life set by Navjot Singh in resigning from the membership of Lok Sabha after his conviction and proceeded to examine broad features of the case and the evidence which was available on record to decide the question of suspension of sentence. On consideration of the nature of evidence and broad features of the case and the purpose for which Navjot Singh Sidhu had sought for stay of the order of conviction, Hon’ble Supreme Court passed order staying the conviction passed against him. (6) THE cases of K. C. Sareen v. CBI ( AIR 2001 SC 3320 ), Chandigarh, State of Punjab v. Navraj Singh ( AIR 2007 SC 1003 ) State of Maharashtra v. Gajanan, ( AIR 2004 SC 1188 ), Union of India v. Atar Singh, referred to supra, are cases related to public servants convicted on corruption charges and in that context it was observed in those cases that when conviction is on a corruption charge, it would be a sublime public policy that the convicted person is kept under disability of the conviction instead of keeping the sentence or imprisonment in abeyance till disposal of the appeal. In such cases, it is obvious that it would be highly improper to suspend the order of conviction of a public servant, which would enable him to occupy the same office, which he misused. THE damage by an order of conviction done to a public servant can also be undone after his order of conviction is set aside by a higher Court. THE damage by an order of conviction done to a public servant can also be undone after his order of conviction is set aside by a higher Court. Therefore, non-staying of the operation of the order of conviction is not of irreversible consequence in case of a public servant. In the cases of Dr. Shailendu Kumar Tamotia and Pravinkumar Paraskumar Gokhroo (referred to supra), Hon’ble Orissa High Court and Gujarat High Court respectively exercised discretion under Section 389(1), Cr. P.C. in favour of the respective petitioners, though they were public servants, by taking into consideration the nature of evidence in the light of broad features of the case and the special circumstances entitling them to the relief(s) they had sought for. (7) FROM the discussion as aforesaid, five broad principles emerge, which, in my considered view, is a guide so far as exercise of discretion under Section 389(1), Cr. P.C. in relation to stay/suspension of conviction is concerned. They may be called the 'Panchasheel' for exercise of discretion under Section 389(1), Cr. P.C. for suspension of an order of conviction. They are - (i) The appellant, who seeks interference of the appellate Court under Section 389(1), Cr. P.C. so far as the order of conviction is concerned, must come with clean hands, and with due frankness and fairness specifically draw attention of the appellate Court to the specific consequences he is going to suffer, if discretion by the Court is not exercised in his favour. (ii) Such discretion by the appellate Court may be exercised in favour of the appellant only in rare and exceptional cases depending upon the special facts of the case and not as a matter of course. (iii) Such discretion may be exercised only where failure to stay the conviction would lead to injustice and irreversible consequences. The Court has to examine carefully on the basis of materials supplied and materials available on recorde as to whether the consequences sought to visit the appellant at present or on a future date is/are real. (iv) While exercising the discretion, the appellate Court has a duty to look at all the aspects including ramification of keeping the conviction in abeyance, and it is under further obligation to support its order for reasons to be recorded by it in writing. (v) In case of public servants convicted of corruption charges, the discretion should not be exercised. (iv) While exercising the discretion, the appellate Court has a duty to look at all the aspects including ramification of keeping the conviction in abeyance, and it is under further obligation to support its order for reasons to be recorded by it in writing. (v) In case of public servants convicted of corruption charges, the discretion should not be exercised. (8) WHILE exercising the discretion as found from the afore-quoted decisions of Hon’ble Supreme Court and other Hon’ble High Courts, the appellate Court may take either of the following approaches, or both the approaches, with reference to the special circumstances peculiar to the appellant: (i) the appellate Court may find out the specific circumstance which may make the appellant suffer certain disqualification provided for in any other statute on the basis of conviction recorded against him, or (ii) it may examine the broad features of the case with reference to the evidence available on record to justify exercise of discretion in favour of the appellant. Whatever be the approach, as well settled in law, it is the duty of an appellate Court to adhere to the broad principles quoted supra. So far as the second approach is concerned, it is found from the precise approach by Hon’ble Supreme Court in Navjot Singh Sidhu's case and Hon’ble Orissa High Court in Dr. Shailendu Kumar Tamotia's (2010 Cri LJ 196) (Ori) case that it is the duty of the Appellate Court to decide "how far is too far" inasmuch as the order suspending conviction must not appear to be an order prejudging the issues involved in the appeal. Coming to the facts of the case, An- nexure-1/d of the additional affidavit is the show-cause notice dated 23-7-2010 issued to the petitioner by Paradeep Port Trust. In the said notice the appellant-petitioner has been asked to show cause within fifteen days from the date of issue of the notice as to why his stevedoring licence shall not be cancelled in accordance with Clause 8(1)(i) of Paradeep Port Trust (Licensing of Stevedores) Regulation, 2009 in view of his conviction. The effect of conviction visited the appellant-petitioner, when the Dumper Owners' Association cancelled the agreement with the appellant-petitioner vide Annexure-1/e in view of his conviction. The effect of conviction visited the appellant-petitioner, when the Dumper Owners' Association cancelled the agreement with the appellant-petitioner vide Annexure-1/e in view of his conviction. Further, Steel Authority of India Ltd. cancelled the agreement with the petitioner vide Annexure-1/f, as the petitioner had failed to fulfill the contractual obligations for want of dumpers for intra-port transportation of cargo of the Steel Authority of India Ltd. Taking me through all the aforesaid documents filed along with the additional affidavit, it is contended by learned counsel for the appellant-petitioner that if the order of conviction passed against the appellant-petitioner is not stayed/suspended, not only the petitioner but the company, of which the petitioner is the Managing Director, shall suffer huge monetary loss, which cannot be reversed in the event the impugned judgment of conviction is set aside. It is further submitted that the offence for which the appellant-petitioner has been convicted has no bearing on his conduct as Managing Director of M/s. Swostik Stevedores Pvt. Ltd. and the appellant-petitioner shall not have the scope and opportunity to misuse the liberty granted to him by the order of suspension of conviction so far as the affair of his Company is concerned. (9) PERUSAL of Annexure-1/e shows that one of the causes for refusal of the Dumpers Owners' Association to supply dumpers to M/s. Swostik Stevedores Pvt. Ltd. of which the appellant-petitioner is the Managing Director, his (petitioner's) conviction by the C.B.I. Court in T.R. No. 83/56 of 1999-95 besides other disputes relating to some payments. Annexure-1/e is dated 10-6-2010 and speaks of an event after passing of the judgment of conviction against the petitioner. The Steel Authority of India Ltd. vide letter dated 1-7-2010 (Annexure-1/f) has cancelled the contract with the company of the petitioner, and vide letter dated 6-7-2010 the Bank Guarantee of Rs. 20,00.000/- (twenty lakhs) deposited by the Company has been invoked. Paradeep Port Trust vide Annexure-1/d has issued notice to cancel the stevedoring licence of the appellant-petitioner. In the event of cancellation of licence of the petitioner, the petitioner and the petitioner's Company shall have to suffer a lot financially. Regard being had to the broad proposition of this Court, it cannot be said at present as to when the appeal of the petitioner can be taken up for hearing. In the event of cancellation of licence of the petitioner, the petitioner and the petitioner's Company shall have to suffer a lot financially. Regard being had to the broad proposition of this Court, it cannot be said at present as to when the appeal of the petitioner can be taken up for hearing. If the petitioner's Company goes without stevedoring licence, which is its sole business, for long, there is possibility of closure of the Company, which would ultimately affect the staff employed by the Company. The consequences, which the appellant-petitioner has already been visited with and the consequence spoken of in Annexure- 1/d (notice for cancellation of stevedoring licence), which may be a reality in near future, are all real and I am satisfied that those consequences are neither imaginary nor creatures of the petitioner for the purpose of this case. Taking into consideration all such facts, I am of the view that refusal by the Court to stay/suspend conviction of the appellant-petitioner would lead to injustice and irreversible consequences, so far as the affair of the Company (of which the petitioner is the Managing Director) is concerned. (10) THE grounds taken by the appellant- petitioner in the appeal memo and especially ground Nos. 4, 7 and 9, if considered in the light of the broad features of the case and the evidence on record, the conclusion becomes irresistible that the appellant-petitioner has contentious grounds to raise in the appeal and there is fair chance of his success in the appeal. Coming to the question of ramification of the order of stay/suspension of conviction to be passed in favour of the appellant-petitioner, on consideration of the facts, I am of the view that continuance of the appellant-petitioner as Managing Director of the Company shall not be prejudicial to the interest of the Company, rather refusal to stay/suspend the conviction may put the Company to huge financial loss and may affect the employees of the Company, as the appellant-petitioner is stated to be the Pro- prietor-cum-Managing Director of the Company. The petitioner is admittedly not a public servant. Submission of Mr. The petitioner is admittedly not a public servant. Submission of Mr. S. K. Padhi, learned senior counsel appearing for the C.B.I, to the effect that charge-sheet filed against the appellant-petitioner in SPE Case No. 4 of 2001 for offence under Section 407, IPC should be taken into consideration while suspending the order of conviction does not commend to me, inasmuch as according to the established principles of criminal jurisprudence a person is presumed to be innocent till his guilt is proved. In the premises as aforesaid, factum of filing of charge-sheet against the petitioner in a single case may not be germane so far as exercise of discretion under Section 389(1), Cr. P.C. in favour of the petitioner, in this case, is concerned. (11) IN fine, the order of conviction passed against the appellant-petitioner by the learned Special Judge (CBI), Bhubaneswar in T.R. No. 83/56 of 1999-95 is stayed/suspended pending disposal of the appeal subject to the condition that the appellant-petitioner shall conduct himself honourably and in a dignified manner so far as the affairs of the Company is concerned and he shall not involve himself in any offence during the currency of this order. The Misc. Case is accordingly allowed. Order accordingly.