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2013 DIGILAW 158 (MP)

Nicer Green Housing and Infrastructure Developers Ltd. v. State of M. P.

2013-02-06

G.D.SAXENA, S.K.GANGELE

body2013
ORDER Saxena, J. -- 1. By preferring this petition under Article 226/227 of the Constitution of India, the petitioner with issuance of writ of certiorari or any other suitable writ, seeks quashment of the order assailed herein dated 16th July 2012 passed by the District Magistrate Gwalior-respondent No.2. Under the said order, the respondent No.2-District Magistrate, Gwalior while prohibiting the petitioner-company from continuing its business within a jurisdiction of Gwalior directed the Sub-Divisional Officer, Dabra to seal its office and premises where the petitioner-company is alleged to carry on such business. An enquiry under the provisions of M.P. Nikshepako Ke Hito Ka Sanrakshan Adhiniyam, 2000 as well as section 420 of IPC, together with other relevant Acts such as Money Circulation Scheme (Benefit) Act, 1978 and section 45 I/A of the Reserve Bank of India Act was also directed to be conducted within a period of fifteen days and after completion of enquiry a detailed report was sought to be produced by the respondent No.2-District Magistrate, Gwalior along with the record. 2. In brief, the admitted facts revealed from perusal of the writ petition and reply filed on behalf of the respondents-State are that petitioner-company ‘Nicer Green Housing and Infrastructure Developers Limited’ is a registered company with its Head Office near Grain Market outside of Jeera Gate Firozpur City (Punjab). It is carrying on business for development of agricultural land in the State of Punjab. The basis of the enquiry conducted against the petitioner-company is a complaint which was sent by one Virendra Singh, a resident of Chinor Road Dabra to the District Magistrate Gwalior alleging that the petitioner-company had received from him the amount of Rs.3,50,000/- under the fixed deposit scheme for a period of two years and two months on 19th July 2009 and it was assured to him that on the date of maturity of deposit, i.e., on 19th July 2011, the cash amount of Rs.4,30,000/- with interest accrued thereon will be refunded or plot or land equivalent to same value will be allotted in his favour. Certain papers were got signed from the complainant. To the effect of said depositing of the amount, one certificate No.DBR/MP/01/022 dated 19.7.2009 was also issued in favour of the complainant Virendra Singh. It is alleged that after date of maturity, the petitioner-company neither returned his deposited amount nor allotted the plot or land to him. Certain papers were got signed from the complainant. To the effect of said depositing of the amount, one certificate No.DBR/MP/01/022 dated 19.7.2009 was also issued in favour of the complainant Virendra Singh. It is alleged that after date of maturity, the petitioner-company neither returned his deposited amount nor allotted the plot or land to him. On receipt of the application in the form of complaint, the enquiry under the directions of the District Magistrate, Gwalior was conducted by the Sub-Divisional Magistrate Dabra. After satisfaction that the said company was conducting business without obtaining permission under the existing laws from the authorities and playing fraud with the public at large, the respondent No.2-District Magistrate prohibited the company from carrying on its business under jurisdiction of Gwalior District, and directed the Sub-Divisional Magistrate Dabra to seal the local branch office at Dabra and hold an enquiry as mentioned herein above. A show cause notice under section 8 of the M.P. State Security Act 1990 was also served upon the petitioner-company through District Magistrate Firozpur, hence this petition. 3. Learned counsel for the petitioner contended that the impugned order passed in the manner aforesaid is without jurisdiction. It is submitted that the petitioner-company is not carrying on any business against the law prevailing in the State. It is submitted that no action against petitioner-company has been in proper manner under the M.P. Nikshepako Ke Hito Ka Sanrakshan Adhiniyam, 2000. That apart, the action taken under National Security Act by the District Magistrate for sealing the office of the petitioner-company for an unlimited period is wholly unjustified and against the settled principles of law. Therefore, it is prayed that by allowing the petition, the impugned order Annexure P-1 dated 16th July 2012 may be quashed. 4. On the other hand, by filing reply it is submitted by the respondents-State that the petitioner-company had failed to place the material through its authorized representative in proving the fairness of the business. The company has further failed to prove the fact that for business in local area it has obtained necessary permissions under the prevailing laws in the State and thus played fraud with the local people. Therefore, the respondent No.2-District Magistrate rightly controlled the business of the company and sealed the office through Sub-Divisional Magistrate Dabra. The order passed by the respondent No.2-District Magistrate, Gwalior under the Act hence does not require any interference. Therefore, the respondent No.2-District Magistrate rightly controlled the business of the company and sealed the office through Sub-Divisional Magistrate Dabra. The order passed by the respondent No.2-District Magistrate, Gwalior under the Act hence does not require any interference. Ultimately, it is prayed that the petition may be dismissed. 5. Heard the learned counsel for the petitioner and the learned Additional Advocate General for the State. Also perused the relevant provisions of law with the assistance of the learned counsel for the parties. 6. Before examining the validity of the impugned order dated 16th July, 2012 passed by the respondent No.2-District Magistrate Gwalior, it would be necessary to enlighten the relevant provisions, same follow as under : Section 3 of Madhya Pradesh Rajya Suraksha Adhiniyam, 1990 is as follows : “3. Power to make restriction orders. -- (1) If a District Magistrate is satisfied with respect to any person that he is acting or is likely to act in a manner prejudicial to the security of the State or the maintenance of public order and that in order to prevent him from so acting it is necessary in the interest of the general public to make an order under this section, the District Magistrate may make an order,- (a) requiring him to notify movement or to report himself in such a manner if satisfied with respect to any person that with a view to preventing him from acting in any manner at such time and to such authority or persons as may be specified in that order; (b) imposing upon him such restriction as may be specified in the order, in respect of his association or communications with such persons as may be mentioned in the order; (c) prohibiting or restricting the possession or use by him such persons as may be mentioned in the order. (2) A restriction order made under section 1 shall remain in operation for such period as may be specified therein and shall in no case exceed a period of one year from the date of the order. Section 7. Period of operation of the orders under sections 4, 5 or 6. (2) A restriction order made under section 1 shall remain in operation for such period as may be specified therein and shall in no case exceed a period of one year from the date of the order. Section 7. Period of operation of the orders under sections 4, 5 or 6. -- A direction made under sections 4, 5 and 6 not to enter any district or part thereof or such area and any district or districts or any part thereof, contiguous thereto, as the case may be, shall be for such period as may be specified therein and in no case exceed a period of one year from the date of which it was made. Section 8. Hearing to be given before order under sections 3, 4, 5 or 6 is passed. -- (1) Before an order under sections 3, 4, 5 or 6 is passed against any person, the District Magistrate shall inform the person in writing of the nature of the material allegations against him and give him a reasonable opportunity of tendering an explanation regarding them. (2) If such person makes an application for examine such witnesses unless for reason to be recorded in writing, the District Magistrate is of opinion that such application is vexation or delay. (3) Any written statement put in by such person shall be filed with the record of the case and such person shall be entitled to appear before the District Magistrate by any legal practitioner for the purpose of tendering his explanation and examining the witnesses produced by him. (4) The District Magistrate proceeding under sub-section (1) may for the purpose of securing the attendance of any person against whom any order is proposed to be made under sections 3, 4, 5 or 6 require such person to appear before him and to execute a security bond with or without sureties for such attendance during inquiry. (5) If the person fails to execute the security bond as required or fails to appear before the District Magistrate during the inquiry, it shall be lawful for the District Magistrate to proceed with the inquiry ex parte and thereupon such order, as was proposed against him, may be passed. Section 9. Appeal. (5) If the person fails to execute the security bond as required or fails to appear before the District Magistrate during the inquiry, it shall be lawful for the District Magistrate to proceed with the inquiry ex parte and thereupon such order, as was proposed against him, may be passed. Section 9. Appeal. -- (1) Any person aggrieved by an order under sections 3, 4, 5 or 6 made by the District Magistrate or any other officer specially empowered under section 13 may appeal to the State Government within thirty days from the date of such order, such appeal shall be decided as for as possible within a period of four months of the date of filing of the appeal. Section 10. Finality of orders passed for certain cases. -- Any order passed under sections 3, 4, 5 or 6 shall not be called in question in any Court except on the grounds-- (1) that the District Magistrate had not followed the procedure laid down in sub-section (1) of section 8; or (2) that there was no material before the District Magistrate upon which he could have based his order; or (3) that the District Magistrate was not of opinion that the witnesses were unwilling to, come forward to give evidence in public against the person in respect of whom an order made under section 5. 7. In Mustakmiya Jabbarmiya Shaikh v. M.M. Mehta Commissioner of Police [ (1995)3 SCC 327 ], the Hon’ble apex Court held that : “It has been held by this Court that in order to bring the activities of a person within the expression of “acting in any manner prejudicial to the maintenance of public order”, the fallout and the extent and reach of the alleged activities must be of such a nature that they travel beyond the capacity of the ordinary law to deal with him or to prevent his subversive activities affecting the community at large or a large section of society. It is the degree of disturbance and its impact upon the even tempo of life of the society or the people of a locality which determines whether the disturbance caused by such activity amounts only to a breach of “law and order” or it amounts to breach of “public order”. It is the degree of disturbance and its impact upon the even tempo of life of the society or the people of a locality which determines whether the disturbance caused by such activity amounts only to a breach of “law and order” or it amounts to breach of “public order”. Applying the ratio of the aforesaid decision to the facts of the present case we find that the activities of the detenu by trying to extort money from ordinary citizens by putting them to fear of death and on their refusal to part with the money to drag them and torture them on public road undoubtedly affected the even tempo of life of the society and, therfore, such activities cannot be said to be a mere disturbance of law and order.” 8. In the case of Mustakmiya Jabbarmiya Shaikh (supra), Hon’ble apex Court clearly observed that in order to bring the activities of a person within the expression of “acting in any manner prejudicial to the maintenance of public order”, the fallout and the extent and reach of the alleged activities must be of such a nature that they travel beyond the capacity of the ordinary law to deal with him or to prevent his subversive activities affecting the community at large or a large section of society. Now on considering the above referred provisions of the Act and also considering rival submissions advanced by the learned counsel for the parties, anxiously, and further considering the aforesaid judicial pronouncement and observations made therein, we find that in the present case, though the District Magistrate has mentioned in the order that the petitioner company has continued the business of borrowing money from the local people without obtaining sanction of Reserve Bank of India and it failed to maintain the accounts of borrowed money from the people who had dealt with the company and so they are cheated by the activities of the company, which act is punishable under various provisions including Indian Penal Code, but no such material was available with him. The learned Additional Advocate General present before this Court could not satisfy that on receipt of application from Virendra Singh what kind of action was proposed by the District Magistrate Gwalior to be taken for the enquiry against the company in regard to its illegal activities which may affect the public by cheating the honest depositors or other illegal activities of same nature by sending to competent agencies. More so, the application addressed to District Magistrate was not sent for enquiry by him or registration of the FIR before the concerned police authorities and with previous permission of the Superintendent of Police Gwalior no investigation was launched against the company. Further, the impugned order does not seem to have been passed for such a period as specified in section 3 of the Act. A bare reading of the provisions of section 3 of Madhya Pradesh Rajya Suraksha Adhiniyam, 1990 clearly indicates that such an order must demonstrate security of the State, maintenance of public order and certain other matters concerned therewith. Detention order of a person can be promulgated but a specific order for prohibition of business or seizure of the properties of Chit Fund Companies can be effected under the provisions of M.P. Nikshepako Ke Sanrakshan Adhiniyam, 2000. Learned Additional Advocate General appearing on behalf of the State could not satisfy that any case under the provisions of M.P. Nikshepko Ke Sanrakshan Adhiniyam, 2000 had been registered against petitioner-company for which investigation was pending or charge-sheet was filed before the competent Court having jurisdiction. 9. On detailed discussions on the legal and factual aspects of this present case, we are of the view that the arguments advanced by the learned counsel for the petitioner is acceptable on the touchstone of the above enunciated legal position, and, therefore, we are holding that the impugned order dated 16th July 2012 passed by District Magistrate Gwalior is not valid by any four corners of the provisions of law as mentioned in section 8 of Madhya Pradesh Rajya Suraksha Adhiniyam 1990 as quoted herein before. The impugned order could not get finality and it is called in question before the Court of law. No doubt, this Court have powers to make such orders as may be necessary to give effect to any order under the Code or to prevent the abuse of process of Court or otherwise to secure the ends of justice. The impugned order could not get finality and it is called in question before the Court of law. No doubt, this Court have powers to make such orders as may be necessary to give effect to any order under the Code or to prevent the abuse of process of Court or otherwise to secure the ends of justice. The ends of justice can only be secured in accordance with law including procedural law and not otherwise. Consequently, we hold that the impugned order dated 16th July, 2012 is against the provisions of Madhya Pradesh Rajya Suraksha Adhiniyam 1990, hence, it is declared null and void having no force. However, the State shall have liberty to take legal action if the occasion arises in the scope of Law “M.P. Nikshepako Ke Sanrakshan Adhiniyam, 2000” within a stipulated period. Necessarily, in that situation, the petitioner-company shall have a right to repudiate the action taken by the State at proper stage before the competent authorities. The District Magistrate shall also have liberty to take appropriate action if any material comes during subsequent enquiries conducted by the competent authorities about the illegal activities of the company in continuing business against the public at large or particular class of persons of the area provided the law prevailing in the State so permits him. 10. Consequently, the petition stands hereby allowed and the order dated 16th July, 2012 is declared null and void.