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2013 DIGILAW 39 (ORI)

Mideast Integrated Steels Ltd. v. State of Orissa

2013-02-04

M.M.DAS

body2013
JUDGMENT M. M. DAS, J. - The petitioners in this Criminal Misc. Case assail the order dated 26.8.2000 passed by the learned S.D.J.M., Bhubaneswar in I.C.C. Case No. 248 of 2000 taking cognizance of offence under Sections 406/468/420/422/34 IPC and seek for quashing of the said proceeding in its entirety. 2. The opp. party NO.2 - IPICOL through its, the then Secretary filed the aforesaid complaint case i.e., I.C.C. Case No. 248 of 2000 before the learned S.D.J.M., Bhubaneswar alleging, inter alia, that the petitioners, who are accused in the said complaint case availed a short term loan of Rs. 25.00 crores from the complainant by securing the same on creating second charge on the assets of the company and by pledging of shares. Accordingly, certain shares of Mideast India Limited and MESCO Pharmaceuticals Ltd. were pledged. The complainant on verification out of the pledged shares, some of the share certificates were earlier pleaded as security for the loan taken from the IDBI. It is also stated in the complaint petition that when clarification was sought for in this regard from the accused persons, the accused company by letter dated 23.1.1999 informed the complainant - IPICOL that the shares which were earlier pledged to the IDBI were pledged with the IPICOL due to error in the computerized data system which was discovered in September, 1998 and was duly intimated to IPICOL by the accused company Mideast Integrated Steels Ltd. (for short, 'the MISL') on 9.10.1998, which according to the complainant, was not received by it. The MISL wanted to pledge 262.98 lakhs numbers of its shares in place of the shares which were already pledged with IDBI, but no pledge agreement has been executed so far. Basing on the above allegations, the complainant alleged that the accused persons have committed offences under Sections 406/468/420/422/34IPC. The learned S.D.J.M. took cognizance of the offences, as stated above, which is challenged before this Court. 3. It appears from the annexures made to the Criminal Misc. Case Petition that as per the 14th High Power Committee meeting of the complainant-IPICOL on 24.2.1999 and as per their advise, the petitioner no.1 pledged further share of 46.65 lakhs against the erroneous double pledged shares and, accordingly, the petitioners submitted additional pledge of shares and also submitted additional security which amounted to Rs. Case Petition that as per the 14th High Power Committee meeting of the complainant-IPICOL on 24.2.1999 and as per their advise, the petitioner no.1 pledged further share of 46.65 lakhs against the erroneous double pledged shares and, accordingly, the petitioners submitted additional pledge of shares and also submitted additional security which amounted to Rs. 24.59 crores as per the market value of the shares and value of the assets. On 30.3.2000, the petitioner no. 1 executed the hypothecation deed/pledge letter showing pledge of shares as additional security to cover the loan amount of Rs. 17.00 crores. After taking the additional security and pledge, as stated above, the IPICOL filed Money Suit No. 8/42/145 of 2009/2004/2000 before the learned Civil Judge (Senior Division), Bhubaneswar for realization of an amount of Rs. 34,54,63,014/- out of which Rs. 17.00 crores is towards the principal and the balance towards interest @ 30% per annum. The said suit was decreed on 15.10.2009. Challenging the said decree, the petitioners have preferred RFA No. 23 of 2010 before this Court and pursuant to the orders passed on 27.4.2011 and 11.5.2011 in the said RFA, the petitioners paid an amount of Rs. 17.00 crores to IPICOL towards the principal amount and the interest portion is now subjudice in the First Appeal. A further sum of Rs. 4.00 crores has been paid on 14.8.2012 pursuant to the direction in the said RFA No. 23 of 2010 in respect of OTS proposal. 4. It may be mentioned here that after the petitioners received the summons in the complaint case from the Court of the learned S.D.J.M., Bhubaneswar, they filed an application to recall the order of cognizance along with the application under Section 205 Cr.P.C. The learned S.D.J.M., however, by a common order dated 18.7.2001 rejected both the applications, which were challenged by the petitioners in Criminal Revision Nos. 444 of 2001 and, 726 of 2001 before this Court which ultimately stood dismissed. 5. A preliminary objection was raised by Mr. D. Panda, learned counsel appearing for the opp. party no. 2 with regard to the maintainability of the application under Section 482 Cr.P.C. in view of dismissal of the earlier criminal revisions. Mr. 444 of 2001 and, 726 of 2001 before this Court which ultimately stood dismissed. 5. A preliminary objection was raised by Mr. D. Panda, learned counsel appearing for the opp. party no. 2 with regard to the maintainability of the application under Section 482 Cr.P.C. in view of dismissal of the earlier criminal revisions. Mr. Panda submitted that this Court in the Criminal Revisions, while examining the rejection order passed by the learned S.D.J.M. on the application filed by the petitioners to recall the order taking cognizance of the offences and after perusing the complaint petition as well as the materials, recorded a finding that cognizance has been taken on the basis of a prima facie case and the petitioners can raise the issue relating to absence of prima facie case at the stage of hearing before charge. He, therefore, submitted that the application under section 482 Cr.P.C. in view of the findings of this Court in the Criminal Revisions cannot be maintained. 6. Mr. J.K. Das, learned senior counsel appearing for the petitioners, on the contrary, with regard to the question of maintainability, submitted that the revisional power of this Court cannot be equated to the inherent power under Section 482 Cr.P.C. The power provided under Section 482 Cr.P.C. to this Court is not a provision endowing power upon the High Court, but a declaration by the Parliament that nothing which has been provided in the Cr.P.C. can limit the inherent power of the High Court. Such declaration by the Parliament in respect of the inherent power of the High Court overrides the other prescription in the Cr.P.C. Hence, the revisional power under Section 397 Cr.P.C. cannot affect the amplitude of the power preserved under Section 482 Cr.P.C. The question, therefore, remains as to whether the High Court would exercise its inherent power after rejection of a revision application challenging an order refusing to recall the order issuing process. 7. 7. The Supreme Court in the case of Superintendent and Remembrancer of Legal Affairs, West Bengal v. Mohan Singh and others, AIR 1975 SC 1002 , in a similar situation, has held that the High Court in exercise of its inherent power can take into account the situation prevailing at the point of• time when its inherent jurisdiction is invoked and consider whether on the facts and circumstances, continuation of the proceeding against the respondent therein would constitute an abuse of the process of Court or its quashing was necessary to secure the ends of justice. The present application under Section 482 Cr.P.C. is not a review of the earlier order of rejection of the revisions. The application for recalling the order of cognizance and issuance of process was filed by the accused persons basing on the ratio of the decision in the case of K.M. Mathew v. State of Kerala, (1992) 1 SCC 217 , where the Supreme Court has held that the court issuing summons had the power to recall the same. This view of the Supreme Court was again overruled in the case of Adalat Prasad v. Rooplal Zindal and others, (2004) 7 SCC 338 , wherein it was held that the learned Magistrate does not have power to recall its own order. Therefore, the position of law as it stands now is that a Magistrate does not have power to recall its own order of taking cognizance of any offence. Hence, as on today, the order rejecting the prayer for recalling the order of taking cognizance was an order without jurisdiction passed by the learned S.D.J.M. and any order passed without jurisdiction pan be considered to be a nullity. 8. This Court, while dismissing the revisions filed against the said order, was not holding all the materials to independently examine whether prima facie the offences as alleged have been made out against the petitioners. However, within the limited scope of interference by exercise of power under Section 397 Cr.P.C. this Court finding that the learned Trial Court has passed the order of cognizance on the basis of a prima facie case did not interfere with the said order. However, within the limited scope of interference by exercise of power under Section 397 Cr.P.C. this Court finding that the learned Trial Court has passed the order of cognizance on the basis of a prima facie case did not interfere with the said order. I, therefore, find that the said order passed in the revision petition in Criminal Revision No. 726 of 2001 cannot stand on the way of this Court in exercising its inherent power under Section 482 Cr.P.C. to examine as to whether continuance of the complaint case would amount to abuse of the process of the Court and such quashing of the order of cognizance is essential to be passed to secure the ends of justice. 9. Mr. Das appearing for the petitioners has raised the following questions: (a) Whether the complainant-opp. party no. 2 IPICOL invoking the jurisdiction of the criminal court on the allegation of the petitioners' committing offences under Sections 406/468/420/ 422/34 I PC, amounts to an abuse of the process of law? (b) Whether the allegations made in the complaint petition are purely civil in nature, there being absence of any criminality? (c) Whether the High Court while exercising jurisdiction under Section 482 Cr.P.C. can consider all documents including public documents filed by the accused persons? 10. Now coming to the last two questions first, it would be profitable to refer to the decision in the case of State of Orissa v. Debendra Nath Padhi, 2005 (I) OLR (BC) 357 : (2005) 1 SCC 568 , where the Supreme Court has held as follows: "Regarding the argument of the accused having to face the trial despite being in a position to produce material of unimpeachable character of sterling quality, the width of the powers of the High Court under Section 482 of the Code and Article 226 of the Constitution is unlimited whereunder in the interests of justice the High Court can make such orders as may be necessary to prevent abuse of the process of any court or otherwise to secure the ends of justice within the parameters laid down in Bhajan Lal case." The aforesaid legal position was further reiterated by the Supreme Court in the case of Rukmini Narvekar v. Vijaya Satardekar and others, (2008) 14 SCC 1 . This has also been reiterated in subsequent decision by the Supreme Court, i.e. in the case of Harshendra Kumar D. v. Rebatilata Koley and others, (2011) 3 SCC 351 , where the Supreme Court went to the extent of holding that in order to prevent injustice or abuse of the process or to promote justice, the High Court may look into the materials which have significant bearing on the matter at prima facie stage. 11. Now, therefore, taking into consideration the documents annexed to the application as well as the undisputed facts, it would be seen that double pledging of the shares as alleged by the complainant was admitted by the accused persons earlier to raising of such objection by the complainant. The accused persons also replaced the, double pledge shares by offering fresh securities. The complainant has even filed a Money Suit for recovery of the amount, which is pending before this Court in an appeal and pursuant to the interim orders passed in the said appeal, the accused persons admittedly have paid a considerable amount of the outstanding in the loan account, i.e., an amount of Rs. 17.00 crores and again for consideration of a proposal for one time settlement, as per the direction of this Court, they have deposited a further sum of Rs. 4.00 crores. 12. The gist of the entire allegations made in the complaint case is that the accused persons offered some shares as security for the loan advanced by the complaint which were earlier pledged to IDBI. This Court taking into consideration all the undisputed documents and facts, finds that the entire claim of the complainant is with regard to depriving the complainant from recovering the money advanced. The complainant thus has made an attempt to couch the case in such manner so as to make out a case of commission of the offence of criminal breach of trust and cheating. The complainant thus has made an attempt to couch the case in such manner so as to make out a case of commission of the offence of criminal breach of trust and cheating. On careful consideration of the nature of allegations made in the complaint petition, the subsequent developments in the case and the undisputed documents, it is found that the entire allegations made in the complaint case is of civil nature and no offences, as alleged, have been, prima facie, made out, as the basis of all the allegations made in the complaint petition are with regard to double pledging of certain shares, which were admitted by the accused persons before such complaint was made to them by the complainant and the said shares were replaced by the accused persons inasmuch as, subsequent to the decree passed, a substantial amount has been paid by the accused persons to the complainant. 13. On considering the above in the light of the decision in the case of Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans Agro Industries Ltd., Calcutta, AIR 1996 SC 2452 , it would be seen that there is enough justification to hold that the case is basically a matter of civil dispute and no criminality can be attributed to the accused persons. 14. Now with regard to the question as to whether in such circumstances, the complaint proceeding should be allowed to continue or not, as this Court has come to the conclusion that the nature of the dispute is basically civil and there is no prima facie material to find out that the offences for which cognizance has been taken. have been committed in the instant case, further continuance of the criminal proceeding will be nothing but an abuse of the process of law and it is highly essential that to secure the ends of justice, the order of cognizance should be quashed along with the entire complaint case. 15. In the result, therefore, the order dated 26.8.2000 passed by the learned S.D.J.M., Bhubaneswar in I.C.C. Case No. 248 of 2000 taking cognizance of the offences under Sections 406/468/420/422/34 IPC against the petitioners - accused persons stands quashed and as a consequence, the complaint case i.e., I.C.C. Case No. 248 of 2000 also stands quashed in its entirety. 16. The CRLMC is accordingly allowed. CRLMC allowed.