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2013 DIGILAW 706 (BOM)

Prem Malik v. State of Maharashtra

2013-03-22

A.H.JOSHI

body2013
Judgment : 1] These are the applications for anticipatory bail. The applicants are amongst present incumbents holding the offices as members of Governing Council of Bombay Textile Research Association (“BTRA” for short). BTRA is registered under the Societies Registration Act. It is managed by the nominees of the Government of India through Ministry of Textiles. It is a non-profit making society. 2] Applicants in these two applications are arraigned as accused in CC No.2/M/2010 filed by the complainant in the Court of Chief Metropolitan Magistrate, 10th Court, Andheri, Mumbai. Complainant had prayed for an order under Section 156(3) of the Code of Criminal Procedure. It was passed. Thereupon Crime No.MECR/1/2011 under section 406, 420 read with 34 of Indian Penal Code is registered by the D.N. Nagar Police Station, Mumbai, against various accused persons. 3] Applicants apprehend arrest furtherance to said Crime No. MECR/1/2011 and hence present applications for anticipatory bail. 4] On its application, the complainant was added as respondent in the present applications. 5] In the process of hearing, this court has heard learned Advocates for the applicants, the learned Additional Public Prosecutor and the learned Advo ate for the complainant. 6] Parties have tendered various compilations. Those were taken on record and have been perused. 7] It is seen from submissions and documents brought on record that the property belonging to BTRA was to be given for development to the complainant firm. 8] It is seen that certain terms were agreed. The consideration i.e. money payable by developer appears to be the part whereupon there was total agreement and the complainant had also made payment of earnest money to BTRA in accordance with the agreed stipulation and even some more money required for deposit towards permission under Urban Land Ceiling Act. It is evident from record that the negotiations and correspondence in that regard was still going on between the parties. 9] During the intervening period certain objections were raised by the Secretary of the Department of Textiles of Central Government regarding the authority of BTRA to dispose of the land. The complainant filed a writ petition, in which the Secretary of Department of Textiles of Central Government ultimately conceded to the authority of BTRA to dispose its land. 10] In the mean time by letter dated 10.10.2005, the complainant asked BTRA to give possession of land before making payment of agreed consideration. The complainant filed a writ petition, in which the Secretary of Department of Textiles of Central Government ultimately conceded to the authority of BTRA to dispose its land. 10] In the mean time by letter dated 10.10.2005, the complainant asked BTRA to give possession of land before making payment of agreed consideration. BTRA has refused this request by its reply dated 18.10.2005. 11] Much thereafter, notices of legal action if agreement was not executed etc. were issued by the complainant. BTRA took time to reply. Considering the passiveness of BTRA as a refusal to perform and hence a cause of action, the complainant filed a civil suit for decree for specific performance. 12] During pendency of civil suit, complainant again gave fresh notice through Advocate A.H.H. Ponda threatening action under criminal law and has later on filed a complaint to police. As cognizance was not taken by police, the complainant filed a case in the Court of Metropolitan Magistrate against nine individuals. Complainant's plea in its own words: 13] Mostly because the complainant wanted to give all details and narrations, the complaint has run into almost 20 pages. The crux of the version of the complainant, however, can be seen in the averments contained in paragraph 25 of the complaint. It would be useful to quote the relevant context for ready reference instead of rewording the same. “25. The Complainant states that from all these facts and circumstances, it is abundantly clear that the Accused made false representations to the Complainant of giving them development rights and assured them of executing the necessary development agreement. However, from their conduct, it appears that from the very beginning, the Accused had no intention to do so and the Accused made the Complainant to part with Rs.1.51 crores on or about 4.11.2003, a sum of Rs. 1 crore on or about 31.08.2004 and Rs.1.50 crores on 08.09.2004 as stated above. The Complainant was also made to pay a sum of Rs.1,55,53,023/- on or about November 2006 to ULC Authorities. The Complainant states that all throughout they have been ready and willing to perform their part of the agreement. In fact, it is they (i.e. the Complainant) who persuaded the ULC Authorities and obtained the necessary orders, as stated above. The Complainant was also made to pay a sum of Rs.1,55,53,023/- on or about November 2006 to ULC Authorities. The Complainant states that all throughout they have been ready and willing to perform their part of the agreement. In fact, it is they (i.e. the Complainant) who persuaded the ULC Authorities and obtained the necessary orders, as stated above. As far as Textile Ministry and their objections is concerned the same was also cleared and sorted out in view of the order of the High Court in W.P. 2279 of 2007 on 18.06.2008. The Complainant were to make the payment only after the execution of the development agreement but, as stated herein above, the Accused had no intention to give the development agreement but by making a false representation, induced the Complainant to part with such large sums of money and also had various acts done which the complainant would not have done. In view of all these facts, it is abundantly clear that the accused Nos. 1 to 10 have cheated the Complainant, which is clear from the fact that the Accused have in their affidavit responded by making false claim and raising technical objections knowing full well that it is the Accused who had no intention to give the development rights to the Complainant. The Complainant state that the Accused have cheated the Complainant and have committed offence of breach of trust.” (quoted from page 46 of A.B.A. No.783 of 2012) Grounds for anticipatory bail: 14] These anticipatory bail applications are pursued by the applicants on following grounds and premises: (a) Applicants are business executives. (b) They do not have criminal background. (c) Dispute subject matter is of purely civil nature. (d) There is no element of cheating whatsoever, at whatever stage, much less at the very initiation of offer. (e) If facts are taken into account it would be irrefutably evident that all steps required for performance of promise on the part of BTRA were taken by accused, however, performance of certain acts by complainant which was condition precedent for invoking the obligation of performance on the part of BTRA was not done by the complainant. (f) Therefore, due to failure on the part of complainant, the accused had no occasion or cause to perform their part. (f) Therefore, due to failure on the part of complainant, the accused had no occasion or cause to perform their part. (g) Strong reliance is placed on conditions forming part of negotiations communicated through letters and reply given from time to time. (h) Refusal on the part of BTRA is to deliver the possession before payment was made by complainant. (i) Till now the complainant has not offered to perform its obligation. (j) It is a clear case of failure or breach on the part of the complainant to perform its obligation, and therefore present is a pure case of civil nature. (k) Element of criminality whatsoever is absent through out. (l) Inference of criminal intention cannot be even suggested much less irrefutably drawn. (m) FIR is an outcome of intention to harass the applicants by every possible mode to force them to succumb to the demands of the complainant. Grounds of opposition and exact plea of complainant 15] Present applications are opposed by the respondent State as well as the complainant with the plea as is disclosed and described in paragraph 25 of the complaint quoted herein before. 16] This court has called upon the learned Advocate Mr. Ponda to formulate and present before the court the exact point of view when the initial intention to deceive had surfaced. On this, learned Advocate for the complainant has summarised and presented the point in a condensed form as follows: The intention to cheat was in existence at the very beginning when BTRA decided / resolved to raise money by selling or giving the property for development. Actually the intention of BTRA was to collect money and then to refuse to sell or develop the property. The intention was simply to raise the money and then to break the promise. Point to be considered 17] The exercise which this court has to do in the background of prolonged submissions and perusal of voluminous record tendered before the court, is to find out as to: “Whether the complainant had made out a case that the element of cheating or deception was in existence at the very inception.” Appreciation of respective plea & evidence and consideration of rival contentions & reasons. 18] The exercise indicated in the foregoing paragraph has to be done by the court as far as possible on the basis of documents which are admitted. 18] The exercise indicated in the foregoing paragraph has to be done by the court as far as possible on the basis of documents which are admitted. None amongst the parties have raised a dispute as to the correctness of the documents. Therefore, the documents as produced by respective parties can be safely referred. 19] It appears that the parties were going on with the transaction and negotiations smoothly for quite long time. Parties were having confidence with one another. Various practical problems were visualized, offers and counter offers were given. 20] It appears that a difference of opinion arose when by letter dated 10.10.2005 the complainant demanded possession of the property before signing of Development Agreement and payment. Copy of this letter is on record of compilation at pages 71 and 72. Relevant text of the letter dated 10.10.2005 reads as follows:- “10th October 2005 M/s. Bombay Textiles Research Association Mumbai Kind Attn: Shri Nandan Damani/Shri Hiren Shah Dear Sirs, Sub : Execution of Development Agreement and Other Papers relating to BITRA Property at Ghatkopar We are writing this letter to you to clear some points regarding the initial date of instalment, because of which, the Development Agreement and other papers could not be executed last week. We have been insisting through out our discussion that the first date of instalment should be six months after the date of execution of Development Agreement with physical possession of the property to be handed over to us. “We do agree that the finalization of drafts has taken much time but we should not be blamed for that. We very much appreciate the co-operation that we have been receiving from you for this project. Unless we have physical possession of the property we will not be in a postilion to make initial assessment and plan early sanction of the project. We have paid to you substantial amount towards earnest money and further amount will be paid on the execution of documents. We need physical possession of the property and intermediate six months time for planning inspection by various authorities. In this connection kindly refer to the letter dated 18th February 2005 which was drafted during our discussion on that date and acknowledged by you. On 21st February 2005 we had gone to take possession but because of your some labour problem we were not given the possession. In this connection kindly refer to the letter dated 18th February 2005 which was drafted during our discussion on that date and acknowledged by you. On 21st February 2005 we had gone to take possession but because of your some labour problem we were not given the possession. In fact we were requested by your Mr. Desai not to insist possession to avoid problem with your labour at that time. The tentative first instalment dated 1st October 2005 was agreed on the basis that the Development Agreement and other papers would be signed in first week of April 2005 but possession would be given on 21 s t February 200 5.” We are trying our level best to obtain for you exemption of ULC not only for development but to enable you to minimise your liability in respect of ULC exemption. We hope that we will receive your cooperation in finalising the dates for instalments and final execution of documents. Thanking you, Yours faithfully, For Neelkanth Enterprise sd/- Authorised Signatory” (quoted from Annexure 'E' page 71 and 72 of the compilation) 21] Complainant's letter dated 10.10.2005 has been responded to by BTRA by letter dated 18.10.2005. Copy thereof is on record at page 73 of paper book. Text thereof reads as follows: “18 October 2005 Mr. Manoj Ajmera Nilkanth Enterprise 2nd Floor, Citi Mall Link Road, Andheri (West) Mumbai – 400 053 Dear Mr. Ajmera With reference to your letter dated 10th October 2005 NE:NMP:sm:05 regarding Execution of Development Agreement and Other papers relating to BTRA property at Ghatkopar we would like to inform you that the delay is not in our part. Your have not been able to sign the agreement and till the agreement is not signed no possession can be given. So accordingly there is no extension possible for payment. You must get the agreement adjudicated stamped and signed for Registration. Thanking you, Yours faithfully, sd/ Nandan Damani.” (quoted from Annexure 'G' i.e. page 73 of the compilation) 22] It is seen that BTRA had declared its stance in very clear and eloquent words. After this reply of BTRA dated 18.10.2005, there has been no movement whatsoever on the part of the complainant to declare the change in its stance which was declared through letter dated 10.10.2005. After this reply of BTRA dated 18.10.2005, there has been no movement whatsoever on the part of the complainant to declare the change in its stance which was declared through letter dated 10.10.2005. 23] It is seen that during the intervening period certain developments occurred which have pushed the transaction of offer and counter offer, if any, in a cold storage. 24] The Secretary of the Department of Textiles of Central Government in purported authority which he believed to have, hindered further transactions. A writ petition was filed by the complainant in the High Court of Bombay challenging the authority of the Textiles Department. BTRA has not taken a stand, hostile to complainant's claim in the writ petition, rather acted supportive thereof. Ultimately, the Government of India conceded to the position that BTRA had full authority to dispose of its assets. 25] The complainant has not shown that it had taken any positive step to alter its stance which was taken through complainant's communication dated 10.10.2005 and BTRA's response through letter dated 18.10.2005 after the problem created by exercise by Textile Department of Central Government was solved. 26] Ultimately, complainant gave notice of legal action through Advocate and also repeated its stance by a notice dated 3.12.2008 followed by a notice dated 21.1.2009. In the said second notice, BTRA wrote that they were waiting for the legal advise or opinion for further action. 27] In that background, on 2.4.2009, the complainant filed Civil Suit No. 876 of 2009 in the High Court claiming decree for specific performance and alternatively, for payment of compensation etc. 28] During pendency of Suit No. 876 of 2009, the complainant – plaintiff took out Notice of Motion NO. 1357 of 2009 praying for the relief by way of injunction seeking restraint against BTRA that they should not create third party interest etc. The learned Single Judge of this court passed order in said Notice of Motion, granting the conditional order of injunction on 30.6.2009 and directed complainant to deposit in the High Court a sum of Rs.45,93,46,977/-towards the unpaid consideration within two weeks and ordered that the injunction shall be operative after the deposit is made, lest shall stand vacated. The learned Single Judge of this court passed order in said Notice of Motion, granting the conditional order of injunction on 30.6.2009 and directed complainant to deposit in the High Court a sum of Rs.45,93,46,977/-towards the unpaid consideration within two weeks and ordered that the injunction shall be operative after the deposit is made, lest shall stand vacated. The said order ultimately remained in abeyance since lawyer appearing for BTRA made a statement that third party interest would not be created, before the Division Bench hearing the appeal against the said interim order of deposit. 29] Much after the stage of Notice of Motion etc. a subsequent development happened, took another step of issuing fresh notice on fresh namely, complainant got legal advise that failure of BTRA in complying with its commitment was rather culmination of initial dishonest intention and hence, the notice was served on BTRA by complainant's Advocate on 5.3.2010 and ultimately present complaint initially before police and then before the Magistrate was filed. 30] Now, the question which is to be considered in the light of submissions advanced by the learned Advocate for the complainant is that, at this stage, would it be possible to draw at least prima facie inference that the conduct of BTRA and its Directors was pregnant with intention of deceit, when, they initiated the proposal for sale / giving property for development. 31] Dishonesty and intention to cheat are a matter of discretion of state of mind of some individual than a corporate policy. Had it to be a matter of corporate policy, it had to emerge in the form of resolution or any document of that sort. Admittedly, to the complainant, any direct evidence of this sort and form does not have in its hands. 32] The complainant has, therefore, to rely upon the oral evidence as regards the conduct of the members of governing council of BTRA and to show that their conduct leads to drawal of an inference as to the intention it being a state of their mind, in existence, at the very initiation of offer. 33] Thus, the existence of intention at very initial stage has to be inferred if such inference emerges from the correspondence. Admittedly, any particular letter of BTRA, when seen in isolation or entire correspondence when seen collectively too do not reveal or prove any such intention. 33] Thus, the existence of intention at very initial stage has to be inferred if such inference emerges from the correspondence. Admittedly, any particular letter of BTRA, when seen in isolation or entire correspondence when seen collectively too do not reveal or prove any such intention. 34] The complainant urges, that the fact that BTRA was in grave financial crunch, and wanted to have liquidity by raising money by making a show of desire to sell the land or give it for development, and ultimately much after receiving earnest money, has refused to sign the development agreement constitutes the proof of pre-existing intention. 35] The complainant's submission recorded in foregoing paragraph is its 'contention'. The said contention is based on complainant's inference. An inference, however believed to be a fact by the person drawing it cannot take place of a “fact” duly described and at least shown to exist, cannot be used as a piece of evidence to prove existence of said fact. 36] At this stage this court has to see, prima facie what is the worth of said contention, and whether carry such weightage that supposition of existence of a fact shall have to be inferred. 37] The supposition will have to rise above the subjective element underlying drawal of inference and to be seen objectively, as to whether such inference alone is impelled from the correspondence. 38] This court has examined the correspondence from different angles and points of view. Those are as below:- – 1st point of view is one as urged by the complainant. – 2nd point of view is as urged by the accused that inference as to existence of intention to cheat at the very beginning cannot be drawn. Conclusion 39] As can be seen this court in earlier paragraphs has already recorded that an objective view has to be taken. Upon seeing and appreciating the facts as are and required to be seen while considering an application for anticipatory bail, the inference as regards existence of intention has to be patent and gross and not miniature and microscopic requiring deep dissection and to be seen by magnifying it. Upon seeing and appreciating the facts as are and required to be seen while considering an application for anticipatory bail, the inference as regards existence of intention has to be patent and gross and not miniature and microscopic requiring deep dissection and to be seen by magnifying it. 40] It is borne on record that inspite of clear refusal to deliver the possession before receiving money i.e. remaining consideration, BTRA has all through out supported the complainant in complainant's writ petition challenging the stance of Secretary of Ministry of Textiles of Central Government. On the other hand the complainant has not altered its stance that it wants possession before the payment is made. The money paid is around Rupees Five Crores, while money due is over Rupees Forty Five Crores apart that many points as regards stipulations to be incorporated in the development agreement are yet to be sorted out. Complainant has failed to convey that its stance expressed through its letter dated 10.10.2005 quoted in foregoing paragraph No. 20 has been changed. 41] In the background discussed herein before, the complainant has failed to show that there exists any material on the basis of which the mind of the Directors of the BTRA could be reflected on which basis the complainant could unmistakably state that the intention at the very initial stage became evident from any particular act or acts. 42] The plea taken by BTRA in civil suit that though there was no concluded contract or that the complainant has failed in performance of its promise to make the payment in accordance with the MOU, is the dispute of pure civil nature raised by BTRA. These or like pleas by BTRA do not rise strong enough to impell an inference as to existence of intention to cheat at the stage of very initiation of offer. 43] It is not the plea of accused – applicants too that the dispute of civil nature could never have a facet of criminality. Transaction arising out of contractual relationship or civil liabilities may have facets and edges of criminal law, but it does not generate the corollary that essentially the inference as to criminal intention could be unmistakably drawn. On the other hand, criminal intention will have to be specifically narrated and attributed. Transaction arising out of contractual relationship or civil liabilities may have facets and edges of criminal law, but it does not generate the corollary that essentially the inference as to criminal intention could be unmistakably drawn. On the other hand, criminal intention will have to be specifically narrated and attributed. 44] In the present case as it appears, the complainant does not want to leave any stone unturned to exert pressure on BTRA to accede to its request and filing of complaint initially to the police and then to the Magistrate with a request for order under section 156(3) of the Criminal Procedure Code, is an effort towards that end. 45] In the given situation, it is clear that the applicants have made out a case for grant of protection as sought by them. 46] Observations and discussion herein before at length became necessary due to bulk of record, stress and length of opposition for anticipatory bail. Observations however would be read as what had emerged prima facie, and would not in any manner influence future litigation. 47] In the result, both the Applications are allowed in term of prayer clause (a), which reads as follows, with directions as under:- In Criminal Application No. 783 of 2012:- “(a) That in the event of arrest of the Applicant Nos. 1 to 4 and 7 arising out of FIR No. MECR/1/2011 registered by the D. N. Nagar Police Station, Mumbai, the Applicant Nos. 1 to 4 and 7 be released on such terms and conditions as may be deemed fit and proper by this Hon'ble Court. In Criminal Application No. 811 of 2012:- (a) That in the event of arrest of the Applicant arising out of FIR No. MECR/1/2011 registered by the D. N. Nagar Police Station, Mumbai, the Applicant be released on bail on such terms and conditions as may be deemed fit and proper by this Hon'ble Court.” (A) In the event of arrest of the applicants in furtherance to FIR No. MECR/1/2011 registered by D. N. Nagar Police Station, Mumbai, the applicants be released on bail on their furnishing personal bond and solvent surety in the sum of Rs.1,00,000/- (Rupees One Lakh) each. (B) In the event of any difficulty in furnishing solvent surety immediately, the applicants may be released on furnishing cash security and solvent surety be furnished within 30 days. (B) In the event of any difficulty in furnishing solvent surety immediately, the applicants may be released on furnishing cash security and solvent surety be furnished within 30 days. (C) As far as investigation is concerned, the applicants shall appear before the Investigating Officer as and when notified by him by a notice. (D) The applicants shall furnish within three days the postal address, cell phone number, landline number and name of contact person for sending message and/or information in the event the Investigating Officer requires personal attendance of the applicants for the purpose of investigation.