HOMI RAJVANSHversusSTATE OF MAHARASHTRA & ORS.

                    [2014] 4 S.C.R. 475


                     .HOMI RAJVANSH                             A
                             v.
            STATE OF MAHARASHTRA & ORS.
             (Criminal Appeal No. 687 of 2014)
                     MARCH 27, 2014
                                                                B
      [P. SATHASIVAM, CJI, RANJAN GOGOi AND
                  N.V. RAMANA, JJ.]

       Code of Criminal Procedure, 1973 - s.482 - Exercise of
power under - Scope - Allegations of misappropriation of C
funds by officials of NAFED - Charge-sheet against appellant
and respondent no. 3 alongwith other accused - Respondent
no.3 filed writ petition u/s.482 CrPC r/w Art. 2261227 of the
Constitution - Appellant not shown or impleaded in the
petition .as a party - High Court allowed the writ petition and o
quashed criminal proceedings pending against respondent
no.3 before the Magistrate - Held: High Court erred in
quashing the complaint against respondent no.3 without
hearing the appellant who was co-accused in the case as their
alleged roles were interconnected - High Court further erred E
in coming to a finding against the appellant without the
appellant being a party in the writ petition filed by respondent
no.3 - High Court simply agreed with the submissions of
respondent no.3 against the appellant without giving him
opportunity of being heard - The High Court over exercised F
its jurisdiction which was in complete violation of the principles
of natural justice - Though the High Court possesses
inherent powers uls. 482 CrPC, these powers are meant to do
real and substantial justice, for the administration of which
alone it exists or to prevent abuse of the process of the court G
- Inasmuch as the appellant was not impleadedlshown as one
of the parties before the High Court, the specific finding
against his alleged role, based on the submissions of
respondent no.3 without giving an opportunity of being heard,
                            475                                 H
    476    SUPREME COURT REPORTS               [2014] 4 S.C.R.


A cannot be sustained - Matter remitted back - Appellant be
  impleaded as respondent no.4 in the writ Petition - High Cowt
  to hear the matter afresh - Penal Code, 1860 - s.1208 rlw
  ss.409, 411,420, 467, 468 and 471.

      The appellant was an Executive Director in National
8
  Agricultural Co-operative Marketing Federation of India
  Ltd. (NAFED). Respondent No.3, the Managing Director
  of NAFED, approved the 1st Non-agricultural tie-up of
  NAFED in order to diversify NAFED's business activities
  and participated in all the meetings and approved all
C transactions for the said purpose. When Respondent
  No.3 was scheduled to go for an international tour, the
  appellant was made the officiating Managing Director in
  order to attend all urgent matters.

o      Subsequently, a public interest litigation was filed
  against NAFED before the High Court on the allegations
  of misappropriation of funds by its officials in non-
  agricultural business. The Government of India, in its
  reply, stated that GBI enquiry will be conducted. The CBI
E filed charge-sheet against the appellant and Respondent
  No.3 along with other accused for committing offence
  under Section 120B read with Sections 409, 411 ,420, 467,
  468 and 471 of IPC. At this stage, Respondent No.3
  preferred Writ Petition for discharge before the High Court
F under Section 482 of CrPC read with Article 226/227 of
  the Constitution. By impugned order, the High Court
  allowed the writ petition and quashed the criminal
  proceedings pending against respondent No.3 before the
  Metropolitan Magistrate.

G      The appellant contended before this Court that: (i) the
  High Court erred in quashing the complaint against
  Respondent No.3 without hearing the appellant, who was
  a co-accused in the case and over exercised its
  jurisdiction by holding a summary trial on facts; (ii) the
H High Court committed error in coming to a finding against
  HOMI RAJVANSH v. STATE OF MAHARASHTRA                477


the appellant without the appellant being a party in the      A
writ petition filed by respondent No.3 and in agreeing with
the submissions of Respondent No.. 3 without affording
an opportunity of being heard to the appellant; and (iii)
that the adverse findings against the appellant in the
impugned judgment would affect the trial, and hence           B
prayed for quashing of the same.

    Allowing the appeal, the Court

     HELD:1. In the writ petition filed by Respondent No.3
before the High Court for quashing the criminal               C -
proceedings, the appellant was not shown or impleaded
as one of the parties. On the other hand, the role of the
appellant was specifically contended before the High
Court at several places and, in categorical terms, in
paragraph 10 of the impugned order. The perusal of the        D
contentions of Respondent No.3 and the categorical
findings followed by conclusion not only exonerated
Respondent No.3 from the criminal prosecution but also
reinforce the allegations levelled against the appellant,
who was admittedly not a party before the High Court.         E
[Paras 8, 13] [482-C-D; 484-D]

     2. The High Court committed an error in quashing
the complaint against Respondent No.3 without hearing
the appellant who is a co-accused in the case as their
                                                              F
alleged roles are interconnected. The High Court
committed an error in coming to a finding against the
appellant without the appellant being a party in the writ
petition filed by Respondent No.3. In fact, the perusal of
the impugned order clearly shows that the High Court
simply agreed with the submissions of Respondent No.3         G
against the appellant without giving him an opportunity
of being heard. The High Court, in the impugned order,
over exercised its jurisdiction which is complete violation
of principles of natural justice since the appellant, who
is a co-accused, was not heard on the allegations levelled    H
    478     SUPREME COURT REPORTS             [2014] 4 S.C.R.


A against him by Respondent No.3. [Paras 15, 16] [484-F-
  H; 485-A-B]
      3. Though the High Court possesses inherent
  powers under Section 482 of the Code, these powers are
B meant to do rea~ and substantial justice, for the
  administration of which alone it exists or to prevent
  abuse of the process of the court. This Court, time and
  again, has observed that extraordinary power should be
  exercised sparingly and with great care and caution. The
  High Court would be justified in exercising the said
C power when it is imperative to exercise the same in order
  to prevent injustice. [Para 17] [485-B-D]

       4. Inasmuch as admittedly the appellant was not
  impleaded/shown as one of the parties before the High
D Court, the specific finding against his alleged role, based
  on the submissions of Respondent No.3 without giving
  an opportunity of being heard, cannot be sustained. The
  matter is remitted to the High Court for fresh disposal. The
  appellant be impleaded as Respondent No. 4 in the Writ
E Petition concerned and the High Court to hear the matter
  afresh after affording opportunity to all the parties
  including the newly impleaded party, and dispose of the
  same as expeditiously as possible. [Paras 18, 19, 20] [485-
    0-G]
F         CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
    No. 687 of 2014.
        From the Judgment & Order dated 29.06.2012 of the High
    Court of Bombay in CRLWP No. 220 of 2010.
G
      P.P. Malhotra, ASG, Shekhar Naphade, Kailash Vasdev,
  Subramonium Prasad, Rajiv Dalal, Varun Tandon, Dinesh
  Kothari, Padmalakshmi Nigam, B.V. Balaram Oas, Yasir Rauf,
  Aniruddha P. Mayee Pawanshree Agarwal, Charudatta
H Mahinderkar, Asha Gopalan Nair, Vishwajit Singh, Abhindra
   HOMI RAJVANSH v. STATE OF MAHARASHTRA                       479


Maheshwari, Pankaj Singh, Umrao Singh Rawat, Sambharya                A
Shankar for the appearing parties.

     The Judgment of the Court was delivered by

     P. SATHASIVAM, CJI. 1. Leave granted.
                                                                      B
     2. The above appeal is filed against the final impugned
judgment and order dated 29.06.2012 passed by the High
Court of Judicature at Bombay in Criminal Writ Petition No. 220
of 2010 wherein the High Court quashed the criminal
proceedings against Alok Ranjan-Respondent No.3 herein (writ          c
petitioner in the High Court) in C.C. No. 1036/CPW/2008
pending before the Metropolitan Magistrate, 19th Court,
Esplanade, Mumbai.

     3. Brief facts:
                                                                      D
     (a) The appellant, an Indian Revenue Service Officer, joined
National Agricultural Co-operative Marketing Federation of India
Ltd. (NAFED), on deputation on 15.07.2003 as an Executive
Director.
                                                                      E
      (b) On 01.1-0.2003, Respondent No.3 herein-Alok Ranjan
took over the charge as the new Managing Director of NAFED
and he approved the 1st Non-agricultural tie-up of NAFED on
13.10.2003 in order to diversify NAFED's business activities
to cope up from severe financial crunch so that income from
                                                                      F
other businesses can compensate the losses being made on
trading of agricultural items. Respondent No. 3 participated in
all the meetings and approved all the transactions entered into
with M/s Swarup Group of Industries (SGI) for the above said
purpose.
                                                                      G
    (c) On 20.04.2004, when the Respondent No. 3 was
scheduled to go for an international tour to Beijing, the appellant
was made the officiating Managing Director for 21.04.2004 to
27.04.2004 in order to attend all urgent matters.
                                                                      H
    480     SUPREME COURT REPORTS                  [2014] 4 S.C.R.


A      (d) In January 2006, a public interest litigation was filed
  against NAFED before the Delhi High Court on the allegations
  of misappropriation of funds by its officials in non-agricultural
  business. The Government of India, in its reply, stated that CBI
  enquiry will be conducted. In the affidavit filed by NAFED, it was
B again reiterated that all the transactions were bona fide.·

       (e) Anticipating pressure of CBI, Respondent No. 3
  directed Mr. M.V. Haridas, Manager (Vigilance and Personnel)
  to lodge a complaint against SGI and, accordingly, a complaint
C was lodged before the CBI Economic Offences Wing (EOW),
  Mumbai.

       (f) The CBI filed a charge-sheet dated 15.12.2008 against
  the appellant herein and Respondent No.3 along with other
   accused for committing offence under Section 120B read with
D Sections 409, 411,420, 467, 468 and 471 of the Indian Penal
   Code, 1860 (in short 'the IPC').

      (g) At this stage, Respondent No.3 preferred a petition
  being Criminal Writ Petition No. 220 of 2010 for discharge
E before the High Court under Section 482 of the Code of
  Criminal Procedure, 1973 (in short "the Code") read with Article
  226/227 of the Constitution of India.

          (h) By impugned order dated 29.06.2012, the High Court
    accepted the case of Respondent No.3 herein and allowed his
F   petition.

        (i) Being aggrieved by the impugned judgment of the High
  Court, the appellant moved before this Court. Since the
  appellant herein was not a party before the High Court, this
G Court, by order dated 19.03.2013, granted him permission to
  file special leave petition.

       4. Heard Mr. Shekhar Naphade, learned senior counsel for
  the appellant, Mr. P.P. Malhotra, learned Additional Solicitor
  General for Respondent No.2-CBI, Mr. Kailash Vasdev,
H learned senior counsel for the contesting Respondent No.3 and
   HOMI RAJVANSH v. STATE OF MAHARASHTRA                      481
             [P. SATHASIVAM, CJI.]
Ms. Asha Gopalan Nair, learned counsel for the State of              A
Maharashtra.

Contentions:

    5. Mr. Shekhar Naphade, Jearned senior counsel for the
appellant, after taking us through the charge sheet dated            B
15.12.2008 filed before the Special Judge, CBI, bye-laws of
NAFED and impugned order of the High Court, submitted as
under:

    (i) the High Court erred in quashing the complaint against       C
Respondent No.3 without hearing the appellant herein, who is
a co-accused in the case;

     (ii) the High Court had over exercised its jurisdiction by
holding a summary trial on facts, which is contrary to the law
                                                                     0
laid down by this Court in catena of judgments;

      (iii) the High Court committed an error in coming to a
finding against the appellant without the appellant being a party
in the writ petition filed by respondent No.3 herein before it;
                                                                     E
    (iv) the High Court committed an error in agreeing with the
submissions of Respondent No.3 herein without affording an
opportunity of being heard to the appellant; and

    (v) the adverse findings against the appellant in the
impugned judgment would affect the trial, and hence prayed for       F
quashing of the same.

     6. On the other hand, Mr. Kailash Vasdev, learned senior
counsel for Respondent No.3 submitted that in the absence of
specific material in the charge-sheet about the role of              G
respondent No.3, the High Court is fully justified in quashing the
criminal case and discharging him. He further submitted that
there is no categorical finding against the appellant and the High
Court has merely reproduced what is stated in the charge sheet
and nothing more.                                                    H
    482      SUPREME COURT REPORTS                    [2014] 4 S.C.R.


A       7. We have carefully considered the rival submissions and
    perused the relevant materials.

    Discussion:

       8. In view of our proposed decision and the ultimate
B direction which we are going to issue at the end, there is no
  need to traverse all the factual details. We have already noted
  the role of the appellant, Respondent No.3 and Respondent
  No.4. A careful consideration of the bye-laws of the NAFED
  also makes clear the separate role of the accused. It is not in
C dispute that in the writ petition filed by Respondent No.3 before
  the High Cou .. for quashing the criminal proceedings, the
  appellant he1e111 was not shown or impleaded as one of the
  parties. On the other hand, the role of the appellant herein was
  specifically contended before the High Court at several places
D and, in categorical terms, in paragraph 10 of the impugned
  order, which is as under:

          "...........According to the learned counsel, the loss that has
          been caused, is attributable to the subsequent MOU dated
          24.4.2004, entered into between NAFED and M/s Swarup
E
          Group of Industries, which was signed by the accused
          No.2 - Homi Rajvansh, who was the then Divisional Head
          of Finance and Accounts and tie up business in NAFED.
          It is submitted that it is the case of the investigating agency
          itself, that the said MOU was signed by the accused No.2
F         - Homi Rajvansh, without the approval of the petitioner or
          without his knowledge. The said MOU neither has any
          quantitative nor any value restrictions. It is submitted that
          the collateral security which had been provided in the
          earlier MOU, was totally missing in this MOU. Not only that,
G         but various relevant clauses appearing in earlier MOU
          protecting and securing the interest of NAFED were either
          deleted or modified without information to the petitioner. It
          is submitted that though the allegation in the charge sheet
          is that the accused No.2 - Homi Rajvansh made such
H         huge disbursement of funds worth Rs.235 crores, without
  HOMI RAJVANSH v. STATE OF MAHARASHTRA                       483
            [P. SATHASIVAM, CJI.]
    taking approval of the Managing Director, i.e., the              A
    petitioner, strangely, the Managing Director, i.e., the
    petitioner has been held responsible for such
    disbursement and has been made an accused in the
    case."
                                                                     B
     9. Apart from the above contentions, the charges levelled
by the investigating agency against the accused persons in the
police report were also highlighted.

    10. The High Court, after adverting to the above
contentions, arrived at the following conclusion:                    c
    "There is great substance in the contention advanced by
    the learned counsel for the petitioner. The allegation that
    the accused No.2 - Homi Rajvansh, committed the acts
    in question without the approval of the Managing Director,       D
    i.e., the petitioner and without informing him and the
    allegation that the Managing Director, i.e., the petitioner
    is responsible for the said acts, cannot go hand in hand
    together. Surely, if the case is that Homi Rajvansh
    committed these illegalities without informing the Managing      E
    Director, as was required and without his permission, as
    was necessary, then the responsibility of such acts (which
    were done without the permission of and the information
    to the petitioner), cannot be fastened on the petitioner. This
    is so obvious, that it does not need any further elaboration."
                                                                     F
    11. Again in paragraph 17, in categorical terms, the High
Court has concluded as under:
    " ....... Significantly, so far as the accused No.2-Homi
    Rajvansh is concerned, the investigation could establish
    that he had acquired huge properties from the ill-gotten         G
    wealth ...... "
    12. In paragraph 22, the High Court arrived at a specific
conclusion against the appellant herein which reads as under:
    "Further, the allegations leveled against the petitioner about   H
    484       SUPREME COURT REPORTS                  [2014] 4 S.C.R.


A         he being in collusion with the accused No.2-Homi
          Rajvansh, are in conflict with the allegations that have been
          levelled against the accused No.2. It has already been
          seen that the allegations that the said accused No.2, Homi
          Rajvansh, did certain wrongs without the permission of the
B         petitioner and behind his back, and that the said Homi
          Rajvansh and the petitioner had conspired to commit the
          said wrongs, cannot go hand in hand together. Indeed, the
          allegations against the co-accused Homi Rajvansh are
          supported by material in the charge sheet, but the very
c         absence of such material, so far as the petitioner is
          concerned, renders the theory of the petitioner being a
          party to the alleged conspiracy, unacceptable."
        13. The perusal of the contentions of Respondent No.3
  herein-the writ petitioner in the High Court and the categorical
D findings followed by conclusion not only exonerated Respondent
  No.3 herein from the criminal prosecution but also reinforce the
  allegations levelled against the appellant herein, who was
  admittedly not a party before the High Court.
E         14. It is settled law that for considering the petition under
    Section 482 of the Code, it is necessary to consider as to
    whether the allegations in the complaint prima facie make out
    a case or not and the Court is not to scrutinize the allegations
    for the purpose of deciding whether such allegations are likely
    to be upheld in trial.
F
       15. The High Court committed an error in quashing the
  complaint against Respondent No.3 without hearing the
  appellant herein who is a co-accused in the case as their
  alleged roles are interconnected. The High Court committed an
G error in coming to a finding against the appellant without the
  appellant being a party in the writ petition filed by Respondent
  No.3. In fact, the perusal of the impugned order clearly shows
  that the High Court simply agreed with the submissions of
  Respondent No.3 against the appellant herein without giving
H him an opportunity of being heard.
    HOMI RAJVANSH v. STATE OF MAHARASHTRA                      485
              [P. SATHASIVAM, CJI.]
      16. We are satisfied that the High Court, in the impugned        A
 order, over exercised its jurisdiction which is complete violation
 of principles of natural justice since the appellant, who is a co-
 accused, was not heard on the allegations levelled against him
 by Respondent No.3 herein.
                                                                       B
       17. Though the High Court possesses inherent powers
 under Section 482 of the Code, these powers are meant to do
 real and substantial justice, for the administration of which alone
 it exists or to prevent abuse of the process of the court. This
 Court, time and again, has observed that extraordinary power
 should be exercised sparingly and with great care and caution.        C
 The High Court would be justified in exercising the said power
 when it is imperative to exercise the same in order to prevent
 injustice.
     18. Inasmuch as admittedly the appellant was not                  D
 impleaded/shown as one of the parties before the High Court,
 the specific finding against his alleged role, based on the
 submissions of Respondent No.3 herein without giving an
 opportunity of being heard, cannot be sustained.
       19. In the light of what is stated above, the impugned          E
 judgment dated 29.06.2012 in Criminal Writ Petition No. 220
 of 2010 is set aside and the matter is remitted to the High Court
 for fresh disposal.
        20. In view of our conclusion, the appellant herein - Homi     F
  Rajvansh be impleaded as Respondent No. 4 in Criminal Writ
. Petition No. 2.20 of 2010 and we request the High Court to hear
  the matter afresh after affording opportunity to all the parties
  including the newly impleaded party, and dispose of the same
  as expeditiously as possible preferably within a period of six       G
  months from the date of receipt of copy of this judgment.
      21. The appeal is allowed on the above terms.

 B.B.B.                                          Appeal allowed.