Wednesday, 16 March 2016

Whether High court can quash prosecution against one accused without hearing co-accused?

The perusal of the contentions of Respondent No.3
herein-the writ petitioner in the High Court and the
categorical 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.
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.
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 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 him an opportunity of being heard.

16) We are satisfied that 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 against him by Respondent No.3 herein.
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. 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
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.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 687 OF 2014
(Arising out of S.L.P. (Crl.) No. 2634 of 2013)
Homi Rajvansh ...
Versus
State of Maharashtra & Ors. ....
Dated;MARCH 27, 2014.


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 petitioner in the High Court) in C.C. No. 1036/CPW/2008
pending before the Metropolitan Magistrate, 19th Court,
Esplanade, Mumbai.

3) Brief facts:
(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.
(b) On 01.10.2003, 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 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.
(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
2Page 3
21.04.2004 to 27.04.2004 in order to attend all urgent
matters.
(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 nonagricultural
business. The Government of India, in its reply,
stated that CBI enquiry will be conducted. In the affidavit
filed by NAFED, it was 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 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
3Page 4
with 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 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 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
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,
4Page 5
learned senior counsel for the contesting Respondent No.3
and Ms. Asha Gopalan Nair, learned counsel for the State of
Maharashtra.
Contentions:
5) Mr. Shekhar Naphade, learned senior counsel for the
appellant, after taking us through the charge sheet dated
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
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
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
5Page 6
party in the writ petition filed by respondent No.3 herein
before it;
(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 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
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.
7) We have carefully considered the rival submissions and
perused the relevant materials.
6Page 7
Discussion:
8) In view of our proposed decision and the ultimate
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 dispute that in the writ petition filed by
Respondent No.3 before the High Court for quashing the
criminal proceedings, the appellant herein 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 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
Group of Industries, which was signed by the accused No.2
7Page 8
– 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 –
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, 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
huge disbursement of funds worth Rs.235 crores, without
taking approval of the Managing Director, i.e., the
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.”
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:
“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,
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 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.”
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
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 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 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
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 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.
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.
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 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 him an opportunity of being heard.

16) We are satisfied that 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 against him by Respondent No.3 herein.
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. 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
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.
11Page 12
19) In the light of what is stated above, the impugned
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
Rajvansh be impleaded as Respondent No. 4 in Criminal Writ
Petition No. 220 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 months from the date of receipt of copy of this
judgment.
21) The appeal is allowed on the above terms.

 ………….…………………………CJI.
 (P. SATHASIVAM)
 .………….……………………………J.
 (RANJAN GOGOI)
 .………….……………………………J.

 (N.V. RAMANA)
NEW DELHI;
MARCH 27, 2014.

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