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2022 (9) TMI 1513 - HC - Indian LawsCheating - Default in repayment of loan - Deposit of bogus share certificates in the Central Bank of India to obtain loans. HELD THAT - The ingredients to constitute an offence under Section 420 of IPC are as follows - (i) A person must commit the offence of cheating under Section 415 and (ii) The person cheated must be dishonestly induced to (a) deliver property to any person or (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security - Cheating is an essential ingredient for an act to constitute an offence under Section 420 of IPC. It is relevant to rely upon the judgment made by the Honourable Supreme Court of India in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD ORS 2006 (7) TMI 575 - SUPREME COURT held that the civil liability cannot be converted into criminal liability and it is necessary to take notice of a growing tendency in business circle to convert purely civil dispute in criminal case. This is obviously on account of prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lender/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claim which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and dishonoured. The term forgery used in these sections is defined in Section 463 of IPC. Whoever makes any false documents with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into express or implied contract, or with intent to commit fraud or that the fraud may be committed, commits forgery. Section 464 of IPC defines making a false document . The condition precedent for an offence under Sections 467, 468 and 471 is forgery. The condition precedent for forgery is making a false document. This case does not relate to any false record and all the documents are more than 30 years old and with proper custody. On perusal of all the proceedings pertaining to the subject properties categorically shows that the matter has been settled by the orders of this Court 50 years ago and the same sought to be re-opened for investigation which is clearly not permissible. The petitioner came into the picture only in the year 1995, when the shares transferred to M/s. V.K.K. Charities, who was the successful bidder in the auction. All the proceedings from the initiation of auction are sanctioned by the BIFR by sanctioning the scheme of rehabilitation. The FIRs in Crime Nos.2 3 of 2016 cannot be sustained as against the petitioner and they are liable to be quashed - Petition closed.
Issues Involved:
1. Quashing of FIRs registered for various offences under IPC. 2. Allegations of forgery and fraudulent transfer of shares and properties. 3. Validity of the sale and transfer of shares and properties. 4. Legal standing and rights of the parties involved. 5. Abuse of process of law. Issue-wise Detailed Analysis: 1. Quashing of FIRs Registered for Various Offences Under IPC: The petitions were filed to quash the FIRs registered in Crime Nos. 2 & 3 of 2016 for offences under Sections 420, 465, 466, 467, 468, 471, and 120B of IPC. The petitioner argued that the cases were previously investigated and closed as "mistake of facts," which was accepted by the Judicial Magistrate. The Additional Director General of Police's order for further investigation without court permission was deemed improper. 2. Allegations of Forgery and Fraudulent Transfer of Shares and Properties: The prosecution alleged that the petitioner and others manipulated revenue records, created false documents, and forged signatures to unlawfully transfer shares and properties initially owned by Ida L Chambers. The petitioner countered that the shares were legally transferred to A. Nagappa Chettiar and subsequently to him through proper legal channels, including public auctions and court-sanctioned processes. 3. Validity of the Sale and Transfer of Shares and Properties: The petitioner argued that the shares and properties were legally transferred over several decades, involving court orders and approvals from the Board for Industrial and Financial Reconstruction (BIFR). The prosecution claimed that the transfers were based on forged documents and illegal actions. However, the court found that the transactions were legally sanctioned and properly documented, thus not constituting forgery or fraud. 4. Legal Standing and Rights of the Parties Involved: The second respondent claimed to be the power agent of George Joseph Chambers, a purported legal heir. However, the court noted that George Joseph Chambers was not recognized as a legal heir of Ida L Chambers, and his claims were previously dismissed by the court. The court emphasized that the second respondent had no locus standi to lodge complaints or claim properties, as his principal had no legal rights over them. 5. Abuse of Process of Law: The court observed that the second respondent's complaints were an attempt to reopen settled matters and usurp properties without legal standing. The FIRs were deemed an abuse of the legal process, as the issues had been resolved through previous court orders and legal proceedings. The court cited precedents emphasizing that civil disputes should not be converted into criminal cases and that such practices should be deprecated. Conclusion: The court quashed the FIRs in Crime Nos. 2 & 3 of 2016, finding no substantial evidence to support the allegations of forgery, fraud, or other criminal offences against the petitioner. The petitions were allowed, and the connected miscellaneous petitions were closed.
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