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Issues Involved:
1. Quashing of FIRs due to the alleged civil nature of the dispute. 2. Allegations of criminal breach of trust, misappropriation, and forgery. 3. Validity of the sale of pledged shares without notice. 4. Applicability of civil versus criminal proceedings. 5. Abuse of process of law in initiating criminal proceedings. Issue-wise Detailed Analysis: 1. Quashing of FIRs due to the alleged civil nature of the dispute: The petitioners sought quashing of FIRs No.505/2005 and No.511/2005 on the grounds that the disputes were essentially civil in nature. They argued that the FIRs were an abuse of the process of law, as the disputes pertained to contractual obligations and securities, which are typically resolved in civil courts. The court agreed, noting that the disputes were already under consideration in civil proceedings, and found that the FIRs did not disclose any criminal offence. 2. Allegations of criminal breach of trust, misappropriation, and forgery: The respondents alleged that the petitioners committed criminal breach of trust and misappropriation by selling pledged shares without notice and at prices below market value. However, the court found that the sale of shares was conducted with prior notice and in accordance with the Pledge Agreements, Memorandum of Settlement, and Consent Award. The court concluded that no criminal breach of trust, misappropriation, or forgery was prima facie made out, as the FIRs did not specify any forged documents. 3. Validity of the sale of pledged shares without notice: The core issue was whether the petitioners sold the pledged shares without notifying the respondents. The court examined the evidence, including letters and notices exchanged between the parties, and found that the respondents were indeed notified of the sale. The court emphasized that the sale was conducted in accordance with the agreements and that the respondents had prior knowledge of the sale, negating the allegations of clandestine transactions. 4. Applicability of civil versus criminal proceedings: The court reiterated the principle that civil and criminal proceedings can run concurrently but emphasized that the criminal proceedings in this case were not justified. The court noted that the allegations lacked the necessary ingredients for criminal offences and were purely civil in nature. The pending civil litigation aimed to declare the sale of pledged shares null and void, further supporting the civil nature of the dispute. 5. Abuse of process of law in initiating criminal proceedings: The court found that the initiation of criminal proceedings was an abuse of the process of law. The FIRs were deemed to fall within the first illustrative category of abuse as outlined in State of Haryana v. Bhajan Lal, where allegations, even if taken at face value, do not constitute a criminal offence. Consequently, the court quashed the FIRs and the proceedings emanating from them, emphasizing that the disputes should be resolved in civil court without prejudice to either party. In conclusion, the court quashed the FIRs and the related criminal proceedings, finding them to be an abuse of the process of law and emphasizing the civil nature of the disputes. The decision underscored the importance of distinguishing between civil and criminal matters and ensuring that criminal proceedings are not misused to exert pressure in civil disputes.
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