2015 (12) TMI 709 - HC - Indian Laws

Allegation of Cheating, fraud, criminal misappropriation, etc., by Office Bearers of the Congress Party who also happen to be the members of a Private Company-Young Indian Private Company (hereinafter referred to as Y.I.) and major shareholders of Associated Journals Private Limited (hereinafter referred to as AJL), which was engaged in publishing of newspapers including National Herald, etc. - Held that - This Court finds no hesitation to put it on record that the modus operandi adopted by petitioners in taking control of AJL via Special Purpose Vehicle i.e. Y.I., particularly, when the main persons in Congress Party, AJL and Y.I. are the same, evidences a criminal intent. Whether it is cheating, criminal misappropriation or criminal breach of trust is not required to be spelt out at this nascent stage. In any case, by no stretch of imagination, it can be said that no case for summoning petitioners as accused in the complaint in question is made out. Questionable conduct of petitioners needs to be properly examined at the charge stage to find out the truth and so, these criminal proceedings cannot be thwarted at this initial stage. Such a view is being formed on a bird s eye view of the whole case and the observations in the impugned order of there being a prima facie case have to be read in the context of there being sufficient grounds for summoning petitioners. Without casting any reflection on the merits of this case and while leaving the larger questions raised in these petitions open, to be considered at the charge-stage, these petitions and the pending applications are dismissed with afore-noted clarification.

Issues Involved:
1. Probity of a National Political Party.
2. Allegations of cheating, criminal breach of trust, and criminal misappropriation.
3. Locus standi of the complainant.
4. Prima facie case for summoning the accused.
5. Criminal conspiracy.
6. Jurisdictional issues regarding summoning accused residing outside the trial court's jurisdiction.
7. Misuse of party funds and assets of AJL.

Detailed Analysis:

1. Probity of a National Political Party:
The judgment scrutinizes the alleged impropriety of a National Political Party's actions, highlighting the need for transparency in how political parties manage funds, especially when sourced from public donations. The court emphasizes that the actions of office bearers of such a party are of public concern, given the serious allegations of fraud and misappropriation.

2. Allegations of Cheating, Criminal Breach of Trust, and Criminal Misappropriation:
The complainant alleges that the office bearers of the Congress Party, by forming Young Indian (Y.I.) and taking over Associated Journals Limited (AJL), committed cheating and criminal breach of trust. The court notes that AJL, despite having significant assets, was assigned a debt of Rs. 90 crores to Y.I. for a mere Rs. 50 lacs, raising questions about the legitimacy of these transactions. The court finds that these actions prima facie attract allegations of cheating, misappropriation, and breach of trust.

3. Locus Standi of the Complainant:
The court rejects the challenge to the complainant's locus standi, emphasizing that in cases involving serious allegations against a political party, any citizen has the right to question the actions of its office bearers. The court refers to the Supreme Court's decision in Subramanian Swamy v. Manmohan Singh, which supports the right of private citizens to proceed against corruption.

4. Prima Facie Case for Summoning the Accused:
The trial court found sufficient grounds to summon the accused based on the pre-summoning evidence. The High Court concurs, stating that the allegations and evidence presented justify the summoning of the accused. The court notes that a deeper scrutiny of facts is required at the charge stage rather than at the summoning stage.

5. Criminal Conspiracy:
The complainant alleges that the accused conspired to defraud the Congress Party and AJL by forming Y.I. and taking over AJL's assets. The court finds that the transactions between the Congress Party, AJL, and Y.I. raise legitimate questions of criminal conspiracy, which need to be addressed in the trial.

6. Jurisdictional Issues Regarding Summoning Accused Residing Outside the Trial Court's Jurisdiction:
The court dismisses the technical objections regarding the summoning of accused who reside outside the trial court's jurisdiction, stating that the allegations against them cannot be brushed aside on such grounds.

7. Misuse of Party Funds and Assets of AJL:
The court highlights the questionable nature of extending interest-free loans to AJL and subsequently assigning the debt to Y.I. The court emphasizes that the actions of the Congress Party's office bearers in managing party funds and AJL's assets are subject to scrutiny, given the allegations of siphoning off funds in a clandestine manner.

Conclusion:
The court finds that the allegations against the accused prima facie make out a case for summoning them to face trial. The judgment underscores the need for transparency and accountability in the actions of political parties and their office bearers, especially when public funds are involved. The petitions challenging the summoning order are dismissed, and the case is left to proceed to the charge stage for a detailed examination of the allegations.

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