2024 (1) TMI 557 - HC - Income Tax

Offences triable by Special Court - ACMM at Delhi's territorial jurisdiction - offences u/s 276C(1)/278 r.w.s. 278B/278E of the Income Tax Act, 1961 and Sections 120B/199/200/204 of the Indian Penal Code, 1865 - a promotee IAS officer in the state of Chhattisgarh is engaged in movement of unaccounted cash through different channels with regard to sectors such as agriculture, mining, liquor trade and licensing in the state of Chhattisgarh. His son Yash Tuteja (accused no. 2) and Saumya Chaurasia (accused no. 3) Deputy Secretary of Chief Minister of Chhattisgarh are his accomplices who are actively engaged and involved in aforementioned illegal operations Interim application seeking stay of that portion of the impugned order passed by the learned ACMM (Special Acts), whereby the said learned ACMM had returned the complaint in respect of the offences under Sections 276C(1)/278 read with Sections 278B/278E of the Income Tax Act, 1961 and Sections 120B/199/200/204 of the Indian Penal Code, 1860 to the petitioner for filing the same before the Court of competent jurisdiction, Whether the Respondents had any right to appear and address arguments or raise any issue on facts or on law, before the learned ACMM at the pre-cognizance stage? - HELD THAT - So far as an accused person is concerned, till the stage when the accused has been summoned by the Criminal Courts, he has no locus to interject or interfere with the proceedings before a Magistrate. The reason is not far to see, in as much as, till the cognizance of the offence is taken, the accused is not a person who is identified as such, for him to be vested with any right of audience, apart from the fact that it is possible that even after the preliminary inquiry under Section 202 Cr.P.C., the magistrate may dismiss the complaint, without even calling upon the accused. Even this Court in Mohua Moitra s case, 2019 (10) TMI 1579 - DELHI HIGH COURT while relying upon the judgements of the Supreme Court, has assertively concluded that the prospective accused cannot stall the proceedings. In the present case, the learned ACMM had not only entertained and heard detailed arguments on behalf of the Respondent No. 8/Accused No. 8, but had actually dismissed the said application vide its order dated 01.11.2022 and yet, had retained the arguments/contentions raised by the Applicant/Accused No. 8 regarding the very maintainability of the complaint as also the lack of territorial jurisdiction to entertain such complaint, for consideration at an appropriate stage. ACMM had committed a grave illegality and irregularity of procedure by not only entertaining the application but also hearing detailed arguments on behalf of the proposed accused person, admittedly at a stage when cognizance was yet to be taken. In other words, learned ACMM appears to have not only committed a procedural irregularity but simultaneously also violated the law as declared by the Constitutional Courts. Whether learned ACMM at Delhi had any territorial jurisdiction, whether conspiracy arose or not, and whether there were any extraordinary or special circumstances arising in the present case entitling the petitioners to approach this Court under Section 482 Cr.P.C? - Though the learned ACMM appears to have applied his mind, however, seems to have been misdirected to reach definitive conclusions on issues like territorial jurisdiction and conspiracy, which in the opinion of this Court could not have been reached without there being evidence on such aspects. This Court has cursorily examined Section 177 Cr.P.C through till Section 187 Cr.P.C., and observes that the Cr.P.C. itself provides for varied places of jurisdiction in varied kind of situations depending upon case to case basis. It would be relevant to consider the provisions of Section 178 Cr.P.C. whereby different situations in respect of an offence, be it where the said offence is committed partly in one local area and partly in another or, where an offence is a continuing one and continues to be committed in more local areas than one or where it consists of several acts done in different local areas may be inquired into or tried by a Court having jurisdiction over any of such local areas. Likewise, the other sections also give simultaneous power to Magistrates in such various jurisdictions, provided some cause of action as contained in the aforesaid sections arises. Similar would be the effect of Section 220 Cr.P.C. Thus, so far as issue (i) is concerned, this Court is of the firm opinion that the respondents had no locus to either file an application or raise any objections qua territorial jurisdiction, conspiracy or bias etc. at the pre-cognizance stage. Equally, the learned Magistrate had, by entertaining the said application and retaining the arguments on such objections and considering the same vide the impugned order, acted with material irregularity necessitating entertaining of the present petition under section 482 Cr.P.C. Whether the issue of conspiracy is an issue of fact which can be proved or disproved only during trial at the time of evidence? - Conspiracy is an issue of fact and can be proved or disproved by the parties by leading evidence during trial and cannot be ascertained merely by appreciating either documents or arguments and therefore, no definitive conclusion on such issue can be reached by any Court at the stage of taking cognizance. The petitioner in the present case has leveled an allegation that the conspiracy has continued at Delhi, which may need to be tested in trial. In the present case, the learned ACMM appears to have committed the error of precisely reaching a definitive conclusion regarding conspiracy. Ld' Magistrate had also definitively concluded that the conspiracy had indeed ended in Chhattisgarh and no part of the said conspiracy continued till Delhi. This conclusion could not and ought not to have been reached by the learned ACMM, particularly at the stage where cognizance of the offences was to be taken. In case such an order is made to stand, then at the stage of taking cognizance, the accused by mere arguments would get an opportunity to show that no such conspiracy was hatched, that too without any evidence. This would be contrary not only to the aforesaid judgement in Mahua Moitra (supra) but also against all cannons of law and procedure. It is trite that conspiracy is an issue of fact which can be proved or disproved only during trial. This Court is of the considered opinion that the definitive conclusion reached by the learned Magistrate in respect of issue (ii), that is, the alleged conspiracy in the present case, is contrary to the law and prima facie unsustainable. In the light of the prima facie observations rendered above in respect of issue nos.(i) and (ii) and the material illegality and irregularity committed by the learned Magistrate, this Court is also of the opinion that the issue no.(iii) regarding relief of stay of the impugned order has to be in the affirmative. Resultantly, the operation of the impugned order dated 06.04.2023 passed by the learned ACMM in Ct. Cases 1183/ 2022 to the extent of return of complaint qua the offences under Section 276C(1)/278 read with Section 278B/278E of the Income Tax Act, 1961 and Sections 120B/199/200/204 of the Indian Penal Code, 1860 is restrained till further orders.

Summary

Issues Involved:

1. Territorial Jurisdiction
2. Conspiracy
3. Maintainability of the Petition under Section 482 Cr.P.C.
4. Right of Accused to Intervene at Pre-Cognizance Stage
5. Application for Stay of Impugned Order

Summary:

1. Territorial Jurisdiction:
The petitioner challenged the ACMM's decision to return the complaint for lack of territorial jurisdiction in Delhi. The ACMM concluded that the alleged offenses, including bribery, illegal commissions, and unaccounted monies, occurred in Chhattisgarh and not in Delhi. The petitioner argued that the conspiracy was a continuing offense and that statements given in Delhi under Section 131(1A) of the I.T. Act formed part of the conspiracy, thus giving Delhi courts jurisdiction. The court noted that the issue of territorial jurisdiction should be determined based on evidence during the trial, not at the pre-cognizance stage.

2. Conspiracy:
The ACMM concluded that the conspiracy did not hatch in Delhi and ended in Chhattisgarh. The petitioner argued that conspiracy is a factual issue that can only be proved or disproved during the trial. The court agreed, stating that the definitive conclusion on conspiracy reached by the ACMM was premature and should be determined during the trial.

3. Maintainability of the Petition under Section 482 Cr.P.C.:
The respondents argued that the petitioner should have filed a revision petition under Section 397 Cr.P.C. instead of approaching the High Court under Section 482 Cr.P.C. The petitioner contended that the inherent powers of the High Court under Section 482 Cr.P.C. could be invoked to prevent abuse of process or to secure the ends of justice. The court found that the petition under Section 482 Cr.P.C. was maintainable due to the material irregularity committed by the ACMM.

4. Right of Accused to Intervene at Pre-Cognizance Stage:
The court held that the accused had no locus to intervene at the pre-cognizance stage. The ACMM committed a grave irregularity by entertaining and hearing detailed arguments from the accused before taking cognizance. The court emphasized that the accused has no right to participate in proceedings under Section 202 Cr.P.C. before process issuance.

5. Application for Stay of Impugned Order:
The court granted the petitioner's application for stay, restraining the operation of the impugned order dated 06.04.2023 to the extent of returning the complaint for lack of territorial jurisdiction. The court found that the ACMM's conclusions on territorial jurisdiction and conspiracy were premature and should be determined during the trial. The stay was granted to prevent prejudice to the petitioner and to ensure a fair trial.

Conclusion:
The court restrained the operation of the impugned order dated 06.04.2023 passed by the ACMM, returning the complaint for lack of territorial jurisdiction, until further orders. The court emphasized that the issues of territorial jurisdiction and conspiracy should be determined during the trial based on evidence. The petition under Section 482 Cr.P.C. was found maintainable due to the material irregularity committed by the ACMM.