Table of Content:-

• Background of the case
• Issues Raised
• Statutory provisions Involved
• Submissions of the parties
• Judgment Analysis
• Conclusion

Case Laws:-

• Zahira Habibulla H. Sheikh v State of Gujarat [(2004) 4 SCC 158]
• Neeharika Infrastructure Pvt Ltd. v. State of Maharashtra [2021 SCC OnLine SC 315]
• Parbatbhai Aahir alias Parbatbhai Bhimsinhbhai Karmur v. State of Gujarat [(2017) 9 SCC 641]

Salimbhai Hamidbhai Menon vs Niteshkumar Magnbhai Patel & Anr. [Criminal Appeal No. 884 of 2021]

Background of the case

On 10th October 2010, the appellant and the first respondent formed a partnership firm named ‘Calla Associate’ and made a partnership deed. According to the deed, the profit and loss sharing ratio between the appellant and the respondent is 45:55 out of which 45% is of the appellant while 55% is of the respondent. On 21st June 2017, the appellant entered into the execution of sale by the document named ‘Sammati Lekh’ in favor of a third party. The appellant thereafter agreed not to make any claim in his capital investment of Rs. 3.89 Crores.

An addendum to sammati lekh had been executed on 23rd August 2017 according to which after adjustment the first respondent need to pay Rs. 5.03 Crores to the appellant also as per the addendum a sale deed in respect of the land situated in Mouje Samiyala was to be executed in favor of the appellant.

On 8th September 2017, a notarized document had been made in which the appellant had relinquished his rights from a parcel of land which belongs to the partnership firm. The appellant alleged that he had relinquished his rights in respect of land situated in Akota but the first respondent had forged the documents and add some additional pages by which it depicts that the appellant had relinquished his rights in respect of the various lands.

On 1st November 2017 appellant issued a legal notice to the first respondent. Further, on 2nd January 2018, a public notice was also issued against the first respondent alleging that there is a misappropriation of the amount invested by the appellant.  On 5th January 2018, the first respondent replied that their partnership had mutually dissolved and a document in that effect had been executed.

On 7th and 25th January 2018, the appellant issued two legal notices alleging the dishonor of the cheques amounting to Rs. 1.47 Crores and Rs. 81.31 Crores. Further on 31st January 2018, the appellant communicated with the bank to cease all the transactions in the account of the firm due to ongoing issues but the bank replied that the appellant had already relinquished his rights in the firm in favor of the respondent by executing a document.

The appellant alleged that after then he came to know that the first respondent had fabricated the dissolution deed and it contains the reference of the document of relinquishment of rights and also the signature on the deed was also forged.

After the preliminary enquiry conducted by the investigating officer, the first respondent urged to settle all the accounts in the presence of the mediator as it was a civil matter.

On 12th March 2018 settlement had been done between the parties and it was decided that a sum of Rs. 26.03 Crores had to be paid to the appellant. Post dated cheques were given to the appellant out of these cheques only one cheque was honored and the remaining cheques were dishonored and as a consequence of this, a proceeding was initiated under the Negotiable Instrument Act, 1881. Despite this, the appellant also initiates a complaint against the first respondent in the police station alleging him of forgery and cheating.

On 24th December 2018, the parties entered into a fresh Memorandum of Understanding (MoU) in which it was envisaged that certain land was transferred in favor of the appellant to pay the outstanding amount. The appellant further alleged that the cheques issued again to the appellant were returned unpaid and the sale deed executed in respect of the land whose title is not marketable.

On 9th July 2020, the first respondent lodged an F.I.R. against the appellant accusing him of forgery. But after investigation, the investigating officer submitted a summary report that the alleged document was not forged by the appellant but by the first respondent. On 6th December 2020, an F.I.R. was lodged under sections 405, 420, 465, 467, 468, and 471 IPC.

The first respondent initiated the proceedings under section 482 Crpc for quashing the F.I.R. The High Court passed an order that

“The matter is between the partners and there appears allegation that some of the partners have taken advantage and siphoned away amount as well as also made falsification of documents.”  

The proceedings were adjourned as the parties seek the time for settlement but on 8th March 2021, the respondent was arrested. On 9th March 2021 issued an oral direction to restrain the arrest of the first respondent.

After considering the new settlement between the parties the bench passed the impugned order which reads as follow:

“At this juncture when the proceedings are clearly pending between the parties and both of them have set the criminal machinery in action, to strike a balance between both the parties the investigation is required to be proceeded, however the present applicant be not arrested till next date of hearing, S.O. to 28.4.2021.”

Aggrieved with impugned order the present appeal was filed.

Issues Raised

Is High Court empowered to restrain the arrest of the accused via oral directions without recording the reason?

Statutory Provisions Involved

• Section 482 of the Code of Criminal Procedure, 1973

“Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.”

Submissions of the Parties

The contentions of the Appellant

1. It was contended that the F.I.R. lodged on 6th December 2020 containing the serious allegations under sections 405, 420, 465 467, 468, and 471 IPC.
2. Further, it was urged that in lieu of MoU made via settlement the cheques issued were dishonored and the land transferred had a defective title and therefore the impugned order of the High Court is not justifiable.

The Contentions of the Respondents

First respondent

1. It was submitted that in lieu of MoU several parcels of land had been transferred in favor of the appellant and a payment of Rs. 50 lacs had been done by the cheque.
2. The said order of the High Court shall be remained in operation due to the second wave of the pandemic.

State of Gujarat

It was submitted that the impugned order refers to the police report which talks about the forgery of two documents namely Deeds of Relinquishment and Dissolution of Partnership.

Judgment Analysis

The court observed that the conduct of the High Court in issuing oral directions to restrain the arrest of the accused while exercising its power under section 482 Crpc was irregular. If the high Court is of opinion that an opportunity shall be provided to the parties for the settlement and for that an interim protection from the arrest shall be granted then a special judicial order need to be passed in that effect because a written order is binding and enforceable.

The court stated that while administering criminal justice, it is the matter of state in order to preserve law and order and not a private matter between complainant and the accused and this principle has been laid down in the case of Zahira Habibulla H. Sheikh v State of Gujarat [(2004) 4 SCC 158].

The Court further observed that the oral directions issued by the courts amount to grave abuse. If there is no written record then in such case the decision in such case would become a dangerous precedent if the parties and investigating officer would rely upon such unrecorded judicial observations.

Further, the court observed that the bench of the High Court issued an ad interim protection against the arrest by the impugned order. The court found twofold reason in the impugned order that the proceedings are pending between the parties and parties have set criminal proceedings in motion.

The court stated that there is no need to provide detailed reasoning of such directions but the reasons record must show there is the applicability of judicial mind. It includes the nature and gravity of offences, the seriousness of the alleged offence(s), the position of the accused, and the likelihood of their availability for investigation, e basis on which a stay of arrest has been granted till the next date.

The court relied on the judgment of Neeharika Infrastructure Pvt Ltd. v. State of Maharashtra [2021 SCC OnLine SC 315] in which the court formulated certain principles which have to be considered by the High Court while deciding a matter under section 482 Crpc.

Further, the court relied upon Parbatbhai Aahir alias Parbatbhai Bhimsinhbhai Karmur v. State of Gujarat [(2017) 9 SCC 641] in which the court formulated the court formulated certain principles for exercising the power under section 482 Crpc.

Conclusion

 The court held that the petition for quashing the F.I.R. was still pending before the court. The High Court while determining the quashing of F.I.R. must consider that whether or not to quash the alleged F.I.R.

The court allowed the appeal and set aside the impugned order of the High Court. The High Court must proceed with the pending proceeding to decide the quashing of F.I.R. under section 482 Crpc.