TMI Blog2015 (12) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal 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. - CRL.M.C.3332/2014 & Crl.M.A.11550/2014, CRL.M.C.3333/2014 & Crl.M.As.11552/2014, 15311/2015 - - - Dated:- 7-12-2015 - MR. SUNIL GAUR, J. For The Petitoner : Dr. A. M. Singhvi, Senior Advocate, with Mr. Prashant Kumar, Mr. Amit Bhandari and Mr. Shikhar Sareen, Advocates, Mr. Kapil Sibal, Senior Advocate, with Mr. Devadatt Kamat, Mr. Rajesh Inamdar, Mr. Javedur Rahman and Mr. Adit Pujari, Advocates For The Respondent : Mr. Rahul Mehra, Standing Counsel (Crl.) with Mr. Sanyog Bahadur, Mr. Shekhar, Advocates Mr. Vinod Diwakar, Additional Public Prosecutor, Mr. Yatinder Chaudhary, Mr. Ishkaran Bhandari and Mr. Ravi Raghuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in detail in the impugned order and hence needs no reproduction. The sum and substance of the case set up against petitioners/accused is that when AJL had closed the printing and publication of newspapers, like National Herald, etc. in the year 2008, it owed a huge debt of ₹ 90 crores to the Congress Party. Although this debt had accumulated over a period of time, but it is pertinent to note that this huge unpaid debt was outcome of interest free loans extended by the Congress Party to AJL from time to time. It has to be kept in mind that AJL was a Public Limited Company, which had immovable assets having value of crores of rupees. It is matter of record that Congress Party had assigned the huge debt of ₹ 90 crores to a Section 25 Company i.e. Young Indian on receiving a paltry amount of ₹ 50 lacs only. For this, the Congress Party owes an explanation to its supporters, donors, etc.. It is also matter of record that accused No.1-Mrs. Sonia Gandhi and her son-Rahul Gandhi, who is accused No.2, owned 38% each of the shares i.e. 76% of Young Indian Company. The debt which AJL owed to Congress Party now stood transferred to Young Indian which was formed in November, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the original shareholders of AJL as well as the supporters/donors of Congress Party have been cheated by petitioners. 7. The substratum of the pre-summoning evidence led by respondent-complainant finds mention in the impugned order. The sequence of events has been recapitulated in the impugned order. The factual eight steps enumerated in the instant complaint, which gives the gist of this complaint, are spelt out as under:- Step 1: AJL was formally closed and printing of the newspapers terminated in April 2008. Step 2: In December 2010, Board of Directors of Young Indian formally passed a Resolution offering to own the outstanding debt of AJL of ₹ 90 crores. This offer was accepted by the Chairman and Board of AJL. Step 3: Accused no.1 to 4 as Senior Office Bearers of Congress Party used their position to provide an unsecured zero interest of loan of ₹ 90 crores. Step 4: The AJL thereafter held a meeting of their Board and without reference to the Shareholders resolved that in lieu of Young Indian owing the debt and for a further consideration of ₹ 50 Lakhs, the entire share equity of AJL would be transferred to Young Indian. Thus, AJL b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares) Director and CMD Director Director Director c) Founder Members/Directors of Young Indian, with percentage of shares owned by them. 1 1 1 1 1 1 A1 A2 A3 A4 A5 A6 (38%) (38%) (12%) (12%) 9. In the impugned order, trial court has subjected the case of respondent-complainant to the test of a prima facie case. By relying upon Apex Court s decision in A.R. Antulay v. Ram Dass (1984) 2 SCC 500 trial court has concluded that anyone can put the criminal law into motion except where the statute enacting or creating an offence indicates to the contrary. After adverting to the ingredients of the offence of cheating, criminal breach of trust, dishonest misappropriation and criminal conspiracy, trial court has concluded as under: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ingredients of alleged offences exists. Attention of this Court was drawn to the comparative chart filed alongwith the written synopsis to highlight as to how the findings returned in the impugned order are unsustainable. It was asserted that due to historical and emotive bond, money was advanced by the Congress Party to AJL from time to time and the objective of the Congress Party as well as AJL is to uphold the legacy and tradition of secularism and non-alignment. It was pointed out that there is no statutory provision, rule, regulation or by-law which prohibits disbursement of money to a newspaper, which is closely linked to the Congress Party and infact Section 13 A of Income Tax Act contemplates income from other sources in respect of Political Parties, which are run on donations and other Political Parties have also invested money in mutual funds, etc.. Pointed reference was made to Bhartiya Janta Party (for short BJP) investing in Canstar Fund. 14. It was asserted on behalf of petitioners that constitution of the Congress Party permits for formation of a trust to hold immovable properties belonging to the Congress Party and there is no allegation that petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y.I. stands duly approved in the AJL s Extraordinary General Meeting of 21st January, 2011 and in the event of winding up of Y.I., which is a Section 25 Company, its assets, if any, shall vest in another Section 25 Company. It was pointed out that there is nothing on record to indicate that the emoluments were being drawn by petitioners as Directors of Y.I. or that the assets of AJL have been depleted or that any wrongful loss has been caused to Y.I. nor petitioners are filling their personal kitties as Directors of Y.I.. 17. On behalf of petitioners, it was pointed out that Section 403 of IPC is applicable in respect of movable properties whereas assets of AJL are immovable properties. According to petitioners, there is no evidence to indicate misappropriation of any immovable property of AJL or Y.I. or that the rental income of AJL has been misappropriated by petitioners. Thus, it was submitted that there is neither wrongful gain or loss to AJL or Y.I. and no illegal act has been committed by petitioners and so, on a plain reading of the complaint in question, it can be certainly said that neither the offence of cheating nor of fraudulent or dishonest misappropriation is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminal conspiracy to take over the assets of AJL. It was pointed out that it is a matter of record that none of the assets of AJL has been taken over by Y.I. and there was no element of cheating in granting or assigning of loan as no unlawful act has been done by petitioners to attract any criminality. It was also pointed out that rental income accruing to AJL has not been transferred to Y.I. or any of its Directors and the incorporation of Y.I. and its objective is not incompatible with the revival of AJL and the decision not to publish any newspaper cannot attract any criminal liability, as it is for the AJL to decide whether to revive National Herald or not. The precise stand taken on behalf of petitioners that the impugned order smacks of mala fides and discloses utter non-application of mind as the necessary ingredients of the offences alleged are lacking and so, malicious prosecution of petitioners ought to be ended to secure the ends of justice. 20. Learned Senior Counsel for the remaining petitioners adopted the submissions advanced on behalf of above petitioners and had supplemented by asserting that entertaining of the complaint in question qua accused-Sam Pitroda and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting that petitioners have alternate remedy to approach the trial court while invoking Section 245 of Cr.P.C.. Reliance was placed upon Apex Court s decision in Nupur Talwar v. CBI (2012) 11 SCC 465 to submit that it is not essential for trial court to deliver a detailed order while issuing the process. It was submitted that sufficient grounds exist for summoning petitioners for the offences in question. It was highlighted by respondent-complainant as to how interest free loan was questionably extended to AJL by Congress Party and was dubiously assigned to Y.I., who had in turn, taken over the Management of AJL and thereby offence of cheating, criminal misappropriation has been blatantly committed by petitioners, which calls for their prosecution in the instant complaint. It was asserted by respondent-complainant that the question of locus standi does not arise as the supporters/donors, etc., of Congress Party as well as the shareholders of AJL have been blatantly duped and larger public interest has been sacrificed which is a serious cause of concern as the trust reposed in the Congress Party has been openly breached. It was pointed out that with the mala fide intention, Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 736; M/s Medchl Chemicals Pharma P.Ltd. v. M/s Biological E.Ltd. Ors. (2000) 3 SCC 269; Rashmi Kumar v. Mahesh Kumar Bhada (1997) 2 SCC 397; State of Haryana Ors. v. Bhajan Lal Ors. (1992) Supp. (1) SCC 335 and Express Newspapers (P) Ltd. v. Union of India AIR 1986 SC 872. 27. Lastly, it was submitted by respondent-complainant that the conspiracy to commit the offence in question is writ large on the face of it and so, prosecution of petitioners in the complaint in question is very well justified on merits and no case for quashing the instant complaint or the impugned order is made out. Thus, dismissal of these petitions is sought. 28. The respective stand taken by both the sides needs to be considered in view of the fact that in a democratic set up, how a Political Party of national stature acts is everybody s concern. Rather, it is a matter of serious concern as allegations of fraud, etc. are levelled against the Congress Party, who has ruled the Nation for many decades. Precisely, it is the act of Office Bearers of Congress Party and their associates which is under scanner in this case. 29. Upon evaluating the impugned order on the touchstone of judicial preced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity i.e. AJL, which is a Public Limited Company, by the Congress Party is a matter of concern in a democratic set up, particularly, when the source of Congress Party s fund is largely from donations given by public and so, any citizen can legitimately question the siphoning off funds by Political Party. What crops up in the mind of a prudent person is as to where was the need of extending interest free loans to a Public Limited Company engaged in a commercial venture of publishing newspapers. 32. Considering the fact that AJL has sizeable assets of ₹ 2000 crores, it needs to be explained by petitioners as to what was the need to assign the huge debt of ₹ 90 crores when this debt could have been easily liquidated by AJL from its sizeable assets. Even writing off such a huge debt by the Congress Party can legitimately attract allegations of cheating, fraud, etc.. Petitioners had gone step further in conspiring to get this huge debt assigned to a Special Purpose Vehicle i.e. Y.I. and thereafter, to hijack AJL via Y.I.. Such grave allegations levelled against petitioners cannot be brushed aside lightly by relying upon judicial precedents cited, to conclude that the ingr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting share equity was taken over by Y.I. or fresh shares were floated to marginalize the existing shareholders and without any public issue of the fresh shares floated, they were allotted to Y.I.. Rather, this is more questionable. At this stage, it would not be worthwhile to consider as to whether a share holder owes the assets of the company or not, because more than 90% of the shares were acquired by Y.I. in a questionable manner. 34. Considering the role played by petitioners-Sam Pitroda and Oscar Fernandes, I find that hyper-technical objections to their summoning on the premise that they reside outside the territorial jurisdiction of the trial court and so, their summoning ought to be preceded by an inquiry, does not carry much substance. The sum and substance of the allegations levelled against petitioners cannot be brushed aside by merely saying that at best it is a case of takeover of AJL and the remedy lies in invoking the provisions of the Company Act. Upon reading the complaint as a whole, it emerges that the transactions of the Congress Party with AJL via Y.I. are not a mere commercial transactions as these transactions legitimately attract the allegations of chea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the court and to secure the ends of justice while cautioning that inherent powers should not be exercised to stifle a legitimate prosecution and High Courts should refrain from giving a prima facie opinion at the initial stage unless there are compelling reasons to do so, as the case set up has to be considered as it is, without adding or subtracting anything to it. Applying the afore-noted parameters to the instant case, this Court finds that the ingredients of the offences alleged are not lacking and sufficient ground to proceed against petitioners certainly exists. No mala fides can be alleged against respondent-complainant nor can it be said that the summoning of petitioners is an abuse of process of the court. 38. This Court is of the considered view that the gravity of the allegations levelled against petitioners has a fraudulent flavour involving a national Political Party and so, serious imputations smacking of criminality levelled against petitioners need to be properly looked into. 39. After having considered the entire case in its proper perspective, this Court finds no hesitation to put it on record that the modus operandi adopted by petitioners in taking contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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