TMI Blog2022 (9) TMI 1513X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 (7) TMI 575 - SUPREME COURT ] held that the civil liability cannot be converted into criminal liability and it is necessary to take notice of a growing tendency in business circle to convert purely civil dispute in criminal case. This is obviously on account of prevalent impression that civil law remedies are time consuming and do not adequately protect the interest of lender/creditors. Such a tendency is seen in several family disputes also, leading to irretrievable breakdown of marriages/families. There is also an impression that if a person could somehow be entangled in a criminal prosecution, there is a likelihood of imminent settlement. Any effort to settle civil disputes and claim which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and dishonoured. The term forgery used in these sections is defined in Section 463 of IPC. Whoever makes any false documents with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into express or implied contract, or with intent to commit fraud or that the fraud may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 46 of 1963 2 of 1964. 3. Thereafter, the properties came into the possession of Ida L Chambers and she died on 13.08.1968, leaving behind the principal of the defacto complainant as her sole legal heir. Since the principal of the defacto complainant was travelling on the high seas, he was not able to concentrate upon the properties. While being so, the defacto complainant collected details and came to know that the equity shares and preferential shares were transferred in the name of A. Nagappa Chettiar and he was representing M/s. Chrome Leather Company as Managing Director. After demise of Ida L Chambers, the said A. Nagappa Chettiar had deposited the bogus share certificates in the Central Bank of India to obtain loans. The said A. Nagappa Cheittiar had shown himself as Managing Director of M/s. Chrome Leather Company as early as on 1944, but he had come to picture only after the demise of Ida L Chambers. 4. Thereafter the said A. Nagappa Chettiar mortgaged the properties belonging to M/s. Chrome Leather Company and also the private properties of George Alexander Chambers and Ida L Chambers. The bank authorities of Central Bank of India without following the rules an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4148 of 2007 on the file of the learned Judicial Magistrate No.I, Poonamallee, and the same were also dismissed by an order dated 23.04.2009 and the closure reports were accepted as the FIRs closed as mistakes of facts. The second respondent failed to prefer any revision as against the said order and it attains finality. 6.1. After three years from the date of the order passed by the learned Judicial Magistrate No.I, Poonamallee, the Additional Director General of Police by his proceedings in R.C.No.C6/8313/2012 had taken up the FIRs registered in Crime Nos.304 305 of 2007 on the file of the City Crime Branch X, Thousand Lights, Chennai. The first respondent filed petitions in Crl.M.P.Nos.3915 3914 of 2013 before the learned Judicial Magistrate No.I, Chengalpattu, seeking permission for further investigation. The learned Judicial Magistrate No.I, Chengalpattu, dismissed both the applications on 26.02.2014. Aggrieved by the same, the first respondent herein filed revision petitions in Crl.R.C.Nos.4 5 of 2014 before the learned Additional District and Sessions Judge, Chengalpattu. Both the petitions were allowed on 11.08.2016 and based on the order passed by the learned Sess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, Chennai. Thereafter, they sold out six movable and immovable properties of M/s. Crome Leather Company Private Limited. The said sale was challenged before this Court in C.S.No.46 of 1963 by Roy Edwin Medclaf Chambers. The counter party viz., Ida L Chambers also filed another suit in C.S.No.2 of 1964 seeking permission to effect a sale of 7000 shares of M/s. Crome Leather Company Private Limited. In both the above suits, a Common Compromise Memo filed in application No.220 of 1965 in C.S.No.2 of 1964 and both the suits were disposed of under a Common Compromise Decree dated 19.02.1965. 6.5. After the compromise decree, Ida L Chambers has become absolute owner of the properties and she entered into an agreement with A. Nagappa Chettiar, with an intention to transfer her shareholding in M/s. Chrome Leather Company Private Limited. As per the said agreement the purchaser viz., A. Nagappa Chettiar was directed to pay a sum of Rs.10 lakhs with interest thereon to Roy Edwin Medcalf Chambers and his family members as per the compromise decree dated 19.02.1965. The share certificate issued in favour of A. Nagappa Chettiar with distinctive numbers totaling 4,995 equity shares and 180 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their capacity for bringing in funds for a start-up operation. 6.8. The said V.K.K. Charities nominated the petitioner herein to the Board of M/s. Chrome Leather Company Private Limited vide order dated 29.05.1995 and nominated him for receiving transfer of shares in his own name and also nominate him as a Director of the company and the same also informed to BIFR. The Central bank of India accepted the nomination and executed necessary share transfer deed transferring 4995 equity shares in favour of the petitioner. The Central Bank of India had also released its dues and issued no due certificate, as such the transfer of shares either in favour of Nagappa Chettiar or in favour of the petitioner did not involve any forgery or fabrication. All the transactions had been effected either with the permission of the Court or it had been recognized by the Court. The transfer in favour of A. Nagappa Chettiar had been clearly admitted by Ida L Chambers and Roy Edwin Medcalf Chambers before this Court in the year 1968 itself. 6.9. He further submitted that after demise of Ida L Chambers, the Executors renounced Executorship and thereafter the Advocate General Official Trustee took po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvert the aforesaid OP as Testamentary Suit and accordingly it had been numbered as T.O.S.No.7 of 2012 and the same was also dismissed by this Court by an order dated 17.07.2018. 6.13. In fact, the acceptance of tender submitted by M/s.V.K.K. Charities has been challenged by one Motherland Leathers before the District Munsif, Tambaram, in O.S.No.3392 of 1993 and the same was also dismissed by an order dated 23.06.1994. Therefore, the second respondent has no locus standi to lodge any complaint. The Hon'ble Supreme Court of India time and again insisted that a civil case cannot be converted into criminal case and such a practice will have to be deprecated. There is absolutely no allegations to attract the offences under Sections 420, 465, 466, 467, 468, 471 120B of IPC, of IPC, as against the petitioner. Hence, he prayed for quashment of both the FIRs in Crime Nos 2 3 of 2016. 7. The learned Additional Public Prosecutor appearing for the first respondent filed counter affidavit in both the cases. On perusal of the counter affidavit filed by the first respondent in Crl.O.P.No.12985 of 2020 revealed that through the judgment dated 19.02.1965 passed by this Court in C.S.N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t following the procedures as contemplated under the Cr.P.C., and without accounting for the same before the Court. 7.3. The investigation revealed that the petitioner had a close nexus with the bank and manipulated the sale of the shares from the name of the successful bidder M/s. V.K.K. Charities into his own name and started selling the properties indiscriminately and thus he had continued with the illegal activities commenced by Nagappa Chettiar. Further the petitioner had entered into an agreement dated 31.01.1995 with M/s. V.K.K. Charities to purchase the shares in his own name as the nominee, much before the sale consideration was deposited into the Central Bank of India. It is evident from the fact that the Central Bank of India had issued no-due certificate to M/s. Chrome Leather Company Private Limited even before the sale was concluded in favour of the petitioner and hence the documentation was preplanned without any transfer of funds into the Central Bank of India. 7.4. During the enquiry, the petitioner gave statement that he has availed a loan from the Indian Bank, Ethiraj Salai Branch to pay the sale consideration. However, the investigation reveals that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rarily without following any of the procedure as mentioned in the Companies Act, 1956, with the criminal intention of grabbing the large landed properties of Ida L Chambers. The subsequent act of the petitioner in selling the landed properties of Ida L Chambers is even more grave offence which has been committed through forging of land records and using benamies for selling them and making huge pecuniary gains. 7.8. The petitioner herein was a sitting Member of Parliament and has been in public life for many years. His above act strikes at the very root of probity in public life which is very essential for a healthy democracy as pointed out by the Hon'ble Supreme Court of India in many cases. Hence the above cases have to be investigated in depth and it is likely that several more persons involved since the magnitude of the case is so enormous that more and more incriminating documents are being seized even at the stage of the investigation. Further the points raised by the petitioner are the subject matter of trial. Criminal jurisprudence would require the alleged offender to co-operate in the investigation and face the trial in the manner known to law. The filing of quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany had been divested of all its immovable properties by virtue of the judgment of this Court dated 19.02.1965, the question of transfer of the properties along with the sale of its shares does not arise. 8.3. He further submitted that more than 9000 documents have been collected in the course of investigation and the evidence discloses that the properties worth about several crores of rupees have been illegally grabbed by the petitioner and his associates, by forgery and fabrication of title deed and share certificates. Further, the investigation is almost reaching its finality and at this stage the FIRs cannot be quashed and therefore, he prayed for dismissal of both the petitions. 9. Mr. M. Vignesh, learned counsel appearing for the respondents 3 to 8 submitted that the respondents 3 to 8 are the only surviving legal heirs of the late George Joseph Chambers and his great grandparents of late George Alexander Chambers and late Ida L Chambers. By virtue of the compromise decree dated 19.02.1965 in C.S.Nos.46 of 1963 2 of 1964, Ida L Chambers is an absolute owner of the properties of M/s. Chrome Leather Company Private Limited. She died on 13.08.1968 without alienating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates were in the name of the trustees viz., H.M. Small, V.P. Jaganathan and Ida L Chambers. However, the shares in possession of the petitioner herein were false and fabricated by the previous owner A. Nagappa Chettiyar. Further the said A. Nagappa Chettiyar and the Central Bank of India were co-conspirators and under valued the shares. Further A. Nagappa Chettiyar and the petitioner entered into a conspiracy to forge and fabricate the share certificate of M/s. Chrome Leather Company Private Limited. 13. It is not disputed by both parties the one English businessman by named George Alexander Chambers had purchased extensive properties in an around Pallavaram Thiruneermalai village and he had also established a tannery company called M/s. Chamber Co in Zamin Pallavaram. He had executed a Will dated 18.12.1930 bequeathing his entire properties in favour of his third wife Ida L Chamber and his son Roy Edwin Medcalf Chambers, born through his second wife and further appointed three persons as Trustees viz., Ida L Chambers, H.M. Small and Vellore Parthasarathy Jaganatha Mudaliyar to manage the properties, since Roy Edwin Medcalf Chamber was a minor at that time. 14. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dder and the same was also confirmed. M/s. V.K.K. Charities nominated the petitioner as Director who was acted upon and the Bank also issued no due certificate on 05.06.1995. Therefore, there is no direct accesses between the petitioner and the said A. Nagappa Chettiar and the petitioner had no connection with him. The said A. Nagappa Chettiar died on 13.03.1982 and after the period of twenty five years, the second respondent claimed to be a power agent of George Joseph Chambers lodged complaints and the same had been registered in Crime Nos.304 305 of 2007 on the file of the City Crime Branch X, Thousand Lights, Chennai. 18. Further, after registration of FIRs in Crime Nos.304 305 of 2007, they conducted detailed investigation and thereafter closed as mistake of facts and the same was also duly accepted by the concerned learned Magistrate. In fact, the protest petitions filed by the second respondent were also dismissed on 23.04.2009. While being so, after the period of four years, the Additional Director General of Police, suo-muto ordered to transfer of investigation to the file of the first respondent herein. Therefore, the first respondent filed petition for further inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no right to initiate any proceedings which were inter-se party viz., Ida L Chamber on the one side and Roy Edwin Medclaf Chambers, who got settled by way of memorandum of compromise and compromise decree dated 19.02.1965 in application in A.No.220 of 1965 in C.S.Nos.46 of 1963 2 of 1964. 22. Further George Joseph Chambers himself died on 06.09.2008 as such, the power executed by him in favour of the second respondent also expired. Therefore, the second respondent has no locus standi to claim any property for his principal. Further his principal viz., George Joseph Chambers had no right over the property and there is a categorical finding by this Court in the order dated 29.06.2012 passed in Application Nos.2361 to 2363 of 2011 in O.P.No.382 of 2010 that the second respondent had played fraud on Court. Though the second respondent obtained order of probate of Will of George Joseph Chambers in O.P.No.382 of 2010 the same was revoked and converted into T.O.S.No.7 of 2012 on the ground of fraud and suppression of material facts. By virtue of the said order, the legal heir certificate obtained by the said George Joseph Chamber was set aside and the title of the M/s. Chrome Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the complainant has not produced any documentary evidence to show that the said Chrome Leather Company was illegally usurped by Nagappa Chettiar and others. Whereas the said legal heirs of Nagappa Chettiar and Jagathratchagan had produced number of documents to prove that Ida L Chambers had sold the Company to Nagappa Chettiar by transferring the shares in his name during the year 1965. The affidavit filed by Ida L Chamber before the Hon'ble High Court also confirms that she had sold the company along with the properties to Nagappa Chettiar. Further the statements filed by the said Nagappa Chettiar and his legal heir clearly established that the said Nagappa Chettiar had mortgaged the company properties and the share certificate in the Central Bank of India and received loan for running the company. Since the said Nagappa Chettiar was not able to pay the debts, the Central Bank of India had brought the property in public auction and sold the same for the debt amount to one V.K.K. Charities and subsequently settled to Jegathratchagan. Therefore, the entire transaction seems to be genuine one and not fabricated transaction as alleged by the complainant. The complainant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. The ingredients to constitute an offence under Section 420 of IPC are as follows :- (i) A person must commit the offence of cheating under Section 415 and (ii) The person cheated must be dishonestly induced to (a) deliver property to any person or (b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security. Cheating is an essential ingredient for an act to constitute an offence under Section 420 of IPC. 28. It is relevant to rely upon the judgment made by the Honourable Supreme Court of India in the case of M/s. Indian Oil Corporation Vs. NEPC India Limited and others reported in (2006) 6 SCC 736, held that the civil liability cannot be converted into criminal liability and it is necessary to take notice of a growing tendency in business circle to convert purely civil dispute in criminal case. This i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery. 31. The term forgery used in these sections is defined in Section 463 of IPC. Whoever makes any false documents with intent to cause damage or injury to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into express or implied contract, or with intent to commit fraud or that the fraud may be committed, commits forgery. Section 464 of IPC defines making a false document . The condition precedent for an offence under Sections 467, 468 and 471 is forgery. The condition precedent for forgery is making a false document. This case does not relate to any false record and all the documents are more than 30 years old and with proper custody. 32. An analysis of Section 464 of IPC shows that it divides false documents into three categories: (i) The first is where a person dishonestly or fraudulently makes or executes a document with the intention of causing it to be believed that such document was made or executed by some other person, or by the authority of some other person, by whom or by whose authority he knows it was not made or executed. (ii) The second is where a person dishonestly or fraudulentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be re-opened for investigation which is clearly not permissible. The petitioner came into the picture only in the year 1995, when the shares transferred to M/s. V.K.K. Charities, who was the successful bidder in the auction. All the proceedings from the initiation of auction are sanctioned by the BIFR by sanctioning the scheme of rehabilitation. 36. That apart, the shares which were pledged to the Central Bank of India by A. Nagappa Chettiar as early in the year 1968 and the charge was also recorded with the Registrar of Company on 08.01.1971. The said A. Nagappa Chettiar transferred 4995 fully paid up equity shares and 1800 fully paid up preference shares to the Central Bank of India by the sanction of Court and authorities. Hence, there is a presumption in respect of these transactions under Section 114 (e) of the Indian Evidence Act. Further all these documents are more than 30 years old and proper custody. Therefore, there is a presumption under Section 90 of the Indian Evidence Act and it cannot be said that these documents were forged and fabricated one. 37. Over all proceedings pertaining to M/s. Chrome Leather Company Private Limited, before this Court initiated by ..... 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