M/S.Coastal Energen Pvt.Ltd., v. The State Of West Bengal

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 29.11.2018

CORAM:

THE HONOURABLE MR.JUSTICE S.S.SUNDAR and THE HONOURABLE MR.JUSTICE C.SARAVANAN W.A(MD)No.1018 of 2017 and C.M.P.(MD)No.6992 of 2017 Against WP(MD)NO.11192 of 2015 1.M/s.Coastal Energen Pvt., Ltd., Represented by Authorised Signatory, 7th Floor, Buhari Towers, 4, Moores Road, Chennai - 600 002.

2.S.M.Zafrulla, Managing Director, Coastal Energen Pvt., Ltd., Chennai - 600 002.

3.Mooza Raza, Chairman,Coastal Energen Pvt., Ltd., Chennai - 600 002.

4.Ahmed A.R.Buhari, Chief Executive Officer (C.E.O), Coastal Energen Pvt., Ltd., Chennai - 600 002.

5.P.K.Sen, Direcotor, Coastal Energen Pvt., Ltd., Chennai - 600 002.

6.G.Selvaraj, Advisor, Electrical, Coastal Energen Pvt., Ltd., Chennai - 600 002.

... Appellants/Petitioners Vs.

1.The State of West Bengal, Represented by its Secretary, Kolkatta.

2.The Inspector of Police-cum-Station House Officer, Shakespeare Sarani Police Station, Kolkatta, West Bengal - 700 017.

3.M/s.Aster Pvt., Ltd., (Formerly Known as Aster Teleservices (P) Ltd.),

E-67, Fourth Crescent, Sainikpuri, Hyderabad - 500 094.

4.M/s.Mirador Commercial Pvt., Ltd., 37, Shakespeare Sarani, Kolkata-17, and also at No.2, India Exchange Place, 2nd Floor, Kolkata - 700 001. ... Respondents/Respondents Prayer: Writ Appeal filed under Clause 15 of the Letter Patent against the order of this Court in W.P.(MD)No.11192 of 2015, dated 06.06.2017.

Prayer in WP(MD). 11192 of 2015 :

Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Certiorari calling for the records relating to the criminal case registered on the file of the 2nd respondent Police in FIR No.249 of 2014 and quash the same as illegal.

For Appellants :Mr.M.Ajmal Khan, Senior Counsel, for M/s.Ajmal Associates For R1 :Tapal Returned For R2 and R3 :No Appearance For R4 :Mr.S.Deenadhayalan

JUDGMENT

(Judgment of the Court was delivered by S.S.SUNDAR,J.) The writ appeal is directed against the order passed by the learned Single Judge of this Court in W.P.(MD)No.11192 of 2015, dated 05.06.2017.

2.The appellants filed the writ petition for issuing a writ of certiorari, to quash the criminal case registered on the file of the second respondent police, namely, the Station House Officer of a Police Station in the State of West Bengal, in Cr.No.241 of 2014. The writ petition was dismissed by the learned Single Judge of this Court, holding that the High Court of Madras either under Section 482 of Criminal Procedure Code or under Article 226 of Constitution of India, cannot quash the criminal case, that has been registered outside the State of Tamil Nadu.

3.The brief facts that are necessary for the disposal of this appeal are as follows:

4.The first appellant is a private limited company registered under the Companies Act, 1956. The second appellant is the Managing Director of the first appellant and the third and fifth appellants are the Chairman and Director of the first appellant company, respectively. The fourth appellant is the Chief Executive Officer of

the appellant company and the sixth appellant is the Advisor (Electrical) of the first appellant company. The fourth respondent herein is a private limited company, having registered Office at Kolkatta. The appellant company is involved in the business of thermal power generation and transmission. The appellant company claims that they are generating power and contributing to the grid of Tamil Nadu Generation of Power and Distribution Corporation (TANGEDCO).

5.The first appellant company appears to have entered into a contract with the third respondent and another company, by name, M/s.SPIC-SMO in relation to the construction of transmission lines between Tuticorin and Madurai. An Ex-Works supply contract, dated 23.08.2010 and a service contract, dated 23.08.2010 with the joint venture of the third respondent and M/s.SPIC-MSO, were entered into. It is admitted that as per the said contract, the joint venture partners were to supply all equipment and materials for the project for a contract price of Rs.24,09,68,075/-. Similarly, a service contract was also entered into for providing various services, as detailed in the said contract for a total contract price of Rs.6,44,31,143/-.

6.It is stated by the fourth respondent that the partner of the joint venture, M/s.SPIC-MSO, had relinquished their part to the fourth respondent. In other words, by acquiring the shares and interest of M/s.SPIC-MSO, the fourth respondent became the joint venture partner with the third respondent for executing the contracts. A factual issue has been raised as to whether the substitution of partner was with the knowledge of the appellants or not. However, this Court is not going into the issue elaborately. But this Court is able to see that no privity of contract between the appellants and the fourth respondent is proved and no material is produced before this Court to show that the appellants had independent contract with the fourth respondent in relation to the contract, that was already awarded by the appellant.

It is also admitted that the fourth respondent had executed a power of attorney, dated 02.03.2012. As per the power of attorney deed, the fourth respondent authorised the third respondent one of the joint venture partners to fulfil the contractual obligations to the appellant company by completing the remaining works. The third respondent was also authorised to raise all invoices on behalf of joint venture and to receive the amount from the appellant for the goods and services supplied.

7.In furtherance of the two agreement entered into for supply and service with the appellant company, the third respondent completed the project and it is stated that all the invoices raised by the third respondent on behalf of the joint venture were honoured by the appellant in full discharge of the contractual obligations. It is also stated by the appellant that the third respondent, on behalf of joint venture, had issued no-due payment certificate on 27.10.2014 in favour of the appellant company confirming that no

payment is due in respect of contracts awarded to the joint venture partners by the appellant company.

8.The appellants further submitted that they were under the bona fide impression that the third respondent had raised invoices and accepted the payments on behalf of the joint venture. It is also stated by the appellant that to their shock and surprise, the fourth respondent sent a communication, dated 31.03.2014 seeking the retention amount of Rs.3,30,00,419/-, as if the same was to be returned to the fourth respondent. After exchange of notices, it is stated that the fourth respondent issued a notice, dated 12.09.2014, threatening to initiate liquidation proceedings against the appellant company under the Companies, Act, 1956, despite the fact that the appellant company refuted the allegations contained in the notice.

It is the specific case of the appellants that they had remitted the retention money to 3rd respondent, who is authorised to receive and acknowledge as per the power of attorney. 9.It is further stated that the fourth respondent thereafter filed a criminal complaint against the appellants for offences punishable under Sections 403, 406, 418, 420, 506 and 120B of IPC before the second respondent police, which is located in Kolkatta in the State of West Bengal. It appears that the second respondent refused to entertain the said complaint, probably on seeing that the complaint did not disclose the commission of any offences within the jurisdiction of second respondent. Thereafter, the fourth respondent has approached the Judicial Magistrate concerned by filing an application under Section 156 of Cr.P.C.

Thereafter, the First Information Report in Cr.No.249 of 2014 came to be registered on 31.07.2014, on the file of the second respondent police for offences punishable under Sections 403, 406, 418, 420, 506 and 120B of IPC. 10.The appellants contended that the appellant company as well as the original partners of joint venture have their Corporate Office in Chennai, within the jurisdiction of this Court and that the contract was executed at Tuticorin. It is further stated that all the payments that were due and payable under the supply and service contract, were paid and acknowledged by the third respondent, within the jurisdiction of this Court and that no part of cause of action arose within the jurisdiction of the second respondent.

As a matter of fact, it is contended by the appellants that no offence was committed within the jurisdiction of the second respondent, even as per the complaint lodged by the fourth respondent.

11.It is in these circumstances, the appellants have preferred the writ petition in W.P.(MD)No.11192 of 2015 stating that the entire cause of action leading to the complaint, which was lodged by the fourth respondent before the second respondent, arose within the jurisdiction of this Court and that the complaint that is pending before the second respondent is liable to be quashed for want of jurisdiction and on other grounds relating to the maintainability of

criminal complaint in respect of subject matter of dispute, which could normally be entertained only by a competent Civil Court. 12.The writ petition was dismissed by the learned Single Judge of this Court by following a judgment of this Court in the case of S.Ilanahai vs State of Maharashtra, reported in 2015 (1) MWN (Crl)

618. The learned Single Judge has held that the judgment in S.Ilanagai's case has been rendered after considering the judgment of Honourable Supreme Court in Navinchandra N.Majithia vs State of Maharashtra and others reported in (2000) 7 SCC 640, and a Larger Bench of the Honourable Supreme Court in Dashrath Rupsingh Rathod vs State of Maharastra and another, reported in (2014) 9 SCC 129, and held that under Article 226 of the Constitution of India, a criminal complaint that was lodged out side the State of Tamil Nadu cannot be quashed by this Court.

13.The learned Senior Counsel appearing for the appellants relied upon the judgment of the learned Single Judge of this Court in S.Ilanahai's case and submitted that the learned Judge has earlier approved the view taken by the Honourable Supreme Court in Navinchandra's case. In paragraph 27 of the Judgment, the learned Single Judge has held as follows:

"27.From the above settled position of law, it is crystal clear that for the purpose of entertaining a Writ Petition under Article 226 of the Constitution, in the light of Clause (2) of Article 226, it is the cause of action, either in full or in part, which confers jurisdiction upon the High Court concerned and not merely the situs of the authority or the person."

14.After accepting the view as the settled position of law in paragraph 27 of the judgment, the learned Single Judge of this Court has acknowledged the position that the jurisdiction under Article 226(2) is different from the power of High Court under Section 482 of Cr.P.C. Since the issue that was raised before the learned Single Judge was in a criminal proceedings under Section 482 of Cr.P.C., the judgment of Honourable Supreme Court in Naveenchandra's case was considered and quoted with approval by the learned Single Judge to come to the conclusion that a writ petition under Article 226 of Constitution of India is maintainable. However, referring to the term 'cause of action' which is unknown to the Criminal Procedure Code, later in the same judgment, the learned Single Judge has held as follows:

"40. Thus, in my considered opinion, so far as the power under Section 482 of the Code of Criminal Procedure for the purpose of quashing the F.I.R. is concerned, the only criteria is the situs of the authority who has registered the case and not the place of commission of the crime either in full or in part. Similarly, the writ jurisdiction of the High Court under Article 226 of the Constitution to quash a criminal case also does not extend beyond the territorial limits of the said High Court if the case is pending on the file of an authority who is located outside the territorial limits of the said High Court. This conclusion is inescapable, in

view of the authoritative pronouncement of the larger Bench of the Hon'ble Supreme Court in Dashrath Rupsingh Rathod case (cited supra) wherein the Court has held that the concept of "cause of action" which is relevant to Civil Law cannot be imported to Criminal Law." 15.The learned Single Judge has relied upon the judgment of larger Bench of the Honourable Supreme Court in the case of Dashrath Rupsingh Rathod vs State of Maharastra and another, reported in (2014) 9 SCC 129, wherein, the decision of Honourable Supreme Court in the case of Naveenchandra's case, was quoted with approval. In paragraph 13 of the judgement, the Honourable Supreme Court has held as follows:

"13.We are alive to the possible incongruities that are fraught in extrapolating decisions relating to civil law onto criminal law, which includes importing the civil law concept of cause of action to criminal law which essentially envisages the place where a crime has been committed empowers the Court at that place with jurisdiction. In Navinchandra N. Majithia v. State of Maharashtra (2000) 7 SCC 640 this Court had to consider the powers of High Courts under Article 226(2) of the Constitution of India. Noting the presence of the phrase cause of action therein it was clarified that since some events central to the investigation of the alleged crime asseverated in the Complaint had taken place in Mumbai and especially because the fundamental grievance was the falsity of the Complaint filed in Shillong, the writ jurisdiction of the Bombay High Court was unquestionably available."

16.Considering the two judgments of the Honourable Supreme Court and the judgment of the learned Single Judge of this Court, this Court has no hesitation to follow the judgment of Honourable Supreme Court in Navinchandra N.Majithia vs State of Maharashtra and others reported in (2000) 7 SCC 640. Its applicability in the present case cannot be disputed and the Larger Bench of Honourable Supreme Court in Dashrath Rupsingh Rathod's case has not expressed any contrary view or disapproved the view expressed by the Honourable Supreme Court in Naveenchandra's case with regard to the jurisdiction of High Court under Article 226(2) of the Constitution of India. Hence, on the interpretation of the three judgments, we have no other option but to hold that the view expressed by the learned Single Judge dismissing the writ petition on the ground that the High Court of Madras cannot exercise its power under Article 226

(2) of Constitution of India, to quash the criminal complaint that was registered outside the State of Tamil Nadu is not proper and hence that part of the order cannot be sustained. 17.However, the next issue with regard to the maintainability of intra-court appeal against the order of this Court allowing or dismissing a writ petition or any other criminal proceedings exercising the criminal jurisdiction of this Court is made as an issue before us. Clause 15 of Letters Patent, 1865, reads as follows:

"Clause 15 - Appeal from the courts of original jurisdiction to the High Court in its appellate jurisdictionAnd we do further ordain that an appeal shall lie to the said High Court of Judicature at Madras, Bombay, Fort William in Bengal from the judgment (not being a judgment passed in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court and not being an order made in the exercise of revisional jurisdiction, and not being a sentence or order passed or made in exercise of the power of superintendence under the provisions of Section 107 of the Government of India Act, or in the exercise of criminal jurisdiction) of one Judge of the said High Court or one Judge of any Division Court, pursuant to Section 108 of the Government of India Act, and that notwithstanding anything hereinbefore provided, an appeal shall lie to the said High Court or one Judge of ant Division Court, pursuant to Section 108 of the Government of India Act, on or after the first day of February, 1929 in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court where the Judge who passed the judgment declares that the case is a fit one for appeal; but that the right to appeal from other judgments of Judges of the said High Court or of such Division Court shall be to Us, Our heirs or successors in Our or Their Privy Council, as hereinafter provided."

18.The learned Senior Counsel appearing for the appellants relied upon Clauses 22, 24 and 25 of Letters Patent, 1865, which according to him are also relevant in the present context and extracted as below:

"22.Ordinary Original Jurisdiction of the High Court-And We do further ordain that the said High Court of Judicature at Madras, shall have Ordinary Original Criminal Jurisdiction within the local limits of its Ordinary Original Civil Jurisdiction and also in respect of all such persons beyond such limits, over whom the said High Court of Judicature at Madras shall have criminal Jurisdiction at the date of the publication of these presents. 23.....

24.Extraordinary Original Criminal Jurisdiction.-And We do further ordain that the said High Court of Judicature at Mardas shall have Extraordinary Original Criminal Jurisdiction over all persons residing in places within the jurisdiction of any Court now subject to the superintendence of the said High Court and shall have authority to try as its discretion any such persons, brought before it on charges preferred by the Advocate-General or by any Magistrate or other officer specially empowered by the Government in that behalf.

25.No Appeal from the High Court exercising Original Jurisdiction.-Court may reserve points of law - And We do further ordain that there shall be no appeal to the said High Court of

Judicature at Madras from any sentence or order passed or made in any criminal trial before the Courts of Original Criminal Jurisdiction which may be constituted by one or more Judges of the said High Court. But it shall be at the discretion of any such court to reserve any point or points of law for the opinion of the said High Court."

19.The learned Senior Counsel submitted that Clause 22 of Letters Patent, 1865, confers jurisdiction and power to High Court to exercise extraordinary criminal jurisdiction. After referring to Clause 22 of the Letters Patent, 1865, the learned Senior Counsel advanced arguments that it is only in respect of the cases entertained under Clause 22 of the Letters Patent, 1865, the intracourt appeal is not maintainable by virtue of Clause 15 of the Letters Patent, 1865, and that an order that was passed in a writ petition exercising criminal jurisdiction cannot be barred by Clause

15. The learned Senior Counsel further submitted that the present appeal is not filed against the order exercising criminal jurisdiction. It is also pointed out by the learned Senior Counsel that the writ petition was dismissed on the question of maintainability and that therefore, the Court has not passed an order exercising its criminal jurisdiction. Hence, Clause 15 of the Letters Patent, will not stand in the way of entertaining the present writ appeal.

20.In the present context, it is necessary to refer to the judgment of the Honourable Supreme Court in the case of Ram Kishan Fauji vs State of Haryana and others, reported in (2017) 5 SCC 533, wherein, the Honourable Supreme Court has held as follows: "56. As we find from the decisions of the aforesaid three High Courts, it is evident that there is no disagreement or conflict on the principle that if an appeal is barred under Clause 10 or Clause 15 of the Letters Patent, as the case may be, no appeal will lie. The High Court of Andhra Pradesh, however, has held that when the power is exercised under Article 226 of the Constitution for quashing of a criminal proceeding, there is no exercise of criminal jurisdiction.

It has distinguished the proceeding for quashing of FIR under Section 482 CrPC and, in that context, has opined that from such an order, no appeal would lie. On the contrary, the High Courts of Gujarat and Delhi, on the basis of the law laid down by this Court in Ishwarlal Bhagwandas (supra), have laid emphasis on the seed of initiation of criminal proceeding, the consequence of a criminal proceeding and also the nature of relief sought before the Single Judge under Article 226 of the Constitution. The conception of criminal jurisdiction as used in Clause 10 of the Letters Patent is not to be construed in the narrow sense. It encompasses in its gamut the inception and the consequence. It is the field in respect of which the jurisdiction is exercised, is relevant.

create an anomalous, unacceptable and inconceivable situation. The provision contained in the Letters Patent does not allow or permit such an interpretation. When we are required to consider a bar or non-permissibility, we have to appreciate the same in true letter and spirit. It confers jurisdiction as regards the subject of controversy or nature of proceeding and that subject is exercise of jurisdiction in criminal matters. It has nothing to do whether the order has been passed in exercise of extraordinary jurisdiction under Article 226 of the Constitution or inherent jurisdiction under Section 482 CrPC.

57.In this regard, an example can be cited. In the State of Uttar Pradesh, Section 438 CrPC has been deleted by the State amendment and the said deletion has been treated to be constitutionally valid by this Court in Kartar Singh v. State of Punjab[41]. However, that has not curtailed the extraordinary power of the High Court to entertain a plea of anticipatory bail as has been held in Lal Kamlendra Pratap Singh v. State of Uttar Pradesh and others[42] and Hema Mishra v. State of Uttar Pradesh and others [43]. But that does not mean that an order passed by the Single Judge in exercise of Article 226 of the Constitution relating to criminal jurisdiction, can be made the subject matter of intra-court appeal. It is not provided for and it would be legally inappropriate to think so.

58. In view of the aforesaid premised reasons, we hold that the High Courts of Gujarat and Delhi have correctly laid down the law and the view expressed by the Full Bench of the High Court of Andhra Pradesh is incorrect.

It is to be noted that the Full Bench of High Court of Andhra Pradesh has held that the judgment quashing the FIR is in exercise of the Original Jurisdiction of the Court under Article 226 of Constitution of India. Writ Appeal lies under Clause 15 of Letters Patent. It is further held that issuing a Writ of Mandamus or Certiorari by High Court under Article 226 of Constitution of India, pertaining to a criminal complaint or proceedings cannot be said to be an order passed in exercise of the Criminal Jurisdiction and hence an appeal under Clause 15 lies. However, this judgment was held to be incorrect by Honourable Supreme Court. 21.

The judgment of the Honourable Supreme Court in the above said case, of course, has made a distinction between the writ petition filed under Article 226 of Constitution of India for quashing a criminal proceedings and other writ petitions that are filed to enforce the fundamental rights in exercising of its extraordinary jurisdiction. Considering the provisions contained in the Letters Patent of other High Courts, which are similar to Clause 15 of our High Court, it has been reiterated that Clause 15 of Letters Patent does not allow or permit an intra-court appeal as against the order of a learned Single Judge exercising criminal jurisdiction.

respect of other areas, where a petition filed under Section 482 of Cr.P.C is normally permitted. The jurisdiction of High Court to entertain the intra-court appeal under Clause 15 of Letters Patent, is restricted.

22.As pointed out by the learned Senior Counsel appearing for the appellant, the writ petition in the present case was decided not on merits, but on the sole ground of maintainability by stating that the writ petition is not maintainable to quash the criminal complaint, that was registered outside the State of Tamil Nadu. This Court has already held that the decision of the learned Single Judge of this Court on the maintainability of writ petition is unsustainable and that a writ petition is maintainable in view of the binding precedent of Honourable Supreme Court in Naveenchandra's case.

When an order is passed declining to entertain the writ petition on the ground of want of jurisdiction, it means that the Court has decided only the jurisdictional issue that it cannot exercise its extraordinary jurisdiction under Article 226 of Constitution of India or Criminal Jurisdiction. Having regard to the nature of order passed by the learned Single Judge of this Court, this Court is of the view that by referring to the judgment of Honourable Supreme Court in Ram Kishan Fauji's case, the Court cannot dismiss the intra-court appeal, which is only against the order refusing to entertain a writ petition on the ground of maintainability, but not on merits. When the Court indirectly held that alternative remedy is available, the legal consequences of dismissing the writ petition for want of territorial jurisdiction are different.

23.It is true that, if the writ petition is allowed by this Court in exercise of its criminal jurisdiction, the intra-court appeal is not maintainable.

24.As stated earlier, the learned Single Judge in this case refused to exercise the criminal jurisdiction on the ground of want of territorial jurisdiction. The jurisdictional issue was decided by relying upon the judgment of this Court in another criminal original petition, wherein, it was also held that writ jurisdiction of High Court under Article 226 of the Constitution of India to quash a criminal case does not extend beyond the territorial limits of the said High Court and that a writ is not maintainable, if the case is pending on the file of an authority, who is located outside the territorial limits of the said High Court. We have held that this view is unsustainable in view of the binding precedent of Honourable Supreme Court in Navinchandra's case. Even in the case of the Ram Kishan Fauji vs State of Haryana and others, reported in (2017) 5 SCC 533, it has been held as follows:

"38.....The vital factor for determination of the maintainability of the intra-court appeal is the nature of jurisdiction invoked by the party and the true nature of the order passed by the learned Single Judge."

25.In this case, though the appellant invoked the criminal jurisdiction of this Court under Article 226 of the Constitution of India, the learned Single Judge refused to exercise the jurisdiction on the ground of want of territorial jurisdiction. The consequence of the order would not be the same, if the writ petition is decided on merits.

26. Having regard to the interpretation and scope of Article 226(2) of Constitution of India as well as Clause 15 of Letters Patent, for meeting the ends of justice, this appeal has to be allowed and the writ petition can be remitted to the learned Single Judge to decide the matter on merits. As a result, this writ appeal is allowed and the order of the learned Single Judge of this Court in W.P.(MD)No.11192 of 2015, dated 06.06.2017 is set aside. The matter is remitted to the learned Single Judge to decide the writ petition on merits. This Court direct the Registry to post the writ petition for hearing before the Honourable Judge dealing with the concerned portfolio.

27.It is stated before this Court that during the pendency of the writ petition, the appellant had an interim order staying further proceedings pursuant to the criminal complaint filed before the second respondent. It is further submitted that this Court has granted interim stay during the pendency of the appeal. Hence, the interim stay granted earlier in the writ petition, will revive to the benefit of the appellants and shall be in force till the disposal of the writ petition. Accordingly, the writ appeal is allowed and disposed of in the above terms. No costs. Consequently, connected miscellaneous petition is closed.

Sd/- Assistant Registrar (CS) // True Copy // Sub Assistant Registrar(CS) To 1.The Secretary, The State of West Bengal, Kolkatta.

2.The Inspector of Police-cum-Station House Officer, Shakespeare Sarani Police Station, Kolkatta, West Bengal - 700 017.

+1cc Mr.Ajmal Associates Sr NO.98165 sp/08.04.2019/11/4c W.A(MD)No.1018 of 2017 29.11.2018