Dhyan Investments and Trading Company Limited and Anr v. Central Bureau of Investigation and Anr

Judgment dt. 11-2-1999 now we do not hesitate to hold that the order framing charge and the Charge framed, which have been impugned in the present case, both, cannot be considered to be of interlocutory nature nor of final nature and it would then mean that they are something which are not covered by the bar of Section 10 of the Special Court Act. So, Section 10 of the Special Court Act would have no application here and as such, we find that no alternate remedy is available to the petitioners.

¶26Once it is held that alternate remedy is not available to the petitioners, the petitioners would be within their right to invoke jurisdiction of this court under Article 226 of the Constitution of India for redressal of their grievance arising from what they say to be violation of their fundamental right to speedy trial and also from the nature of trial, if allowed to go on, which they call to be oppressive on account of extinguishment of the entire cause of action, which the complainant - CANFINA Services may have had against the petitioners, and also from their submission that there is no prima facie case made out against them. For these very reasons, we would further say that this petition would also be maintainable under Section 482 of the CrPC.

¶27We may add here that we have already seen that power of the High Court under Article 226 of the Constitution of India is wide and discretionery in nature and whatever limitations are there, they are only self-imposed ones, though, ordinarily, this court would not entertain a petition for a writ under Article 226 of the Constitution of India where the petitioner has an alterate remedy which is equally efficacious. It would mean that in a rare case, this court can exercise it's power under Article 226 of the Constitution, inspite of availability of alternate remedy, though it can be done only in exceptional circumstances. In this case, apart from absence of equally efficacious alternate remedy, there are also grounds raised, which we have referred to just now, which make us believe that they need consideration by this court in exercise of it's extra-ordinary jurisdiction under Article 226 of the Constitution of India and also under Section 482 of the CrPC and, therefore, we hold that this petition, as filed under Article 226 of the Constitution of India, read with Section 482 of the CrPC, is maintainable.

¶28There is also an objection raised by respondent no.1-CBI that, in this petition, jurisdiction of this court under Article 226 as well as Article 227 of the Constitution of India, both, are clubbed together and this practice has been deprecated by the Supreme Court in the case of Surya Dev Rai Vs. Ram Chander Rai and Ors.1. The case of Surya Dev Rai (supra) has been overruled by a Larger Bench of the Apex Court in Radhey Shyam and Anr. Vs. Chhabi Nath and Ors.2 to the extent mentioned therein. In Radhey Shyam (supra), the Supreme Court has held that the legal proposition laid down in Surya Dev Rai (supra) that judicial orders passed by a civil court can be examined and then corrected / reversed by the writ court under Article 226 of the Constitution of India by issuing a writ of AIR 2003 SC 3044 2009 AIR SCW 4006 certiorari, is incorrect and it further held that judicial orders of civil court are not amenable to writ jurisdiction under Article 226 of the Constitution of India. It also held that jurisdiction under Article 227 is distinct from jurisdiction under Article 226 and a contrary view taken in this regard in Surya Dev Rai (supra) has been overruled.

¶29So, the law now is that judicial orders passed by civil courts are not amenable to writ jurisdiction under Article 226 of the Constitution. The order framing charge impugned herein is undoubtedly a judicial order. The proceedings under Article 226 of the Constitution, as held in Umaji Keshao Meshram and Ors. Vs. Smt. Radhikabai and Anr.1, are in exercise of the original jurisdiction of the High Court; while proceedings under Article 227 of the Constitution of India are not original but supervisory and, therefore, in exercise of the original jurisdiction of the High Court under Article 226 of the Constitution of India, this court cannot scrutinze a judicial order for it's legality and correctness or otherwise. So, this petition would not be maintainable under Article 227 of the Constitution and we hold so. But, this is a petition which is also filed under Article 226 of the Constitution of India and Section 482 of the Code of Criminal Procedure. It is also a petition which seeks ultimately reliefs of quashing of the Charge framed and quashing of the criminal proceedings. Such reliefs can be sought by invoking power of this court under Section 482 of the Code of Criminal Procedure read with Article 226 of the Constitution of India, provided there are sufficient legal grounds available to do so. It then follows that

(1986) Supp. SCC 401 though this petition is not maintainable under Article 227 of the Constitution, it is still maintainable under Article 226 of the Constiution, read with Section 482 of the CrPC. We further find that the labelling of this petition in the manner it is made, though not appreciable, would not adversely affect the maintainability of this petition under Article 226 of the Constitution read with Section 482 of CrPC.

¶30There is one more objection as to maintainability of this petition taken by respondent no.1-CBI. It is about the unreasonable delay caused and laches committed in filing this petition. We must say that this is not a case where there has occurred a great delay in filing of the petition. There is no dispute about the fact that the charge here was framed in 2007 and this petition has been filed about seven years later, but, the petitioner has given an explanation for the delay of about seven years, which we find to be satisfactory. Learned Senior Advocate for the petitioners has submitted that some time, before filing of this petition, in the year 2014, the petitioners came across a decision of the Apex Court in the case of Narendra Lal Jain (supra), wherein the Supreme Court found that it was a fit case for quashing of the criminal proceedings under Section 482 of the CrPC. It noted that the allegations made against the accused by the bank were similar to the averments made by the bank in it's suit filed against the accused for recovery of amounts claimed to be due from them and found that the bank had already settled amicably it's civil dispute with the accused and that there was no subsisting grievance of the bank in that regard and, therefore, it further found that even if the offence of criminal conspiracy was not compoundable under Section 320 of the Code of Criminal Procedure, the same would not act as a bar for exercise of power under Section 482 of the Code of Criminal Procedure. It further held that when the bank had amicably settled it's civil dispute with the accused and had no subsisting grievance against the accused, the criminal proceedings deserved to be quashed and set aside or otherwise they were likely to become oppressive or might partake of character of lame prosecution. It further held that if any criminal proceeding assumes the character of a lame prosecution or is likely to become oppressive for the accused, it would be a good ground for the accused to invoke the extra-ordinary power of the High Court under Section 482 of the Code of Criminal Procedure. These are the very grounds taken in this petition seeking quashing of the criminal proceedings and as this petition has been filed almost immediately after judgment in the case of Narendra Lal Jain (supra) came, we are of the view that there is no such unreasonable delay in filing of this petition as to disqualify the petitioners from invoking extra-ordinary jurisdiction of this court under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure.

¶31Of course, learned counsel for respondent no.1-CBI would submit that ratio of Narendra Lal Jain (supra) does not apply to the facts of the present case as the settlement of dispute in the instant case was not with the petitioners but was with Citibank NA and, therefore, the admission of CANFINA Services that it had no surviving cause of action would have to be construed as confined only to the dispute between it and the Citibank NA and not extending to allegations made against the petitioners. According to learned Senior Advocate for the petitioners, the argument is devoid of any merit. We would say that argument so made on behalf of respondents is really an argument touching upon the merits of the matter, which we would have to consider on it's own merit, and we will do so in later part of this judgment. But, for the purpose of deciding the issue of maintainability of this petition, it would have no bearing on the issue of delay and laches, given the contention of the petitioners that the judgment in the said case is what prompted them to think that their case is similar and so they have come before this court. The argument is, therefore, rejected.

¶32There is yet another objection as to the maintainability of this petition anchored in the nature of this case. Respondent no.1-CBI submits that this case involves economic offences of larger magnitude, which drive it out of the judicial review of this court, under Section 482 of the Code, read with Article 226 of the Constitution. This objection besically touches upon the merits of the matter and so will be dealt with by us later on. Suffice it to say it here that this petition, as filed under Article 226 of the Constitution of India, read with Section 482 of the Code of Criminal Procedure, 1973, for the reasons stated earlier, is maintainable and the objection taken by respondent no.1-CBI in this regard is rejected.

¶33Now the time is ripe for considering the merits of this case. Much stress has been laid by learned Senior Advocate for the petitioners upon the out of court settlement between CANFINA Services and Citibank NA, thereby settling civil liability of the Citibank NA towards the CANFINA Services during pendency of appeals before the Supreme Court, arising out of Miscellaneous Petition No.74 of 1995 filed by CANFINA Services against Citibank NA and other respondents named therein, one of whom was petitioner no.1. Learned Senior Advocate for the petitioners submits that in this settlement, Citibank NA had agreed to make good the financial loss caused to CANFINA Services on account of transaction dated 13 th May 1992 and this was accepted by CANFINA Services while saying that on account of such settlement, CANFINA Services would not have any surviving cause of action. He submits that the civil appeals before the Apex Court arose out of the Judgment dated 17 th January 2001 passed in Miscellaneous Petition No.74 of 1995, whereby the Citibank NA and the remaining respondents were jointly and severally ordered and decreed to pay CANFINA Services a sum of Rs.38,01,13,561=64, with further interest on amount of Rs.22,12,50,000/- @ 18% p.a. from the date of the petition till payment / realization. He further submits that this civil case was substantially based upon the tort of conspiracy entered into between Citibank NA, petitioner no.1 and other respondents to the civil case, whereby Citibank NA, petitioner no.1 and the remaining respondents thereto had acted together to cause financial loss to CANFINA Services and such being the nature of the civil case, the amicable settlement between Citibank NA and CANFINA Services amounted to settlement of criminal liability as well and, therefore, the criminal proceedings against the petitioners could not be continued or otherwise they would become oppressive for the petiitoners. He further submits that this is in addition to the fact that CANFINA Services had expressly admitted that on account of such settlement, it would not have any surviving cause of action. He further submits that all these facts are recorded in the order of the Supreme Court dated 13 th November 2007, by which the appeal filed by Citibank NA against CANFINA Services was dismissed as being infructuous and that even the other appeals filed by the remaining respondents were dismissed as infructuous. Reliance is placed upon the case of ITC Ltd. (supra), which has attained finality, after Special Leave Petitions filed against it were dismissed by the Apex Court on 1 st March 2013. This is, however, strongly contested by learned counsel for respondent no.1-CBI, who submits that the settlement being only between CANFINA Services and Citibank NA and the petitioners not being party to it, cannot be made use of for exoneration of criminal liability of the petitioners.

¶34Arriving at the said amicable settlement between CANFINA Services and Citibank NA; the settlement having been in relation to the judgment and decree of the Special Court delivered in Miscellaneous Petition No.74 of 1995 on 17 th January 2001; recording of the fact of settlement by the Supreme Court in it's order dated 13 th November 2007 and; the Supreme Court dismissing all the appeals arising out of the judgment and decree dated 17 th January 2001 as infructuous, are all matters of record. Similarly, the civil case filed by CANFINA Services against Citibank NA, petitioner no.1 and other respondents being primarily based upon the tort of conspiracy entered into between Citibank NA, petitioner no.1 and remaining respondents to the civil case and injury in the nature of financial loss having been thereby caused to CANFINA Services are also matters of record. So, the question is as to whether the said settlement and also admission of CANFINA Services that on account of the said settlement, it would not have any surviving cause of action, could also be construed as amounting to even settlement of criminal liability of the petitioners and other accused persons by CANFINA Services, thereby rendering the continuation of criminal proceedings against the petitioners as oppresive or turning the criminal proceedings into a lame prosecution of the petitioners ?

¶35Upon consideration of the nature of the settlement, nature of the civil liability and all the relevant facts and circumstances of the case, our answer to the above referred question is in the negative and the reasons therefor are being stated in the following paragraphs.

¶36As the petitioners have relied upon the case of Narendra Lal Jain (supra), we would first have to consider if the petitioners can rightly rely upon it or not. In our considered opinion, they cannot as the facts of that case were different from facts of this case. In that case, parties to civil case were also the accused in criminal case, which is exactly not the case here. In this case, the liability to make good the monetary loss suffered by CANFINA Services was mutually settled only between CANFINA Services and Citibank NA and it is only Citibank NA, which had admitted it's civil liability to compensate CANFINA Services of the financial loss suffered by it and it was accepted by CANFINA Services by way of settlement, which was confirmed by the Apex Court in it's order dated 13 th November 2007. Such settlement between two parties, one of which is not even an accused (Citibank NA), can never be construed as having the effect of exonerating the petitioners of their criminal liability by CANFINA Services in the present matter. To this settlement, petitioner no.1, though a respondent in the civil case, was not a party and, therefore, whatever amicable settlement was there in between CANFINA Services and Citibank NA cannot be said to be a settlement between CANFINA Services and the petitioners even for the inter se civil rights and civil liabilities, much less criminal liability of petitioners in criminal law and, therefore, the order dated 13 th November 2007, having regard to the provisions made in Section 43 of the Indian Evidence Act, would have no relevance to the facts of the present case. (See Smt. Rumi Dhar Vs. State of West Bengal and Anr.1). Section 43 of the Indian Evidence Act provides that judgments, orders or decrees, other than those mentioned in Sections 40, 41 and 42, are irrelevant, unless the existence of such judgments, orders or decrees is a fact in issue or is relevant under some provisions of this Act. The said order of the Supreme Court is not the one which is covered by Sections 40 or 41 or 42 of the Indian Evidence Act. It's existence, so far as the criminal proceedings are concerned, is not a fact in issue nor is it relevant for the purpose of determination of criminal liability of the petitioners in the present proceedings, especially when the admission given by CANFINA Services that it has no surviving cause of action is not in relation to the petitioners but is in relation to Citibank NA. On the contrary, reaching of an amicable settlement by Citibank NA with CANFINA Services, Citibank NA agreeing to make good the financial loss caused to AIR 2009 SC 2195 CANFINA Services and CANFINA Services accepting such settlement, amounts to admission of civil liability arising from tort of civil conspiracy by Citibank NA against CANFINA Services under Section 19 of the Indian Evidence Act, rather than exoneration by CANFINA Services of Citibank NA from tort of civil conspiracy involved in the civil case. Any admission by a party of tort of civil conspiracy would have a potential of admitting by it of offence of criminal conspiracy. It is a different matter that Citibank NA, as a legal entity, is not made an accused here. It is also a different matter that ultimately, after having accepted the settlement, CANFINA Services stated that on account of such settlement, it would have no surviving cause of action, but the fact remains that the settlement and the admission would be relevant only as against Citibank NA and not against the remaining respondents. Similarly, withdrawal of the civil case, being Miscellaneous Petition No.74 of 1995, owing to such settlement, would also have no bearing upon the criminal liability of the petitioners. Saying that CANFINA Services had no cause of action and it's withdrawal of the civil case resulted in extinguishment of cause of action for CANFINA Services to file criminal complaint against the petitioners, would be like going against the fundamental tenets of criminal jurisprudence. Once a complaint alleging commission of criminal offence is made, criminal law is set in motion as per Section 154 of CrPC and the rest is done by the Investigating Officer as per law. If there is compounding of offence under Section 320 of the CrPC, there is necessarily an admission by the accused of commission of offence by him and it is only by operation of law, the compounding of offence is accepted by the court and the accused is not sentenced to suffer any punishment. If any quashing of complaint or FIR takes place in a non-compoundable offence, it is for preventing the abuse of process of court or to secure ends of justice and it can be so even upon settlement between the complainant and the accused and not for the reason of settlement between the complainant and some other person or entity, not an accused. In this case, Citibank NA is not an accused and so it's settlement with CANFINA Services cannot absolve the petitioners of their criminal liability here. In any case, the settlement of civil liability of Citibank NA towards CANFINA Services was only for the reason of expiation of civil injury caused to CANFINA Services and for extinguishing it's right to recover the financial loss caused thereby and it was not for atoning the criminal liability alleged against the petitioners.

¶37In the case of Narendra Lal Jain (supra), on which heavy reliance has been placed by the petitioners, the facts, as stated earlier, were different. In that case, the respondents, the officials of the bank and the company, conspiring together, projected inflated figures of creditworthiness of the company and enabled the company to secure more advances and loans from bank than the company was entitled to and thus had caused financial loss to the bank. On account of these wrongs committed by the respondents, bank had registered FIRs against the company officials and several officers of the Bank of Maharashtra and simultaneously, the bank also instituted suit for recovery of amount claimed to be due from the respondents. In the civil proceedings, the respondents were also the persons who were the accused persons in criminal proceedings. The suit was disposed of in terms of consent decree which was upon receipt of payment by the bank and the payment was so received on account of amicable settlement of civil liability of respondents-accused to pay the amount to bank. There was also no subsisting grievance of the bank in that regard, which was brought to the notice of the Supreme Court. It was under these circumstances that the Apex Court held that even though offence under Section 120B of the IPC was not compoundable, while offence under Section 420 of the IPC was compoundable, the trial of the respondents for offences registered against them, was likely to become oppressive or might partake of the character of lame prosecution and so it found that the settlement arrived at between the parties would be a good ground to invoke extra-ordinary power of High Court under Section 482 of the Code of Criminal Procedure. Such are not the facts of the present case. There is no settlement of civil liability arising from tort of civil conspiracy between petitioners and CANFINA Services. There is no admission given by CANFINA Services regarding extinguishment of it's civil cause of action in relation to the petitioners and there is no admission made in that regard in relation to the petitioners. Even in the reply filed by CANFINA Services - the respondent no.3 herein, there is no such admission given by it, although during the course of the arguments, its learned counsel stated that CANFINA Services would have no objection if the petition is allowed. Such statement made during the course of the arguments would not be of much significance unless it is found that CANFINA Services, by amicable settlement of its civil case with Citibank NA, has intended to also impliedly settle the criminal liability with the petitioners and there is no such intention seen even impliedly on the part of CANFINA Services. Besides, giving of no objection may be indicative of disinterestedness of CANFINA Services in the criminal proceedings, may be for the reason that it has already been compensated for it's loss by Citibank NA. But, the lack of interest cannot be construed as equivalent to an admission that petitioners are not criminally liable. Therefore, in our respectful submission, case of Narendra Lal Jain (supra) would have no application to the facts of the present case.

¶38There is another reason for our conclusion made as above. There is a difference between "civil conspiracy" and "criminal conspiracy". A "criminal conspiracy", as defined under Section 120-B of the IPC, is, an agreement between two or more persons to do or cause to be done an illegal act or an act which is not legal by illegal means. In other words, it is an agreement between two or more persons to commit a criminal offence. An agreement to commit a criminal offence between two or more persons itself is a punishable offence under Section 120-B of the IPC. So, the essence of "criminal conspiracy" is an agreement between two or more persons. The concept of "civil conspiracy" is, however, slightly different. It has not only an element of agreement between two or more persons to cause injury to another, but it also requires the conspirators to execute that agreement or do acts in pursuance of the agreement to the damage of the plaintiff. Some times, in civil conspiracy, the conduct and acts of the conspirators bringing about injury to the plaintiff may not by themselves be regarded as a legal wrong. What is more important in civil conspiracy is the actual damage caused to the plaintiff and that is what completes the cause of action. Essential character of "civil conspiracy" has been described by Lord Macnaghten in Quinn Vs. Leathem1 in following words : "A conspiracy to injure might give rise to civil liability even though the end were brought about by conduct and acts which by themselves and apart from the element of combination or concerted action could not be regarded as a legal wrong."

¶39At the cost of repetition, we would say that a tort of civil conspiracy would essentially be in the nature of an agreement between two defendants to effect an unlawful purpose which results in actual damage to the plaintiff. So, what is essential in the tort of civil conspiracy is causing of damage by the defendants to the plaintiff irrespective of the motive of self-interest or protection of one's trade. [See Moghul Steam Shipping Co. Vs. McGregor (1889) 23 Queens Bench Division 598 (617)].

¶40In a later case of Crafter Handwoven Harris Twed Vs. Veitch, 1942 AC 435 (488), it has been held that damage to the plaintiff, in order to prove tort of civil conspiracy, must be established. However, proving of the damage to the plaintiff is not so material as agreement to commit criminal offence is in the offence of criminal conspiracy punishable under Section 120-B of IPC. In the instant case, the petitioners are facing prosecution primarily for their alleged [1901] AC 495 involvement in the offence of criminal conspiracy between them and the other accused persons for commiting various offences as alleged against them, which offences have been stated by the prosecution to be a part of the larger conspiracy to defraud Indian investors. Here, CANFINA Services has not reached any settlement in respect of any conspiracy, much less criminal conspiracy, alleged against the petitioners. It has only put a quietus to it's civil claim for damages proved by it against Citibank NA and other defendants and by acceptance by it of the entire damages from one of the defendants to the civil case, it cannot be said that it is also accepting the fact that with that settlement, even the criminal liability of the petitioners does not survive. On the contrary, Citibank NA, as a company, not having been made an accused in the present criminal proceedings does not encounter any criminal liability in this case and so the settlement made with it in a civil case would not result in exoneration of criminal liability of the accused including the petitioners. Things would have been different if Citibank NA were also made an accused. That is not, however, the case here.

¶41Then, we must say it here that in the amicable settlement between CANFINA Services and Citibank NA, accepted by the Apex Court in it's order dated 13 th November 2007 passed in the aforestated civil appeals, there is no acknowledgment on the part of the CANFINA Services of the exoneration of the criminal liability of the petitioners. That apart, the offences alleged against the petitioners are of serious nature and this would be an additional ground for us to not accept the settlement as a good ground by itself to quash the criminal proceedings here. Therefore, amicable settlement between CANFINA Services and Citibank NA cannot be used by the petitioners to seek quashing of the Charge framed against them and also the criminal proceedings here. These very facts were also there in the case of Gopakumar B. Nair Vs. C.B.I. and Anr.1, and, therefore, the Supreme Court refused to confer any benefit of the private settlement upon the accused persons therein. There have been many other cases with similar fact situation where the Apex Court refused to interfere. We would refer to some of them briefly in ensuing paragraph.

¶42In the case of Sushil Suri Vs. C.B.I. and Anr.2, the Apex Court held that merely because the dues of the bank were paid, the appellant therein could not be exonerated from the criminal liability and for this reason, it refused to quash the charge-sheet. In another case of Central Bureau of Investigation Vs. Hari Singh Ranka and Ors.3, the Apex Court set aside the order of the High Court quashing criminal proceedings on the ground that larger social interests were in peril. It found that the case against the accused was not so simple as to say that the accused had only borrowed money from the bank and diverted it somewhere else and thereafter paid the amount. The Apex Court opined that the case reflected fiscal impurity and in a way a financial fraud. In these circumstances, the Apex Court found that civil settlement of the controversy would not suffice to wipe off the criminal liability. AIR 2014 SC (Supp) 1733 AIR 2011 SC 1713 AIR 2018 SC (Supp) 2487

¶43This case also involves allegation of commission of serious offences by the petitioners and other accused persons reflecting fiscal impurity and they were in a way a part of larger conspiracy to defraud Indian investors. The present case, unlike the case of Narendra Lal Jain (Supra), is not a simple case. In Narendra Lal Jain, the petitioners obtained more advances or loans from the bank than they were entitled to by taking recourse to projection of inflated figures of creditworthiness of the company represented by them. But, here the allegations are that the petitioners had purchased certain units of two securities, namely, CANDOUBLE and CANPREMIUM at a rate lesser than the prevailing market rate on 15 th May 1992 and sold these securities to CANFINA Services at the market rate and the petitioners enabled by their such transaction, sharebroker – Hiten Dalal and other accused persons to obtain a greater profit than they would have in normal course made, the beginning of which was made on 13 th May 1992, when two officers of the CANFINA Services, M.K. Ashok Kumar (Accused No.1) and S. Mohan (Accused No.2) sold these securities at a much discounted price than the prevailing market rate, thereby triggering further transactions of alleged fraudulent nature in between Citibank NA and Share Broker – Hiten Dalal; petitioners and Share Broker – Hiten Dalal and, finally, the petitioners and CANFINA Services. Although it is submitted by learned Senior Advocate for the petitioners that these were the one-off transactions, the material present on record, when accepted as it is at this stage, however, does not show them to be so, rather the material prima facie indicates that there was a possibility of those transactions being part of a larger conspiracy, wherein Indian investors were dishonestly made to lose their hard-earned money, which conspiracy later on came to be known as "Securities Scam of 1992-93" or "1992 Indian Stock Market Scam". In other words, this case, prima facie, does have the element of fiscal impurity and financial fraud and cannot be treated to be something as having overwhelmingly and predominently civil flavour. Therefore, the ratio of the said case of Central Bureau of Investigation Vs. Hari Singh Ranka and Ors.1 would squarely apply to the facts of the present case and as such, the amicable settlement between CANFINA Services and Citibank NA would not be sufficient to wipe off criminal liability of the petitioners.

¶44For all the reasons stated here-in-above, we find no merit in the argument of learned Senior Advocate for the petitioners that amicable settlement reached between CANFINA Services and Citibank NA and the admission given by CANFINA Services about it's having no surviving cause of action, as recorded in the order of the Apex Court dated 13 th November 2007 passed in Civil Appeal No.2116 of 2001 and connected other appeals, would also amount to exoneration of the petitioners of their criminal liability in the presnt proceedings. The argument is, therefore, rejected.

¶45It is submitted by learned Senior Advocate for the petitioners that if at all there was any criminal liability of anybody, it was first and foremost of Citibank NA, which had purchased the said securities from CANFINA Services at much discounted rate. He submits that it was on 13 th May 1992 that CANFINA Services AIR 2018 SC (Supp) 2487 sold to Citibank NA 75,00,000 units of CANDOUBLE at an abnormally low price of Rs.16.50 per unit, when the market rate on that day was in the range of Rs.30 to Rs.35. He submits that CANDOUBLE was a listed security on the Bombay Stock Exchange and, therefore, its market rate was available not only on 13 th May 1992 but also on 15 th May 1992, but this was not so in case of CANPREMIUM, which security not being a listed one, it is only a speculation of respondent no.1-CBI that even this security of CANPREMIUM was purchased by Citibank NA from CANFINA Services at a rate which was much lower than the market rate. He submits that the fact is that nobody is sure as to at what rate units of CANPREMIUM were being traded on 13 th May 1992 or 15 th May 1992. So, he submits that whatever loss that was actually suffered by CANFINA Services may have been so due to its two officers, who sold these two securities on 13 th May 1992 to Citibank NA, but Citibank NA was not made an accused in the present crime and to top it all, CANFINA Services amicably settled its civil case with Citibank NA, absolving it of civil liability completely. He further submits that the petitioners were involved only in the transactions of 15 th May 1992 and it is a matter of record that the units of CANDOUBLE and CANPREMIUM sold by them on 15 th May 1992 to CANFINA Services were at the market rate of Rs.30/- per unit and Rs.20/- per unit respectively and, therefore, so far as the transaction between petitioners and CANFINA Services was concerned, there was no financial loss caused to CANFINA Services. He further submits that this is thus a case where there is no financial loss caused to CANFINA Services by any acts committed by the petitioners and then if financial loss incurred by CANFINA Services on account of its transaction with Citibank NA on 13 th May 1992 was the beginning of the further transaction of 15 th May 1992, the petitioners could still be not held liable for it as, admittedly, Citibank NA has been exonerated of its any liability by CANFINA Services. He further submits that there is also no evidence showing that 2 crore units of CANPREMIUM sold by the petitioners to CANFINA Services on th May 1992 were in fact part of the 2.8 crore units purchased by Citibank NA from CANFINA Services on 13 th May 1992, which had ultimately landed in the kitty of the petitioners through Share Broker – Hiten Dalal. He also submits that in the civil case initiated by the petitioners, the running accounts of the petitioners with Share Broker – Hiten Dalal, the reflecting entries in respect of the sale of the aforestated units to CANFINA Services on 15 th May 1992 have been duly certified to be correct by the Special Court, the Custodian, the Bond Committee and the Chartered Accountant appointed by the agencies. According to him, such certification of the correctness of the accounts of the petitioners itself is sufficient to hold that there were genuine transactions entered into by the petitioners, which had nothing to do with the criminal conspiracy. He further submits that though the petitioner no.1 was initially notified under Section 3 of the Special Court Act by the Custodian, later on, by the order passed on 21 st August 2009 in Miscellaneous Petition No.25 of 2001, the learned Senior Judge of the High Court denotified the petitioners and such denotification of the petitioners would further show the genuineness of the accounts of the petitioners. He also submits that there was no entrustment of any amount to the petitioners and the accounts of the petitioners being clean, the petitioners could not be said to have had any role in committing any offence of criminal breach of trust and receiving of stolen property.

¶46Whatever has been said by the learned Senior Advocate for the petitioners by way of afore-stated argument may be true to a large extent, yet there is one fact which does not appear to be prima facie true. It is about the transaction of th May 1992, when the petitioners purchased certain units of CANDOUBLE and CANPREMIUM from Share Broker-Hiten Dalal. The purchase price of these units was Rs.29.75 per unit and Rs.19.75 per units and the market price of these units on that day was Rs.30 and Rs.20 respectively. It is this difference between the purchase price and the market price which shows that there is a case for proceeding further against the petitioners in this crime, which prima facie justifies the framing of Charge against the petitioners, which has been impugned herein. The Charge is based upon the offence of criminal conspiracy, punishable under Section 120-B of the IPC, and the allegation being that the petitioners were also a part of the conspiracy entered into between two officers of CANFINA Services i.e. accused nos.1 and 2, two officers of Citibank NA, Share Broker – Hiten Dalal and other accued persons, it cannot be said at this stage itself that the petitioners had no knowledge of what had transpired between Citibank NA or its officers, two officers of CANFINA Services and the other accused persons on 13 th May 1992 and also on 15 th May 1992, especially when there is prima facie material showing that the petitioners had purchased the aforestated units of CANDOUBLE and CANPREMIUM at a price which was slightly lower than the market price on 15 th May 1992. Then, there was no immediate delivery of these securities to CANFINA Services and it was after CANFINA Services wrote to the petitioners about non-receipt of physical units of these securities, that the petitioners scampered across the market and saw to it that those units were physically delivered to CANFINA Services. The petitioners have given their explanation about the circumstances in which this lapse occured, but that is something which relates to defence of the petitioners, which cannot be considered at this stage while exercising extra-ordinary jurisdiction of this court under Article 226 of the Constitution of India, read with Section 482 of the Code of Criminal Procedure. If there is a certification of correctness of the accounts of the petitioners by Special Court, Custodian and Chartered Accountant appointed by the agencies, that certificate, at this stage, can only be considered for satisfying ourselves about the completion of the transactions by actual delivery of the units of the said securities to CANFINA Services at the rates they were actually sold by the petitioners to CANFINA Services on 15 th May 1992 and also about TISCO shares, but that certificate, at this stage, without there being any detailed evidence adduced in the matter, cannot be accepted as also acknowledging innocence of the petitioners in purchasing the units of these two securities on 15 th May 1992 at a rate which was lower than the market rate. Similarly, the order of the Special Court dated 21 st August 2009 could not be seen as an admission of absence of any criminal liability of the petitioners in the present matter for the reason that while denotifying the petitioner no.1, the Special Court, relying upon the case of Minu Mehta Vs. Shawak D. Mehta1, held that such denotification would not have any adverse effect on the continuance of the prosecution against the petitioners.

¶47There is also an argument made on behalf of the petitioners that the money used by the officers of CANFINA Services to purchase from the petitioners the aforestated units of CANDOUBLE and CANPREMIUM securities could never be said to be entrusted to the petitioners and, therefore, no offence punishable under Section 409 of the Code of Criminal Procedure would be prima facie made out. There is further argument that the accounts having been certified by the Custodian and authorized Chartered Accountant appointed by the agencies and the CANFINA Services having acknowledged on 15 th July 1992, the discharge of liability of the petitioners towards them, there would not be prima facie case made out against the petitioners for offences relating to forgery and falsification of accounts. There is also an argument that receiving of stolen property punishable under Section 411 of the IPC, is an offence which would be prima facie made out only if there is attributable to the petitioners any dishonest intention and there is no such material being present here. While it is true that the petitioners could not be said to be the accused who were entrusted with any property and it is also true that there is certification of the accounts of the petitioners by the Special Court, Custodian and the Chartered Accountant appointed by the agencies, but, it can also not be ignored that the petitioners are primarily accused of offence of criminal conspiracy punishable under Section 120-B of IPC, which is about an agreement to commit criminal offence or

(1998) 2 SCC 418 offences, which by itself is an independent offence. For proving this offence, what is necessary is the proof of the criminal agreement and not its execution and about criminal conspiracy, we find that there is material present here, as can be gathered from events of 13 th May 1992 and 15 th May 1992, prima facie showing it's commission. That being so, we are of the view that it would be a matter of defence for the petitioners to establish their case that there was no entrustment of any property to them and that they were nowhere involved in commission of the offences relating to fogery and falsification of accounts. Same would be true even about the offence of dishonestly receiving stolen property punishable under Section 411 of the IPC. Therefore, the case of Anand Kumar Mohatta and Anr. Vs. State (NCT of Delhi), Department of Home and Anr.1, wherein it is held that when there is no entrustment of property, there is no offence of criminal breach of trust and also the case of Satish Mehra Vs. State (NCT of Delhi) and Anr.2, wherein it is held that if the allegations do not disclose prima facie case and prosecution of accused would result in abuse of process of court, the proceedings can be quashed at any stage, would have no application to the facts of the present case.

¶48For the reasons afore-stated, we find that this is not a case wherein it could be said that even upon taking all the allegations made against the petitioners at their face value and by accepting them as they are, no prima facie case is made out against the petitioners in respect of the charge which has been framed

(2019) 11 SCC 706

(2012) 13 SCC 614 against them and that would mean that this is not a fit case for quashing and setting aside the criminal proceedings.

¶49The conclusion reached above receives further support from the nature of the allegations made against the petitioners and remaining accused persons in the present case. These allegations show that the transactions in question were not predominently and overwhelmingly of civil flavour and had greater repurcussions on the economic system of India and prima faice, they could not be regarded as one-off transactions, rather they being related to a greater conspiracy to cause monetory loss to banks, financial institutions and investors in India, a possibility of their having criminal flavour in true sense cannot be ruled out at this stage.

¶50Such being the nature of the present case, we are of the view that cases of Parbatbhai Aahir alias Parbatbhai Bhimsinhbhai Karmur and Ors. Vs. State of Gujarat and Anr.1, Gian Singh Vs. State of Punjab2 and B.S. Joshi Vs. State of Haryana3 would have no application to the facts of the present case. This is the additional reason for us to say that no interference with the criminal proceedings by this court in exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India, read with Section 482 of the Code of Criminal Procedure, is warranted. This court also does not see any abuse of the process of court in continuance of the criminal proceedings, nor feels it necessary to make

(2017) 9 SCC 641

(2012) 10 SCC 303

(2003) 4 SCC 675 interference therein to secure ends of justice for the petitioners, and rather is of the opinion that ends of justice would possibly be duly secured, if the trial of the petitioners is taken to it's logical end in accordance with law.

¶51Of course, there is also an argument that the criminal trial has not proceeded any further after framing of Charge in the year 2007 and this has caused great prejudice to the defence of the petitioners; while, quashing of the criminal proceedings would cause no prejudice to the prosecution. By placing reliance upon the case of P. Ramachandra Rao Vs. State of Karnataka1, it is contended that because of the unreasonable delay in completion of the trial, right of the accused to speedy trial has been infringed. We, however, do not accept the contention and reject it for the reasons which follow this paragraph.

¶52As rightly submitted by learned counsel for respondent no.1-CBI, the concept of speedy trial has been well explained by the Constitution Bench of the Supreme Court in the case of Abdul Rehman Antulay (supra), wherein the Apex Court has held that the concept is necessarily relative in nature. It further held that it is neither advisable nor practicable to fix any time limit for trial of offences and much would depend upon several factors such as nature of offence, number of accused, number of witnesses, workload in the particular case, means of communication and several other relevant circumstances. It also held that each and every delay does not necessarily prejudice the accused as some delays indeed work to his advantage.

(2002) 4 SCC 578

¶53Similarly, in the case of Kartar Singh Vs. State of Punjab1, another Constitution Bench of the Apex Court found that no length of time is per se too long to clear the test of speedy trial principle, nor the accused is under a duty to show the actual prejudice by the delay of disposal of the case. It also held that in such a case, the court has to adopt a balancing approach by taking note of the possible prejudices and disadvantages which may be suffered by the accused by avoidable delay and thus has to determine whether there is really any deprivation of the accused of his right to speedy trial or not. The relevant observations are reproduced as under:- "92. Of course, no length of time is per se too long to pass scrutiny under this principle nor the accused is called upon to show the actual prejudice by delay of disposal of cases. On the other hand, the court has to adopt a balancing approach by taking note of the possible prejudices and disadvantages to be suffered by the accused by avoidable delay and to determine whether the accused in a criminal proceeding has been deprived of his right of having speedy trial with unreasonable delay which could be identified by the factors – (1) length of delay, (2) the justification for the delay, (3) the accused's assertion of his right to speedy trial, and (4) prejudice caused to the accused by such delay." . The aforestated proposition of law was reiterated in the case of P. Ramchandra Rao Vs. State of Karnataka2, which was Seven Judges Bench

(1994) 3 SCC 569

(2002) 4 SCC 578 decision, with the clarification that the guidelines laid down in Abdul Rehman Antulay (supra) are not exhaustive but only illustrative and that they are not intended to operate as hard and fast rules to be applied like a straight jacket formulae. It further held that their applicability would depend on the fact situation of each case.

¶54Having regard to the above referred principles of law, we find that this is not a case which could be quashed only upon consideration of what apparently seems to be a long delay in conclusion of the trial. As stated earlier, this case involves transactions, which are alleged to be part of larger conspiracy of defrauding Indian investors and which indicate element of fiscal impurity. Then, there is presently only one Special Court which is now dealing with all these cases, some of which have voluminious evidence. There is also an interim relief staying all further proceedings in the present case, which is Special Case No.2 of 1998, operating since 20 th June 2014. All these circumstances would only show that there is no deliberate delay by the prosecution, rather the delay seems to be systemic. But, it is a question to be decided by this court as to whether or not any delay of systemic nature should enure to the benefit of the accused. The answer would have to be given in the context of factor of prejudice to the accused. If there is any prejudice occurred to the accused, the advantage must go to the accused, and if not, the benefit would be withheld. In this case, there does not appear to be possibility of causing of any prejudice to the petitioners, as the evidence to be aduced by the prosecution is predominently documentary and not oral. Therefore, if there is any delay, it is more likely to cause prejudice to the prosecution and can possibly even work to the advantage of the petitioners. Therefore, we find that, on the anvil of principles laid down in P. Ramchandra Rao's case (supra), this is not a case of clear infringement of right to speedy trial of the petitioners and, therefore, no advantage of this principle can be granted to the petitioners.

¶55In the result, we find that the petition is without any merit. It stands dismissed.

¶56At this stage, learned Senior Advocate for the petitioners makes a request for staying the effect and operation of this judgment for a period of at-least six weeks. Though the request is opposed by learned counsel for respondent no.1, we are of the view that there being already granted interim relief by this court during pendency of this petition, the request would have to be granted in the interest of justice and accordingly it is granted. We direct that there shall be stay to the effect and operation of this judgment for a period of six weeks from today and the interim stay to the trial granted by this court earlier shall also continue for a further period of six weeks from today. ( M.M. SATHAYE, J. ) ( SUNIL B. SHUKRE, J. ) Signed by: Sneha A. Dixit Designation: PS To Honourable Judge Date: 22/08/2023 18:54:57

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION WRIT PETITION NO.2141 OF 2014 1. Dhyan Investments & Trading Company Ltd., ] th Floor, Tulsani Chambers, ] 212, Nariman Point, Mumbai – 400 021. ] 2. Tushar Sarda, ] Indian Inhabitant, residing at 11, Geetanjali 73, ] Vallabhai Patel Road, Santacruz (West), ] Mumbai – 400 054. ] .. Petitioners Versus 1. Central Bureau of Investigation, ] having it's office at New Hind House, ] nd Floor, Narottam Morarji Road, Ballard Estate, ] Mumbai - 400 038. ] 2. The State of Maharashtra ] 3. Canbank Financial Services Ltd., ] A company incorporated under the Companies Act, ] 1956, having it's registered office at Naveen Complex, ] 14, M.G. Road, Bangalore – 560 001 and Bombay ] Office at Rajbahadur Mansion, 1 st Floor, 32, ] Bombay Samachar Marg, Mumbai – 400 023. ] 4. Mr. S. Ramesh Kumar, ] Age 60 years, R/o. 704, Whispering Palms, ] Lokhandwala Complex, Akurli Road, ] Kandivali (East), Mumbai – 400 101. ] 5. Ashish Parthasarathy, ] Age 52 years, Indian Inhabitant, ] R/o. 501, Shimira, 16 th Road, Khar (West), ] Mumbai – 400 052. ] .. Respondents 2023:BHC-AS:23910-DB Mr. Amit Desai, Senior Advocate, with Mr. Dinesh Purandare, Mr. Firdosh Pooniwalla, Mr. Ravi Gandhi, Mr. M.A. Kamdar, Mr. Rashmin Jain, Mr. Karan Thakkar and Mr. Prathamesh Jadhav, i/by Kanga & Co., for the Petitioners. Mr. Limosin A., with Mr. H.S. Venegavkar, for Respondent No.1-CBI. Mr. K.V. Saste, APP for Respondent No.2-State. Ms. Aarti Shah, with Mr. Ramesh Rajput, i/by Mulla & Mulla & Craigie Blunt & Caroe, for Respondent No.3-CFSL. CORAM : SUNIL B. SHUKRE AND M.M. SATHAYE, J.J. RESERVED ON : 5 TH JUNE, 2023. PRONOUNCED ON : 22 ND AUGUST 2023. JUDGMENT : ( Per SUNIL B. SHUKRE, J. ) 1. This is a petition invoking jurisdiciton of this Court under Articles 226 and 227 of the Constitution of India, read with Section 482 of the Code of Criminal Procedure, 1973, seeking quashing and setting aside of the charge-sheet filed and Charge framed in Special Case No.2 of 1998 against the petitioners. The facts leading to filing of the present petition are stated in brief as under : (i) The petitioner no.1 is a company registered under the Companies Act, 1956 and petitioner no.2 is an individual, who would take care of the transactions of petitioner no.1. The petitioners are accused nos.3 and 4, respectively, in Special Case No.2 of 1998 filed before the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, (hereinafter called as "Special Court Act:", for short). Respondent no.1 is the informant in Special Case No.2 of 1998, which registered the FIR against the petitioners and other accused persons at the behest of Respondent no.3 – Canbank Financial Services Ltd., (hereinafter called as "CANFINA Services", for short), a company to whom the alleged financial loss, on account of fraudulent transactions entered into by the petitioners with other accused persons, has been caused. Respondent no.4 – S. Ramesh Kumar and respondent no.5 – Ashish Parthasarathy are the Executives of Citibank NA and are accused no.5 and accused no.6, respectively, in Special Case No.2 of 1998. The other accused persons in Special Case No.2 of 1998 are one M.K. Ashok Kumar (Accused No.1), S. Mohan (Accused No.2), the officers of CANFINA Services and Hiten Dalal (Accused No.7) – the Share Broker. (ii). The case against the petitioners in Special Case No.2 of 1998 is that they were part of the criminal conspiracy, object of which was to dishonestly and fraudulently cause wrongful loss to CANFINA Services and the criminal conspiracy was hatched by the petitioners and the remaining accused persons. The case arose against the petitioners when, some time in May, 1994, CANFINA Services filed a complaint with respondent no.1 alleging commission of various offences in respect of the transactions in two securities, viz. CANDOUBLE and CANPREMIUM, undertaken by CANFINA Services on 13 t