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SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, M.R. SHAH, JJ.
Salimbhai Hamidbhai Menon – Petitioner
Versus
Niteshkumar Maganbhai Patel and Another – Respondents
Criminal Appeal No. 884 of 2021, SLP (Crl) No. 4617 of 2021
Decided On : 31-08-2021
(A) Indian Penal Code, 1860 – Sections 405, 420, 465, 467, 468 and 471 – Criminal Procedure Code, 1973 – Section 482 – Criminal breach of trust, cheating and forgery – Restraint on arrest of respondent by High Court – Procedure followed by High Court of issuing an oral direction restraining arrest of first respondent was irregular – If after hearing parties High Court was of the view that opportunity should be granted to Counsel for appellant and first respondent to explore possibility of a settlement and, on that ground, interim protection against arrest ought to be granted, specific judicial order to that effect was necessary – Oral observations in court are in course of a judicial discourse – Text of a written order is what is binding and enforceable – Issuing oral directions (presumably to APP) restraining arrest, does not form a part of judicial record and must be eschewed – Absent a judicial order, investigating officer would have no official record emanating from High Court on the basis of which a stay of arrest is enforced – Administration of criminal justice is not a private matter between complainant and accused but implicates wider interests of State in preserving law and order as well as a societal interest in sanctity of criminal justice administration – Oral directions of this nature by High Court are liable to cause serious misgivings – Such a procedure is open to grave abuse – Most High Courts deal with high volumes of cases – Judicial assessments change with roster – Absent a written record of what has transpired in course of a judicial proceeding, it would set a dangerous precedent if parties and investigating officer were expected to rely on unrecorded oral observations – Procedure which was followed by Single Judge must be eschewed in future – Judges speak through their judgments and orders – Written text is capable of being assailed – Element of judicial accountability is lost where oral regimes prevail – This would set a dangerous precedent and is unacceptable – Judges, as much as public officials over whose conduct they preside, are accountable for their actions. (Paras 23, 24 and 25)
(B) Criminal Procedure Code, 1973 – Section 482 – Indian Penal Code, 1860 – Sections 405, 420, 465, 467, 468 and 471 – Criminal breach of trust, cheating and forgery – Restraint on arrest of respondent by High Court – Procedure which was followed by Single Judge must be eschewed in future. Judges speak through their judgments and orders – Written text is capable of being assailed – Element of judicial accountability is lost where oral regimes prevail – This would set a dangerous precedent and is unacceptable. Judges, as much as public officials over whose conduct they preside, are accountable for their actions – Offences which are alleged to be involved are punishable under provisions of Sections 405, 420, 465, 467, 468 and 471 of Penal Code – These offences are of a serious nature – While an order granting a stay of arrest in a proceeding under Section 482 of Cr.P.C. lies within jurisdiction of High Court, grant of such relief must be after a judicious application of mind, which must emerge from reasons which are recorded by Judge – Formulation of reasons in a judicial order provides backbone of public confidence in sanctity of judicial process – While directing that proceedings are to be listed on a future date, High Court is not expected to deliver a detailed judgment elaborating upon reasons why a stay of arrest has been granted – But reasons recorded by Court must reflect an application of mind to relevant facts and circumstances, including nature and gravity of allegations; seriousness of the alleged offence(s); position of accused and likelihood of their availability for investigation; and basis on which a stay of arrest has been granted till next date – High Court has not alluded to allegations made in FIR – This constitutes a serious deficiency – Petition before High Court is for quashing FIR under Section 482 – While determining whether to grant ad-interim relief in such a case, involving a stay of arrest, High Court must bear in mind parameters for exercise of jurisdiction for quashing, which has been invoked – Interim order of a stay of arrest is in aid of final relief which is sought in petition – Considerations germane to exercise of jurisdiction to quash an FIR must be present to mind while deciding whether an interim stay of arrest is warranted – What is present to mind must emerge from text of order – Considerations which ought to weigh in whether or not to exercise jurisdiction to quash must be present in mind of Judge while determining whether an interim order should be made – That these considerations have been borne in mind can only be evident from reasons, however brief, which have been indicated in order of High Court – This does not emerge from impugned order of High Court – Order of High Court set aside – High Court would be at liberty to proceed to deal with petition under Section 482 of Cr.P.C. which is pending consideration. (Paras 27, 28, 32 and 33)
Facts of the case:
Present appeal arises from a judgment dated 31st March 2021 of a Single Judge of the High Court of Gujarat. On 10 October 2010, the appellant and the first respondent entered into a deed of partnership under which a firm by the name of Calla Associates was constituted. The share of the first respondent in the profit / loss is alleged to be 55 per cent while the share of the appellant, 45 per cent. On 21 June 2017, a document styled as ‘’sammati-lekh’’ was allegedly entered into by the appellant consenting to the execution of a sale deed in favour of a third party and the appellant agreed not to make any claim in the amount of Rs 3.89 crores from his capital investment. On 23 August 2017, an addendum to the “sammati-lekh” is alleged to have been executed in terms of which certain amounts were to be adjusted and an amount of Rs 5.03 Crores was to be paid by the first respondent to the appellant. It has been alleged that under the terms of the addendum, a sale deed of certain land situated at Mouje Samiyala was to be executed in favour of the appellant. It has been alleged that on 4 September 2017, a document was prepared and notarised on 8 September 2017 pertaining to record the relinquishment of rights by the appellant from a parcel of land belonging to the firm. The allegation of the appellant is that under the terms of the original document, appellant agreed to relinquish rights only in certain land situated at Akota, Vadodara. However, it is alleged that the first respondent forged the internal pages of the document and added additional survey numbers of land, over and above what was agreed to be relinquished.
Findings of Court:
Formulation of reasons in a judicial order provides the backbone of public confidence in the sanctity of the judicial process. While directing that the proceedings are to be listed on a future date, the High Court is undoubtedly not expected to deliver a detailed judgment elaborating upon reasons why a stay of arrest has been granted. But the reasons recorded by the Court must reflect an application of mind to relevant facts and circumstances,
Result : Appeal allowed. Order of High Court set aside.
ORDER :
1. This appeal arises from a judgment dated 31 March 2021 of a Single Judge of the High Court of Gujarat.
2. On 10 October 2010, the appellant and the first respondent entered into a deed of partnership under which a firm by the name of Calla Associates was constituted. The share of the first respondent in the profit/loss is alleged to be 55 per cent while the share of the appellant, 45 per cent. On 21 June 2017, a document Digitally signed by styled as “sammati-lekh” was allegedly entered into by the appellant consenting to the execution of a sale deed in favour of a third party and the appellant agreed not to make any claim in the amount of Rs. 3.89 crores from his capital investment.
3. On 23 August 2017, an addendum to the “sammati-lekh” is alleged to have been executed in terms of which certain amounts were to be adjusted and an amount of Rs. 5.03 crores was to be paid by the first respondent to the appellant. It has been alleged that under the terms of the addendum, a sale deed of certain land situated at Mouje Samiyala was to be executed in favour of the appellant.
4. It has been alleged that on 4 September 2017, a document was prepared and notarised on 8 September 2017 pertaining to record the relinquishment of rights by the appellant from a parcel of land belonging to the firm. The allegation of the appellant is that under the terms of the original document, the appellant agreed to relinquish rights only in certain land situated at Akota, Vadodara. However, it is alleged that the first respondent forged the internal pages of the document and added additional survey numbers of land, over and above what was agreed to be relinquished.
5. On 1 November 2017, an advocate’s notice was issued by the appellant to the first respondent which was followed by a public notice on 2 January 2018 alleging misappropriation of the amount invested by the appellant. In a reply dated 5 January 2018, the respondent suggested that partnership had been mutually dissolved and documents had been executed to that effect.
6. On 25 January 2018, a legal notice was issued by the appellant complaining of the dishonour of a cheque of Rs. 1.47 crores and on 7 January 2018, of another cheque in the amount of Rs. 81.31 lacs.
7. On 31 January 2018, the appellant addressed a communication to the bankers to cease all transactions in the account of the partnership firm due to disputes between the parties.
8. On 22 February 2018, the appellant received a communication from HDFC Bank recording that the bank had received a document allegedly executed on 8 September 2017 by which the appellant had relinquished all his rights in the firm in favour of the first respondent. The appellant alleges that it was then that he came to know that the first respondent has fabricated the deed of dissolution of partnership dated 10 February 2018. This forged deed allegedly contained a reference to another forged document dated 8 September 2017. According to the appellant, his signature on the deed of dissolution of partnership is forged and another copy of the document without his signature was notarised on 23 February 2018.
9. On 25 February 2018, the investigating officer at JP Road Police Station conducted a preliminary enquiry into a complaint lodged by the appellant, which is stated to have been disposed of on the ground that the first respondent was ready to settle the accounts in the presence of a mediator and that the allegations were of a civil nature.
10. On 12 March 2018, a settlement was arrived at between the appellant and the first respondent in terms of which it was agreed that the partnership be dissolved and a sum of Rs. 26.03 crores be paid to the appellant. Post-dated cheques were issued to the appellant. One of Rs. 50 lacs was honoured while the remaining cheques were dishonoured, leading to the initiation of proceedings under the Negotiable Instruments
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