MOOL CHAND GARG, J:

1. This common judgment shall dispose of the aforesaid two petitions, one filed under Section 397 of the Code of Criminal Procedure (hereinafter referred to as "Code") and the other filed under Section 482 of the Code by the same petitioners praying for quashing of the Criminal Complaint No. 1263/1/2005 and the order dated 01.07.2005 of the Metropolitan Magistrate, New Delhi directing registration of an FIR on the allegations contained in the aforesaid Complaint filed under Section 200 of the Code and to investigate the same in exercise of the provisions contained under Section 156(3) of the Code. Prayer has also been made to quash the FIR bearing No. 436/2005 dated 6.8.2005 registered under Sections 420/467/468/471/120-B/34 IPC at Police Station Defence Colony, New Delhi in compliance with the aforesaid order against the petitioners and others.

2. It is the case of the Petitioners that petitioner No.2 M/s Shri Ram Mills Ltd. (hereinafter referred to as the "Company") is owner of large chunk of the land ad-measuring about 67,785.50 sq. mtr. in Worli Mumbai. The first petitioner is its Director. This company became a sick company. For its revival a scheme was framed under the directions of the Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as "the AAIFR") which permitted the company to dispose of 4848.1 sq. mtr. of land to meet its liability towards financial institutions. In that context the Company entered into a development agreement dated 27.04.1994 with the 2nd respondent/ complainant, M/s Utility Premises Ltd. (referred to as "UTILITY" hereinafter) whereby it was agreed that the said land measuring 4848.1 sq. mtr., would be developed by UTILITY and residential flats would be constructed to be thereafter. The sale proceeds of those flats were to be shared between them 50:50. No money was received by the Company from the Complainant in this regard at that time. As per the agreement, the ownership and possession of the land was always to remain with the Company. The agreement also mentions that FSI (Floor Space Index) to be made available under the agreement would be between 86,000 and 1,20,000 sq. ft. but actually the FSI made available was only 86,725 sq. ft. FSI. The company also entered into a second agreement with UTILITY on 18.07.1994 to make available additional land of 2500 sq. mtr. However this could not be done as they could not agree to the price and therefore the said agreement was rescinded by mutual consent vide agreement dated 22.06.1996 as mentioned in clause 5 of the said Agreement. Vide this agreement the Complainant and M/s Bhupendera Capital also agreed to confine their rights of development only to the extent of FSI of 86,725 sq.ft. in the land in question. It may be mentioned there that the aforesaid agreements contained an Arbitration Clause for settling inter se disputes between the parties. There was also a prohibition clause restraining the Company from creating any third party interest in the Land to be developed. This agreement was also signed by M/s Bhupendra Capital and Finance Ltd., who came into the picture because of the agreement dated 09.11.1994 whereby the rights of the Company to receive 50% of the sale proceeds of the flats were transferred to them. Another agreement dated 28.06.96 also entered into between the parties, witnessed another important development when the complainant also transferred all its rights under the Agreement dated 27.4.1994 in favor of M/s Ansal Housing Pvt. Ltd. (hereinafter referred to as "Ansals") for consideration by accepting Rs.40 crores from them.

3. On 06.08.2004 a loan of Rs. 50 crores was taken by M/s Vijay Infrastructure from Infrastructure Leasing and Financial Services Trust Company Ltd. (hereinafter referred to as "IL&FS"). In that transaction the Company/petitioner No.2 gave its guarantee by creating a mortgage of its entire property measuring 67,785.50 sq. mtr., including 4848.1