1. Land lease for cricket stadium and allied infrastructure — Allegations of fraud and corruption — FIRs under IPC and Prevention of Corruption Act — Petitions for quashing. (Para 1 , 3 , 5 , 6 , 7 , 10 )
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2018 Supreme(SC) 1125
SUPREME COURT OF INDIA
A.K. SIKRI, ASHOK BHUSHAN, JJ.
HIMACHAL PRADESH CRICKET ASSOCIATION & ANR. – APPELLANT(S)
VERSUS
STATE OF HIMACHAL PRADESH & ORS. – RESPONDENT(S)
CRIMINAL APPEAL NOS. 1258-1259 OF 2018 WITH WRIT PETITION (CRIMINAL) NO. 135 OF 2017
Decided On : 02-11-2018
Important Points
IMPORTANT POINTS
When 11 persons are charged with criminal act with conspiracy and 9 of them are absolved, ex facie, no case of cheating/fraud or criminal breach of trust is made out.
Filing of chargesheet and an order taking cognizance is not a final judicial order. It is a preliminary process open to challenge in higher judicial fora.
Conversion of the Society into not for profit company under Section 25 of the Companies Act, 1956 as per the mandate of BCCI thereby preventing State Government from controlling it, is not a criminal act.
When 11 persons are charged with criminal act with conspiracy and 9 of them are absolved, ex facie, no case of cheating/fraud or criminal breach of trust is made out.
Filing of chargesheet and an order taking cognizance is not a final judicial order. It is a preliminary process open to challenge in higher judicial fora.
Conversion of the Society into not for profit company under Section 25 of the Companies Act, 1956 as per the mandate of BCCI thereby preventing State Government from controlling it, is not a criminal act.
Subject
Criminal Law - Quashing of FIR
Act Referred
COMPANIES ACT: S.25
CONSTITUTION OF INDIA: Art.32
CRIMINAL PROCEDURE CODE: S.173, S.321, S.482, S.156(3)
HIMACHAL PRADESH LEASE RULES: R.8(1)
INDIAN PENAL CODE: S.447, S.406, S.420, S.120(b)
PREVENTION OF CORRUPTION ACT: S.13(2)
PREVENTION OF DAMAGE TO PUBLIC PROPERTY ACT: S.3
CONSTITUTION OF INDIA: Art.32
CRIMINAL PROCEDURE CODE: S.173, S.321, S.482, S.156(3)
HIMACHAL PRADESH LEASE RULES: R.8(1)
INDIAN PENAL CODE: S.447, S.406, S.420, S.120(b)
PREVENTION OF CORRUPTION ACT: S.13(2)
PREVENTION OF DAMAGE TO PUBLIC PROPERTY ACT: S.3
Headnote
(a) Criminal jurisprudence – Appellants along with 7 IAS officers, 1 HPAS officer, 1 Executive Engineer and 2 Gram Panchayat members charged u/s 406, 420, 447, 120B, Indian Penal Code, 1860; section 13(2), Prevention of Corruption Act, 1988 and Section 3 of Prevention of Damage to Public Property Act, 1984 – Sanction not granted/withdrawn for prosecution of all the administrative officers – IAS officers made Principal Secretary to CM and Advisor to CM – The HPAS officer promoted to IAS – No criminal acts alleged against administrative officers – Whole case revolving around allotment of land on lease for construction of cricket stadium and allied facilities – Being lease, land remains with the State – Lease granted for public purpose, cricket stadium – Nine out of 11 persons charged with conspiracy absolved – Sufficient for absolving others. (Para 42)
(b) Code of Criminal Procedure, 1973 – Section 174 and 190 – Filing of chargesheet and an order taking cognizance is not a final judicial order – It is a preliminary process open to challenge in higher judicial fora. (Para 42)
(c) Criminal jurisprudence – Appellants charged with conversion of Society into not for profit company under Section 25 of the Companies Act, 1956 – Done as per the mandate of BCCI – Thereby preventing State Government from controlling it – Not a criminal act – Held, if at all, subject matter was a civil dispute between the appellants and the respondents. (Para 43)
(d) Code of Criminal Procedure, 1973 – Section 482 – Principles for invoking jurisdiction by High Court restated. (Para 46)
(1992) Supp. (1) SCC 335; (2006) 6 SCC 736; (2017) 13 SCC 369 – Relied upon
1992 Supp (1) SCC 222; (2003) 263 ITR 345; (2012) 344 ITR 544; (1997) 4 SCC 770; (1991) 4 SCC 406; (2008) 8 SCC 781; (2013) 1 SCC 205; (2003) 9 SCC 700; (2014) 2 SCC 1; (2004) 6 SCC 522; (2013) 10 SCC 591; (2011) 8 SCC 737; (2011) 9 SCC 286; (2010) 14 SCC 527; (1963) 1 SCR 778; AIR 1967 SC 1; (1990) 4 SCC 239 – Referred
Facts of the case:
Two FIRs registered against the appellants u/s 406, 420, 447, 120B IPC; section 13(2) of PC Act and Section 3 of Prevention of Damage to Public Property Act are the subject matter of these appeals.
The appellants filed petitions under Section 482 of the Code of Criminal Procedure before the High Court of Himachal Pradesh for quashing of the said FIRs. These petitions have been dismissed by the High Court. That judgment is impugned in the instant appeals.
During the pendency of these proceedings, investigation was completed. On the day judgment was pronounced by the High Court, the chargesheets were filed in the Court of Special Judge. After the filing of the said chargesheets, the appellants have also filed Writ Petition (Criminal) seeking quashing of these chargesheets.
Finding of the Court:
Ex facie, no case of cheating/fraud or criminal breach of trust is made out.
Result: Appeal allowed.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
- administrative law
Table of Contents
2. Prosecution based on political vendetta — Absence of criminal intent — Valid administrative decisions under lease rules — Selective prosecution of junior officials versus senior officers. (Para 8 , 9 , 12 , 13 , 14 , 15 , 17 , 18 , 19 , 21 , 22 , 25 , 26 , 27 , 28 , 29 , 30 , 31 )
3. Leases granted following administrative procedures and rules — Lack of criminal intent — Selective prosecution of junior officers suggests mala fides — Conversion to company was statutory. (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 )
4. Inherent powers under Section 482 CrPC should be exercised to prevent abuse of process and secure ends of justice when no prima facie offence is disclosed. (Para 46 , 47 )
5. Appeals allowed — High Court judgment set aside — FIRs quashed — Writ petition disposed of. (Para 48 )
6. When can the High Court exercise its inherent powers under Section 482 of the CrPC to quash criminal proceedings?
The power should be exercised carefully and sparingly to prevent abuse of the process of any court or to secure the ends of justice, particularly when a trial would result in unnecessary harassment or where it appears the trial would likely end in acquittal. (Para 46 )
7. Does the grant of land leases at nominal rates by government authorities necessarily constitute a criminal offence?
No, if the decision was a conscious administrative act taken by senior officials in accordance with applicable rules and for a public purpose, the absence of criminal intent precludes prosecution for fraud or corruption. (Para 32 , 37 , 42 )
8. What is the legal significance of prosecuting only junior officials while exempting senior decision-makers in a conspiracy case?
Such selective prosecution, where senior officers who processed the same decisions are not charged, lends support to allegations of mala fides and suggests the prosecution may be politically motivated rather than based on evidence of criminality. (Para 41 , 42 )
9. Can the conversion of a not-for-profit society into a Section 25 company be treated as a criminal act to evade government control?
No, statutory conversion permitted by law and mandated by governing bodies lacks criminal intent and cannot be construed as a crime, even if the motive is to maintain autonomy from state control. (Para 43 )
JUDGMENT
A.K. SIKRI, J.
Two FIRs are the subject matter of these appeals. One FIR No. 12 of 2013 dated August 01, 2013 is under Sections 406, 420, 120B of the Indian Penal Code, 1860 (IPC) and Section 13(2) of the Prevention of Corruption Act, 1988 (PC Act) has been registered against the appellants herein as well as some other persons. Second FIR No.14 of 2013 dated October 03, 2013 is under Section 447 read with Section 120B of the IPC, Section 3 of Prevention of Damage to Public Property Act, 1984 and Section 13(2) of the PC Act. The appellants filed petitions under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.) before the High Court of Himachal Pradesh for quashing of the said FIRs. These petitions have been dismissed by the High Court vide common judgment dated April 25, 2014. That judgment is impugned in the instant appeals. When the Special Leave Petitions (out of which these appeals arise) were filed, notice thereof was issued on January 5, 2015 and stay of further proceedings was also granted in the case arising out of the said FIRs which are pending before the Special Judge, Kangra, Dharamshala, Himachal Pradesh. That stay has been extended from time to time and is, therefore, continuing.
2) During the pendency of these proceedings, investigation was completed. On the day judgment was pronounced by the High Court, the chargesheets were filed in the Court of Special Judge. After the filing of the said chargesheets, the appellants have also filed Writ Petition (Criminal) No. 135 of 2017 in this Court seeking quashing of these chargesheets. Both these proceedings were clubbed and heard together which we propose to dispose of by this common judgment.
3) Appellant No. 1 is a Cricket Association of Himachal Pradesh which was initially registered as a Society under the Societies Registration Act, 1860 vide Registration Certificate dated June 08, 1990. On September 15, 2001, appellant No. 1 made an application for allotment of land to develop and construct the world class cricket stadium and consequently, the Commissioner-cum-Secretary (Education) granted permission for transfer of land to the Himachal Pradesh Youth Services and Sports Department with certain conditions. A lease deed dated July 29, 2002 was executed between appellant No.1 and respondent No. 1 through Director, Himachal Pradesh Youth Services and Sports Department for the said land at Village Mouja and Tehsil Dharamshala, District Kangra for construction of an international cricket stadium which was duly constructed. On July 14, 2005, a not for profit company in the name of Himalayan Players Cricket Association was incorporated under Section 25 of the Companies Act, 1956. Name of this company was changed to Himachal Pradesh Cricket Association on August 31, 2005.
4) Purusant to a proposal to host international cricket matches at Dharamshala, the International Cricket Council inspected the cricket infrastructure being developed at Dharmashala by appellant No. 1 and, inter alia, observed that the quality of accommodation left much to be desired. Need for some more facilities and hotel accommodation of desired quality was specifically stressed.
5) Having regard to this report, the appellants decided to construct a club house on the leased land. There was also a parcel of idle land in the middle of the land allotted for the stadium. Appellant No.1 towards this end made a request to the Director, Youth Services and Sports for allotment of additional land adjacent to the stadium admeasuring 720 square metres, vide its letter dated July 03, 2008. Since it was Gram Panchayat land, consent thereof was also needed for its allotment to the appellant No.1. Appellant No.1, thus, approached the Gram Panchayat. Pursuant to meetings between the office bearers of appellant No. 1 and Gram Panchayat, members of Uparali Dhari Development Division, Dharamshala, the said Gram Panchayat issued no objection for allotment of the land. Proposal of appellant No. 1 for al
