HIMACHAL PRADESH CRICKET ASSOCIATION Vs THE STATE OF HIMACHAL PRADESH
Bench: HON'BLE MR. JUSTICE A.K. SIKRI, HON'BLE MR. JUSTICE ASHOK BHUSHAN, HON'BLE MR. JUSTICE AJAY RASTOGI
Judgment by: HON'BLE MR. JUSTICE A.K. SIKRI
Case number: Crl.A. No.-001258-001259 / 2018
Diary number: 38932 / 2014
Advocates: SNEHASISH MUKHERJEE Vs
VARINDER KUMAR SHARMA
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NOS. 1258-1259 OF 2018
HIMACHAL PRADESH CRICKET ASSOCIATION & ANR. .....APPELLANT(S)
VERSUS
STATE OF HIMACHAL PRADESH & ORS. .....RESPONDENT(S)
W I T H
WRIT PETITION (CRIMINAL) NO. 135 OF 2017
J U D G M E N T
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
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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.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 2 of 53
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.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 3 of 53
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 allotment of additional land was mooted with the
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authorities as well. Respondent No. 1 vide letter dated November
16, 2009 took up the matter with the ACS-cum-FC Revenue to the
Government of Himachal Pradesh for approval to lease out
government land in Mohal Kand Mauja Khanyara, Tehsil
Dharamshala, District Kangra, measuring in 3-28-06 hectare in
favour of appellant No. 1. Respondent No. 1 granted approval to
lease out the aforesaid land in favour of appellant No. 1 vide letter
dated November 16, 2009 which was conveyed vide letter dated
November 18, 2009. As a result, lease deed was executed between
appellant No. 1 and respondent No. 1 for lease of the said land
situated at Mohal Kand Mauza Khanyara, Tehsil Dharmashala.
6) Club house was constructed at the stadium premises at
Dharamshala under the name and style of “Aveda HPCA Club
House”. Completion Certificate was issued on March 10, 2011 and
was certified complete in all aspects as per approved plan of the
Executive Officer, Municipal Council, Dharamshala. The Town and
Country Planning Department, Dharamshala also issued no
objection certificate dated March 15, 2011 for use of part of the
infrastructure of cricket stadium as club house for cricket activities.
Respondent No. 1 also approved the tariff for availing the
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accommodation facilities of the club house vide its letter dated
September 08, 2011.
7) The Board of Control for Cricket in India (BCCI) granted permission
to the Himachal Pradesh Cricket Association to convert itself from a
"not for profit" society to a "not for profit" company during its annual
general meeting held on September 19, 2011. A majority of cricket
associations throughout the country have been converting
themselves from a not for profit society to a not for profit company
registered under the Companies Act, 1956 in order to ensure better
and transparent management of their affairs.
Realising that unless world class accomodation was available
for the teams playing at the stadium and the officials concerned
accompanying such teams, the venue at Dharamshala that was
being painstakingly developed by the appellant No. 1 from its own
funds would be grossly underutilised and the State would lose out in
hosting cricket matches, appellant No. 1 and its office bearers began
working out a method to construct a world class motel for such
purposes.
Appellant No. 1 realized that if the use of the same was
restricted only to usage during match days for use of teams and
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their officials, the same would not be commercially viable. As the
terms of the lease may not be technically wide enough to cover this
allied infrastructure being developed for the game of cricket, vide its
letter dated December 24, 2011, appellant No. 1 wrote to the
respondent to request it to permit commercial activity on the said
land on even non match days and amend the lease terms
accordingly. The above letter was forwarded by the District
Magistrate to the Principal Secretary (Revenue), Government of
Himachal Pradesh and the Principal Secretary (Revenue),
Government of Himachal Pradesh issued no objection for execution
of a supplementary lease enabling commercial activity on the
additional land at Kandi provided that the lease money was charged
in accordance with the Lease Rules, 2011. A supplementary lease
deed was executed between the appellant No.1 and the State of
Himachal Pradesh enabling use of the additional land commercially.
Necessary permissions for development on the said land were
obtained including for commercial hotel. The hotel constructed
under the name and style of “The Pavilion” obtained registration with
the Tourism Department of the State and Tariffs, etc. were also fixed
by the said Department on September 26, 2012. In the meantime,
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on September 22, 2012 resolution was passed by the appellant No.
1 company to take over the assets and liabilities of the society.
Agreement dated October 01, 2012 was also executed between the
Himachal Pradesh Cricket Association (the society) and Himachal
Pradesh Cricket Association (the Company) to enable the Society to
convert itself into a Company. Accordingly, the Society was
converted into a Company and the Himachal Pradesh Cricket
Association stood converted from a society to a not for profit
company registered under the Companies Act, 1956 and the
Registrar of Companies was informed of the same in due course.
8) Within a couple of months, from the aforesaid developments, there
was a change of political executive in the State of Himachal Pradesh
pursuant to the elections of legislative assembly. According to the
appellants, with the change of political power, tirade against the
appellants started by the new Government. In fact, even during the
election campaign, the Congress (I) had published a ‘Congress
Chargesheet’ wherein serious allegations were levelled against the
appellants. The appellants department sprung into action and
started seeking information from the appellants on various aspects,
though this information was already available with the State
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Government. A formal FIR No. 12 of 2013 dated August 01, 2013
was registered which, according to the appellants, is the result of the
said ‘Congress Chargesheet’. In fact, some time before that, a
complaint under Section 156(3) Cr.P.C. was made by one Vinay
Sharma against appellant No. 1 and its office bearers in which
orders were passed by Special Judge, Kangra on July 02, 2013
directing the police authorities to investigate the said case and
submit the report to it. Thus, two parallel proceedings were started.
9) Further allegation of the appellants is that investigation was
personally monitored by respondent No. 2 herein who was the Chief
Minister at that time. He had also made various public statements
from time to time that he was interested in taking over the entire
function of the Cricket Association and its assets. According to the
appellants, at the behest of respondent No. 2, even the Registrar of
Societies, Himachal Pradesh issued notice dated September 7,
2013 on the issue of formation of company under Section 25 of the
Companies Act, 1956 and taking over the assets of the society.
Against this notice, Writ Petition No. 7593 of 2013 was filed wherein
the High Court passed the orders keeping in abeyance the
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allegations raised in the notice dated September 7, 2013 of the
Registrar of Societies.
10) Another FIR No. 14 of 2013 dated October 03, 2013 came to be
registered against the appellants and others alleging commission of
offences under Section 447 read with Section 120B of the IPC,
Section 3 of the Prevention of Damage to Public Property Act, 1984
and Section 13(2) of the PC Act. Many other actions were taken by
the respondents, which according to the appellants, were mala fide
moves, reference whereto shall be made at the appropriate stage.
At this juncture, the appellants filed petition under Section 482 of
Cr.P.C. on January 06, 2014 seeking quashing of FIR No. 12 of
2013 which stands dismissed vide impugned judgment dated April
25, 2014.
11) The High Court in the impugned judgment has taken note of catena
of judgments of this Court pertaining to powers of the High Court
within the scope of Section 482 of Cr.P.C. Thereafter, it has
observed that after lodging of the FIR, investigation has been
conducted and the material collected during investigation discloses
that 18 persons made accused in the aforesaid FIR are prima facie
involved in the commission of offences. On this ground, it has
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brushed aside the argument of the appellants that it was a case of
vengeance, political vendeta and mala fide. The High Court has
also observed that allegations of mala fide based on the facts after
lodging of the FIR are of no consequence and cannot be the basis
for quashing the proceedings. For this purpose, it has referred to
the judgment of this Court in State of Bihar & Anr. v. P.P. Sharma
& Anr.1. It has also observed that even otherwise, the file does not
disclose at this stage how it is the case of mala fide. In the opinion
of the High Court, in such circumstances, merits of the case is to be
tested during trial inasmuch as FIR and Final Report of Investigating
Agency discloses that case for trial is made out. As the power under
Section 482 Cr.P.C. is to be exercised carefully, cautiously and in
rarest of rare cases, keeping in mind the law laid down by this Court,
the High Court refused to quash the proceedings. We may also
record here that one of the submissions of the appellants before the
High Court was that appellant No. 2 and other persons are not
public servants and, therefore, provisions of PC Act could not be
invoked against them. This argument has also been found to be
unmerited on the ground that some of the accused persons arrayed
with the appellants are public servants and also that allegation in the 1 1992 Supp (1) SCC 222
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FIR is that all these accused persons has the conspiracy and
wrongful gain to themselves and wrongful loss to the State, in the
process, the officials misused their position to show favour to other
accused persons.
12) Mr. Patwalia, learned senior counsel appearing for the appellants, at
the outset, drew the attention of this Court to the fact that M/s.
Subhash Ahluwalia, Subhash Negi, Ajay Sharma, Deepak Sanan
and T.G. Negi, who are the IAS Officers, were associated with the
grant of three leases. They were the main persons who took active
part in deciding that the three leases should be granted to the
appellants and on that basis, final decision was taken. However, as
far as these Officers are concerned, prosecution sanction has either
been denied or they have not been prosecuted at all. Likewise, Mr.
Gopal Chand, who belongs to Himachal Pradesh Administrative
Service, was arrayed as one of the accused person, but in his case
also, the sanction though given earlier stood withdrawn. He has
even been promoted to IAS cader. Mr. Patwalia submitted in tabular
form status of Officers who have allegedly conspired with the
appellants, which is as under:
Sl. Name of Officer Post at the time of Role as per FIR Sanction
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No. alleged offence
FIR No. 12 of 2013 dated 01.08.2013 under Sections 406/420/120B IPC and Section 13(2), Prevention of Corruption Act
1 Subhash Ahluwalia
IAS, Director-cum- Special Secretary, Youth Services and Sports Department, Government of Himachal Pradesh.
Sh. Subhash Ahluwalia, at the time of grant of lease of the Government Land to HPCA for the construction of Cricket Stadium had ignored the rules and had not mentioned the provisions of Lease Rules, 1993 in his noting. Further, Sh. Subhash Ahluwalia was a signatory to the Lease Deed dated 29.07.2002.
Not Charged
(Not enough evidence of malafide intention).
2 Subhash Negi IAS, Secretary, Youth Services and Sports Department, Government of Himachal Pradesh
Sh. Subhash Negi, at the time of grant of lease of the Government Land to HPCA for the construction of Cricket Stadium had ignored the rules and had not mentioned the provisions of Lease Rules 1993 in his noting.
Not Charged
(Not enough evidence of malafide intention).
3 T.G. Negi IAS, Principal Secretary, Youth Services and Sports Department, Government of Himachal Pradesh.
Sh. T.G. Negi made no efforts to reject the notings of accused Sh. Ajay Sharma and instead forwarded the same for approval of the Chief Minister.
Not Charged
(Not enough evidence of malafide intention).
4 Ajay Sharma IAS, Director-cum- Special Secretary, Youth Services and Sports Department, Government of Himachal Pradesh.
In 2008, then Chief Minister P.K. Dhumal marked the application of HPCA for permission of construction of Club House and its commercial use to Sh. Ajay Sharma
Prosecution sanction declined by Central Government on
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and asked him to prepare the proposal for the same. Sh. Ajay Sharma, by abusing his official position proposed for permission to the HPCA with the approval of the Chief Minister. The land was leased only for construction of cricket stadium and not club house. Sh. Ajay Sharma, by abusing his office in criminal conspiracy with HPCA, contrary to the terms and conditions of the lease deed has provided undue benefit to the HPCA and loss to the State Government.
25.08.2015.
Prosecution sanction withdrawn by the State Government on 09.04.2018.
5 Deepak Sanan IAS, Principal Secretary-cum- Financial Commissioner, Revenue Department, Government of Himachal Pradesh.
Sh. Deepak Sanan issued NOC for the commercial use of Government land which was leased to HPCA for the construction of Hotel Pavilion by reversing the earlier decision of Council of Minister. Sh. Deepak Sanan also notified the Lease Rules, 2011, on the basis of which supplementary lease was executed, in accordance with Rule 9.
Prosecution sanction declined by Central Government on 25.08.2015.
Prosecution sanction withdrawn by the State Government on 09.04.2018.
6 Gopal Chand HPAS, Additional Secretary, Revenue Department, Government of Himachal Pradesh
Sh. Gopal Chand had recommended for the commercial use of land leased to HPCA in Mohal Kand and marked the file to Sh. Deepak Sanan, whereas under Schedule
Prosecution sanction granted on 03.04.2014 withdrawn by the State Government
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20 of the Business Rules, he could have recommended the matter to be taken to the Cabinet.
on 03.08.2016.
Promoted to IAS.
FIR No. 14 of 2013 dated 03.10.2013 under Sections 447/120B IPC, Section 3 of the Prevention of Damage to Public Property Act, 1984 and Section 13(2) of the
Prevention of Corruption Act
7 K.K. Pant IAS, Deputy Commissioner, Kangra, Himachal Pradesh
On 14.03.2008, Sh. K.K. Pant chaired a meeting with other accused, without following due procedure and without having any statutory power for doing so, for reallocation of Type IV, UGC accommodation in the possession of the Education Department and the presumptions drawn in the meeting were made with the intention to give undue advantage to HPCA. Sh. K.K. Pant overlooked the report regarding condition of building.
Prosecution sanction declined by Central Government on 27.03.2015.
8 P.C. Dhiman IAS, Principal Secretary, Education Department, Government of Himachal Pradesh
Sh. P.C. Dhiman issued NOC to the Department of Youth Services and Sports, contrary to the recommendations/ conditions of the Director, Higher Education, and without mentioning the disposal of building in accordance with rules/norms and recovery costs from HPCA.
Prosecution sanction declined by Central Government on 24.08.2015.
9 Devi Chand Executive Engineer, Devi Chand Chauhan, Prosecution
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Chauhan Dharamshala Division, HPPWD
while working as Executive Engineer (Civil), Dharamshala, HPPWD Division forwarded the report sent by the then SDO Sub-Division No. 1, Dharamshala, regarding dilapidated condition of Type IV accommodations, without following procedure as laid down by the Government of India, Central Public Works Department Code, whihc led two illegal demolition of two storied building (Type IV accommodation) of the Education Department existing adjacent to the present Cricket Stadium gate, which was an eyesore to the HPCA and alleged to be a security threat to the players. Thus, the motive of the Executive Engineer was to intentionally give an advantage to HPCA thereby misusing his official position.
sanction declined by Department Secretary but recommende d by the then Chief Minister Sh. Virbhadra Singh. Hence, prosecution sanction granted on 23.09.2014 and 15.10.2014 (FIR No. 14/13 dated 03.10.2013)
13) Thus, the Government Officers who have granted lease are not
been prosecuted. He, thus, submitted that the main Government
functionaries were left out which shows that the Government wanted
to protect its own Officers but, at the same time, roped in the
appellants and others because of political enmity.
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14) Dilating on the aforesaid plea, namely, the entire prosecution is due
to political vendetta, without any legal basis, Mr. Patwalia submitted
that the genesis of the prosecution starts with the failed attempt by
the then State Government to take over appellant No. 1 in the year
2005 under the provisions of the HP Sports (Registration,
Recognition and Regulation of Associations) Act, 2005 due to the
interim protection granted by the Himachal Pradesh High Court on
May 18, 2005. This Act was subsequently repealed. According to
him, in view of the repeated interference by State Governments in
the internal affairs of autonomous cricket associations, the BCCI
has informally encouraged such member associations to re-register
themselves as not for profit charitable Section 25 Companies under
the Companies Act, 1956, as amended, for better legal compliances,
transparency and to avoid interference in internal affairs by State
Governments. Accordingly, various member associations of the
BCCI have converted themselves to Section 25 not for profit
charitable companies governed by the provisions of the Companies
Act, 1956. Appellant No. 1 also followed the suit as a result of
aforesaid mandate of the BCCI. Accordingly, a not for profit
company in the name of Himalayan Players Cricket Association was
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incorporated under Section 25 of the Companies Act, 1956. On
August 31, 2005, the said Company was permitted to change its
name to Himachal Pradesh Cricket Association and was issued a
fresh certificate of incorporation. During this process, the HP Sports
(Registration, Recognition and Regulation of Associations) Act, 2005
stood repealed and no further steps were taken in the interregnum
to convert the society to a section 25 company. Thereafter, on
September 19, 2011, the BCCI took up the pending request of
appellant No. 1 to permit it to convert itself to a Section 25 not for
profit company and granted the same. Pursuant to the permission
by the BCCI, amendments were carried out by the members at the
AGM of the appellant No. 1 on September 22, 2012 resolving to
convert the appellant No. 1 society to a Section 25 Company.
Accordingly, an agreement was executed on October 01, 2012
converting the society to a Section 25 Company and informing the
Registrar of Companies of the same. On October 31, 2012,
appellant No. 1 now registered as a Section 25 Company under the
Companies Act, 1956 informed the Registrar of Societies of the
State of Himachal Pradesh of the change in the memorandum and
rules of the appellants. Further, on November 02, 2012, once again
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the intimation regarding change in status of appellant No. 1 from a
not for profit society to a not for profit company was given to the
Registrar of Societies, State of Himachal Pradesh. Thus, from
October 01, 2012, appellant No. 1 has been existing as a Company
with due intimation to the State of Himachal Pradesh paying its
lease rent and taxes in accordance with law. He also argued that
the effect of such statutory conversion from a firm to a company by
statutory provisions for income tax purposes has been considered
by the Bombay High Court in the case of Commissioner of Income
Tax, Mumbai v. Texspin Engg. and Mfg. Works, Mumbai2 and
Punjab & Haryana High Court in the case of Commissioner of
Income Tax (Central), Ludhiana v. M/s. Rita Mechanical Works,
Ludhiana3 wherein it has been held as under:
"There is a difference between vesting of the property, in this case, in the limited company and distribution of the property. On vesting in the limited company under Part IX of the Companies Act, the properties vest in the company as they exist. ...
“In the present case, we are concerned with a partnership firm being treated as a company under the statutory provisions of Part IX of the Companies Act. In such cases, the company succeeds the firm. Generally, in the case of a transfer of a capital asset, two important ingredients are: existence of a party and a counter-party
2 (2003) 263 ITR 345
3 (2012) 344 ITR 544
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and, secondly, incoming consideration qua the transferor. In our view, when a firm is treated as a company, the said two conditions are not attracted. There is no conveyance of the property executable in favour of the limited company. It is no doubt true that all properties of the firm vest in the limited company on the firm being treated as a company under Part IX of the Companies Act, but that vesting is not consequent or incidental to a transfer. It is a statutory vesting of properties in the company as the firm is treated as a limited company. On the vesting of all the properties statutorily in the company, the cloak given to the firm is replaced by a different cloak and the same firm is now treated as a company, after a given date. ..."
15) On the aforesaid basis, submission of Mr. Patwalia was that
conversion of a not for profit society to a not for profit charitable
company which is expressly permitted by law cannot be construed
as a crime. The assets - in the present case leased land remain as
they are. In fact, the appellants have constructed a world class
stadium and a world class hotel on the leased premises.
Importantly, the State Government continues to remain the owner of
the land and has the power under the leases to cancel the same for
violation of terms and conditions of the lease.
16) It was highlighted by him that on the midnight of October 26, 2013,
the State Government had cancelled the leases and forcibly
dispossessed the appellants from the leased lands. However, on
November 05, 2013, the Himachal Pradesh High Court strictured the
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State Government and ordered status quo ante and handed over
the possession of the leased lands to the appellants. The State
Government thereafter accepted this order and withdrew the
cancellation of lease notices on November 19, 2013. Subsequently,
another notice dated May 23, 2015 was issued seeking cancellation
of the leases which too stands withdrawn on August 09, 2018. At
present, there are no proceedings pending for cancellation of the
leases.
17) Mr. Patwalia argued that there were specific allegations of mala fide
against respondent No. 2 from the very inception of these
proceedings about how he first caused the FIR to be registered and
thereafter interfered in the investigations, by being head of the SIT.
He also further stated that the conduct of respondent No.2 from
opposing the present appeals after having filed a counter affidavit in
the present matter stating that he was not a necessary party and it
was not his job to defend the prosecution, depicts mala fides on his
part. This, according to him, was sufficient to quash the FIR as
investigation was tainted. In support, he referred to the case of
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Union of India & Ors. v. Sushil Kumar Modi & Ors.4 wherein this
Court held as under:
"4. ...The agencies concerned must bear in mind and, if needed, be reminded of the caution administered by Lord Denning in this behalf in R. v. Metropolitan Police Commr. [(1968) 1 All ER 763 : (1968) 2 WLR 893 : (1968) 2 QB 118] Indicating the duty of the Commissioner of Police, Lord Denning stated thus: (All ER p. 769)
"I have no hesitation, however, in holding that, like every constable in the land, he should be, and is, independent of the executive. He is not subject to the orders of the Secretary of State, …. I hold it to be the duty of the Commissioner of Police, as it is of every chief constable, to enforce the law of the land. He must take steps so to post his men that crimes may be detected; and that honest citizens may go about their affairs in peace. He must decide whether or not suspected persons are to be prosecuted; and, if need be, bring the prosecution or see that it is brought; but in all these things he is not the servant of anyone, save of the law itself. No Minister of the Crown can tell him that he must, or must not, keep observation on this place or that; or that he must, or must not, prosecute this man or that one. Nor can any police authority tell him so. The responsibility for law enforcement lies on him. He is answerable to the law and to the law alone.”
...There can hardly be any doubt that the obligation of the police in our constitutional scheme is no less."
18) Mr. Patwalia referred to various documents placed on record and
contended that they would ex facie show that administrative
decisions were taken at various levels and by variou departments by
the concerned officers prior to sanction of leases in favour of
appellant No.1. Therefore, no wrong, much less culpable wrong,
4 (1997) 4 SCC 770
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was committed by the appellants and others. He specifically
referred to the allegation that there is no provision of grant of lease
at a token rate of Re.1/- per month under the applicable lease rules.
His response was that this argument is completely fallacious. The
leases of the appellants were granted under the H.P. Lease Rules,
1993. The appellants wanted to set up a cricket stadium with allied
world class infrastructure to enable the ICC to grant international
games to Himachal Pradesh and, thus, were eligible for grant of
lease under Rule 4(vii) - public purpose in the interest of the
development of the State. The appellants were also eligible for
grant of larger areas under Rule 5 in terms of the exemption
provided therein. In fact, the decision to lease the land at token rate
of Re.1/- per month for construction of cricket stadium was a well
thought out administrative decision by the State Government in the
interest of the State and has admittedly put Dharamshala on the
world map. This decision was taken by the State Cabinet after
considering the advice and presentation from the officers concerned.
RTI documents in the possession of the appellants record the
decision of the Cabinet dated May 27, 2002 as under:
"Item No. 14 Government of Himachal Pradesh
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General Administration Department (Confidential & Cabinet)
Subject: Leasing out of Government land for the construction of International Cricket Stadium at Dharamshala to H.P. Cricket Association on usual terms and conditions.
The above proposal was discussed by the Cabinet in its meeting held on 27.5.2002 and the decision arrived at thereon is reproduced below:-
"The Cabinet approved the propsoal regarding lease rates. Advantages of the Project explained by the AD were considered and it was decided that land be leased out at token rate of Re.1/- per month for a period of 99 years."
The implementation report of the above decision may please be sent to this Department within a fortnight from the receipt of this communication.
Sd/- Addl. Secretary (GAD)"
19) Further, Rule 8 provides for lease amount to be paid. At the time of
grant of lease, the appellant being a society had to pay lease
amount under Rule 8(1)(ii) at 8% of the latest highest market value
of the land leased or double the average market value of five years
whichever is less. The proviso to Rule 8(1) empowers the State
Government to reduce the lease amount in deserving cases and
reads as under:
"8(1) Lease Amount. - (1) The lease amount (fresh or renewal of existing lease) shall be charged from the eligible institutions and persons per annum as under:- ......
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 24 of 53
Provided that the State Government may reduce the amount for special reasons in deserving cases."
Therefore, the State Government took a conscious decision in
exercise of its powers under the proviso to Rule 8(1) of the H.P.
Lease Rules, 1993 and granted the lease at a token rate of Re.1/-
per month.
20) Based on the aforesaid material and circumstances highlighted by
Mr. Patwalia, his submission was that no case was made out
against the appellants and others, for prosecuting them under
criminal law, much less under the provisions of PC Act and the High
Court in its impugned judgment has totally glossed over these
aspects by limiting the exercise to copiously quoting various
judgments and on that basis, dismissing the petitions of the
appellants, without any discussion as to how principles contained in
those judgments is applicable in the instant case.
21) He also submitted that in the facts of the present case, simply
because chargesheet has been filed thereafter and the order taking
cognizance has been passed would not mean that the appellants
cannot prosecute these cases. He submitted that even the
chargesheet and cognizance order has been challenged by filing
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 25 of 53
Writ Petition (Criminal) No. 135 of 2017 which, according to him, is
maintainable having regard to the fact that the appeals arising out of
petitions under Section 482 of Cr.P.C. are pending in this Court and
those events happened during the pendency of these proceedings.
He referred to the the cases of Delhi Judicial Service
Association, Tis Hazari Court, Delhi v. State of Gujarat & Ors.5
and Monica Kumar & Anr. v. State of Uttar Pradesh & Ors.6,
wherein it is held that this Court has inherent power to quash FIR,
chargesheet, charges etc. in exercise of powers under Articles 32,
136 and 142 to do complete justice in a cause or matter pending
before it and that there is no restriction on this power of the Court.
According to him, the present is not a case where the appellants are
alleging that a judicial order is in violation of their fundamental rights.
The present is a case where the appellants have pleaded that:
(i) there is no criminal act on their part and the facts do not
disclose any offence;
(ii) all Officers who processed the case of the appellants are not
prosecuted;
5 (1991) 4 SCC 406
6 (2008) 8 SCC 781
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 26 of 53
(iii) two Officers Subhash Ahluwalia and T.G. Negi who processed
the case of the appellants were made Principal Secretary to CM and
Advisor to CM, respectively, by the respondent No. 2 and were not
prosecuted;
(iv) there is no criminal act on the part of the officers and they
performed their appropriate administrative duties due to which
sanction stands declined by the Central Government and the CVC;
(v) leases were validly granted as per proper procedures and in
accordance with lease rules;
(vi) FIR was registered on the basis of “Congress Chargesheet”;
(vii) investigation was personally supervised by the respondent No.
2;
(viii) chargesheet filed is the outcome of this tainted investigation;
(ix) prosecution is mala fide and vexatious to settle personal
political scores;
(x) even otherwise the State Government continues to remain
owner of the land which is on lease and on which the appellants
have constructed assets worth above 150 crores;
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 27 of 53
(xi) these assets are for use of the public of the State and are
being used as such. Further, filing of chargesheet and an order
taking cognizance is not a final judicial order. It is a preliminary
process in criminal law and is open to challenge in higher judicial
fora such as this Court.
22) Last submission of the learned senior counsel was that, in any case,
at best the matter could have been subject matter of a civil dispute
between the appellants and the respondents but has mala fidely
been given the cloak of a criminal proceeding to harass the
appellants with a mala fide prosecution. The salutary principle of
law, viz. Actus Reus Non Facit Reum Nisi Mens Sit Rea has been
erroneously ignored by the High Court and he cited the case of C.K.
Jaffer Sharief v. State7 and R. Balakrishna Pillai v. State of
Kerala8. He also pleaded that, in another politically motivated case
by respondent No. 2, the same view has been taken by the
Himachal Pradesh High Court in the case of A.N. Sharma v. State
of H.P. (Cr. MMO No. 134/2015) against which Special Leave
Petition filed by the State Government stands dismissed by this
Court. 7 (2013) 1 SCC 205
8 (2003) 9 SCC 700
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 28 of 53
23) He, thus, concluded his argument with the submission that case was
clearly covered by the judgments of this Court in State of Haryana
& Ors. v. Bhajan Lal & Ors.9 and Vineet Kumar & Ors. v. State of
Uttar Pradesh & Anr.10
24) Insofar as respondent No. 1 i.e. State of Himachal Pradesh is
concerned, learned Advocate General submitted that State has
already taken a decision not to continue with these criminal
proceedings. He, in fact, supported the case of the appellants and
submitted that State has no objection if these proceedings are
quashed. However, there was a strong opposition on behalf of
respondent No. 2 to the relief sought by the appellants and
refutation of the arguments advanced by the appellants.
25) Mr. Anoop George Chaudhary, learned senior counsel appearing for
the respondent No. 2, submitted that the Special Leave Petition was
infructuous ab initio inasmuch as chargesheet was filed against 18
accused persons out of whom only appellant No. 2 had sought
quashing thereof. It was further submitted that, in any case, on the
very day of passing impugned judgment by the High Court i.e. April
9 (1992) Supp. (1) SCC 335
10 (2017) 13 SCC 369
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 29 of 53
25, 2014, the Investigating Agency filed the challan under Section
173 Cr.P.C. and on perusal thereof, the Special Court took
cognizance vide order dated September 06, 2014 and issued
summons to the accused persons. Therefore, the Special Leave
Petition had, in any case, had become infructuous because of the
aforesaid developments. He also submitted that insofar as
appellant No. 1, namely, Himachal Pradesh Cricket Association is
concerned, it was not arrayed as accused person; no challan was
filed against it and, therefore, no cognizance was also taken.
26) Rebutting the allegations of mala fide, he submitted that because of
the irregularities committed in the allotment of land etc. by the then
Government, it was one of the issue in the Assembly Elections in the
year 2012 and the Congress had complained against the aforesaid
irregularity by stating the same with the preparation of 'Congress
Chargesheet'. That would not mean that it was out of political
vendetta. In fact, the misdeeds of earlier Government was exposed.
In any case, after 2012 elections, when the earlier Government did
not come back to power, inquiry was ordered to the affairs of
appellant No. 1 which was conducted by the Anti-Corruption Bureau
(ACB). As a result of said inquiry, FIR was registered which
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 30 of 53
culminated in filing of the challan as prima facie case was made out
by collecting requisite material. He also referred to the Constitution
Bench judgment in the case of Lalita Kumari v. Government of
Uttar Pradesh & Ors.11 as per which preliminary inquiry before
registering an FIR should be conducted to ascertain whether the
information received, reveals any cognizable offence. He submitted
that due procedure was followed in accordance with the said
judgment.
27) On merits, Mr. Chaudhary submitted that on the basis of final report
and consequently the cognizance order a clear case of
cheating/fraud criminal breach of trust/criminal
misconduct/usurpation of public land worth crores of rupees/loss to
state exchequer is made out against the accused persons. Hence,
no cogent grounds exist for quashing of criminal proceedings.
Reliance in this regard has been placed upon a judgment rendered
by this Court in Indian Oil Corporation v. NEPC India Ltd. &
Ors.12:
"12. The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to
11 (2014) 2 SCC 1
12 (2006) 6 SCC 736
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 31 of 53
quash complaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a few—Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCC 692 : 1988 SCC (Cri) 234], State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426], Rupan Deol Bajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC (Cri) 1059], Central Bureau of Investigation v. Duncans Agro Industries Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045], State of Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996 SCC (Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC 259 : 1999 SCC (Cri) 401], Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 : 2000 SCC (Cri) 615], Hridaya Ranjan Prasad Verma v. State of Bihar [(2000) 4 SCC 168 : 2000 SCC (Cri) 786], M. Krishnan v. Vijay Singh [(2001) 8 SCC 645 : 2002 SCC (Cri) 19] and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005) 1 SCC 122 : 2005 SCC (Cri) 283] . The principles, relevant to our purpose are:
(i) A complaint can be quashed where the allegations made in the complaint, even if they are taken at their face value and accepted in their entirety, do not prima facie constitute any offence or make out the case alleged against the accused.
For this purpose, the complaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry nor a meticulous analysis of the material nor an assessment of the reliability or genuineness of the allegations in the complaint, is warranted while examining prayer for quashing of a complaint.
(ii) A complaint may also be quashed where it is a clear abuse of the process of the court, as when the criminal proceeding is found to have been initiated with mala fides/malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 32 of 53
(iii) The power to quash shall not, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution.
(iv) The complaint is not required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the complaint, merely on the ground that a few ingredients have not been stated in detail, the proceedings should not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are absolutely necessary for making out the offence.
(v) A given set of facts may make out: (a) purely a civil wrong; or (b) purely a criminal offence; or (c) a civil wrong as also a criminal offence. A commercial transaction or a contractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the complaint relates to a commercial transaction or breach of contract, for which a civil remedy is available or has been availed, is not by itself a ground to quash the criminal proceedings. The test is whether the allegations in the complaint disclose a criminal offence or not."
28) Dubbing the allegations of mala fide against respondent No. 2 as
frivolous, it was argued that the High Court has rightly found no
merit therein. In any case, argued the learned senior counsel, the
High Court rightly observed that once the chargesheet is filed, such
a plea becomes redundant as held in State of A.P. v. Golconda
Linga Swamy and Anr.13 and Umesh Kumar v. State of Andhra
Pradesh & Anr.14. The learned senior counsel also questioned the
13 (2004) 6 SCC 522
14 (2013) 10 SCC 591
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 33 of 53
move on the part of State Government to withdraw the case in
question. It was argued that no fresh ground or subsequent aspect
has emerged or come in public domain for doing the same and,
therefore, such course of action was not permissible as held in
State of Tamil Nadu & Ors. v. K. Shyam Sunder & Ors.15, Andhra
Pradesh Dairy Development Corporation Federation v. B.
Narasimha Reddy & Ors.16 and State of Himachal Pradesh v.
Nishant Sareen17. Moreover, argued the learned senior counsel,
the only procedure prescribed in law was to take the route of
Section 321 of Cr.P.C. which has not happened in the instant case.
29) Replying to the arguments of the appellants that it was a civil
dispute, Mr. Chaudhary argued that FIR/Final Report clearly depicts
that there is sufficient evidence of cheating, criminal breach of
trust/criminal misconduct, conspiracy and destruction of evidence
against the accused persons, therefore, it was not merely a civil
case and, thus, the authorities have rightly registered the FIR and
filed criminal proceedings. He also argued that at the time of
cognizance, there was sanction for prosecution against all public
15 (2011) 8 SCC 737
16 (2011) 9 SCC 286
17 (2010) 14 SCC 527
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 34 of 53
servants (wherever applicable) and even if sanction is subsequently
withdrawn, it would not impact trial. It was further submitted that in
the case of two remaining accused i.e. Ajay Sharma and Deepak
Sanan, challan was not presented for want of sanction under PC
Act, as the permission seeking sanction was pending with Union
Home Ministry though sanction for IPC offences was granted by
State Government. The prosecution sanction against Gopal Chand,
an HCS Officer was initially granted but later on withdrawn without
there being any change of circumstance. The necessity of non-
grant/requirement of prosecution sanction can be decided by trial
court during the course of trial and it is not a ground for Himachal
Pradesh Cricket Association to seek quashing of entire prosecution.
30) The learned senior counsel also defended non-prosecution of Ajay
Sharma and Deepak Sanan, two IAS Officers. He specifically
pointed out that allegations in the chargesheet against appellant
No.2 which, according to him, disclosed that prima facie case was
established against him and, therefore, there was no reason to
quash the chargesheet.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 35 of 53
31) Insofar as Writ Petition (Criminal) No. 135 of 2017 is concerned, it
was argued that such a writ petition was not maintainable under
Article 32 of the Constitution, more so, when order of cognizance
had not been challenged at all. Support from the judgments in
Ujjam Bai v. State of U.P.18, Naresh Shridhar Mirajkar & Ors. v.
State of Maharashtra & Anr.19 and Northern Corporation v.
Union of India & Ors.20 was taken in this behalf. He reiterated that
there were serious allegations against the accused persons and,
therefore, no case for quashing of the chargesheet/challan was
made out.
32) Before we undertake the exercise of deliberating on the arguments
of the counsel for the parties and reach our conclusions, it would be
in the fitness of things to recapitulate the events in brief with focus
on the allegations of alleged criminality which have been fastened
upon the appellants and others. Appellant No. 1 was initially
registered as a Society under the Societies Registration Act, 1860 in
the year 1990. It is now a not for profit company incorporated under
Section 25 of the Companies Act, 1956. One of the allegations
18 (1963) 1 SCR 778
19 AIR 1967 SC 1
20 (1990) 4 SCC 239
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 36 of 53
pertains to the so-called illegalities committed in the conversion of
the society into deemed company under Section 25 of the
Companies Act, 1956. Be that as it may, the Society, after its
formation, had applied for land at Village Mauja and Tehsil
Dharamshala, District Kangra for construction of an international
cricket stadium. A proper lease was executed between appellant
No. 1 and the State of Himachal Pradesh through Director, Himachal
Pradesh Youth Services and Sports Department. It happened more
than 16 years ago. In respect of this lease, the allegation is that it
was executed at a monthly rent of Re.1/- which was allegedly done
to favour the appellants. Admittedly, proviso to Rule 8 of the Rules
empowers the State Government to adopt such a course and
decision to this effect was taken after due deliberations at a very
high level, keeping in view the necessity of such a stadium in the
State, which did not have any cricket stadium.
33) After the allotment of the land to appellant No. 1, it constructed
cricket stadium thereupon. Appellant was desirous of making a
world-class cricket stadium which could host international cricket
matches as well. For this purpose, it submitted proposal to the ICC.
The ICC got the stadium and playground inspected through Mr. Alan
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 37 of 53
Hurst, it's match referee. He inspected the stadium and submitted
his report dated September 20, 2007. The venue was not approved,
at that stage, for hosting international matches. A perusal of the
report submitted by the said referee would disclose that there were
no adequate hotel facilities in the area and, therefore, 'tour support
was lacking'. Two hotels were shown to Mr. Hurst and it was found
by him that each of them were at substantial distance from the
ground. Moreover, the facilities in the said hotels were also not
adequate. Notwithstanding the same, insofar as the cricket ground
is concerned, the match referee had lauded it for its quality and
settings. It can be seen from the general
comments/recommendations/conclusions in his report and the
relevant portion whereof reads as under:
"This ground has one of the best settings imaginable. The people involved in its development have been innovative and are passionate and visionary. They have done a great job so far in getting this ground to where it is and should be congratulated and encouraged. I have no doubt that with adequate finances, in the near future, this ground can become one of the best in the country. The idea of having a 'hotel' as an integral part of the ground with dual use as corporate boxes during games is not new, however, the circular restaurant planned for the top, with 360 deg views of the Himalayas and surrounding area will make it unique.
Having said this, I believe that at this stage there is still a lot of work to be done that relates to its suitability for staging International cricket. I am informed that sufficient finance has
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 38 of 53
recently been obtained to complete everything, and further work is now underway. I have listed below the issues I still have concerns with and things that need to be changed. If all of these things are addressed, I would have no hesitation in recommending this ground as suitable as an International ODI venue. The administrators have ensured me that all of these things will be addressed with urgency. They are extremely keen to get into the BCCI ground rotation system as soon as possible."
34) It is clear from the above that Mr. Hurst was of the view that the
cricket ground at this picturesque place with scenic beauty can be
transformed into one of the best cricket grounds in the country,
which would be suitable for international events if the deficiencies
pointed out therein are taken care of. Apart from providing other
facilities to improve the infrastructure (which could be easily taken
care of), main concern was to have a hotel as an integral part of the
ground with the dual use as corporate boxes during the game.
Because of the above, appellant No.1 felt need to construct a club
house on the lease land and also seek allotment of some other land
for the purpose of construction of a hotel, keeping in view the
observations contained in the aforesaid inspection report.
Accordingly, it sent request for promotion to construct a club house
on the lease land which was accorded by respondent No.1 through
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 39 of 53
Directorate of Youth Services and Sports on June 23, 2008 subject
to completing all the formalities.
35) As far as construction of hotel is concerned, the case of the
appellants is that there was a parcel of idle land in the middle of the
land alloted for the stadium and for allotment of this land, request
was made to the Director, Youth Services and Sports. This land
belongs to Gram Panchayat. Gram Panchayat issued no objection
for the allotment of land on September 14, 2009 pursuant to which
respondent No.1 granted approval to lease out this land in favour of
appellant No.1 on November 16, 2009 and the lease deed was also
executed on December 14, 2009. Thereafter, for the purpose of
hotel, additional land was given.
36) Pertinently, insofar as this lease deed is concerned, since the land
was to be used for commercial purpose, namely, the club house, it
provided rental at commercial rate i.e. the market rate which the
appellant No.1 was supposed to pay. After the execution of the
lease, club house was constructed and the Town and Country
Planning Department, Dharamshala also issued No Objection
Certificate for the use of part of infrastructure of cricket stadium as
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 40 of 53
club house for cricket activities. It is also pertinent to mention that
Principal Secretary (Revenue), Government of Himachal Pradesh
issued no objection for execution of supplementary lease enabling
commercial activities on additional land provided that lease money
was charged in accordance with the Lease Rules, 2011. This led to
execution of supplementary lease deed dated June 23, 2012 on
which commercial hotel was constructed after obtaining requisite
permissions.
37) From the aforesaid events, following aspects can be culled out:
Appellant No.1 has been given lease of land on which cricket
stadium was constructed and thereafter lease for additional land
meant for club house and also supplementary lease for commercial
activity i.e. the hotel. It is only in respect of the land which is meant
for cricket stadium that rental of Re.1/- per month was agreed to be
charged by invoking proviso to Rule 8. Thus, it is not contrary to
law. State of Himachal did not have any cricket ground, much less
State of art cricket ground. It is, for this reason, that the land was
given on lease for the purpose of constructing the cricket ground,
which may become pride of Himachal Pradesh, at nominal rental.
Insofar as lease in respect of club house and supplementary lease
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 41 of 53
for commercial activity (i.e. hotel) is concerned, the lease money has
been fixed in accordance with Lease Rules, 2011, namely, at
commercial rates. There can hardly be any element of criminality in
the afofresaid allotments inasmuch as six very senior officers in the
State Government (four of them of IAS Cadre and one belongs to
Himachal Pradesh Administrative Service) who had examined the
matter and only after their approval, the allotments were made.
There is no culpability attributed to them, which is a very crucial
factor.
38) What is more important is that the matter was looked into by
Director-cum-Special Secretary, Youth Services and Sports
Department as well as Secretary, Youth Services and Sports
Department and it is only after the examination of the proposal by
them and their final approval, lands in question were allotted.
39) The respondents have submitted status report before the High
Court, pursuant to the directions issued by it. As per the said status
report as well as the FIRs, allegations against the appellants and
others who are arrayed as accused persons are that appellant No.2
along with other accused indulged in illegal activities. It is alleged
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 42 of 53
that Shri R.S. Gupta, the then Deputy Commissioner, had prepared
report ignoring the report of Divisional Forest Officer who had
assessed the value of trees at Rs.50 lakhs at that time, thereby
causing wrongful loss to the Government. Further, one Shri Deepak
Sanan, the then Revenue Secretary, provided a helping hand to the
accused persons for granting permission to set up and run a
commercial hotel and the matter was not taken to the Cabinet which
was in violation of Schedule 20 of H.P. Rules of Business. It is also
alleged that Himachal Pradesh Cricket Association Society was
merged into a company just to prevent the State Government from
controlling it. These are the main allegations.
40) Insofar as other allegations are concerned, two Officers, namely,
Shri R.S. Gupta and Shri Deepak Sanan are implicated. While
doing so, other senior Officers who took active part in decision
making have not been touched.
41) In the two FIRs, seven IAS Officers, one Officer belonging to
Himachal Pradesh Administrative Service and one Executive
Engineer, Dharamshala Division in Himachal Pradesh PWD
Department played their significant role at one stage or the other.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 43 of 53
Interstingly, in the FIRs, these nine Officers were also implicated and
specific role attributed to them which has been already mentioned in
the tabulated format while recording the arguments of Mr. Patwalia.
This would demonstrate that insofar as Mr. Subhash Ahluwalia
(IAS), Director-cum-Special Secretary, Youth Services and Sports
Department is concerned, allegation against him was that he
ignored the rules and did not mention the provisions of Lease Rules,
1993. He was also signatory to lease deed dated July 29, 2002. It
is important to mention that entire FIRs proceed on the basis that
appellants conspired with these Officers, among others. The
imputation against Mr. Subhash Ahluwalia is that in fixing the rent at
Re.1/- per month, he not only ignored the rules and did not even
mention in his noting thereby implying that he was party to the
alleged conspiracy. Similar allegations are against other eight
persons as well alleging their role at different stages.
Notwithstanding the same, three Officers, namely, Subhash
Ahluwalia, Subhash Negi and T.G. Negi were not even charged on
the purported ground that there were not enough evidence and mala
fide intention. In respect of Mr. Ajay Sharma, Central Government
had declined the sanction. Though, State Government had
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 44 of 53
accorded the sanction for prosecution earlier but it has also later
withdrawn. Same is the position in respect of Deepak Sanan. Mr.
Gopi Chand, who belongs to HPAS, though the prosecution sanction
was granted earlier, in his case also, not only prosecution sanction
was withdrawn by the State Government, he has even been
promoted to IAS Cadre. In case of Mr. K.K. Pant and Mr. P.C.
Dhiman, other IAS Officers, prosecution sanction is declined. This
leaves us only Mr. Devi Chand Chauhan, Executive Engineer,
Dharamshala Division in PWD, though in his case also, prosecution
sanction was earlier rejected but subsequently granted on the
recommendation of the then Chief Minister. There are two Gram
Panchayat members, who had issued no objection for allotment of
land for club house, who have been prosecuted. These three
Officers are public servants who remain as accused persons. This
Court gets an impression that in the entire conspiracy story put up
by the prosecution, high Government officials are deliberately let off
and very junior Officers were become scapegoat in order to ensure
that a case under PC Act survives in respect of appellants as well
who are not public servants. Even otherwise, when the aforesaid
eight persons are not charged or proceeded against for want of
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 45 of 53
prosecution, this lends support to the allegations of the appellants in
imputing motives for their prosecution.
42) This Court, on a 360° scanning of the matter, arrives at the
conclusion that the elements of criminal intent or criminal acts are
lacking. Following factors do stand established from record:
(i) there is no criminal act on their part and the facts do not
disclose any offence;
(ii) none of the officers who processed the case of the appellants
are not prosecuted;
(iii) two Officers Subhash Ahluwalia and T.G. Negi who took active
part in the decision making were made Principal Secretary to CM
and Advisor to CM, respectively, by respondent No. 2 and were not
prosecuted;
(iv) As per the prosecution, there is no criminal act on the part of
the officers and they performed their appropriate administrative
duties due to which sanction stands declined by the Central
Government and the CVC. That itself is sufficient to absolve others
from any criminal prosecution;
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 46 of 53
(x) even otherwise the State Government continues to remain
owner of the land which is on lease and on which the appellants
have constructed assets worth above 150 crores;
(xi) these assets are for use of the public of the State and are
being used as such. Further, filing of chargesheet and an order
taking cognizance is not a final judicial order. It is a preliminary
process in criminal law and is open to challenge in higher judicial
fora such as this Court.
43) Insofar as conversion of Society into not for profit company under
Section 25 of the Companies Act, 1956 is concerned, it was
obviously done as per the mandate of BCCI. There can hardly be
an element of criminality therein. This Court fails to understand as
to how any criminal intent can be attributed in merging the said
society into a company, that too, to prevent the State Government
from controlling it, which is the motive attributed by the respondents
themselves. It rather shows the intent of the State Government
which wanted to grab the control of the Cricket Association. Such a
tendency on the part of the State authorities is condemned by a
Committee headed by former Chief Justice R.M. Lodha and
approved by this Court. If at all, this is a reflection upon the State
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 47 of 53
Government. It also lends credence to the submission of the
appellants that when the State Government fail to achieve the
aforesaid purpose, it went after the appellants. If at all, the subject
matter was a civil dispute between the appellants and the
respondents.
44) We may also mention that record reveals that respondent No.2
personally supervised the investigation. However, we are
eschewing the discussion as to whether chargesheet is result of
mala fide or political vendetta, since we feel that, ex facie, no case
of cheating/fraud or criminal breach of trust is made out. However,
at the same time, it would be necessary to point out that in the
proceedings filed by the appellants under Section 482 Cr.P.C.,
respondent No.2 was impleaded as the allegations of mala fides
were attributed to him. Since, we are not looking into these
allegations, respondent No.2 does not have much role to play in
these proceedings. That apart, respondent No.2 has filed counter
affidavit stating that he is not a necessary party and it is not his job
to defend the prosecution. Having regard to the stand taken by the
respondent No.1 not to prosecute these cases, even otherwise, no
purpose would be served in continuing with these proceedings.
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 48 of 53
45) In view of our aforesaid discussion, argument of respondent No.2
that the appeals have become infructuous cannot be accepted.
46) We are conscious of the scope of powers of the High Court under
Section 482 of Cr.P.C. The inherent jurisdiction is to be exercised
carefully and with caution and only when exercise is justified by the
tests specifically laid down in the Section itself. Further, inherent
power under this provision is not the rule but it is an exception. The
exception is applied only when it is brought to the notice of the Court
that grave miscarriage of justice would be committed if the trial is
allowed to proceed where the accused would be harassed
unnecessarily. If the trial is allowed to linger when prima facie it
appears to the Court that the trial could likely to be ended in
acquittal. It is, for this reason, principle which is laid down by catena
of judgments is that the power is to be exercised by the High Court
either to prevent abuse of process of any court or otherwise to
secure the ends of justice. However, whenever it is found that the
case is coming within the four corners of the aforesaid parameters,
the powers possessed by the High Court under this provision are
very wide. It means that the Court has to undertake the exercise
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 49 of 53
with great caution. However, the High Court is not to be inhibited
when the circumstances warrant exercise of such a power to do
substantial justice to the parties. This provision has been eloquently
discussed in Bhajan Lal's case which has become locus classicus.
Principle Nos. (i) and (ii) of Indian Oil Corporation are, therefore,
become applicable. The entire subject matter has been revisited in
a recent judgment in Vineet Kumar and some of the discussion
therein which takes note of earlier judgments is reproduced below:
"26. A three-Judge Bench in State of Karnataka v. M. Devendrappa [State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri) 539] had the occasion to consider the ambit of Section 482 CrPC. By analysing the scope of Section 482 CrPC, this Court laid down that authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice the Court has power to prevent abuse. It further held that Court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. The following was laid down in para 6: (SCC p. 94)
“6. … All courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in course of administration of justice on the principle quando lex aliquid alicui concedit, concedere videtur et id sine quo res ipsae esse non potest (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the section, the court does not function as a court of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 50 of 53
the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone courts exist. Authority of the court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the court has power to prevent abuse. It would be an abuse of process of the court to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers court would be justified to quash any proceeding if it finds that initiation/continuance of it amounts to abuse of the process of court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.”
27. Further in para 8 the following was stated: (Devendrappa case [State of Karnataka v. M. Devendrappa, (2002) 3 SCC 89 : 2002 SCC (Cri) 539] , SCC p. 95)
“8. … Judicial process should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of a private complainant to unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any court or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426].”
In the instant case, the High Court simply noted those
judgments which put a note of caution in exercising the powers
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under Section 482 Cr.P.C. to quash such proceedings and
dismissed the petition with a shallow examination of the case,
thereby glossing over the material facts (which are noted
hereinabove) and failing to examine that these pertinent aspects
were sufficient to demonstrate that no criminal case was made out,
particularly when all the concerned officers, who had taken the
decision, were let off on the ground that they had not committed any
wrong.
47) As far as Writ Petition (Criminal) No. 135 of 2017 is concerned, the
appellants came to this Court challenging the order of cognizance
only because of the reason that matter was already pending as the
appellants had filed the Special Leave Petitions against the order of
the High Court rejecting their petition for quashing of the
FIR/Chargesheet. Having regard to these peculiar facts, writ petition
has also been entertained. In any case, once we hold that FIR
needs to be quashed, order of cognizance would automatically
stands vitiated.
48) As a consequence, criminal appeals are allowed thereby setting
aside the impugned judgment of the High Court, allowing the petition
Criminal Appeal Nos. 1258-1259 of 2018 & Anr. Page 52 of 53
filed by the appellants under Section 482 Cr.P.C. and quashing the
FIR No. 12 of 2013 dated August 01, 2013 under Sections 406, 420,
120B of the IPC and Section 13(2) of the PC Act and FIR No.14 of
2013 dated October 03, 2013 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. In view thereof,
writ petition also stands disposed of accordingly.
No order as to cost.
.............................................J. (A.K. SIKRI)
.............................................J. (ASHOK BHUSHAN)
NEW DELHI; NOVEMBER 02, 2018.
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