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REPORTABLE     

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.  687         OF 2014 (Arising out of S.L.P. (Crl.) No. 2634 of 2013)

Homi Rajvansh               .... Appellant(s)

Versus

State of Maharashtra & Ors.               ....  Respondent(s)

J U D G M E N T

P.Sathasivam, CJI.

1) Leave granted.

2) The above appeal  is  filed against  the final  impugned  

judgment and order dated 29.06.2012 passed by the High  

Court of Judicature at Bombay in Criminal Writ Petition No.  

220 of 2010 wherein the High Court quashed the criminal  

proceedings  against  Alok  Ranjan-Respondent  No.3  herein  

(writ petitioner in the High Court) in C.C. No. 1036/CPW/2008  

pending  before  the  Metropolitan  Magistrate,  19th Court,  

Esplanade, Mumbai.   

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3) Brief facts:

(a) The appellant, an Indian Revenue Service Officer, joined  

National  Agricultural  Co-operative  Marketing  Federation  of  

India  Ltd.  (NAFED),  on  deputation  on  15.07.2003  as  an  

Executive Director.   

(b) On  01.10.2003,  Respondent  No.3  herein–Alok  Ranjan  

took  over  the  charge  as  the  new  Managing  Director  of  

NAFED and he approved  the  1st Non-agricultural  tie-up  of  

NAFED on 13.10.2003 in order to diversify NAFED’s business  

activities to  cope up from severe financial  crunch so that  

income from other  businesses can compensate the losses  

being made on trading of agricultural items.  Respondent No.  

3  participated  in  all  the  meetings  and  approved  all  the  

transactions  entered  into  with  M/s  Swarup  Group  of  

Industries (SGI) for the above said purpose.

(c) On  20.04.2004,  when  the  Respondent  No.  3  was  

scheduled  to  go  for  an  international  tour  to  Beijing,  the  

appellant  was  made  the  officiating  Managing  Director  for  

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21.04.2004  to  27.04.2004  in  order  to  attend  all  urgent  

matters.

(d) In  January  2006,  a  public  interest  litigation  was  filed  

against NAFED before the Delhi High Court on the allegations  

of  misappropriation  of  funds  by  its  officials  in  non-

agricultural business.  The Government of India, in its reply,  

stated that CBI enquiry will be conducted.  In the affidavit  

filed  by  NAFED,  it  was  again  reiterated  that  all  the  

transactions were bona fide.

(e) Anticipating pressure of CBI, Respondent No. 3 directed  

Mr. M.V. Haridas, Manager (Vigilance and Personnel) to lodge  

a complaint against SGI and, accordingly, a complaint was  

lodged  before  the  CBI  Economic  Offences  Wing  (EOW),  

Mumbai.   

(f) The CBI filed a charge-sheet dated 15.12.2008 against  

the appellant herein and Respondent No.3 along with other  

accused  for  committing  offence  under  Section  120B  read  

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with Sections 409, 411,420, 467, 468 and 471 of the Indian  

Penal Code, 1860 (in short ‘the IPC’).

(g)  At this stage, Respondent No.3 preferred a petition being  

Criminal Writ Petition No. 220 of 2010 for discharge before  

the High Court under Section 482 of the Code of Criminal  

Procedure,  1973  (in  short  “the  Code”)  read  with  Article  

226/227 of the Constitution of India.   

(h) By impugned order dated 29.06.2012, the High Court  

accepted the case of Respondent No.3 herein and allowed  

his petition.   

(i) Being aggrieved by the impugned judgment of the High  

Court,  the  appellant  moved  before  this  Court.   Since  the  

appellant herein was not a party before the High Court, this  

Court, by order dated 19.03.2013, granted him permission to  

file special leave petition.

4)  Heard Mr. Shekhar Naphade, learned senior counsel for  

the appellant, Mr. P.P. Malhotra, learned Additional Solicitor  

General  for  Respondent  No.2-CBI,  Mr.  Kailash  Vasdev,  

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learned senior counsel for the contesting Respondent No.3  

and Ms. Asha Gopalan Nair, learned counsel for the State of  

Maharashtra.

Contentions:

5) Mr.  Shekhar  Naphade,  learned senior  counsel  for  the  

appellant,  after  taking us through the charge sheet dated  

15.12.2008 filed before the Special Judge, CBI, bye-laws of  

NAFED and impugned order of the High Court, submitted as  

under:  

(i) the High Court erred in quashing the complaint against  

Respondent No.3 without hearing the appellant herein, who  

is a co-accused in the case;   

(ii) the  High  Court  had over  exercised  its  jurisdiction  by  

holding a summary trial on facts, which is contrary to the law  

laid down by this Court in catena of judgments;

(iii) the  High  Court  committed  an  error  in  coming  to  a  

finding against the appellant without the appellant being a  

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party  in  the  writ  petition  filed  by  respondent  No.3  herein  

before it;

(iv) the High Court committed an error in agreeing with the  

submissions of Respondent No.3 herein without affording an  

opportunity of being heard to the appellant; and

(v) the  adverse  findings  against  the  appellant  in  the  

impugned judgment would affect the trial, and hence prayed  

for quashing of the same.

6) On the other hand, Mr. Kailash Vasdev, learned senior  

counsel for Respondent No.3 submitted that in the absence  

of  specific  material  in  the  charge-sheet  about  the  role  of  

respondent No.3, the High Court is fully justified in quashing  

the criminal case and discharging him.  He further submitted  

that there is no categorical finding against the appellant and  

the High Court has merely reproduced what is stated in the  

charge sheet and nothing more.   

7) We have carefully considered the rival submissions and  

perused the relevant materials.

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Discussion:

8) In  view  of  our  proposed  decision  and  the  ultimate  

direction which we are going to issue at the end, there is no  

need to traverse all  the factual  details.   We have already  

noted  the  role  of  the  appellant,  Respondent  No.3  and  

Respondent No.4.  A careful consideration of the bye-laws of  

the  NAFED  also  makes  clear  the  separate  role  of  the  

accused.  It is not in dispute that in the writ petition filed by  

Respondent  No.3  before  the  High  Court  for  quashing  the  

criminal proceedings, the appellant herein was not shown or  

impleaded as one of the parties.  On the other hand, the role  

of the appellant herein was specifically contended before the  

High Court  at  several  places and,  in  categorical  terms,  in  

paragraph 10 of the impugned order, which is as under:

“………..According to the learned counsel, the loss that has  been caused, is attributable to the subsequent MOU dated  24.4.2004, entered into between NAFED and M/s Swarup  Group of Industries, which was signed by the accused No.2  

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–  Homi  Rajvansh,  who  was  the  then  Divisional  Head  of  Finance and Accounts and tie up business in NAFED.  It is  submitted that it is the case of the investigating agency  itself, that the said MOU was signed by the accused No.2 –  Homi Rajvansh, without the approval  of the petitioner or  without  his  knowledge.   The  said  MOU neither  has  any  quantitative nor any value restrictions.  It is submitted that  the  collateral  security  which  had  been  provided  in  the  earlier  MOU,  was  totally  missing in  this  MOU.   Not  only  that, but various relevant clauses appearing in earlier MOU  protecting and securing the interest of NAFED were either  deleted or modified without information to the petitioner.  It  is  submitted that  though the  allegation  in  the  charge  sheet is that the accused No.2 – Homi Rajvansh made such  huge disbursement of funds worth Rs.235 crores, without  taking  approval  of  the  Managing  Director,  i.e.,  the  petitioner,  strangely,  the  Managing  Director,  i.e.,  the  petitioner   has  been  held  responsible  for  such  disbursement and has been made an accused in the case.”

9) Apart from the above contentions, the charges levelled  

by the investigating agency against the accused persons in  

the police report were also highlighted.

10) The  High  Court,  after  adverting  to  the  above  

contentions, arrived at the following conclusion:

“There is great substance in the contention advanced by  the learned counsel for the petitioner.  The allegation that  the accused No.2 – Homi Rajvansh, committed the acts in  question  without  the approval  of  the Managing Director,  i.e.,  the  petitioner  and  without  informing  him  and  the  allegation that the Managing Director, i.e., the petitioner is  responsible  for  the  said  acts,  cannot  go  hand  in  hand  together.   Surely,  if  the  case  is  that  Homi  Rajvansh  committed  these  illegalities  without  informing  the  Managing  Director,  as  was  required  and  without  his  permission,  as  was  necessary,  then  the  responsibility  of  such acts (which were done without the permission of and  

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the information to the petitioner),  cannot be fastened on  the petitioner.  This is so obvious, that it does not need any  further elaboration.”

11) Again in paragraph 17, in categorical terms, the High  

Court has concluded as under:

“…….Significantly,  so  far  as  the  accused  No.2—Homi  Rajvansh  is  concerned,  the  investigation  could  establish  that he had acquired huge properties  from the ill-gotten  wealth……”

12) In paragraph 22,  the High Court arrived at a specific  

conclusion  against  the  appellant  herein  which  reads  as  

under:

“Further,  the  allegations  leveled  against  the  petitioner  about  he being in  collusion  with  the accused No.2-Homi  Rajvansh,  are  in  conflict  with  the  allegations  that  have  been levelled  against  the  accused No.2.   It  has  already  been seen that the allegations that the said accused No.2,  Homi Rajvansh, did certain wrongs without the permission  of  the petitioner and behind his  back,  and that the said  Homi Rajvansh and the petitioner had conspired to commit  the said wrongs, cannot go hand in hand together. Indeed,  the allegations against the co-accused Homi Rajvansh are  supported by material  in the charge sheet, but the very  absence  of  such  material,  so  far  as  the  petitioner  is  concerned,  renders  the  theory  of  the  petitioner  being  a  party to the alleged conspiracy, unacceptable.”

13) The  perusal  of  the  contentions  of  Respondent  No.3  

herein-the  writ  petitioner  in  the  High  Court  and  the  

categorical  findings  followed  by  conclusion  not  only  

exonerated  Respondent  No.3  herein  from  the  criminal  

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prosecution  but  also  reinforce  the  allegations  levelled  

against the appellant herein, who was admittedly not a party  

before the High Court.

14)  It is settled law that for considering the petition under  

Section 482 of the Code, it is necessary to consider as to  

whether the allegations in the complaint  prima facie make  

out  a  case  or  not  and  the  Court  is  not  to  scrutinize  the  

allegations  for  the  purpose  of  deciding  whether  such  

allegations are likely to be upheld in trial.   

15) The  High  Court  committed  an  error  in  quashing  the  

complaint  against  Respondent  No.3  without  hearing  the  

appellant  herein who is  a  co-accused in the case as their  

alleged roles are interconnected.   The High Court committed  

an error in coming to a finding against the appellant without  

the  appellant  being  a  party  in  the  writ  petition  filed  by  

Respondent No.3.  In fact, the perusal of the impugned order  

clearly  shows that  the High Court  simply agreed with  the  

submissions of Respondent No.3 against the appellant herein  

without giving him an opportunity of being heard.   

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16) We are satisfied that the High Court, in the impugned  

order,  over  exercised  its  jurisdiction  which  is  complete  

violation of principles of natural justice since the appellant,  

who  is  a  co-accused,  was  not  heard  on  the  allegations  

levelled against him by Respondent No.3 herein.   

17) Though  the  High  Court  possesses  inherent  powers  

under Section 482 of the Code, these powers are meant to  

do  real  and  substantial  justice,  for  the  administration  of  

which alone it exists or to prevent abuse of the process of  

the court.   This Court,  time and again,  has observed that  

extraordinary power should be exercised sparingly and with  

great care and caution.  The High Court would be justified in  

exercising the said power when it is imperative to exercise  

the same in order to prevent injustice.

18) Inasmuch  as  admittedly  the  appellant  was  not  

impleaded/shown  as  one  of  the  parties  before  the  High  

Court, the specific finding against his alleged role, based on  

the submissions of Respondent No.3 herein without giving an  

opportunity of being heard, cannot be sustained.

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19) In  the  light  of  what  is  stated  above,  the  impugned  

judgment dated 29.06.2012 in Criminal Writ Petition No. 220  

of 2010 is set aside and the matter is remitted to the High  

Court for fresh disposal.   

20) In view of our conclusion, the appellant herein – Homi  

Rajvansh be impleaded as Respondent No. 4 in Criminal Writ  

Petition No. 220 of 2010 and we request the High Court to  

hear the matter afresh after affording opportunity to all the  

parties including the newly impleaded party, and dispose of  

the same as  expeditiously  as  possible  preferably  within  a  

period of six months from the date of receipt of copy of this  

judgment.

21) The appeal is allowed on the above terms.

       ………….…………………………CJI.              (P. SATHASIVAM)                                  

   .………….……………………………J.               (RANJAN GOGOI)  

   .………….……………………………J.   

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           (N.V. RAMANA)  NEW DELHI; MARCH 27, 2014.

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