Vide the impugned orders, the High Court has stayed the proceedings of the FIRs registered against the concerned respondents-accused as also stayed the proceedings of ECIR No.-ECIR/HIU-I/06/2023 registered by the Directorate of Enforcement against the concerned respondents, and further directed not to take any coercive action against the said respondents pending the said writ petitions. 2,801 crores to the Shipra Group/
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Borrowers comprising of Shipra Hotels Ltd., Shipra Estate Ltd.
A pledge agreement was also entered into by Shipra Groups and M/s Kadam with IHFL pledging 100% equity shares (dematerialized) of M/s Kadam to secure the loan. IHFL on 01.07.2021 ultimately sold the shares of M/s
Kadam pledged with it to one Final Step Developers P. Ltd) had no source of funds of its own, the funds to purchase the shares of M/s
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Kadam were provided to the Final Step Developers by the M3M India, which managed to take loan from the IHFL on the same day i.e.
for the offences under Sections 420, 467, 468, 471 6 and 120-B at Police Station Beta-2, Greater Noida alleging inter alia that the first charge of YEIDA was preserved in the permission issued on 09.01.2018 for pledging the shares to IHFL however, the IHFL neither informed nor sought any permission of YEIDA before transferring the shares of M/s Kadam to M3M India. On 22.07.2023, yet another FIR being No 611 of 2023 came to be filed by one Mohit Singh, authorized representative of Shipra Group, against Reena Bagga in her capacity as an authorized officer of IHFL and others for the offences under Section 420, 120B IPC and 82 of Registration Act at Police Station Kavi Nagar, Ghaziabad, alleging therein that “Shipra Mall”, which formed a part of the properties mortgaged with IHFL, had been sold in pursuance of recovery proceedings on the basis of false and fabricated documents, for a sum of Rs. Further FIR No 197/2023 dated 15.04.2023 was filed by YEIDA at PS Beta-2, Greater Noida, UP, which also refers to the 8 aforesaid FIR No 427/2023 dated 09.04.2023 registered at P.S.
In the circumstances, as it may also involve adjudication on facts, we deem it appropriate to permit the petitioners to approach the respective jurisdictional High Courts to challenge all four FIRs and the ECIR within two weeks from today, with a request to the respective High Courts to consider and decide the petitions expeditiously, not later than six months of their presentation. In so far as the further FIR No 197/2023 dated 15.04.2023 filed by YEIDA and ECIR bearing No ECIR/HIU-I/06/2023 are concerned, no coercive steps would be taken against the petitioner financial institution and its officers, representatives and managers till final disposal of such petitions by the High Court, and it would be open for the petitioners to seek stay of proceedings which would be considered by the High Court on its own merits. Similarly, the respondent Reena Bagga and IHFL filed another writ petition being Criminal Miscellaneous Writ Petition No 11837/2023 seeking quashing of the FIR being No.611/2023 registered against them as also all the consequential actions taken by any authority/agency in pursuance to the said FIR. The High Court passed the other impugned orders on 08.08.2023 in Criminal Miscellaneous Writ Petition No.11837/2023 and on 13.09.2023 in Criminal Miscellaneous Writ Petition No.14053/2023, following the order dated 13.07.2023 passed in Writ Petition No.10893/2023.Consequently, the proceedings of the FIR No.197/2023, FIR No.611/23 as also the ECIR No ECIR/HIU-I/06/2023 have been stayed qua the concerned respondents herein pending the said three writ petitions before the High Court, and the concerned respondents who are the accused in the said FIRs have been protected from any coercive action being taken against them.
Raju appearing for the appellant ED in all the three appeals vehemently submitted that this Court had passed the order dated 04.07.2023 in Gagan Banga’s case staying the proceedings of ECIR and the FIRs registered against the concerned respondents without hearing the ED, and therefore the ED has filed a Review Petition, which is pending before this Court.
They further submitted that the High Court taking into consideration the order passed by this Court in Gagan Banga’s case had rightly protected the financial institution and its officers who had discharged their duties for the recovery of the dues from the borrowers. Mahesh Cooperative Urban Bank Shareholders Welfare Association vs Ramesh Kumar Bung and Others, to submit that even in case of Neeharika Infrastructure (supra), the discretion has been conferred on the High Court to pass the interim orders in exceptional cases for not taking coercive steps against the accused pending the proceedings, particularly when the proceedings under the SARFAESI Act were initiated against the borrowers. Without undermining the powers of the High Court under Section 482 of Cr.PC to quash the proceedings if the allegations made in the FIR or complaint prima facie do not constitute any offence against the accused, or if the criminal proceedings are found to be manifestly malafide or malicious, instituted with ulterior motive etc., we are of the opinion that the High Court could not have stayed the investigations and restrained the investigating agencies from investigating into the cognizable offences as alleged in the FIRs and the ECIR, particularly when the investigations were at a very nascent stage.
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In a way, by passing such orders of staying the investigations and restraining the investigating 14 agencies from taking any coercive measure against the accused pending the petitions under Section 482 Cr.PC, the High Court has granted blanket orders restraining the arrest without the accused applying for the anticipatory bail under Section 438 of Cr.PC.
33.2. It is only in cases where no cognizable offence or offence of any kind is disclosed in the first information report that the Court will not permit an investigation to go on. Save in exceptional cases where non-interference would result in miscarriage of justice, the Court and the judicial process should not interfere at the stage of investigation of offences.
When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482CrPC, only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR. The High Court shall not and as such is not justified in passing the order of not to arrest and/or “no coercive steps” either during the investigation or till the investigation is completed and/or till the final report/charge-sheet is filed under Section 173CrPC, while dismissing/disposing of the quashing petition under Section 482CrPC and/or under Article 226 of the Constitution of India. Whenever an interim order is passed by the High Court of “no coercive steps to be adopted” within the aforesaid parameters, the High Court must clarify what does it mean by “no coercive steps to be adopted” as the term “no coercive steps to be adopted” can be said to be too vague and/or broad which can be misunderstood and/or misapplied.”
Case Title: DIRECTORATE OF ENFORCEMENT Vs. NIRAJ TYAGI (2024 INSC 106)
Case Number: Crl.A. No.-000843-000843 / 2024
