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Star Coal (India) Private Limited & Others v/s State of Gujarat & Others

Company & Directors' Information:- STAR INDIA PRIVATE LIMITED [Active] CIN = U72300MH1994PTC076485

Company & Directors' Information:- STAR COAL (INDIA) PRIVATE LIMITED [Active] CIN = U51909TN2005PTC057166

Company & Directors' Information:- S C I INDIA LIMITED [Active] CIN = U24110BR1984PLC001994

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- GUJARAT COAL PRIVATE LIMITED [Active] CIN = U23101GJ2008PTC055293

Company & Directors' Information:- STAR COMPANY LIMITED [Strike Off] CIN = U67120WB1927PLC005620

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- STAR T V PRIVATE LIMITED [Strike Off] CIN = U51395UP1985PTC007023

Company & Directors' Information:- STAR OF INDIA LIMITED. [Strike Off] CIN = U99999CH1946PLC001119

Company & Directors' Information:- A. S. STAR PRIVATE LIMITED [Active] CIN = U74999RJ2016PTC056637

Company & Directors' Information:- STAR O & M PRIVATE LIMITED [Active] CIN = U74999DL2015PTC281303

Company & Directors' Information:- K. D. STAR PRIVATE LIMITED [Active] CIN = U45201GJ2011PTC067973

Company & Directors' Information:- STAR LTD. [Dissolved] CIN = U99999MH1921PTC000957

    Special Criminal Application (Quashing) Nos. 825 of 2014 & 1459 of 2014

    Decided On, 15 March 2016

    At, High Court of Gujarat At Ahmedabad


    For the Appellants: P.M. Thakkar, Senior Advocate, P.P. Majmudar, Advocate. For the Respondents: -------------

Judgment Text

1 Since the relief prayed for in both the captioned writ applications is to quash the selfsame First Information Report, those were heard analogously and are being disposed of by this common judgment and order.

2 The writ applicants before me have prayed for the following reliefs:

"27 (A) Your Lordships be pleased to quash and set aside the F.I.R. being C.R. No. I-45 of 2014 registered at A-Division Police Station Gandhidham, Dist. Kachchh (At Annexure-A hereto) as well as all consequential proceedings pursuant to the aforesaid F.I.R.;

(B) During pendency and final disposal of the present petition, Your Lordships may be pleased to stay further proceedings of F.I.R. being C.R. No. I-45 of 2014 registered at A-Division Police Station, Gandhidham, Dist. Kachchh (At Annexure-A hereto);

(C) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case;"

2. The case of the prosecution may be summarized as under:

2.1 The respondent No. 2 lodged a First Information Report being C.R. No. I-45 of 2014 on 15th February, 2014 with the 'A' Division Police Station, Gandhidham, District: Kachchh inter alia stating that he resided at Bhuj and owns agricultural land situated in village : Reldi, Taluka: Bhuj, District: Kutch. After the devastating earthquake of 2001 which destroyed the Kutch extensively, the Central Government introduced a scheme to promote the industrialization. The object of floating such a scheme was to rehabilitate the entire region of Kutch. It is the case of the first informant that he is engaged in the business of identifying the land suitable for the industrial purpose. He would show lands to the parties interested and help them in buying such parcels of land. He is also engaged in the business of purchasing parcels of land at reasonable rates for the persons who are desirous of putting up the industries in Kutch.

2.2 One Star Coal (India) Private Limited having its registered office at Chennai was interested in purchasing land which containing Bauxite.

2.3 It is his case that one Mubarak Hussein Habib Mohammad, Director and authorized person of the company along with one Dilip Premnarayan Kabra of Shri Laxmi Trading Company having its office at Ville Parle West, Mumbai, met him at Gandhidham, as Star Coal (India) Private Limited was interested in buying a huge parcel of land.

2.4 It is his case that he consulted the Geologist and tried to identify the land containing Bauxite. After identifying such parcel of land, he showed the same to the authorized person of the company and Shri Kabra.

2.5 The first informant, thereafter, contacted the respective owners of the land and ascertained whether they were interested to sell the land or not. Most of those were his personal friends.

2.6 A Memorandum of Understanding was arrived at duly signed by the first informant as well as Shri Kabra. According to the Memorandum of Understanding, a sale deed for the land admeasuring 1568 Acres was to be executed at the rate of Rs. 1,75,000/- (Rupees One Lakh Seventy Five Thousand only) per Acre. Thus, in all, the total sale consideration was fixed at Rs. 27,44,00,000/- (in words : Rupees Twenty Seven Crores Forty Four Lakh only). The first informant had made himself very clear that he would purchase the land from the farmers in his own way, and would also incur the risk in the said transaction.

2.7 It is his case that he was paid Rs. 2,70,00,000/- (Rupees Two Crore Seventy Lac only) at the time of MoU. The said amount was towards the stamp duty, registration, etc. The balance amount of Rs. 24,74,00,000/-(Rupees Twenty Four Crore Seventy Four lac only) was to be paid after the sale deed was executed in favour of the company.

2.8 According to the first informant, he kept on purchasing the land from the different owners. He also executed sale deeds in favour of the owners by investing his own money.

2.9 When time came for payment of the balance consideration, the same was not paid.

2.10 In the F.I.R., the first informant has further stated as under:

"I demanded the outstanding consideration money from the accused persons, but the accused persons assured me that they will make payment of the entire amount together. But, if amount if paid by cheque to the original owner in the deed, only then such deeds will be considered valid in the audit of our company. Cash transaction will not be permitted during the audit of the company. Therefore, in reality the deeds were executed after paying cash amount to the owners of the agricultural land, who were my friends and relatives. But in the deeds, I had mentioned the cheques of my account as the consideration money, because the company was to pay me this purchase amount by cheque. The owners of agricultural land mentioned on page No. 9 and 10 of this application were paid money and deeds were prepared in the name of the company. Mubarak Hussein Mohammad, Director and authorized by the company, made signature in these deeds as purchaser. A meeting of the Directors of Star Coal (India) Pvt. Ltd. was convened for purchase of this land on 10.06.2008 and it was declared therein that the land has to be purchased by Ahmed Suleman and Mubarak Hussein Habib Mohammad through Dilip Kabra of Shri Laxmi Trading Company. Thus, Mubarak Hussein Habib Mohammad and Dilipbhai Kabra were the authorised persons of Star Coal (India) Pvt. Ltd. and Ahmed Hussein Habib Mohammad, main Director of Star Coal (India) Pvt. Ltd. made signatures. The deeds and details of payment are as per page No. 9 and 10 of the application."

"In accordance with above, registered sale deeds were made in the name of company till 13.04.2010, but company directors did not pay amount to us. As such assurance was given that entire amount will be paid together, accused persons stated that this amount is ordinary for this company. The turn over of our company was two thousand crores, but Dilipbhai Kabra told me that company Director instructed not to make payment till documents for 1568 Acres are not produced, and I will get amount altogether. I purchased land for less than Rs. 1,75,000/- and it was not affordable for me to invest. After believing Directors of the company and Dilipbhai Kabra, out of fear, the sale deed of remaining land admeasuring 1262 Acre was executed in the name of my friends and requested to pay the amount as per the sale deed."

2.11 It is his case that he contacted Mr. Kabra, who in turn, instructed him to deposit the cheques, but on inquiry, it was revealed that the account was closed, i.e. the account maintained by Shri Kabra in the name of his company.

2.12 It is his case that he invested in all Rs. 24,74,00,000/- (Rupees Twenty Four Crores Seventy Four Lakh only) relying upon the assurance given by Mr. Kabra, but the conditions of MoU remained unfulfilled.

3. It appears that on 5th March, 2014, the following order was passed:

"It is contended that dispute is purely of civil nature and in fact while executing agreement to sell, the petitioner company has parted with huge sum of Rs. 2.70 Crores in favour of complainant and Rs. 2.00 Crores in favour of accused No. 4, who is broker. It is also contended that for the very piece of land, civil litigation was also initiated which has ultimately been disposed of on compromise.

Considering the above aspects, RULE. Ad-interim-relief in terms of paragraph No. 27(B). Learned APP waives service. Direct Service is permitted."

4. The very same order was passed on 15th April,, 2014 in the connected application being the Special Criminal Application No. 1459 of 2014 filed by the applicant accused - Dilip Premnarayan Kabra.

5. Mr. P.M. Thakkar, the learned senior advocate appearing for Star Coal (India) Private Limited and its office bearers submitted that the Board of Directors of the company had resolved that the land be purchased through Shri Laxmi Trading Corporation Agro Sales Limited, Mumbai, managed by Mr. Kabra. Mr. Kabra also received an advance amount from the company to the tune of Rs. 2.60 Crore. The amount was deposited in the account of Shri Kabra maintained with the Oriental Bank of Commerce, Mumbai.

6. Mr. Thakkar further pointed out that it is Mr. Kabra, who messed up the entire transaction, and that too after pocketing about Rupees five Crore. He submitted that even after investing Rupees Five Crore, his clients have not been able to derive any clear title of any parcel of land. All the sale deeds are between the original owners of the land and Mr. Kabra. The company has no document worth the name executed in its favour for any parcel of land.

7. According to Mr. Thakkar, there is no case worth the name against his clients and the investigation by the police will be nothing, but an abuse of the process of law.

8. Mr. Vora, the learned counsel appearing for the applicant (original accused No. 2), namely, Mr. Kabra of the connected application being the Special Criminal Application No. 1459 of 2014, submitted that the dispute is purely of a civil nature. He submitted that even if the entire case of the first informant is accepted as true, none of the ingredients to constitute the offence of cheating or criminal breach of trust are spelt out.

9. On the other hand, both the writ applications have been vehemently opposed by Mr. Y.N. Ravani, the learned advocate appearing for the respondent No. 2 - first informant and by the learned Additional Public Prosecution appearing for the respondent No. 1 - State of Gujarat. They submitted that the police should be permitted to complete the investigation in accordance with law. They submitted that plain reading of the First Information Report discloses commission of a cognizable offence.

10. Having heard the learned counsel appearing for the parties and having considered the materials on record, prima facie, it appears that the company was interested in buying the parcels of land situated in the region of Kachchh containing rich Bauxite. It appears that the accused of the connected matter entered into a transaction with the first informant. It is evident from page - 113 of the paper book that an amount of Rs. 2,60,00,000/- (Rupees Two Crore Sixty Lac only) was transferred in the account of Shri Kabra. The document at page - 113 would indicate that Star Coal (India) Private Limited instructed its Banker to debit the amount and transfer the fund in the account of LTC Agro Sales Ltd. i.e. the company managed by Mr. Kabra. In the same manner, thereafter, again, on 17th May, 2011, Rs. 2 Crore (Rupees Two Crore only) were transferred in the account of Mr. Kabra by the company.

11. It is not in dispute that, till this date, not even a small parcel of land has been transferred in favour of the company. In fact, there is no privity of contract between the company and the first informant and the owners of the different parcel of land. After investing more than Rs. 5 Crore (Rupees Five Crore), the entire transaction seems to have failed. It also appears that the cheques, which were issued by the accused, namely, Mr. Kabra, could not be encashed by the first informant as the account was found

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to be closed. 12. I am of the view that more than a prima facie case is made out against the accused of the Special Criminal Application No. 1459 of 2014 and the police should be permitted to proceed ahead with the investigation. So far as the accused persons of the Special Criminal Application No. 825 of 2014 are concerned, no case is made out against them. 13. In the result, the Special Criminal Application No. 825 of 2014 is allowed. The First Information Report bearing C.R. No. I-45 of 2014 registered with the 'A' Division Police Station, Gandhidham, District: Kachchh for the offence punishable under Sections 406, 420, 120B and 507(2) of the Indian Penal Code is, hereby, ordered to be quashed so far as the company and its office bearers are concerned. Consequently, all further proceedings pursuant thereto stand terminated qua the applicants of the Special Criminal Application No. 825 of 2014. Rule is made absolute. 14. So far as the Special Criminal Application No. 1459 of 2014 is concerned, the same is rejected. Rule is discharged. The ad-interim relief granted in terms of para - 17(B) is vacated forthwith. The police shall complete the investigation and file an appropriate report in accordance with law.