20 Jul 2121

In exceptional situations, an interim protection order might be issued if the reasons are concise and legitimate - Supreme Court of India

Case : A P Mahesh Cooperative Urban Bank Shareholders Welfare Association v. Ramesh Kumar Bung and Ors. Special Leave Petition (Criminal) No. 3869 of 2021 With Special Leave (Criminal) No. 3875 of 2021

Court : Supreme Court of India

Bench : Justice Indira Banerjee and Justice V. Ramasubramanian

Decided on : 20 Jul 2121

The Relevant Statutes

Section156(3), 91, 482 of the Code of Criminal Procedure, 1973

Sections 409, 420, 467, 468, 471, 477A, 120 B of Indian Penal Code, 1860

Section 84 of Multi­-State Cooperative Societies Act, 2002

Brief Facts & Procedural History

1. The petitioner filed two complaints against the Respondents 1 to 3 in the file of the III Additional Chief Metropolitan Magistrate in Hyderabad. The learned Magistrate issued an order under Section 156(3) of the Code of Criminal Procedure, 1973 instructing the police to register cases and conduct investigations, and the police filed two First Information Reports as a result of the order (FIR).

2. The accused in those two complaints, Respondents 1 to 3, were identified as I Presently Chairman and erstwhile Senior Vice Chairman; (ii) Managing Director and CEO; and (iii) Presently Vice Chairman and erstwhile Chairman of A.P. Mahesh Cooperative Urban Bank in those two complaints. The petitioner accused the Respondents 1 to 3 of violating Sections 409, 420, 467, 468, 471, and 477A of the Indian Penal Code, 1860, as well as Section 120B of the Indian Penal Code, 1860. At this point, it's important to understand that the Cooperative Bank in question is a multi-state cooperative society controlled by the Multi-State Cooperative Societies Act of 2002.

3. The Respondents Nos. 1 to 3, in this case, filed two criminal petitions under Section 482 of the Code of Criminal Procedure, 1973 shortly after the criminal charges were filed, seeking to have the criminal complaints dismissed. In FIR, the Respondents 1 to 3 asked for a temporary stay of all further actions, including their detention, pending the outcome of the criminal charges.

4. The petitioner was placed as the second respondent in the quash petitions, therefore the motions for a stay in I.A. Nos. 1 and 1 of 2021 were vigorously fought by the petitioner herein.

6. The High Court issued a reasoned decision granting a stay of all further proceedings in both complaints after hearing the Respondents 1 to 3 (persons charged) and the petitioner (de facto complainant). The petitioner has filed the aforementioned SLPs in defiance of the stated ruling.

7. The petitioner, who was aggrieved by the High Court judgment, filed the current appeal.

The Issue(s) of the Case

Whether the order passed by the High Court for the State of Telangana in two interlocutory applications granting a stay of all further proceedings including the arrest of the Respondents 1 to 3 valid?

The Observations of the Court/Commission

1. Referring to the case of Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra & Others (2021) SCC Online SC 315, Certainly, the High Court has room to issue an interim injunction of the type at issue here, "in unusual instances with care and circumspection, stating brief reasons." Certainly, the High Court has room to issue an interim injunction of the type at issue here, "in unusual instances with care and circumspection, stating brief reasons." This Court acknowledged in paragraph 60 of the Report in Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra & Others (2021) SCC Online SC 315 that there may be allegations of abuse of process of law, such as converting a civil dispute into a criminal dispute to pressure the accused. The High Court has elaborated on how the accusations of bank fraud were formed throughout the hearings involving claims of electoral fraud in the order challenged in these petitions. Given the considerations outlined in Neeharika Infrastructure Pvt. Ltd. vs. State of Maharashtra & Others (2021) SCC Online SC 315, the challenged order cannot be deemed to be defective.

2. Honourable Supreme Court of India observes that A forensic audit is one of the interim petitions requested by the petitioner in the civil writ procedures. The prayer is now being considered. Allegations of the petitioner's nature cannot be taken at face value without a forensic examination, and the court cannot rely on the petitioner's ipse dixit.

3. Honourable Supreme Court of India also observes that the petitioner's claim that the High Court was influenced by the existence of civil writ proceedings is false. The High Court took notice of how the tone of the proceedings altered from February 2020 to February 2021, and it was against this backdrop that the learned Judge noted the pending civil procedures and the overlapping of accusations.

The Decision Held by the Court/Commission

Honourable Supreme Court of India upheld the judgment given by the Honourable High Court for the State of Telangana i.e., giving interim protection to Respondents 1 to 3 in this case and guaranteeing that the supremacy of the ballot is not undermined by police authorities as a result, the SLPs are dismissed. As a result, the applications for stay are denied, and the previously granted stay is revoked. Due to the rejection of the stay applications, the vacate stay petitions have been closed.

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