LAW FOR ALL : “that a criminal prosecution, if otherwise justifiable and based upon adequate evidence, does not become vitiated on account of malafides or political vendetta of the first informant or complainant.”

Wednesday, July 21, 2021

“that a criminal prosecution, if otherwise justifiable and based upon adequate evidence, does not become vitiated on account of malafides or political vendetta of the first informant or complainant.”

“that a criminal prosecution, if otherwise justifiable and based upon adequate evidence, does not become vitiated on account of malafides or political vendetta of the first informant or complainant.” granting stay of all further proceedings including the arrest of the Respondents 1 to 3 herein (petitioners before the High Court), pending two main petitions for quashing the criminal complaints in Crime Nos. 218 and 222 of 2021 of Banajara Hills Police Station, Hyderabad, the de facto complainant, has come up with these Special Leave Petitions.

Briefly and broadly, the reasons provided by the learned Judge of the High Court for granting stay of further proceedings in the complaints are as follows: (i) That while one of the two complaints relates to ‘loan fraud’, the other relates to ‘voter fraud’; (ii) That the term of office of the Board of Directors of the Cooperative Bank expired in April, 2020 and the election process that was set in motion in March, 2020 culminated in the holding of elections on 20.12.2020; (iii) That there was a huge acrimony surrounding the elections, leading to the filing of a batch of writ petitions both before and after the conduct of elections; (iv) That there was an overlapping of the allegations relating to ‘loan fraud’ and ‘voter fraud’ in the writ petitions also, challenging or supporting the election process; 5 (v) That in the said batch of writ petitions, another learned Judge of the same High Court had passed a common order on 08.01.2021, directing the results of the election to be declared and the newly elected Board to take charge but directing the newly elected Directors not to take policy decisions until further orders; (vi) That even before the registration of the FIRs in March, 2021 the police issued a notice under Section 91 Cr.PC to the Manager of the Bank asking him to preserve the CCTV footage of a particular period, which was clearly in violation of the mandate of law; and (vii) That the allegations of ‘voter fraud’ and ‘loan fraud’ are interrelated to the issues raised in the writ petitions and that therefore further proceedings in the criminal complaints are liable to be stayed.

held that

Therefore, it was patently an election dispute which was sought to be converted to a criminal case. More often than not 21 election disputes are fought on different turfs, such as polling booths, police stations and court rooms. Sometimes, persons who raise these disputes manage to camouflage their real motive by words clothed in high moral fiber and strong legal content. But unfortunately, the petitioner could not do it successfully in this case, as the election disputes came to the court first before the petitioner could fall back upon allegations of loan fraud. Fortunately, the High Court saw through the game. This is why the High Court in its impugned order, granted the extraordinary relief of stay of further proceedings including the arrest of Respondents 1 to 3 herein. The facts are so glaring and the background setting so shocking, that the High Court correctly found it to be a fit and proper case to grant interim reliefs to Respondents 13 herein. 21. Having seen the factual aspects, let us now deal with the three questions of law on which the learned counsel for the petitioner sought to raise a high pitch

It is completely wrong on the part of the petitioner to contend that the High Court was swayed by the pendency of civil writ proceedings. The High Court actually took note of the manner in which the color of the entire proceedings changed from February 2020 to February 2021 and it is in that background that the learned Judge took note of the pendency of civil proceedings and the overlapping of allegations. Therefore, the petitioner cannot press into service the ratio in Mohd. Allauddin Khan (supra) and K. Jagdish (supra). 26. Even the decision in N.N. Global Mercantile Pvt. Ltd. (supra) will not go the rescue of the petitioner since the reference in the impugned order to Section 84 of the Multistate cooperative Societies Act, 2002 is only for the limited purpose of dealing with the allegations relating to admission of members. 27. Therefore, we are of the considered view that the High Court was perfectly justified in granting interim protection to the Respondents 1 to 3 herein and in ensuring that the supremacy of the ballot is not sabotaged by the authority of the police.

REPORTABLE

IN THE SUPEME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CRIMINAL) NO.3869 OF 2021

A P MAHESH COOPERATIVE URBAN

BANK SHAREHOLDERS WELFARE

ASSOCIATION … PETITIONER(S)

VERSUS

RAMESH KUMAR BUNG AND ORS. …RESPONDENT(S)

WITH

SPECIAL LEAVE (CRIMINAL) NO. 3875 OF 2021

J U D G M E N T

V. Ramasubramanian, J.

1. Challenging an order passed by the High Court for the State of

Telangana in two interlocutory applications granting stay of all

further proceedings including the arrest of the Respondents 1 to 3

herein (petitioners before the High Court), pending two main

petitions for quashing the criminal complaints in Crime Nos. 218

and 222 of 2021 of Banajara Hills Police Station, Hyderabad, the de

facto complainant, has come up with these Special Leave Petitions.

2. We have heard Shri Dil Jit Singh Ahluwalia, learned counsel

for the petitioner and Mr. Siddharth Luthra and Mr. Niranjan

Reddy, learned senior counsel appearing for the Respondent Nos. 1

to 3 herein.

3. The petitioner herein filed two complaints on the file of the III

Additional Chief Metropolitan Magistrate at Hyderabad against the

Respondents 1 to 3 herein on 19.02.2021. The learned Magistrate

passed an order under Section 156(3) of the Code of Criminal

Procedure, directing the police to register cases and take up

investigation, pursuant to which, the Police registered two First

Information Reports (FIR for short) in Crime Nos. 218 and 222 of

2021 respectively on 12.03.2021 and 13.03.2021.

4. The Respondents 1 to 3 herein who were the accused in those

two complaints were described in those two complaints respectively

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.

The offences complained of by the petitioner against the

Respondents 1 to 3 herein were under Sections 409, 420, 467, 468,

471 and 477A read with 120B IPC. It is necessary to take note at

this stage that the Cooperative Bank involved is actually a multistate cooperative society governed by the MultiState Cooperative

Societies Act, 2002.

5. Immediately after the registration of the complaints, the

Respondent Nos. 1 to 3 herein filed two petitions in Criminal

Petition Nos. 2370 and 2371 of 2021 under Section 482 of the Code

seeking to quash the criminal complaints. Pending disposal of the

criminal complaints, the Respondents 1 to 3 herein sought interim

stay of all further proceedings including their arrest, in FIR Nos.

218 and 222 of 2021.

6. The applications for stay in I.A. Nos. 1 and 1 of 2021 were

hotly contested by the petitioner herein, as the petitioner was

arrayed as the second respondent in the quash petitions.

7. After hearing the Respondents 1 to 3 herein (persons accused)

and the petitioner herein (de facto complainant), the High Court

passed a reasoned order on 27.04.2021 granting stay of all further

proceedings in both the complaints. It is against the said order that

the petitioner has come up with the above SLPs.

8. Briefly and broadly, the reasons provided by the learned Judge

of the High Court for granting stay of further proceedings in the

complaints are as follows:

(i) That while one of the two complaints relates to ‘loan

fraud’, the other relates to ‘voter fraud’;

(ii) That the term of office of the Board of Directors of

the Cooperative Bank expired in April, 2020 and the

election process that was set in motion in March,

2020 culminated in the holding of elections on

20.12.2020;

(iii) That there was a huge acrimony surrounding the

elections, leading to the filing of a batch of writ

petitions both before and after the conduct of

elections;

(iv) That there was an overlapping of the allegations

relating to ‘loan fraud’ and ‘voter fraud’ in the writ

petitions also, challenging or supporting the election

process;

(v) That in the said batch of writ petitions, another

learned Judge of the same High Court had passed a

common order on 08.01.2021, directing the results

of the election to be declared and the newly elected

Board to take charge but directing the newly elected

Directors not to take policy decisions until further

orders;

(vi) That even before the registration of the FIRs in

March, 2021 the police issued a notice under

Section 91 Cr.PC to the Manager of the Bank asking

him to preserve the CCTV footage of a particular

period, which was clearly in violation of the

mandate of law; and

(vii) That the allegations of ‘voter fraud’ and ‘loan fraud’

are interrelated to the issues raised in the writ

petitions and that therefore further proceedings in

the criminal complaints are liable to be stayed.

9. Assailing the said order of the learned Judge, it was contended

by Mr. Ahluwalia, learned counsel for petitioner:

(i) That the High Court should not have stayed further

proceedings, when on a plain reading of the

complaints, cognizable offences are prima facie

made out, especially in the teeth of the law laid

down by this Court in Neeharika Infrastructure

Pvt. Ltd. vs. State of Maharashtra & Others1

and

Skoda Auto Volkswagon India Pvt. Ltd. vs.

State of U.P.

;

(ii) That the impugned order is clearly contrary to the

decisions of this Court in Mohd. Allauddin Khan

vs. State of Bihar & Ors.

and K. Jagdish vs.

Udaya Kumar GS4

in as much as it holds the

pendency of civil writ petitions relating to voter

fraud, as having any bearing upon the criminal

complaints; and

(iii) That the High Court was in error in thinking that

some of the allegations pertained to disputes

arbitrable under Section 84 of MultiState

Cooperative Societies Act, 2002 and that such a

view is in the teeth of the decision of this Court in

N.N. Global Mercantile Pvt. Ltd. vs. Indo Unique

Flame Ltd.

10. Mr. Ahluwalia, learned counsel for the petitioner took us

through all the documents including the pleadings in the writ

petitions, the interim order passed in the writ petitions, the various

complaints made to the police as well as the Reserve Bank of India

1 (2021) SCC Online SC 315

2 (2020) SCC Online SC 988

3 (2019) 6 SCC 107

4 (2020) 14 SCC 552

5 (2021) SCC Online SC 13

and the way the State treated those complaints. He also drew our

attention to various passages in the decisions of this Court in

Neeharika (supra) and made a passionate appeal that heavens will

certainly fall if the stay granted by the High Court is not vacated.

11. In response, Messrs. Siddharth Luthra and Niranjan Reddy,

learned senior counsel appearing for respondents 1 to 3 argued:

(i) That normally this Court would not interfere with

an interim order passed by the High Court when the

main matter is pending adjudication before the High

Court;

(ii) That what is taken exception to in Neeharika

(supra) is the tendency of courts to pass innocuous

orders, not to take coercive steps and that too

without assigning any reasons; and

(iii) That in the case on hand the High Court had more

justifiable reasons than one to grant a stay and

such reasons are also recorded by the learned

Judge and that the tendency to foist criminal

complaints at the time of elections can be taken

note of by courts whenever a challenge is made to

the initiation of the prosecution.

12. We have considered the rival submissions and also gone

through pleadings and documents. Before we proceed to consider

the rival contentions, it is necessary to take note of the sequence of

events that preceded the lodging of the FIRs, as they throw some

light on the first principle of Criminal Law that “witnesses may lie,

but circumstances may not”. The sequence is as follows:

(i) The term of office of the erstwhile Board of Directors

of the Cooperative Bank was to expire in April, 2020

and hence a Returning Officer was appointed in

February, 2020. An election notification was issued

on 18.03.2020 but it was withdrawn after COVID19 struck;

(ii) A final voters list was issued on 17.11.2020 followed

by a fresh election notification on 24.11.2020;

(iii) The 1st respondent herein was the Senior Vice

Chairman and the 3rd respondent herein was the

Chairman in the erstwhile Board of Directors. The

nd respondent was the Managing Director and

CEO;

(iv) Immediately after the election notification dated

24.11.2020 was issued, the petitioner herein filed a

writ petition on 30.11.2020 in W.P. No. 21795 of

2020, praying for a declaration that the proposed

conduct of elections based on a bogus voters list

dated 17.11.2020 was illegal and contrary to the

provisions of the MultiState Cooperative Societies

Act, 2002, as well as certain provisions of the

Banking Regulation Act, on account of the

illegalities committed by the then Board of

Directors. Pending their Writ Petition No. 21795 of

2020, the petitioner herein sought two interim

reliefs in I.A. Nos. 1 and 2 of 2020, respectively for

(i) the conduct of a thorough investigation with the

help of police/investigation agencies and to bring

the culprits before law; and (ii) stay of operation of

the bogus voters list.

(v) Though the aforesaid writ petition was filed on

30.11.2020, the elections were held as scheduled on

20.12.2020. The counting of votes began on

21.12.2020, but halfway through, the Returning

Officer decided to stop the counting of votes, for

reasons not decipherable now and in any case not

necessary for the present dispute;

(vi) Therefore, few more writ petitions came to be filed

by certain individuals including the 1st Respondent

herein. The details of those writ petitions are as

follows:

W.P.No. Filed By Prayer Made

23849/202

Srinivas Asawa Challenging the action of the

Returning Officer in stopping

the process of counting of

votes and seeking a direction

to declare the results

23853/202

Ramesh Kumar

Bung (1st RR)

23869/202

Shrikant Inani do23976/202

Shaligram Dhoot

and Mala Dhoot

Challenging the action of the

Returning Officer in

conducting the elections in an

arbitrary manner and seeking

fresh elections

(vii) The applications praying for interim relief in all the

aforesaid writ petitions were taken up together by

another learned Judge of the High Court. After

hearing elaborate arguments, the learned Judge

passed a common order dated 08.01.2021 in all the

Interim Applications in those writ petitions. The

operative portion of the said order reads as follows:

“(i) I.A. No. 1 of 2020 in W.P.No. 23853, I.A. No. 1 of

2020 in W.P. No. 23869 and I.A. No. 1 of 2020 in W.P.

No. 23849 of 2020 are ordered and the Returning

Officer is directed to announce the result of the

election held on 20.12.2020;

ii) in I.A. No. 1 of 2020 in W.P. No. 21795 of 2020,

issue notice, returnable by 02.02.2020;

iii) I.A. No. 2 of 2020 in W.P. No. 21795 of 2020 is

filed praying to stay the operation of bogus voters list

dated 17.11.2020. for the reasons stated above,

petitioner is not entitled to the relief sought in the

interlocutory Application I.A. No. 2 of 2020 in W.P.

No. 21795 of 2020 is dismissed;

iv) In I.A. No. 1 of 2020 in W.P.No. 23976 of 2020

petitioners are praying to suspend the declaration of

results of the election. For the reasons stated above,

petitioners are not entitled to the relief sought in the

Interlocutory Application. I.A.No.1 of 2020 in W.P. No.

23976 of 2020 is dismissed;

v) I.A. No. 2 of 2020 in W.P. No. 23976 of 2020 is

filed to direct the 4th respondent Bank to conduct reelection to the posts of Directors. Unless the Court

holds that the election process undertaken by the

Returning Officer is vitiated, Court cannot direct reelection. Therefore, prayer sought in this Interlocutory

Application cannot be granted at this stage. I.A. No. 2

of 2020 in W.P. No. 21976 of 2020 is dismissed;

vi) Until further orders, the newly elected Directors

are directed not to take policy decisions affecting the

affairs of the society and the bank, including dealing

with the funds of the society except for attending to

day to day needs of the Society and the Bank and

payment of salaries and allowances of the staff.”

(viii) Challenging one portion of the common order dated

08.01.2021 forbidding the newly elected directors

from taking any policy decisions, the Management

of the Bank filed two writ appeals in W.A. No. 21

and 22 of 2021. Upon being informed that the writ

petitions were listed for hearing on 09.02.2021, the

Division bench disposed of the writ appeals by an

order dated 21.01.2021, granting opportunity to the

Management of the Bank to move an appropriate

application before the learned Judge seeking

necessary clarification;

(ix) Pursuant to the aforesaid order of the Division

Bench, the 2nd Respondent moved applications for

clarification, but later chose to withdraw the same;

(x) On 02.01.2021 and 03.01.2021, (a few days before

the learned Judge passed the common interim order

in the writ petitions), the petitioner Association

claims to have sent by post, a complaint to the

police;

(xi) Thereafter, on 22.01.2021, the petitioner admittedly

moved the Hon’ble Minister for Agriculture,

Marketing and Cooperation, Government of

Telangana, with a petition regarding the inaction on

the part of the police on the complaints allegedly

sent by post on 02.01.2021 and 03.01.2021. On the

petition so given by the petitioner herein, the

Hon’ble Minister issued a direction to the

Commissioner of Police on 22.01.2021 to the

following effect:

“Enclosed are the complaints wherein serious

allegations are made of commission of cognizable

offences. Kindly get both the FIRs registered and

investigation be carried out immediately. Copies of

FIRs be forwarded to Government within two days.”

(xii) On 03.02.2021, the petitioner herein filed a fresh

writ petition in W.P. No. 2724 of 2021 with the

following main and interim prayers:

“MAIN PRAYER:

In light of the extraordinary facts and circumstances

above, this Hon’ble Court may graciously be pleased

to pass a writ of mandamus or an order(s)/

direction(s) of the nature of mandamus:

(i) Directing Respondent No. 2 to suspend the

Board of Directors of Respondent 5 Bank and

appoint an administrator (as has also been

recommended by Respondent No. 4 to Respondent

No. 2 vide letter No. 6392/CoopI/A2/2020 dated

23.12.20) in view of the serious allegations of inter

alia largescale money siphoning, fraud, falsification

of documents and forging of records done by

Respondent No. 7 and Respondent No. 8, in

conspiracy with Respondent No. 6, which acts are

gravely prejudicial to the interest of both the Society

as well as its members, contrary to the Multi State

Cooperative Societies Act, 2002 and Bye laws of

Respondent No. 5, for which cognizable offences

Respondent No. 4 has directed Commissioner of

Police, Hyderabad to register two FIRs and carry out

investigation immediately;

(ii) Directing Respondent No. 3 to carry out a

forensic audit of the bank as recommended vide

letter No. 6392/CoopI/A2/2020 dated 23.12.20 of

Respondent No. 4 to Respondent No. 2, which has

informedly been recommended onward by

Respondent No. 2 to Respondent No. 3;

(iii) Directing Respondent No. 3 for removal of

Respondent No. 6 as the MD & CEO of Respondent

No. 5 Bank in view of the serious allegations against

him of inter alia largescale money siphoning, frauds,

falsification of documents, forging of records of

Respondent No. 5 Bank, done in conspiracy with

Respondent Nos. 7 and 8;

(iv) pass any other orders/directions deemed just

and reasonable to protect the interests of thousands

of small investors of the Bank in the facts and

circumstances of the case.

INTERIM PRAYERS: For the reasons stated

hereinabove, pending disposal of the writ petition,

the Petitioner herein prays that this Hon’ble Court,

in light of the extraordinary facts and circumstances

above, may graciously be pleased to:

(i) ad interim suspend the Boards of Directors of

Respondent No. 5 bank, appoint a Retired Supreme

Court/High Court Judge as an administrator of

Respondent No. 5, during the pendency of the writ

petition or Respondent No. 2 acting upon

representation No. 6392/CoopI/A2/2020 dated

23.12.20 forwarded by Respondent No. 4 to

Respondent No. 2 or representation of Petitioner

dated 17.01.21 to Respondent No. 3, whichever is

earlier, so as to secure the proper management of the

Bank and to prevent causing irreparable harm to the

interest of the small depositors of the Petitionerassociation, in view of the serious allegations of

largescale money siphoning, fraud, falsification of

documents, forging of records of Respondent No. 5,

by Respondent No. 6 in conspiracy with Respondent

No. 7 and Respondent No. 8, which criminal offences

of serious fraud are under police investigation; or in

the alternative, suspend Respondent No. 6 and

appoint a retired Managing Director of any Public

Sector Undertaking Bank as an ad interim MD and

CEO of the Respondents No. 5 bank, until

Respondent No. 2 has acted upon the Petitioner’s

representation dated 17.01.21 or during the

pendency of this petition, whichever is earlier; and

(ii) until further orders direct that the newly

elected Directors to not to take any policy decisions

affecting the affairs of the society and the bank,

including dealing with the funds of the society except

for attending to the day to day needs of the Society

and the Bank and payment of salaries and

allowances to the staff, as already directed by this

Hon’ble Court vide order dated 08.01.21 in CWP No.

21795/2020 filed by the Petitioner, which is sub

judice; and pass any other orders/directions deemed

just and reasonable to protect the interests of

thousands of small investors of the Bank in the facts

and circumstances of the case.”

(xiii) On 05.02.2021 the High Court ordered notice before

admission in W.P. No. 2724 of 2021 but did not

grant any interim order;

(xiv) By coincidence or otherwise, the Deputy Registrar of

Cooperative Societies, who was nominated to be the

Returning Officer for the conduct of the elections,

was also issued with a charge memo on the very

same day namely 03.02.2021, the date on which the

petitioner filed their second writ petition in W.P. No.

2725 of 2021. Contending that the charge memo

was the product of the handiwork of certain

disgruntled elements, the Returning Officer filed a

writ petition in W.P. No. 3679 of 2021. On

22.02.2021, the High Court granted interim stay of

further proceedings pursuant to the charge memo;

(xv) In the meantime, the petitioner lodged two

complaints on the file of the III Additional Chief

Metropolitan Magistrate on 19.02.2021, one of them

revolving around allegations about the grant of

loans and the other revolving around allegations

relating to voter fraud.

(xvi) The learned Magistrate passed an order under

Section 156(3) of the Code, pursuant to which, the

police registered an FIR bearing No.218 of 2021 on

12.03.2021 and an FIR bearing No.222 of 2021 on

13.03.2021;

(xvii) Praying for quashing of these two complaints, the

Respondents 1 to 3 herein filed Criminal Petition

Nos. 2370 and 2371 of 2021. The Respondents 1 to

3 impleaded the petitioner herein as 2nd Respondent

in those quash petitions. According to the

petitioner, the learned Judge heard arguments in

the petitions for interim stay pending the quash

petitions and reserved orders on 23.03.2021. It is

claimed by the petitioner that thereafter they filed

counter affidavits to the criminal petitions on

01.04.2021. It is further claimed by the petitioner

that thereafter they also filed a memo on

15.04.2021 enclosing a copy of the judgment of this

Court in Neeharika (supra) dated 13.04.2021.

However, the learned Judge passed a common order

granting stay of further proceedings in both the

quash petitions, on 27.04.2021. Therefore, the

petitioner has come up with the above SLPs.

13. The above sequence of events would show that the petitioner

herein who was admittedly registered as an Association only in the

year 2019 (as per the averments in Para 2 of W.P.No.21795 of

2020), fired their first salvo, only against the proposed elections, by

filing a writ petition on 30.11.2020. After failing to get any interim

order preventing the Returning Officer from proceeding with the

election, the petitioner indulged in a multipronged attack, by

sending police complaints by post on 02.01.2021 and 03.01.2021,

then moving the Hon’ble Minister and getting a direction from him

to the Commissioner of Police on 22.01.2021, thereafter moving a

postelection writ petition in Writ petition No.2724 of 2021 to

prevent the newly elected Board from taking charge and then filing

private complaints before the III Additional Metropolitan Magistrate

on 19.02.2021 and getting an order under Section 156(3) of the

Code leading to the registration of the FIRs. The complaints lodged

by the petitioner Association, contained allegations relating to the

period 20162019 and 2020, though the association itself was

registered only in 2019.

14. It is of interest to note that the petitioner Association which

lawfully came into existence by registering itself as an Association

under the relevant law only in 2019, started off only with a

grievance relating to the elections and the creation of the post of

Chairman Emeritus, at the beginning. It appears that the petitioner

Association moved a writ petition way back in February, 2020 in

W.P. No. 3687 of 2020 expressing an apprehension that elections

will not be conducted fairly. But a learned Judge of the High Court

dismissed the writ petition by an order dated 20.02.2020. As

against the said order, the petitioner filed a writ appeal in W.A. No.

154 of 2020 which is stated to be pending.

15. The petitioner has made a passing reference in Paragraph 3 of

their writ petition W.P. No. 21795 of 2020, to the above writ appeal

W.A. No.153 of 2020, which even according to them, related only to

an election dispute.

16. Similarly, the petitioner has made a passing reference to

another writ appeal in W.A.No.141 of 2020 in Para 3 of their writ

petition in W.P.No.21795 of 2020. This, according to the petitioner

Association related to the conferment of the title of Chairman

Emeritus on the 1st Respondent herein. The background facts

relating to this writ appeal, are not disclosed by the petitioner fully

in their writ petition.

17. Therefore, it is obvious that the petitioner started a dispute

first against the conferment of the title of Chairman Emeritus on

the 1st Respondent and then they raised issues with regard to the

proposed elections, first in a writ petition filed in February, 2020

and then in a writ petition filed in November, 2020. It is only

thereafter that the allegations relating to loan fraud were raised by

the petitioner Association. Apparently, the petitioner had the

blessings of the powers that be, which is why a direction was issued

on 22.01.2021 by the Hon’ble Minister, to the Commissioner of

Police to register the complaints and report to the Government.

18. What is important to note, is the fact that in I.A.No.1 of 2020

in W.P.No.21975 of 2020 the petitioner had prayed for a direction to

Respondents 1 to 4 therein (namely the State of Telangana, Central

Registrar, the Returning Officer and the Management of the Bank)

to conduct a thorough investigation with the help of the

police/investigation agencies. The learned Judge who heard this

I.A. along with other applications in the connected writ petitions,

merely ordered (on 08.01.2021), notice returnable by 02.02.2021 in

the said application.

19. In the next writ petition W.P.No.2724 of 2021 filed by the

petitioner on 03.02.2021 (after the declaration of results pursuant

to the order of the High Court dated 08.01.2021), the petitioner

again made a prayer for interim relief to suspend the elected Board

on the ground that allegations of large scale money siphoning, fraud

and falsification and forging of documents are under police

investigation. On the date on which W.P.No.2724 of 2021 was filed

namely 03.02.2021, no FIR was pending, but the petitioner was

emboldened to make such a statement in their writ petition, on

account of the endorsement that they were able to secure from the

Hon’ble Minister on 22.01.2021. It is only after failing to secure any

interim order even in the second writ petition that the private

complaints were filed by the petitioner before the Magistrate on

19.02.2021.

20. Therefore, it was patently an election dispute which was

sought to be converted to a criminal case. More often than not

election disputes are fought on different turfs, such as polling

booths, police stations and court rooms. Sometimes, persons who

raise these disputes manage to camouflage their real motive by

words clothed in high moral fiber and strong legal content. But

unfortunately, the petitioner could not do it successfully in this

case, as the election disputes came to the court first before the

petitioner could fall back upon allegations of loan fraud.

Fortunately, the High Court saw through the game. This is why the

High Court in its impugned order, granted the extraordinary relief

of stay of further proceedings including the arrest of Respondents 1

to 3 herein. The facts are so glaring and the background setting so

shocking, that the High Court correctly found it to be a fit and

proper case to grant interim reliefs to Respondents 13 herein.

21. Having seen the factual aspects, let us now deal with the three

questions of law on which the learned counsel for the petitioner

sought to raise a high pitch.

22. As rightly pointed out by the learned senior counsel appearing

for Respondents 1 to 3, Neeharika (supra) certainly allowed space

for the High Court to pass an interim order of the nature impugned

herein, “in exceptional cases with caution and circumspection,

giving brief reasons”. What is frowned upon in Neeharika (supra)

is the tendency of the courts to pass blanket, cryptic, laconic, nonspeaking orders reading “no coercive steps shall be adopted”. In

Paragraph 60 of the Report in Neeharika (supra), this Court

recognized that there may be allegations of abuse of process of law,

converting a civil dispute into a criminal dispute, with a view to

pressurize the accused. In the order impugned in these petitions,

the High Court has given elaborate reasons as to how the

allegations of bank fraud were developed during the proceedings

concerning allegations of election fraud. Therefore, the impugned

order cannot be said to be bad in the light of Neeharika principles.

23. In fact, Neeharika reiterates the parameters laid down in the

celebrated decision in State of Haryana vs. Bhajan Lal6

. One of

the cardinal principles evolved in Bhajan Lal (supra) found in

paragraph 102 (7) reads as follows:

“where a criminal proceeding is manifestly attended with mala

fide and/or where the proceeding is maliciously instituted with an

ulterior motive for wreaking vengeance on the accused and with a

view to spite him due to private and personal grudge”

6 1992 Supp (1) SCC 335

In paragraph 37 of the decision in Neeharika, the above

passage from Bhajan Lal is extracted. In fact Bhajan Lal (supra)

took note of the view expressed by Bhagwati, C.J. in Sheonandan

Paswan vs. State of Bihar7

to the effect “that a criminal

prosecution, if otherwise justifiable and based upon adequate

evidence, does not become vitiated on account of malafides or

political vendetta of the first informant or complainant.” Yet Bhajan

Lal (supra) laid down seven principles in paragraph 102, the last

which we extracted above. The seven principles enunciated in

paragraph 102 of Bhajan Lal (a twomember Bench) are actually

quoted with approval in Neeharika (a threemember Bench).

24. In fact, one of the interim prayers sought by the petitioner in

the civil writ proceedings is for the conduct of a forensic audit. The

said prayer is pending consideration. Allegations of the nature

projected by the petitioner cannot be taken for their face value

without a forensic audit and the court cannot go by the ipse dixit of

the petitioner.

7 (1987) 1 SCC 288

25. It is completely wrong on the part of the petitioner to contend

that the High Court was swayed by the pendency of civil writ

proceedings. The High Court actually took note of the manner in

which the color of the entire proceedings changed from February

2020 to February 2021 and it is in that background that the

learned Judge took note of the pendency of civil proceedings and

the overlapping of allegations. Therefore, the petitioner cannot press

into service the ratio in Mohd. Allauddin Khan (supra) and K.

Jagdish (supra).

26. Even the decision in N.N. Global Mercantile Pvt. Ltd. (supra)

will not go the rescue of the petitioner since the reference in the

impugned order to Section 84 of the Multistate cooperative

Societies Act, 2002 is only for the limited purpose of dealing with

the allegations relating to admission of members.

27. Therefore, we are of the considered view that the High Court

was perfectly justified in granting interim protection to the

Respondents 1 to 3 herein and in ensuring that the supremacy of

the ballot is not sabotaged by the authority of the police. Hence the

SLPs are dismissed. Consequently the applications for stay are

dismissed and the stay earlier granted is vacated. The vacate stay

petitions are closed in view of the dismissal of the stay applications.

………………………………..J.

(INDIRA BANERJEE)

………………………………..J.

(V. RAMASUBRAMANIAN)

New Delhi

July 20, 2021

LAW FOR ALL

LawforAll

advocatemmmohan

WELCOME TO LEGAL WORLD

Wednesday, July 21, 2021

“that a criminal prosecution, if otherwise justifiable and based upon adequate evidence, does not become vitiated on account of malafides or political vendetta of the first informant or complainant.”