Brief Facts
- Between 2017 and 2020, IHFL sanctioned loans worth ₹2,801 crores to the Shipra Group, which defaulted on repayment. Consequently, IHFL auctioned Shipra Group’s property, Shipra Mall, which was purchased by Himri Estate. Mohit Singh, representing the Shipra Group, filed FIRs against IHFL and Himri Estate, alleging the mall was undervalued, causing state revenue loss, and accusing IHFL of falsely declaring Shipra Group as defaulters to seize assets. Later, ED initiated a money laundering probe under the Prevention of Money Laundering Act, 2002.
- Since, various FIR were registered against IIFL and its officers, the same were challenge before the Apex Court though WP No. 166/2023 (Ganga Banga v, State of WB) and the Apex Court disposed the writ petition with the directions to approach the concerned High Courts for quashing of FIR(s), however, in the meantime Supreme Court through its ex-parte order stayed the criminal proceedings in the 3 FIRs and ordered for taking no coercive actions against the official s of IIFL in FIR No. 197/2023 till the disposal of Petition by the High Court.
- Thereafter original Petitioners approached Allahabad High Court in light of the liberty granted by the Apex Court. High Court vide its order dated 13.07.2023 stayed the investigation in FIR No. 197/2023 and ECIR and ordered for no coercive action against the Petitioner.
- Aggrieved by the same the ED preferred the present appeal.
Issues
- Whether the High Court would be justified in granting an interim stay of investigation or directing “no coercive steps” during the pendency of a quashing petition under Section 482 CrPC or Article 226 of the Constitution, and under what circumstances?
Held
- The Apex Court quashed the impugned stay order passed by the High Court by holding that the order of the Allahabad High Court was not in consonance with the settled legal position as enunciated in Neeharika Infrastructure, AIR 2021 SC 1918 and State of Telangana v. Habib Abdullah Jeelani, 2017 2 SCC 779.
- In our opinion, it’s a matter of serious concern that despite the legal position settled by this Court in catena of decisions, the High Court has passed the impugned orders staying the investigations of the FIRs and ECIR in question in utter disregard of the said settled legal position. 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. It hardly needs to be reiterated that the inherent powers under Section 482 of Cr.PC do not confer any arbitrary jurisdiction on the High Court to act according to whims or caprice. The statutory power has to be exercised sparingly with circumspection and in the rarest of rare cases. In a way, by passing such orders of staying the investigations and restraining the investigating 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.
- Without elaborating any further, suffice it to say that judicial comity and judicial discipline demands that higher courts should follow the law. The extraordinary and inherent powers of the court do not confer any arbitrary jurisdiction on the court to act according to its whims and caprice.
Relevant Paragraphs
- 20,21,22,23,24