SUPREME COURT HOLDS THAT ORAL DIRECTIONS BY THE HIGH COURT RESTRAINING ARREST, IS NOT A PART OF THE JUDICIAL RECORD
The Division Bench of the Hon’ble #SupremeCourt of India in the case of Salimbhai Hamidbhai Memon vs Nitesh kumar Maganbhai Patel & Anr. (Criminal Appeal No. 884 of 2021), vide its #Judgment dated 31-08-2021 held that #oraldirections by the #HighCourt restraining #arrest, does not form a part of the #judicialrecord. The text of a written order is what is binding and therefore enforceable.
Background of the proceedings:
One Mr Salimbhai Hamidbhai Memon (the ‘Appellant’) and Nitesh Kumar Maganbhai Patel (the ‘Respondent’) formed a Partnership in the name of Calla Associates (the ‘Firm’) under a Deed of Partnership dated 10-10-2010. The profit and loss share of the Respondent was alleged to be 55 % and for the Appellant it was 45% under the Deed of Partnership.
In 2017, a document was executed between the Parties whereby they agreed to execute a sale deed in favour of a third party and the Appellant agreed not to make any claim in the amount of Rs 3.89 Crores from his capital investment. However, the Appellant also agreed to relinquish a certain part of land belonging to the Firm. In this regard, a document was alleged to be executed on 08-09-2017, which recorded the relinquishment of rights by the Appellant from a parcel of land belonging to the Firm.
However, the Appellant issued a Notice to the Respondent and alleged that the internal pages of the document are forged and additional survey numbers of land, over and above what was agreed to be relinquished was added. On 05-01-2018, Respondent replied to the Notice and suggested that Partnership had been mutually dissolved and documents had been executed to that effect.
Meanwhile, the Appellant issued a Legal Notice dated 25-01-2018 to the Respondent for the dishonour of a cheque of Rs 1.47 Crores and on 07-01-2018, a second Notice was issued for another cheque for the amount of Rs 81.31 Lacs.
The Appellant also informed the Bank to cease all transactions in the account of the Partnership Firm due to disputes between the Parties. However, the Bank informed the Appellant that the bank had received a document executed 08-09-2017 by which the Appellant had relinquished all his rights in the Firm in favour of the Respondent.
As a result, the Appellant filed a Police Complaint against the Respondent for falsification of documents and misappropriation of funds. The said Complaint was disposed-off with the reasoning that the allegations are of civil nature and that the Respondent is ready for settlement. Upon settlement, the Parties agreed to dissolve the Partnership and the Respondent agreed to pay a sum of Rs 26.03 Crores to the Appellant. However, the Cheques given by the Respondent were dishonoured upon presentation, which led to initiation of proceedings under the Negotiable Instruments Act 1881 by the Appellant.
Thereafter, the Appellant also instituted a Complaint on 20.06.2018 before the Gotri Police Station against the Respondent making allegations of forgery and cheating. But the said Complaint was also disposed-off. On the other hand, the Respondent also filed a Complaint before the Vadodara City Police Station against the Appellant alleging an act of forgery on the part of the Appellant. Moreover, during the investigation the Police submitted its report, whereby it was found that the alleged document executed on 08-09-2017 was not forged by the Appellant but by the Respondent himself.
As a result, on 06-12-2020 a FIR was registered under Sections 405, 420, 465, 467, 468 and 471 of the Indian Penal Code against the Respondent. On 08-03-2021, the Respondent was arrested. Consequently, the Respondent instituted proceedings before the High Court under Section 482 of the Code of Criminal Procedure 1973 (“CrPC”) for quashing the said FIR, being a Criminal Misc. Application No 19358 of 2020.
The High Court during the judicial proceedings passed oral directions and restrained the arrest of the Respondent till pendency of the proceedings.
Thereafter, the Single Bench of the High Court passed Order dated 31-03-2021 whereby it stated that to strike a balance between both the Parties the investigation is required to be proceeded, however the Respondent will not be arrested till next date of hearing,
Supreme Court
The Appellant being aggrieved by the said Order filed an Appeal before the Supreme Court. The Hon’ble Supreme Court of India observed and held that the High Court was not justified in issuing a direction restraining the arrest of the Respondent till the next date of listing without reasons.
The Supreme Court stated that the procedure followed by the High Court of issuing an oral direction restraining the arrest of the Respondent was irregular. It further pointed out oral observations in Court are in the course of judicial discourse. Therefore, the text of a written order is what is binding and enforceable. Moreover, issuing oral directions restraining arrest does not form a part of the judicial record and must be eschewed.
The Court relied on the case of Parbatbhai Aahir alias Parbatbhai Bhimsinhbhai Karmur v. State of Gujarat [(2017) 9 SCC 641], wherein the Supreme Court formulated the governing principles to guide the exercise of powers under Section 482 of the CrPC.
In this view, the Supreme Court further held that the impugned Order dated 31-03-2021 passed by the Single Judge of the High Court issuing an ad interim protection against arrest till the next date of listing is liable to be set aside. As such, in the absence of a written record of what has transpired in the course of a judicial proceeding, it would set a dangerous precedent if the Parties and the investigating officer were expected to rely on unrecorded oral observations. However, the Court clarified that High Court is at liberty to proceed with the Petition under Section 482 of Cr.PC, which is pending before it.
Lakshmi Vishwakarma
Senior Legal Associate
The Indian Lawyer & Allied Services
Edited By
Sushila Ram Varma
Chief Consultant and Editor
The Indian Lawyer & Allied Services