Ad-interim relief

Querist : Anonymous (Querist) 05 October 2011 This query is : Resolved
I need to know whether at the pre-admission stage of filing a writ petition, for quashing of criminal proceedings in the lower court, the High Court can grant ad-interim relief to the Petitioner? Please inform me if there is any section of CRPC in this regard, or relevant judgement. Thanks.

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s.subramanian (Expert) 06 October 2011
Yes. it can be granted invoking sec.482 of crp.c.

Raj Kumar Makkad (Expert) 06 October 2011
It is the discretionary power of High Court. If circumstances of case warrant stay or proceeding pending before trial court then definitely stay is granted. I put one of such case from my High Court.

Punjab-Haryana High Court
Hardayal Singh vs Income Tax Officer on 6 August, 2003
Equivalent citations: (2004) 188 CTR P H 583, 2004 268 ITR 385 P H
Author: V Jain
Bench: V Jain

JUDGMENT

V.M. Jain, J.

1. This revision petition has been filed by the accused-petitioner under Section 401/482 Cr. P.C., seeking quashment of the criminal complaint under Section 277 of the IT Act, 1961, copy Annex. P-1, and also quashing the order dt. 19th Jan., 1990, copy Annex. P-3, passed by the Addl. Sessions Judge, vide which order dt. 22nd May, 1989, copy Annex. P-2, passed by the learned Chief Judicial Magistrate discharging the accused was set aside and the case was ordered to be sent to the Chief Judicial Magistrate for further inquiry into the matter.

2. The facts which are relevant for the decision of the present petition are that the ITO filed a complaint for the offence under Section 277 of the IT Act r/w Section 34 of the Indian Penal Code against the accused-petitioner and others. It was alleged that M/s Vishkarma Motors, accused No. 1, was a partnership concern of which accused Nos. 2 to 4, namely, Hardayal Singh, Rakha Singh and Smt. Punna Devi were the partners having the share to the extent of 1/3 each. It was alleged that the accused submitted IT return for the asst. yr. 1973-74 on 18th July, 1973, and that the assessment was completed under Section 143(3) of the IT Act on 10th Sept., 1973. It was alleged that subsequently, the ITO impounded certain books of account relating to the asst. yr. 1973-74 and notice under Section 131 of the IT Act was served on accused No. 1. It was alleged that on the basis of the information collected, the ITO served notice under Section 148 of the IT Act upon accused Nos. 2 and 3 for reopening the assessment for the asst. yr. 1973-74. It was alleged that after perusing the account books and other material, the ITO made reassessment on 12th March, 1980. It was alleged that against the said reassessment, the accused filed appeal before the CIT and thereupon the assessment order dt. 12th March, 1990, was set aside by the CIT(A) on 7th Jan., 1983, and the ITO was directed to pass fresh order after hearing the assessee. Thereafter, the ITO passed fresh order of assessment dt. 19th March, 1984, and a penalty notice under Section 271(1)(c) of the IT Act for concealment of income was also issued. It was alleged that the accused had knowingly made wrong verification on the IT return, declaring the income at a lower figure and further delivered knowingly wrong accounts and false statements of account believing the same to be false and did not believe the same to be true and, as such, had committed the offence punishable under Section 277 of the IT Act. It was alleged that accused Nos. 2 to 4 had been arrayed as accused being responsible to the conduct of the business of the firm.

3. After the aforesaid complaint was filed by the ITO, the accused were summoned and thereafter the complainant produced pre-charge evidence. Thereafter, the learned Chief Judicial Magistrate after hearing both sides vide order dt. 22nd May, 1989, copy Annex. P-2, found that no case was made out against accused No. 2, Hardayal Singh and accused No. 4, Smt. Punna Devi, as they were not incharge and were not having the control of the business, whereas accused No. 3 Rakha Singh was the incharge and was having control on the business. Accordingly, accused No. 2. Hardayal Singh and accused No. 4. Smt. Punna Devi were discharged whereas accused No. 3 had been declared as proclaimed offender. It was directed that the file be consigned and the same shall be requisitioned as and when accused No. 3, Rakha Singh, was arrested. Aggrieved against this order passed by the Chief Judicial Magistrate, the ITO (complainant) filed revision petition in the Sessions Court. The learned Addl. Sessions Judge, vide order dt. 19th Jan., 1990, copy Annex. P-3, found that under Section 278B of the IT Act even the firm is guilty of the offence if the offence had been committed by the firm. It was found that accused Hardayal Singh, prima facie appeared to be guilty for the commission of the offence alleged in this case and could not be discharged as ordered by the trial Court. It was also found that so far as Smt. Punna Devi was concerned, she was only a sleeping partner of the firm and the revision petition was not directed against her discharge on that account. Resultantly, while accepting the revision petition, the learned Addl. Sessions Judge, directed the trial Court for further inquiry into the matter. Aggrieved against this order of the learned Addl. Sessions Judge, Hardayal Singh (partner) and M/s Vishkarma Motors filed the present revision petition in this Court under Section 401/482 Cr.PC. Vide order dt. 27th Feb., 1990, the revision petition was admitted and further proceedings before the trial Court were stayed.

4. I have heard the learned counsel for the parties in detail and have gone through the record carefully.

5. The learned counsel appearing for the petitioner submitted before me that the learned Magistrate had rightly ordered the discharge of the accused-petitioner and that the learned Addl. Sessions Judge had erred in law in setting aside the order of discharge qua the present petitioners. It was submitted that the criminal complaint, copy Annex. P-1, was filed by the complainant, namely, ITO on the ground that while filing the IT return on 18th July, 1973, for the asst. yr. 1973-74, the accused had made a wrong verification on the return declaring income at a lower figure and had submitted wrong accounts and false statements of account believing the same to be false and not believing the same to be true, and in this manner as per the complainant the accused had committed the offence under Section 277 of the IT Act. It was submitted that in this manner, as per the complainant, the accused had committed the offence on 18th July, 1973, at the time when the accused had allegedly filed a false IT return for the asst. yr. 1973-74. It was submitted that the law which was prevalent at the relevant time, i.e., on 18th July, 1973, would apply in this case and the amendments which were made subsequently would have no application to the present case and as such neither the firm M/s Vishkarma Motors nor its partner Hardayal Singh could be prosecuted for the offence under Section 277 of the IT Act. Reliance has been placed on the law laid down by a Division Bench of this Court, in the case of CIT v. Jagdish Lal Behl (1983) 139 ITR 622 (P&H) and the law laid down by a Single Bench of this Court, in the case of Smt. Prem Lata v. ITO (1985) 151 ITR 723 (P&H).

6. On the other hand, the learned counsel for respondent No. 1 (complainant) has submitted before me that the accused had furnished fresh IT return for the asst. yr. 1973-74, subsequently and as such on the basis of the said return, the accused could be prosecuted under the amended Act.

7. Section 278 of the IT Act (after its amendment w.e.f. 1st April, 1964), as it stood on 18th July, 1973, the date on which the IT return was filed by the accused, was as under :

"Abetment of false return, etc.--If a person abets or induces in any manner another person to make and deliver an account, statement or declaration relating to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true, he shall be punishable with rigorous imprisonment for a term which may extend to two years :

Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the Court, such imprisonment shall not be for less than six months."

8. With effect from 1st Oct., 1975, Section 278 of the IT Act, 1961, was amended to read as under :

"Abetment of false return, etc.--If a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under Sub-section (1) of Section 276C, he shall be punishable,--

(i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;

(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine."

9. With effect from 1st Oct., 1975, Section 278B, was also added in the IT Act, which reads as under :

"Offences by companies.--(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in Sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence, and shall be liable to be proceeded against and punished accordingly.

Explanation--For the purposes of this section,--

(d) 'company' means a body corporate, and includes-

(i) A firm; and

(ii) an AOP or a BOI whether incorporated or not; and

(b) 'director', in relation to-

(i) a firm, means a partner in the firm;

(ii) any AOP or a BOI, means any member controlling the affairs thereof."

10. In Jagdish Lal Behl's case (supra), it was held by a Division Bench of this Court, as under :

"So far as the liability of the directors of the company is concerned, we might add that Section 278B which was brought on the statute book w.e.f. 1st Oct., 1975, by the Taxation Laws (Amendment) Act, 1975, makes only the director who was incharge of the business of the company guilty of the offences in question. Since the offences were committed in the year 1965-66, we cannot apply the principle enshrined in this section to create ex post facto offences. To do so would tantamount to acting contrary to the clear mandate contained in Article 20 of the Constitution. Mr. Awasthy has submitted that even prior to the coming into force of Section 278B of the Act, position of law was the same. We are, however, of the view that if the legislature itself thought of clarifying the position of law, it would not be proper for us to assume something to be in existence and then to go on to punish a person for a criminal offence. We, therefore, affirm the view taken by the learned Chief Judicial Magistrate and decline to allow the appeal as against the respondents Nos. 1 to 3. ....."

The law laid down by the Division Bench in the above said authority was followed by a Single Bench of this Court in Smt. Prem Lata's case (supra).

11. From a perusal of the above, in my opinion, it would be clear that accused-petitioner, Hardayal Singh, could not be prosecuted for having committed the offence on 18th July, 1973, inasmuch as Section 278B of the IT Act was introduced only w.e.f. 1st Oct., 1975, whereas the offence was allegedly committed prior thereto, i.e., on 18th July, 1973. The submission of the learned counsel for the respondent that the accused had furnished fresh IT return for the asst. yr. 1973-74 even subsequently and on that basis the accused could be prosecuted under the amended Act, in my opinion, is misconceived. Copy of the criminal complaint filed by the ITO is available on the record as Annex. P-1. There is not even a word in the entire criminal complaint that any other IT return was filed by the accused after 18th July, 1973, for the asst. yr. 1973-74. In this view of the matter it cannot be said that the accused had committed any offence on the ground that the accused had allegedly filed a subsequent IT return, especially when the criminal complaint is silent in this regard.

12. With regard to the prosecution of the firm-M/s Vishkarma Motors as accused, in my opinion, the prosecution against the firm is also liable to be quashed on the short ground that at the relevant time, i.e., on 18th July, 1973, when the offence was allegedly committed, the accused could only be punished with rigorous imprisonment for a term which may extend to 2 years, There was no provision for sentencing the accused to pay fine. In my opinion, the firm could not be prosecuted since the firm could not be sentenced to undergo rigorous imprisonment. Reliance in this regard may be placed on the law laid down by a Division Bench of Allahabad High Court in the case of Modi Industries Ltd. v. B.C. Goel (1981) Tax LR 990 (All), in which it was held that a juristic person like a company could not be awarded punishment of imprisonment.

13. In view of the above, in my opinion, the criminal complaint and all subsequent proceedings arising therefrom against the accused-petitioner, namely, Hardayal Singh and the firm are abuse of the process of law and are liable to be quashed. Accordingly, I accept the present petition, set aside the order dt. 19th Jan., 1990, Annex. P-3, passed by the Addl. Sessions Judge and quash the criminal complaint, copy Annex. P-1, under Section 277 of the IT Act r/w Section 34 IPC, and all subsequent proceedings taken thereon against the accused-petitioner.

ajay sethi (Expert) 06 October 2011
agree with experts it is the diiscretion of the court if prima facie case made out

prabhakar singh (Expert) 06 October 2011
i also agree with experts

Querist : Anonymous (Querist) 06 October 2011
Many thanks for your responses.

Shonee Kapoor (Expert) 06 October 2011
What other ad-interim relief are you seeking except Stay?

Regards,

Shonee Kapoor
harassed.by.498a@gmail.com

Querist : Anonymous (Querist) 06 October 2011
The Petitioner is a government employee and wants a stay on the disciplinary action that his employers are planning to take, pending criminal trial. And this is the ad-interim relief the petitioner desires.

Arun Kumar Bhagat (Expert) 07 October 2011
I think in criminal revision exercising power u/s 482 High Court shall not restrain the Employer from initiating disciplinary action against the petitioner.