HIMACHAL PRADESH CRICKET ASSOCIATION & ANR. versus STATE OF HIMACHAL PRADESH & ORS.

[2018] 13 S.C.R.

AHIMACHAL PRADESH CRICKET ASSOCIATION & ANR.

STATE OF HIMACHAL PRADESH & ORS.

(Criminal Appeal Nos. 1258-1259 of 2018)

BNOVEMBER 02, 2018

[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]

Code of Criminal Procedure, 1973: s.482 – Quashing of FIRs– In the instant case, lease of land was granted by the Governmentto the appellant no.1 for construction of world class cricket stadiumC– Additional land was allotted to appellant by Gram Panchayat – Aclub house was constructed on the part of the infrastructure of theallotted land – Another land was allotted for using commerciallyand hotel was constructed on it – Appellant no1 was initiallyregistered as society which was later converted to company –DTwo FIRs against appellants and some other persons alleging illegalgrant of lease of land to appellant no.1 – One under ss.406, 420,120B IPC and s.13(2) of POC Act and another under s.447 r/ws.120B, s.3 of PDPP Act,1984 and s.13(2) of POC Act – High Courtdismissed the petition for quashing of FIRs by brushing aside theargument of appellants that it was case of vengeance, politicalEvendeta and mala fide – On appeal, held: No criminal case wasmade out against the appellants, particularly when all the concernedofficers, who took the decision in grant of lease of land were let offon the ground that they had not committed any wrong – HighGovernment Officials who were involved in lease grant were notFcharged or proceeded for want of prosecution – Two senior officialswho took active part in decision making in lease grant were madePrincipal Secretary and Advisor to CM respectively – Even as perprosecution, there was no criminal act on part of the officers asthey had performed their appropriate administrative duties – Insofaras conversion of Society into not for profit company under s.25 ofGthe Companies Act, 1956 was concerned, it was done as per themandate of BCCI – There was no element of criminality therein – Inthe proceedings filed by the appellants under s.482, respondentNo.2 (CM) was impleaded, as the allegations of mala fides wereattributed to him – Since, no case of cheating/fraud or criminal

HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OFHIMACHAL PRADESH

breach of trust was made out, respondent No.2 did not have muchrole to play in these proceedings – Having regard to the stand takenby respondent No.1 not to prosecute these cases, even otherwise,no purpose would be served in continuing with these proceedings –FIRs accordingly quashed – Penal Code, 1860 – ss.406, 420,120B, s.447 r/w s.120B – Prevention of Corruption Act – s.13(2) –Prevention of Damage to Public Property Act,1984 – s.3 – HimachalPradesh Lease Rules, 1993 – r.8.

Disposing of the appeals and the writ petition, the Court

HELD: 1. Appellant No.1 was given lease of land on whichcricket stadium was constructed and thereafter lease foradditional land meant for club house and also supplementary leasefor commercial activity i.e. the hotel. It is only in respect of theland which is meant for cricket stadium that rental of Re.1/- permonth was agreed to be charged by invoking proviso to Rule 8 ofthe H.P. Lease Rules, 1993. Thus, it was not contrary to law.State of Himachal did not have any cricket ground, much lessState of art cricket ground. It was, for this reason, that the landwas given on lease for the purpose of constructing the cricketground, which may become pride of Himachal Pradesh, at nominalrental. Insofar as lease in respect of club house and supplementarylease for commercial activity (i.e. hotel) was concerned, the leasemoney was fixed in accordance with Lease Rules, 2011, namely,at commercial rates. There can hardly be any element ofcriminality in these allotments inasmuch as six very senior officersin the State Government (four of them of IAS Cadre and onebelonged to Himachal Pradesh Administrative Service) who hadexamined the matter and only after their approval, the allotmentswere made. There was no culpability attributed to them, which isa very crucial factor. [Paras 37][901-G-H; 902-A-C]

2. In the two FIRs, seven IAS Officers, one Officerbelonging to Himachal Pradesh Administrative Service and oneExecutive Engineer, Dharamshala Division in Himachal PradeshPWD Department played their significant role at one stage orthe other. Insofar as the Director-cum-Special Secretary, YouthServices and Sports Department was concerned, allegation againsthim was that he ignored the rules and did not mention theprovisions of Lease Rules, 1993. He was also signatory to

Alease deed. Entire FIRs proceeded on the basis that appellantsconspired with these Officers, among others. The imputationagainst the Director-cum-Special Secretary was that in fixing therent at Re.1/- per month, he not only ignored the rules and didnot even mention in his noting thereby implying that he was partyto the alleged conspiracy. Similar allegations were against otherBeight persons as well alleging their role at different stages.Notwithstanding the same, three Officers were not even chargedon the purported ground that there were not enough evidenceand mala fide intention. In respect of other officers, Governmenthad declined the sanction. In case of some officers, StateCGovernment had accorded the sanction for prosecution earlierbut later withdrew the same. There were two Gram Panchayatmembers, who had issued no-objection for allotment of land forclub house, who were prosecuted. These three Officers werepublic servants who remain as accused persons. Thus, in theentire conspiracy story put up by the prosecution, highDGovernment officials were deliberately let off and very juniorOfficers were become scapegoat in order to ensure that caseunder PC Act survives in respect of appellants as well who arenot public servants. Even otherwise, when the said eight personswere not charged or proceeded against for want of prosecution,Ethis lent support to the allegations of the appellants in imputingmotives for their prosecution. [Para 41][903-B-H; 904-A-B]3. There was no criminal act on their part and the facts donot disclose any offence; the officers who processed the case ofthe appellants were not prosecuted; two Officers who took activeFpart in the decision making were made Principal Secretary toCM and Advisor to CM, respectively, by respondent No. 2 andwere not prosecuted; As per the prosecution, there was nocriminal act on the part of the officers and they performed theirappropriate administrative duties due to which sanction stooddeclined by the Central Government and the CVC. That itself isGsufficient to absolve others from any criminal prosecution; evenotherwise the State Government continues to remain owner ofthe land which is on lease and on which the appellants haveconstructed assets worth above 150 crores; these assets are foruse of the public of the State and are being used as such. Further,H

filing of chargesheet and an order taking cognizance is not finaljudicial order. It is preliminary process in criminal law and isopen to challenge in higher judicial fora. [Para 42][904-C-G]

4. The conversion of Society into not for profit companyunder Section 25 of the Companies Act, 1956 was done as perthe mandate of BCCI. There can hardly be an element ofcriminality therein. It rather shows the intent of the StateGovernment which wanted to grab the control of the CricketAssociation. Such tendency on the part of the State authoritieswas condemned by Committee headed by former Chief Justiceand also approved by this Court. If at all, this was reflectionupon the State Government. It also lent credence to thesubmission of the appellants that when the State Governmentfailed to achieve the said purpose, it went after the appellants. Ifat all, the subject matter was civil dispute between the appellantsand the respondents. Ex facie, no case of cheating/fraud orcriminal breach of trust was made out. Since, these allegationsare not made out, respondent No.2 does not have much role toplay in these proceedings. That apart, respondent No.2 has filedcounter affidavit stating that he is not necessary party and it isnot his job to defend the prosecution. Having regard to the standtaken by the respondent No.1 not to prosecute these cases, evenotherwise, no purpose would be served in continuing with theseproceedings. [Paras 43, 44][904-G-H; 905-A-E]

5. The inherent jurisdiction under Section 482 Cr.P.C. is tobe exercised carefully and with caution and only when exerciseis justified by the tests specifically laid down in the Section itself.Further, inherent power under this provision is not the rule butit is an exception. The exception is applied only when it is broughtto the notice of the Court that grave miscarriage of justice wouldbe committed if the trial is allowed to proceed where the accusedwould be harassed unnecessarily. The power is to be exercisedby the High Court either to prevent abuse of process of any courtor otherwise to secure the ends of justice. However, wheneverit is found that the case is coming within the four corners of theseparameters, the powers possessed by the High Court under thisprovision are very wide. It means that the Court has to undertakethe exercise with great caution. However, the High Court is not

Ato be inhibited when the circumstances warrant exercise of sucha power to do substantial justice to the parties. In the instantcase, the High Court dismissed the petition with shallowexamination of the case, thereby glossing over the material factsand failing to examine that these pertinent aspects were sufficientto demonstrate that no criminal case was made out, particularlyBwhen all the concerned officers, who had taken the decision, werelet off on the ground that they had not committed any wrong.[Para 46][905-G-H; 906-A-B; 907-G-H; 908-A-B]

State of Haryana & Ors. v. Bhajan Lal & Ors. (1992)Supp. (1) SCC 335 : [1990] 3 Suppl. SCR 259; IndianCOil Corporation v. NEPC India Ltd. & Ors. (2006) 6SCC 736 : [2006] 3 Suppl. SCR 704; Vineet Kumar &Ors. v. State of Uttar Pradesh & Anr. (2017) 13 SCC369 : [2017] 6 SCR 922 – relied on.

State of Bihar & Anr. v. P.P. Sharma & Anr. 1992 SuppD(1) SCC 222 : [1991] 2 SCR 1; Commissioner of IncomeTax, Mumbai v. Texspin Engg. and Mfg. Works, Mumbai(2003) 263 ITR 345; Commissioner of Income Tax(Central), Ludhiana v. M/s. Rita Mechanical Works,Ludhiana (2012) 344 ITR 544; Union of India & Ors.Ev. Sushil Kumar Modi & Ors. (1997) 4 SCC 770 : [1997]1 SCR 490; Delhi Judicial Service Association, TisHazari Court, Delhi v. State of Gujarat & Ors. (1991)4 SCC 406 : [1991] 3 SCR 936; Monica Kumar & Anr.v. State of Uttar Pradesh & Ors. (2008) 8 SCC 781 :[2008] 9 SCR 943; C.K. Jaffer Sharief v. State (2013)F1 SCC 205 : [2012] 10 SCR 1079; R. Balakrishna Pillaiv. State of Kerala (2003) 9 SCC 700 : [2003] 2 SCR436; Lalitha Kumari v. Government of Uttar Pradesh &Ors. (2014) 2 SCC 1 : [2013] 14 SCR 713; State ofA.P. v. Golconda Linga Swamy and Anr. (2004) 6 SCCG522 : [2004] 3 Suppl. SCR 147; Umesh Kumar v. Stateof Andhra Pradesh & Anr. (2013) 10 SCC 591 : [2013]14 SCR 213; State of Tamil Nadu & Ors. v. K. ShyamSunder & Ors. (2011) 8 SCC 737 : [2011] 11 SCR 1094;Andhra Pradesh Dairy Development Corporation

HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OFHIMACHAL PRADESH

Fedration v. B. Narasimha Reddy & Ors. (2011) 9 SCC286 : [2011] 14 SCR 1; State of Himachal Pradesh v.Nishant Sareen (2010) 14 SCC 527 : [2010] 13 SCR1200; Ujjam Bai v. State of U.P. [1963] 1 SCR 778;Naresh Shridhar Mirajkar & Ors. v. State ofMaharashtra & Anr. AIR 1967 SC 1 : [1966] SCR 744;Northern Corporation v. Union of India & Ors. (1990)4 SCC 239 : [1990] 3 SCR 621 – referred to.

Case Law Reference

[1991] 2 SCR 1(2003) 263 ITR 345(2012) 344 ITR 544[1997] 1 SCR 490[1991] 3 SCR 936[2008] 9 SCR 943[2012] 10 SCR 1079[2003] 2 SCR 436[1990] 3 Suppl. SCR 259[2017] 6 SCR 922[2013] 14 SCR 713[2006] 3 Suppl. SCR 704[2004] 3 Suppl. SCR 147[2013] 14 SCR 213 [2011] 11 SCR 1094[2011] 14 SCR 1[2010] 13 SCR 1200[1963] 1 SCR 778[1966] SCR 744 [1990] 3 SCR 621

ACRIMINAL APPELLATE JURISDICTION: Criminal AppealNos. 1258-1259 of 2018

From the Judgment and Order dated 25.04.2014 of the High Courtof Himachal Pradesh at Shimla in Cr. MMO. No. 6 of 2014.

With

W.P. (Crl.) No. 135 of 2017.

Ashok Sharma, Adv. Gen., P. S. Patwalia, Anoop GeorgeChaudhary, Mrs. June Chaudhari, Sr. Advs., Mrs. Bihu Sharma, Ms.Purnima Krishna, Snehasish Mukherjee, Manish Kumar, AkshayCAmritanshu, Ajay Marwah, Parmatma Singh, D. K. Thakur, ShariqAhmed, Kunal Verma, Varinder Kumar Sharma, Advs. for the appearingparties.

The Judgment of the Court was delivered by

A. K. SIKRI, J. 1. Two FIRs are the subject matter of theseDappeals. One FIR No. 12 of 2013 dated August 01, 2013 is under Sections406, 420, 120B of the Indian Penal Code, 1860 (IPC) and Section 13(2)of the Prevention of Corruption Act, 1988 (PC Act) has been registeredagainst the appellants herein as well as some other persons. SecondFIR No.14 of 2013 dated October 03, 2013 is under Section 447 readwith Section 120B of the IPC, Section 3 of Prevention of Damage toEPublic Property Act, 1984 and Section 13(2) of the PC Act. The appellantsfiled petitions under Section 482 of the Code of Criminal Procedure,1973 (Cr.P.C.) before the High Court of Himachal Pradesh for quashingof the said FIRs. These petitions have been dismissed by the High Courtvide common judgment dated April 25, 2014. That judgment is impugnedFin the instant appeals. When the Special Leave Petitions (out of whichthese appeals arise) were filed, notice thereof was issued on January 5,2015 and stay of further proceedings was also granted in the case arisingout of the said FIRs which are pending before the Special Judge, Kangra,Dharamshala, Himachal Pradesh. That stay has been extended fromtime to time and is, therefore, continuing.G

2. During the pendency of these proceedings, investigation wascompleted. On the day judgment was pronounced by the High Court,the chargesheets were filed in the Court of Special Judge. After thefiling of the said chargesheets, the appellants have also filed Writ Petition

(Criminal) No. 135 of 2017 in this Court seeking quashing of thesechargesheets. Both these proceedings were clubbed and heard togetherwhich we propose to dispose of by this common judgment.

3. Appellant No. 1 is Cricket Association of Himachal Pradeshwhich was initially registered as Society under the Societies RegistrationAct, 1860 vide Registration Certificate dated June 08, 1990. OnSeptember 15, 2001, appellant No. 1 made an application for allotmentof land to develop and construct the world class cricket stadium andconsequently, the Commissioner-cum-Secretary (Education) grantedpermission for transfer of land to the Himachal Pradesh Youth Servicesand Sports Department with certain conditions. lease deed dated July29, 2002 was executed between appellant No.1 and respondent No. 1through Director, Himachal Pradesh Youth Services and SportsDepartment for the said land at Village Mouja and Tehsil Dharamshala,District Kangra for construction of an international cricket stadium whichwas duly constructed. On July 14, 2005, not for profit company in thename of Himalayan Players Cricket Association was incorporated underSection 25 of the Companies Act, 1956. Name of this company waschanged to Himachal Pradesh Cricket Association on August 31, 2005.

4. Purusant to proposal to host international cricket matches atDharamshala, the International Cricket Council inspected the cricketinfrastructure being developed at Dharmashala by appellant No. 1 and,inter alia, observed that the quality of accommodation left much to bedesired. Need for some more facilities and hotel accommodation ofdesired quality was specifically stressed.

5. Having regard to this report, the appellants decided to constructa club house on the leased land. There was also parcel of idle land inthe middle of the land allotted for the stadium. Appellant No.1 towardsthis end made request to the Director, Youth Services and Sports forallotment of additional land adjacent to the stadium admeasuring 720square metres, vide its letter dated July 03, 2008. Since it was GramPanchayat land, consent thereof was also needed for its allotment to theappellant No.1. Appellant No.1, thus, approached the Gram Panchayat.Pursuant to meetings between the office bearers of appellant No. 1 andGram Panchayat, members of Uparali Dhari Development Division,Dharamshala, the said Gram Panchayat issued no objection for allotmentof the land. Proposal of appellant No. 1 for allotment of additional land

Awas mooted with the authorities as well. Respondent No. 1 vide letterdated November 16, 2009 took up the matter with the ACS-cum-FCRevenue to the Government of Himachal Pradesh for approval to leaseout government land in Mohal Kand Mauja Khanyara, TehsilDharamshala, District Kangra, measuring in 3-28-06 hectare in favourof appellant No. 1. Respondent No. 1 granted approval to lease out theBaforesaid land in favour of appellant No. 1 vide letter dated November16, 2009 which was conveyed vide letter dated November 18, 2009. Asa result, lease deed was executed between appellant No. 1 and respondentNo. 1 for lease of the said land situated at Mohal Kand Mauza Khanyara,Tehsil Dharmashala.C

6. Club house was constructed at the stadium premises atDharamshala under the name and style of “Aveda HPCA Club House”.Completion Certificate was issued on March 10, 2011 and was certifiedcomplete in all aspects as per approved plan of the Executive Officer,Municipal Council, Dharamshala. The Town and Country PlanningDDepartment, Dharamshala also issued no objection certificate dated March15, 2011 for use of part of the infrastructure of cricket stadium as clubhouse for cricket activities. Respondent No. 1 also approved the tarifffor availing the accommodation facilities of the club house vide its letterdated September 08, 2011.

E7. The Board of Control for Cricket in India (BCCI) grantedpermission to the Himachal Pradesh Cricket Association to convert itselffrom “not for profit” society to “not for profit” company during itsannual general meeting held on September 19, 2011. majority of cricketassociations throughout the country have been converting themselvesfrom not for profit society to not for profit company registered underFthe Companies Act, 1956 in order to ensure better and transparentmanagement of their affairs.

Realising that unless world class accomodation was available forthe teams playing at the stadium and the officials concernedaccompanying such teams, the venue at Dharamshala that was beingGpainstakingly developed by the appellant No. 1 from its own funds wouldbe grossly underutilised and the State would lose out in hosting cricketmatches, appellant No. 1 and its office bearers began working out amethod to construct world class motel for such purposes.

Appellant No. 1 realized that if the use of the same was restrictedonly to usage during match days for use of teams and their officials, thesame would not be commercially viable. As the terms of the lease maynot be technically wide enough to cover this allied infrastructure beingdeveloped for the game of cricket, vide its letter dated December 24,2011, appellant No. 1 wrote to the respondent to request it to permitcommercial activity on the said land on even non match days and amendthe lease terms accordingly. The above letter was forwarded by theDistrict Magistrate to the Principal Secretary (Revenue), Governmentof Himachal Pradesh and the Principal Secretary (Revenue), Governmentof Himachal Pradesh issued no objection for execution of supplementarylease enabling commercial activity on the additional land at Kandiprovided that the lease money was charged in accordance with the LeaseRules, 2011. supplementary lease deed was executed between theappellant No.1 and the State of Himachal Pradesh enabling use of theadditional land commercially. Necessary permissions for developmenton the said land were obtained including for commercial hotel. Thehotel constructed under the name and style of “The Pavilion” obtainedregistration with the Tourism Department of the State and Tariffs, etc.were also fixed by the said Department on September 26, 2012. In themeantime, on September 22, 2012 resolution was passed by the appellantNo. 1 company to take over the assets and liabilities of the society.Agreement dated October 01, 2012 was also executed between theHimachal Pradesh Cricket Association (the society) and HimachalPradesh Cricket Association (the Company) to enable the Society toconvert itself into Company. Accordingly, the Society was convertedinto Company and the Himachal Pradesh Cricket Association stoodconverted from society to not for profit company registered underthe Companies Act, 1956 and the Registrar of Companies was informedof the same in due course.

8. Within couple of months, from the aforesaid developments,there was change of political executive in the State of Himachal Pradeshpursuant to the elections of legislative assembly. According to theappellants, with the change of political power, tirade against the appellantsstarted by the new Government. In fact, even during the electioncampaign, the Congress (I) had published ‘Congress Chargesheet’wherein serious allegations were levelled against the appellants. Theappellants department sprung into action and started seeking information

Afrom the appellants on various aspects, though this information wasalready available with the State Government. formal FIR No. 12 of2013 dated August 01, 2013 was registered which, according to theappellants, is the result of the said ‘Congress Chargesheet’. In fact,some time before that, complaint under Section 156(3) Cr.P.C. wasmade by one Vinay Sharma against appellant No. 1 and its office bearersBin which orders were passed by Special Judge, Kangra on July 02, 2013directing the police authorities to investigate the said case and submitthe report to it. Thus, two parallel proceedings were started.9. Further allegation of the appellants is that investigation waspersonally monitored by respondent No. 2 herein who was the ChiefCMinister at that time. He had also made various public statements fromtime to time that he was interested in taking over the entire function ofthe Cricket Association and its assets. According to the appellants, atthe behest of respondent No. 2, even the Registrar of Societies, HimachalPradesh issued notice dated September 7, 2013 on the issue of formationDof company under Section 25 of the Companies Act, 1956 and takingover the assets of the society. Against this notice, Writ Petition No.7593 of 2013 was filed wherein the High Court passed the orders keepingin abeyance the allegations raised in the notice dated September 7, 2013of the Registrar of Societies.

E10. Another FIR No. 14 of 2013 dated October 03, 2013 came tobe registered against the appellants and others alleging commission ofoffences under Section 447 read with Section 120B of the IPC, Section3 of the Prevention of Damage to Public Property Act, 1984 and Section13(2) of the PC Act. Many other actions were taken by the respondents,which according to the appellants, were mala fide moves, referenceFwhereto shall be made at the appropriate stage. At this juncture, theappellants filed petition under Section 482 of Cr.P.C. on January 06,2014 seeking quashing of FIR No. 12 of 2013 which stands dismissedvide impugned judgment dated April 25, 2014.

11. The High Court in the impugned judgment has taken note ofGcatena of judgments of this Court pertaining to powers of the High Courtwithin the scope of Section 482 of Cr.P.C. Thereafter, it has observedthat after lodging of the FIR, investigation has been conducted and thematerial collected during investigation discloses that 18 persons madeaccused in the aforesaid FIR are prima facie involved in the commission

of offences. On this ground, it has brushed aside the argument of theappellants that it was case of vengeance, political vendeta and malafide. The High Court has also observed that allegations of mala fidebased on the facts after lodging of the FIR are of no consequence andcannot be the basis for quashing the proceedings. For this purpose, ithas referred to the judgment of this Court in State of Bihar & Anr. v.P.P. Sharma & Anr.[1]. It has also observed that even otherwise, the filedoes not disclose at this stage how it is the case of mala fide. In theopinion of the High Court, in such circumstances, merits of the case is tobe tested during trial inasmuch as FIR and Final Report of InvestigatingAgency discloses that case for trial is made out. As the power underSection 482 Cr.P.C. is to be exercised carefully, cautiously and in rarestof rare cases, keeping in mind the law laid down by this Court, the HighCourt refused to quash the proceedings. We may also record here thatone of the submissions of the appellants before the High Court was thatappellant No. 2 and other persons are not public servants and, therefore,provisions of PC Act could not be invoked against them. This argumenthas also been found to be unmerited on the ground that some of theaccused persons arrayed with the appellants are public servants andalso that allegation in the FIR is that all these accused persons has theconspiracy and wrongful gain to themselves and wrongful loss to theState, in the process, the officials misused their position to show favourto other accused persons.12. Mr. Patwalia, learned senior counsel appearing for theappellants, at the outset, drew the attention of this Court to the fact thatM/s. Subhash Ahluwalia, Subhash Negi, Ajay Sharma, Deepak Sananand T.G. Negi, who are the IAS Officers, were associated with thegrant of three leases. They were the main persons who took active partin deciding that the three leases should be granted to the appellants andon that basis, final decision was taken. However, as far as these Officersare concerned, prosecution sanction has either been denied or they havenot been prosecuted at all. Likewise, Mr. Gopal Chand, who belongs toHimachal Pradesh Administrative Service, was arrayed as one of theaccused person, but in his case also, the sanction though given earlierstood withdrawn. He has even been promoted to IAS cader. Mr.Patwalia submitted in tabular form status of Officers who have allegedlyconspired with the appellants, which is as under:

880SUPREME COURT REPORTS

ASl. Name of Post at the Role as per FIR SanctionNo. Officer time of alleged offence BFIR No. 12 of 2013 dated 01.08.2013 under Sections 406/420/120B IPC and Section 13(2), Prevention of Corruption Act1 Subhash IAS, Director-Sh. Subhash Not CAhluwalia cum-Special Ahluwalia, at Charged Secretary, the time of Youth grant of lease (Not Services and of the enough evidence Sports Government of DDepartment, Land to HPCA malafide Government for the intentionof Himachal construction of Pradesh. Cricket ). Stadium had Eignored the rules and had not mentioned the provisions of Lease Rules, F1993 in his noting. Further, Sh. Subhash Ahluwalia was Ga signatory to the Lease Deed dated 29.07.2002.

A2Subhash NegiIAS, Secretary, Sh. Subhash Not Youth Services Negi, at the Chargedand Sports time of grant of Department, lease of the (Not Government of Government enough evidence of BHimachal Land to HPCA malafide Pradeshfor the construction of intention).Cricket Stadium had Cignored the rules and had not mentioned the provisions of Lease Rules D1993 in his noting.3T.G. NegiIAS, Principal Sh. T.G. Negi Not Secretary, made no efforts ChargedEYouth Services to reject the and Sports notings of (Not Department, accused Sh. enough evidence of Government of Ajay Sharma malafide Himachal and instead Pradesh.forwarded the intention).Fsame for approval of the Chief Minister.G4Ajay SharmaIAS, Director-In 2008, then Prosecution cum-Special Chief Minister sanction Secretary, P.K. Dhumal declined by Youth Services marked the Central

Aand Sports application of HPCA Government Department, for permission of on Government construction of Club 25.08.2015. of Himachal House and its Prosecution BPradesh. commercial use to sanction Sh. Ajay Sharma and withdrawn by asked him to prepare the State the proposal for the Government same. Sh. Ajay Con Sharma, by abusing 09.04.2018. his official position proposed for permission to the HPCA with the Dapproval of the Chief Minister. The land was leased only for construction of Ecricket stadium and not club house. Sh. Ajay Sharma, by abusing his office in criminal conspiracy Fwith HPCA, contrary to the terms and conditions of the lease deed has provided undue Gbenefit to the HPCA and loss to the State Government.

HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF883HIMACHAL PRADESH [A. K. SIKRI, J.]5 Deepak Sanan IAS, Principal Sh. Deepak Prosecution ASecretary-Sanan issued sanction cum-Financial NOC for the declined by Commissionercommercial use Central , Revenue of Government Government Department, land which was on BGovernment leased to HPCA 25.08.2015. of Himachal for the Prosecution Pradesh. construction of sanction Hotel Pavilion withdrawn by reversing the Cearlier decision by the State Government of Council of Minister. Sh. on 09.04.2018. Deepak Sanan also notified the DLease Rules, 2011, on the basis of which supplementary lease was executed, in Eaccordance with Rule 9. 6 Gopal Chand HPAS, Sh. Gopal Prosecution Additional Chand had sanction FSecretary, recommended granted on Revenue for the 03.04.2014 Department, commercial use withdrawn Government of land leased by the State of Himachal to HPCA in Government GPradesh Mohal Kand on and marked the 03.08.2016. file to Sh. Promoted to Deepak Sanan, IAS.

Athe presumptionsdrawn in the meeting were made with the intention to give Bundue advantage to HPCA. Sh. K.K. Pant overlooked the report regarding Ccondition of building. 8 P.C. Dhiman IAS, Principal Sh. P.C. Dhiman Prosecution DSecretary, issued NOC to sanction Education the Department declined by Department, of Youth Services Central Government and Sports, Government of Himachal contrary to the on EPradesh recommendations24.08.2015. / conditions of the Director, Higher Education, and without Fmentioning the disposal of building in accordance with rules/norms and Grecovery costs from HPCA.

A9 Devi Chand Executive Devi Chand Prosecution Chauhan Engineer, Chauhan, while sanction Dharamshala working as declined by Division, Executive Department HPPWD Engineer (Civil),Secretary but BDharamshala, recommended HPPWD by the then Division Chief Minister forwarded the Sh. Virbhadra report sent by the Singh. Hence, Cthen SDO Sub-prosecution Division No. 1, sanction Dharamshala, granted on regarding 23.09.2014 dilapidated and Dcondition of 15.10.2014 Type IV (FIR No. accommodations, 14/13 dated without 03.10.2013) following Eprocedure as laiddown by the Government of India, Central Public WorksFDepartment Code, whihc led two illegal demolition of two storied Gbuilding (TypeIV accommodation) of the Education Department

existing adjacent to the present Cricket Stadium gate, which was an Beyesore to the HPCA and alleged to be security threat to the players. CThus, the motive of the Executive Engineer was to intentionally Dgive an advantage to HPCA thereby misusing his official Eposition.

13. Thus, the Government Officers who have granted lease arenot been prosecuted. He, thus, submitted that the main Governmentfunctionaries were left out which shows that the Government wanted toprotect its own Officers but, at the same time, roped in the appellantsand others because of political enmity.

14. Dilating on the aforesaid plea, namely, the entire prosecutionis due to political vendetta, without any legal basis, Mr. Patwalia submittedthat the genesis of the prosecution starts with the failed attempt by thethen State Government to take over appellant No. 1 in the year 2005under the provisions of the HP Sports (Registration, Recognition andRegulation of Associations) Act, 2005 due to the interim protectiongranted by the Himachal Pradesh High Court on May 18, 2005. This

AAct was subsequently repealed. According to him, in view of the repeatedinterference by State Governments in the internal affairs of autonomouscricket associations, the BCCI has informally encouraged such memberassociations to re-register themselves as not for profit charitable Section25 Companies under the Companies Act, 1956, as amended, for betterlegal compliances, transparency and to avoid interference in internalBaffairs by State Governments. Accordingly, various member associationsof the BCCI have converted themselves to Section 25 not for profitcharitable companies governed by the provisions of the Companies Act,1956. Appellant No. 1 also followed the suit as result of aforesaidmandate of the BCCI. Accordingly, not for profit company in theCname of Himalayan Players Cricket Association was incorporated underSection 25 of the Companies Act, 1956. On August 31, 2005, the saidCompany was permitted to change its name to Himachal Pradesh CricketAssociation and was issued fresh certificate of incorporation. Duringthis process, the HP Sports (Registration, Recognition and Regulation of

Associations) Act, 2005 stood repealed and no further steps were takenDin the interregnum to convert the society to section 25 company.Thereafter, on September 19, 2011, the BCCI took up the pending requestof appellant No. 1 to permit it to convert itself to Section 25 not forprofit company and granted the same. Pursuant to the permission bythe BCCI, amendments were carried out by the members at the AGMEof the appellant No. 1 on September 22, 2012 resolving to convert theappellant No. 1 society to Section 25 Company. Accordingly, anagreement was executed on October 01, 2012 converting the society toa Section 25 Company and informing the Registrar of Companies of thesame. On October 31, 2012, appellant No. 1 now registered as Section25 Company under the Companies Act, 1956 informed the Registrar ofFSocieties of the State of Himachal Pradesh of the change in thememorandum and rules of the appellants. Further, on November 02,2012, once again the intimation regarding change in status of appellantNo. 1 from not for profit society to not for profit company was givento the Registrar of Societies, State of Himachal Pradesh. Thus, fromGOctober 01, 2012, appellant No. 1 has been existing as Company withdue intimation to the State of Himachal Pradesh paying its lease rentand taxes in accordance with law. He also argued that the effect ofsuch statutory conversion from firm to company by statutoryprovisions for income tax purposes has been considered by the BombayHigh Court in the case of Commissioner of Income Tax, Mumbai v.H

Texspin Engg. and Mfg. Works, Mumbai[2] and Punjab & HaryanaHigh Court in the case of Commissioner of Income Tax (Central),Ludhiana v. M/s. Rita Mechanical Works, Ludhiana[3] wherein it hasbeen held as under:

“There is difference between vesting of the property, inthis case, in the limited company and distribution of the property.On vesting in the limited company under Part IX of the CompaniesAct, the properties vest in the company as they exist. ...

“In the present case, we are concerned with partnershipfirm being treated as company under the statutory provisions ofPart IX of the Companies Act. In such cases, the companysucceeds the firm. Generally, in the case of transfer of capitalasset, two important ingredients are: existence of party and acounter-party and, secondly, incoming consideration qua thetransferor. In our view, when firm is treated as company, thesaid two conditions are not attracted. There is no conveyance ofthe property executable in favour of the limited company. It is nodoubt true that all properties of the firm vest in the limited companyon the firm being treated as company under Part IX of theCompanies Act, but that vesting is not consequent or incidental toa transfer. It is statutory vesting of properties in the company asthe firm is treated as limited company. On the vesting of all theproperties statutorily in the company, the cloak given to the firm isreplaced by different cloak and the same firm is now treated asa company, after given date. ...”

15. On the aforesaid basis, submission of Mr. Patwalia was thatconversion of not for profit society to not for profit charitable companywhich is expressly permitted by law cannot be construed as crime.The assets - in the present case leased land remain as they are. In fact,the appellants have constructed world class stadium and world classhotel on the leased premises. Importantly, the State Government continuesto remain the owner of the land and has the power under the leases tocancel the same for violation of terms and conditions of the lease.

16. It was highlighted by him that on the midnight of October 26,2013, the State Government had cancelled the leases and forcibly

2 (2003) 263 ITR 345

3 (2012) 344 ITR 544

Adispossessed the appellants from the leased lands. However, onNovember 05, 2013, the Himachal Pradesh High Court strictured theState Government and ordered status quo ante and handed over thepossession of the leased lands to the appellants. The State Governmentthereafter accepted this order and withdrew the cancellation of leasenotices on November 19, 2013. Subsequently, another notice dated MayB23, 2015 was issued seeking cancellation of the leases which too standswithdrawn on August 09, 2018. At present, there are no proceedingspending for cancellation of the leases.

17. Mr. Patwalia argued that there were specific allegations ofmala fide against respondent No. 2 from the very inception of theseCproceedings about how he first caused the FIR to be registered andthereafter interfered in the investigations, by being head of the SIT. Healso further stated that the conduct of respondent No.2 from opposingthe present appeals after having filed counter affidavit in the presentmatter stating that he was not necessary party and it was not his job to

Ddefend the prosecution, depicts mala fides on his part. This, accordingto him, was sufficient to quash the FIR as investigation was tainted. Insupport, he referred to the case of Union of India & Ors. v. SushilKumar Modi & Ors.[4] wherein this Court held as under:

“4. ...The agencies concerned must bear in mind and, if needed,Ebe reminded of the caution administered by Lord Denning in thisbehalf in R. v. Metropolitan Police Commr. [(1968) 1 All ER 763: (1968) 2 WLR 893 : (1968) 2 QB 118] Indicating the duty of theCommissioner of Police, Lord Denning stated thus: (All ER p.769)

F“I have no hesitation, however, in holding that, like every constablein the land, he should be, and is, independent of the executive.He is not subject to the orders of the Secretary of State, …. Ihold it to be the duty of the Commissioner of Police, as it is ofevery chief constable, to enforce the law of the land. He musttake steps so to post his men that crimes may be detected; andGthat honest citizens may go about their affairs in peace. He mustdecide whether or not suspected persons are to be prosecuted;and, if need be, bring the prosecution or see that it is brought; butin all these things he is not the servant of anyone, save of the

4 (1997) 4 SCC 770H

law itself. No Minister of the Crown can tell him that he must,or must not, keep observation on this place or that; or that hemust, or must not, prosecute this man or that one. Nor canany police authority tell him so. The responsibility for lawenforcement lies on him. He is answerable to the law and tothe law alone.”

...There can hardly be any doubt that the obligation of the policein our constitutional scheme is no less.”

18. Mr. Patwalia referred to various documents placed on recordand contended that they would ex facie show that administrative decisionswere taken at various levels and by variou departments by the concernedofficers prior to sanction of leases in favour of appellant No.1. Therefore,no wrong, much less culpable wrong, was committed by the appellantsand others. He specifically referred to the allegation that there is noprovision of grant of lease at token rate of Re.1/- per month under theapplicable lease rules. His response was that this argument is completelyfallacious. The leases of the appellants were granted under the H.P.Lease Rules, 1993. The appellants wanted to set up cricket stadiumwith allied world class infrastructure to enable the ICC to grantinternational games to Himachal Pradesh and, thus, were eligible forgrant of lease under Rule 4(vii) - public purpose in the interest of thedevelopment of the State. The appellants were also eligible for grant oflarger areas under Rule 5 in terms of the exemption provided therein. Infact, the decision to lease the land at token rate of Re.1/- per month forconstruction of cricket stadium was well thought out administrativedecision by the State Government in the interest of the State and hasadmittedly put Dharamshala on the world map. This decision was takenby the State Cabinet after considering the advice and presentation fromthe officers concerned. RTI documents in the possession of the appellantsrecord the decision of the Cabinet dated May 27, 2002 as under:

“Item No. 14

Government of Himachal PradeshGeneral Administration Department

(Confidential & Cabinet)

Subject: Leasing out of Government land for the construction ofInternational Cricket Stadium at Dharamshala to H.P. Cricket Associationon usual terms and conditions.

CDEF

AThe above proposal was discussed by the Cabinet in its meeting held on27.5.2002 and the decision arrived at thereon is reproduced below:-

“The Cabinet approved the propsoal regarding lease rates. Advantagesof the Project explained by the AD were considered and it was decidedthat land be leased out at token rate of Re.1/- per month for period ofB99 years.”

The implementation report of the above decision may please be sent tothis Department within fortnight from the receipt of this communication.

Addl. Secretary (GAD)”

19. Further, Rule 8 provides for lease amount to be paid. At thetime of grant of lease, the appellant being society had to pay leaseamount under Rule 8(1)(ii) at 8% of the latest highest market value ofthe land leased or double the average market value of five years whicheveris less. The proviso to Rule 8(1) empowers the State Government toDreduce the lease amount in deserving cases and reads as under:

“8(1) Lease Amount. - (1) The lease amount (fresh or renewalof existing lease) shall be charged from the eligible institutionsand persons per annum as under:-

Provided that the State Government may reduce the amount forspecial reasons in deserving cases.”

Therefore, the State Government took conscious decision inexercise of its powers under the proviso to Rule 8(1) of the H.P. LeaseRules, 1993 and granted the lease at token rate of Re.1/- per month.F

20. Based on the aforesaid material and circumstances highlightedby Mr. Patwalia, his submission was that no case was made out againstthe appellants and others, for prosecuting them under criminal law, muchless under the provisions of PC Act and the High Court in its impugnedjudgment has totally glossed over these aspects by limiting the exerciseGto copiously quoting various judgments and on that basis, dismissing thepetitions of the appellants, without any discussion as to how principlescontained in those judgments is applicable in the instant case.

21. He also submitted that in the facts of the present case, simplybecause chargesheet has been filed thereafter and the order taking

cognizance has been passed would not mean that the appellants cannotprosecute these cases. He submitted that even the chargesheet andcognizance order has been challenged by filing Writ Petition (Criminal)No. 135 of 2017 which, according to him, is maintainable having regardto the fact that the appeals arising out of petitions under Section 482 ofCr.P.C. are pending in this Court and those events happened during thependency of these proceedings. He referred to the the cases of DelhiJudicial Service Association, Tis Hazari Court, Delhi v. State ofGujarat & Ors.[5] and Monica Kumar & Anr. v. State of Uttar Pradesh& Ors.[6], wherein it is held that this Court has inherent power to quashFIR, chargesheet, charges etc. in exercise of powers under Articles 32,136 and 142 to do complete justice in cause or matter pending beforeit and that there is no restriction on this power of the Court. Accordingto him, the present is not case where the appellants are alleging that ajudicial order is in violation of their fundamental rights. The present is acase where the appellants have pleaded that:

(i) there is no criminal act on their part and the facts do not discloseany offence;

(ii) all Officers who processed the case of the appellants are notprosecuted;

(iii) two Officers Subhash Ahluwalia and T.G. Negi who processedthe case of the appellants were made Principal Secretary to CMand Advisor to CM, respectively, by the respondent No. 2 andwere not prosecuted;

(iv) there is no criminal act on the part of the officers and theyperformed their appropriate administrative duties due to whichsanction stands declined by the Central Government and the CVC;

(v) leases were validly granted as per proper procedures and inaccordance with lease rules;

(vi) FIR was registered on the basis of “Congress Chargesheet”;

(vii) investigation was personally supervised by the respondentNo. 2;

(viii) chargesheet filed is the outcome of this tainted investigation;

5 (1991) 4 SCC 406

6 (2008) 8 SCC 781

A(ix) prosecution is mala fide and vexatious to settle personalpolitical scores;

(x) even otherwise the State Government continues to remainowner of the land which is on lease and on which the appellantshave constructed assets worth above 150 crores;

(xi) these assets are for use of the public of the State and arebeing used as such. Further, filing of chargesheet and an ordertaking cognizance is not final judicial order. It is preliminaryprocess in criminal law and is open to challenge in higher judicialfora such as this Court.

22. Last submission of the learned senior counsel was that, in anycase, at best the matter could have been subject matter of civil disputebetween the appellants and the respondents but has mala fidely beengiven the cloak of criminal proceeding to harass the appellants with amala fide prosecution. The salutary principle of law, viz. Actus ReusDNon Facit Reum Nisi Mens Sit Rea has been erroneously ignored bythe High Court and he cited the case of C.K. Jaffer Sharief v. State[7]and R. Balakrishna Pillai v. State of Kerala[8]. He also pleaded that, inanother politically motivated case by respondent No. 2, the same viewhas been taken by the Himachal Pradesh High Court in the case of A.N.Sharma v. State of H.P. (Cr. MMO No. 134/2015) against which SpecialELeave Petition filed by the State Government stands dismissed by thisCourt.

23. He, thus, concluded his argument with the submission thatcase was clearly covered by the judgments of this Court in State ofHaryana & Ors. v. Bhajan Lal & Ors.[9] and Vineet Kumar & Ors. v.FState of Uttar Pradesh & Anr.[10]

24. Insofar as respondent No. 1 i.e. State of Himachal Pradesh isconcerned, learned Advocate General submitted that State has alreadytaken decision not to continue with these criminal proceedings. He, infact, supported the case of the appellants and submitted that State hasGno objection if these proceedings are quashed. However, there was

7 (2013) 1 SCC 2058 (2003) 9 SCC 7009 (1992) Supp. (1) SCC 33510 (2017) 13 SCC 369

strong opposition on behalf of respondent No. 2 to the relief sought bythe appellants and refutation of the arguments advanced by the appellants.

25. Mr. Anoop George Chaudhary, learned senior counsel appearingfor the respondent No. 2, submitted that the Special Leave Petition wasinfructuous ab initio inasmuch as chargesheet was filed against 18accused persons out of whom only appellant No. 2 had sought quashingthereof. It was further submitted that, in any case, on the very day ofpassing impugned judgment by the High Court i.e. April 25, 2014, theInvestigating Agency filed the challan under Section 173 Cr.P.C. and onperusal thereof, the Special Court took cognizance vide order datedSeptember 06, 2014 and issued summons to the accused persons.Therefore, the Special Leave Petition had, in any case, had becomeinfructuous because of the aforesaid developments. He also submittedthat insofar as appellant No. 1, namely, Himachal Pradesh CricketAssociation is concerned, it was not arrayed as accused person; nochallan was filed against it and, therefore, no cognizance was also taken.26. Rebutting the allegations of mala fide, he submitted thatbecause of the irregularities committed in the allotment of land etc. bythe then Government, it was one of the issue in the Assembly Electionsin the year 2012 and the Congress had complained against the aforesaidirregularity by stating the same with the preparation of ‘CongressChargesheet’. That would not mean that it was out of political vendetta.In fact, the misdeeds of earlier Government was exposed. In any case,after 2012 elections, when the earlier Government did not come back topower, inquiry was ordered to the affairs of appellant No. 1 which wasconducted by the Anti-Corruption Bureau (ACB). As result of saidinquiry, FIR was registered which culminated in filing of the challan asprima facie case was made out by collecting requisite material. Healso referred to the Constitution Bench judgment in the case of Lalita

Kumari v. Government of Uttar Pradesh & Ors.[11] as per whichpreliminary inquiry before registering an FIR should be conducted toascertain whether the information received, reveals any cognizableoffence. He submitted that due procedure was followed in accordancewith the said judgment.

27. On merits, Mr. Chaudhary submitted that on the basis of finalreport and consequently the cognizance order clear case of cheating/11 (2014) 2 SCC 1

Afraud criminal breach of trust/criminal misconduct/usurpation of publicland worth crores of rupees/loss to state exchequer is made out againstthe accused persons. Hence, no cogent grounds exist for quashing ofcriminal proceedings. Reliance in this regard has been placed upon ajudgment rendered by this Court in Indian Oil Corporation v. NEPCIndia Ltd. & Ors.[12]:B

“12. The principles relating to exercise of jurisdiction under Section482 of the Code of Criminal Procedure to quash complaints andcriminal proceedings have been stated and reiterated by this Courtin several decisions. To mention few—Madhavrao JiwajiraoScindia v. Sambhajirao Chandrojirao Angre [(1988) 1 SCCC692 : 1988 SCC (Cri) 234], State of Haryana v. Bhajan Lal[1992 Supp (1) SCC 335 : 1992 SCC (Cri) 426], Rupan DeolBajaj v. Kanwar Pal Singh Gill [(1995) 6 SCC 194 : 1995 SCC(Cri) 1059], Central Bureau of Investigation v. Duncans AgroIndustries Ltd. [(1996) 5 SCC 591 : 1996 SCC (Cri) 1045], StateDof Bihar v. Rajendra Agrawalla [(1996) 8 SCC 164 : 1996 SCC(Cri) 628], Rajesh Bajaj v. State NCT of Delhi [(1999) 3 SCC259 : 1999 SCC (Cri) 401], Medchl Chemicals & Pharma (P)Ltd. v. Biological E. Ltd. [(2000) 3 SCC 269 : 2000 SCC (Cri)615], Hridaya Ranjan Prasad Verma v. State of Bihar [(2000)4 SCC 168 : 2000 SCC (Cri) 786], M. Krishnan v. Vijay SinghE[(2001) 8 SCC 645 : 2002 SCC (Cri) 19] and ZanduPharmaceutical Works Ltd. v. Mohd. Sharaful Haque [(2005)1 SCC 122 : 2005 SCC (Cri) 283] . The principles, relevant to ourpurpose are:

(i) complaint can be quashed where the allegations made in theFcomplaint, even if they are taken at their face value and acceptedin their entirety, do not prima facie constitute any offence or makeout the case alleged against the accused.

For this purpose, the complaint has to be examined as whole,but without examining the merits of the allegations. Neither adetailed inquiry nor meticulous analysis of the material nor anassessment of the reliability or genuineness of the allegations inthe complaint, is warranted while examining prayer for quashingof complaint.

12 (2006) 6 SCC 736H

(ii) complaint may also be quashed where it is clear abuse ofthe process of the court, as when the criminal proceeding is foundto have been initiated with mala fides/malice for wreakingvengeance or to cause harm, or where the allegations are absurdand inherently improbable.

(iii) The power to quash shall not, however, be used to stifle orscuttle legitimate prosecution. The power should be used sparinglyand with abundant caution.

(iv) The complaint is not required to verbatim reproduce the legalingredients of the offence alleged. If the necessary factualfoundation is laid in the complaint, merely on the ground that afew ingredients have not been stated in detail, the proceedingsshould not be quashed. Quashing of the complaint is warrantedonly where the complaint is so bereft of even the basic factswhich are absolutely necessary for making out the offence.

(v) given set of facts may make out: (a) purely civil wrong; or(b) purely criminal offence; or (c) civil wrong as also criminaloffence. commercial transaction or contractual dispute, apartfrom furnishing cause of action for seeking remedy in civil law,may also involve criminal offence. As the nature and scope of acivil proceeding are different from criminal proceeding, the merefact that the complaint relates to commercial transaction orbreach of contract, for which civil remedy is available or hasbeen availed, is not by itself ground to quash the criminalproceedings. The test is whether the allegations in the complaintdisclose criminal offence or not.”

28. Dubbing the allegations of mala fide against respondent No. 2as frivolous, it was argued that the High Court has rightly found no merittherein. In any case, argued the learned senior counsel, the High Courtrightly observed that once the chargesheet is filed, such plea becomesredundant as held in State of A.P. v. Golconda Linga Swamy andAnr.[13] and Umesh Kumar v. State of Andhra Pradesh & Anr.[14]. Thelearned senior counsel also questioned the move on the part of StateGovernment to withdraw the case in question. It was argued that nofresh ground or subsequent aspect has emerged or come in public domain

13 (2004) 6 SCC 522

14 (2013) 10 SCC 591

Afor doing the same and, therefore, such course of action was notpermissible as held in State of Tamil Nadu & Ors. v. K. Shyam Sunder& Ors.[15], Andhra Pradesh Dairy Development CorporationFederation v. B. Narasimha Reddy & Ors.[16] and State of HimachalPradesh v. Nishant Sareen[17]. Moreover, argued the learned seniorcounsel, the only procedure prescribed in law was to take the route ofBSection 321 of Cr.P.C. which has not happened in the instant case.

29. Replying to the arguments of the appellants that it was civildispute, Mr. Chaudhary argued that FIR/Final Report clearly depictsthat there is sufficient evidence of cheating, criminal breach of trust/criminal misconduct, conspiracy and destruction of evidence against theCaccused persons, therefore, it was not merely civil case and, thus, theauthorities have rightly registered the FIR and filed criminal proceedings.He also argued that at the time of cognizance, there was sanction forprosecution against all public servants (wherever applicable) and even ifsanction is subsequently withdrawn, it would not impact trial. It wasDfurther submitted that in the case of two remaining accused i.e. AjaySharma and Deepak Sanan, challan was not presented for want ofsanction under PC Act, as the permission seeking sanction was pendingwith Union Home Ministry though sanction for IPC offences was grantedby State Government. The prosecution sanction against Gopal Chand,an HCS Officer was initially granted but later on withdrawn withoutEthere being any change of circumstance. The necessity of non-grant/requirement of prosecution sanction can be decided by trial court duringthe course of trial and it is not ground for Himachal Pradesh CricketAssociation to seek quashing of entire prosecution.30. The learned senior counsel also defended non-prosecution ofFAjay Sharma and Deepak Sanan, two IAS Officers. He specificallypointed out that allegations in the chargesheet against appellant No.2which, according to him, disclosed that prima facie case was establishedagainst him and, therefore, there was no reason to quash the chargesheet.

31. Insofar as Writ Petition (Criminal) No. 135 of 2017 is concerned,Git was argued that such writ petition was not maintainable under Article32 of the Constitution, more so, when order of cognizance had not been15 (2011) 8 SCC 73716 (2011) 9 SCC 28617 (2010) 14 SCC 527H

challenged at all. Support from the judgments in Ujjam Bai v. State ofU.P.[18], Naresh Shridhar Mirajkar & Ors. v. State of Maharashtra& Anr.[19] and Northern Corporation v. Union of India & Ors.[20] wastaken in this behalf. He reiterated that there were serious allegationsagainst the accused persons and, therefore, no case for quashing of thechargesheet/challan was made out.

32. Before we undertake the exercise of deliberating on thearguments of the counsel for the parties and reach our conclusions, itwould be in the fitness of things to recapitulate the events in brief withfocus on the allegations of alleged criminality which have been fastenedupon the appellants and others. Appellant No. 1 was initially registeredas Society under the Societies Registration Act, 1860 in the year 1990.It is now not for profit company incorporated under Section 25 of theCompanies Act, 1956. One of the allegations pertains to the so-calledillegalities committed in the conversion of the society into deemedcompany under Section 25 of the Companies Act, 1956. Be that as itmay, the Society, after its formation, had applied for land at Village Maujaand Tehsil Dharamshala, District Kangra for construction of aninternational cricket stadium. proper lease was executed betweenappellant No. 1 and the State of Himachal Pradesh through Director,Himachal Pradesh Youth Services and Sports Department. It happenedmore than 16 years ago. In respect of this lease, the allegation is that itwas executed at monthly rent of Re.1/- which was allegedly done tofavour the appellants. Admittedly, proviso to Rule 8 of the Rulesempowers the State Government to adopt such course and decision tothis effect was taken after due deliberations at very high level, keepingin view the necessity of such stadium in the State, which did not haveany cricket stadium.

33. After the allotment of the land to appellant No. 1, it constructedcricket stadium thereupon. Appellant was desirous of making world-class cricket stadium which could host international cricket matches aswell. For this purpose, it submitted proposal to the ICC. The ICC gotthe stadium and playground inspected through Mr. Alan Hurst, it’s matchreferee. He inspected the stadium and submitted his report datedSeptember 20, 2007. The venue was not approved, at that stage, for

18 (1963) 1 SCR 778

19 AIR 1967 SC 120 (1990) 4 SCC 239

Ahosting international matches. perusal of the report submitted by thesaid referee would disclose that there were no adequate hotel facilitiesin the area and, therefore, ‘tour support was lacking’. Two hotels wereshown to Mr. Hurst and it was found by him that each of them were atsubstantial distance from the ground. Moreover, the facilities in the saidhotels were also not adequate. Notwithstanding the same, insofar asBthe cricket ground is concerned, the match referee had lauded it for itsquality and settings. It can be seen from the general comments/recommendations/conclusions in his report and the relevant portionwhereof reads as under:“This ground has one of the best settings imaginable. The peopleCinvolved in its development have been innovative and arepassionate and visionary. They have done great job so far ingetting this ground to where it is and should be congratulated andencouraged. I have no doubt that with adequate finances, in thenear future, this ground can become one of the best in the country.DThe idea of having ‘hotel’ as an integral part of the ground withdual use as corporate boxes during games is not new, however,the circular restaurant planned for the top, with 360 deg views ofthe Himalayas and surrounding area will make it unique.

Having said this, I believe that at this stage there is still lot ofEwork to be done that relates to its suitability for staging Internationalcricket. I am informed that sufficient finance has recently beenobtained to complete everything, and further work is nowunderway. I have listed below the issues I still have concernswith and things that need to be changed. If all of these things areaddressed, I would have no hesitation in recommending this groundFas suitable as an International ODI venue. The administratorshave ensured me that all of these things will be addressed withurgency. They are extremely keen to get into the BCCI groundrotation system as soon as possible.”

34. It is clear from the above that Mr. Hurst was of the view thatGthe cricket ground at this picturesque place with scenic beauty can betransformed into one of the best cricket grounds in the country, whichwould be suitable for international events if the deficiencies pointed outtherein are taken care of. Apart from providing other facilities to improvethe infrastructure (which could be easily taken care of), main concern

was to have hotel as an integral part of the ground with the dual use ascorporate boxes during the game. Because of the above, appellant No.1felt need to construct club house on the lease land and also seekallotment of some other land for the purpose of construction of hotel,keeping in view the observations contained in the aforesaid inspectionreport. Accordingly, it sent request for promotion to construct clubhouse on the lease land which was accorded by respondent No.1 throughDirectorate of Youth Services and Sports on June 23, 2008 subject tocompleting all the formalities.

35. As far as construction of hotel is concerned, the case of theappellants is that there was parcel of idle land in the middle of the landalloted for the stadium and for allotment of this land, request was madeto the Director, Youth Services and Sports. This land belongs to GramPanchayat. Gram Panchayat issued no objection for the allotment ofland on September 14, 2009 pursuant to which respondent No.1 grantedapproval to lease out this land in favour of appellant No.1 on November16, 2009 and the lease deed was also executed on December 14, 2009.Thereafter, for the purpose of hotel, additional land was given.

36. Pertinently, insofar as this lease deed is concerned, since theland was to be used for commercial purpose, namely, the club house, itprovided rental at commercial rate i.e. the market rate which the appellantNo.1 was supposed to pay. After the execution of the lease, club housewas constructed and the Town and Country Planning Department,Dharamshala also issued No Objection Certificate for the use of part ofinfrastructure of cricket stadium as club house for cricket activities. Itis also pertinent to mention that Principal Secretary (Revenue),Government of Himachal Pradesh issued no objection for execution ofsupplementary lease enabling commercial activities on additional landprovided that lease money was charged in accordance with the LeaseRules, 2011. This led to execution of supplementary lease deed datedJune 23, 2012 on which commercial hotel was constructed after obtainingrequisite permissions.

37. From the aforesaid events, following aspects can be culled

out:

Appellant No.1 has been given lease of land on which cricketstadium was constructed and thereafter lease for additional land meantfor club house and also supplementary lease for commercial activity i.e.

Athe hotel. It is only in respect of the land which is meant for cricketstadium that rental of Re.1/- per month was agreed to be charged byinvoking proviso to Rule 8. Thus, it is not contrary to law. State ofHimachal did not have any cricket ground, much less State of art cricketground. It is, for this reason, that the land was given on lease for thepurpose of constructing the cricket ground, which may become pride ofBHimachal Pradesh, at nominal rental. Insofar as lease in respect of clubhouse and supplementary lease for commercial activity (i.e. hotel) isconcerned, the lease money has been fixed in accordance with LeaseRules, 2011, namely, at commercial rates. There can hardly be anyelement of criminality in the afofresaid allotments inasmuch as six veryCsenior officers in the State Government (four of them of IAS Cadre andone belongs to Himachal Pradesh Administrative Service) who hadexamined the matter and only after their approval, the allotments weremade. There is no culpability attributed to them, which is very crucialfactor.

D38. What is more important is that the matter was looked into byDirector-cum-Special Secretary, Youth Services and Sports Departmentas well as Secretary, Youth Services and Sports Department and it isonly after the examination of the proposal by them and their final approval,lands in question were allotted.

E39. The respondents have submitted status report before the HighCourt, pursuant to the directions issued by it. As per the said statusreport as well as the FIRs, allegations against the appellants and otherswho are arrayed as accused persons are that appellant No.2 along withother accused indulged in illegal activities. It is alleged that Shri R.S.Gupta, the then Deputy Commissioner, had prepared report ignoring theFreport of Divisional Forest Officer who had assessed the value of treesat Rs.50 lakhs at that time, thereby causing wrongful loss to theGovernment. Further, one Shri Deepak Sanan, the then RevenueSecretary, provided helping hand to the accused persons for grantingpermission to set up and run commercial hotel and the matter was notGtaken to the Cabinet which was in violation of Schedule 20 of H.P. Rulesof Business. It is also alleged that Himachal Pradesh Cricket AssociationSociety was merged into company just to prevent the State Governmentfrom controlling it. These are the main allegations.

40. Insofar as other allegations are concerned, two Officers,Hnamely, Shri R.S. Gupta and Shri Deepak Sanan are implicated. While

doing so, other senior Officers who took active part in decision makinghave not been touched.

41. In the two FIRs, seven IAS Officers, one Officer belonging toHimachal Pradesh Administrative Service and one Executive Engineer,Dharamshala Division in Himachal Pradesh PWD Department playedtheir significant role at one stage or the other. Interstingly, in the FIRs,these nine Officers were also implicated and specific role attributed tothem which has been already mentioned in the tabulated format whilerecording the arguments of Mr. Patwalia. This would demonstrate thatinsofar as Mr. Subhash Ahluwalia (IAS), Director-cum-SpecialSecretary, Youth Services and Sports Department is concerned, allegationagainst him was that he ignored the rules and did not mention the provisionsof Lease Rules, 1993. He was also signatory to lease deed dated July29, 2002. It is important to mention that entire FIRs proceed on thebasis that appellants conspired with these Officers, among others. Theimputation against Mr. Subhash Ahluwalia is that in fixing the rent atRe.1/- per month, he not only ignored the rules and did not even mentionin his noting thereby implying that he was party to the alleged conspiracy.Similar allegations are against other eight persons as well alleging theirrole at different stages. Notwithstanding the same, three Officers,namely, Subhash Ahluwalia, Subhash Negi and T.G. Negi were not evencharged on the purported ground that there were not enough evidenceand mala fide intention. In respect of Mr. Ajay Sharma, CentralGovernment had declined the sanction. Though, State Government hadaccorded the sanction for prosecution earlier but it has also laterwithdrawn. Same is the position in respect of Deepak Sanan. Mr. GopiChand, who belongs to HPAS, though the prosecution sanction wasgranted earlier, in his case also, not only prosecution sanction waswithdrawn by the State Government, he has even been promoted to IASCadre. In case of Mr. K.K. Pant and Mr. P.C. Dhiman, other IASOfficers, prosecution sanction is declined. This leaves us only Mr. DeviChand Chauhan, Executive Engineer, Dharamshala Division in PWD,though in his case also, prosecution sanction was earlier rejected butsubsequently granted on the recommendation of the then Chief Minister.There are two Gram Panchayat members, who had issued no objectionfor allotment of land for club house, who have been prosecuted. Thesethree Officers are public servants who remain as accused persons. ThisCourt gets an impression that in the entire conspiracy story put up by the

Aprosecution, high Government officials are deliberately let off and veryjunior Officers were become scapegoat in order to ensure that caseunder PC Act survives in respect of appellants as well who are notpublic servants. Even otherwise, when the aforesaid eight persons arenot charged or proceeded against for want of prosecution, this lendssupport to the allegations of the appellants in imputing motives for theirBprosecution.

42. This Court, on 360° scanning of the matter, arrives at theconclusion that the elements of criminal intent or criminal acts are lacking.Following factors do stand established from record:

C(i) there is no criminal act on their part and the facts do not discloseany offence;

(ii) none of the officers who processed the case of the appellantsare not prosecuted;

(iii) two Officers Subhash Ahluwalia and T.G. Negi who took activeDpart in the decision making were made Principal Secretary to CMand Advisor to CM, respectively, by respondent No. 2 and werenot prosecuted;

(iv) As per the prosecution, there is no criminal act on the part ofthe officers and they performed their appropriate administrativeEduties due to which sanction stands declined by the CentralGovernment and the CVC. That itself is sufficient to absolve othersfrom any criminal prosecution;

(x) even otherwise the State Government continues to remainowner of the land which is on lease and on which the appellantsFhave constructed assets worth above 150 crores;

(xi) these assets are for use of the public of the State and arebeing used as such. Further, filing of chargesheet and an ordertaking cognizance is not final judicial order. It is preliminaryprocess in criminal law and is open to challenge in higher judicialGfora such as this Court.

43. Insofar as conversion of Society into not for profit companyunder Section 25 of the Companies Act, 1956 is concerned, it was obviouslydone as per the mandate of BCCI. There can hardly be an element ofcriminality therein. This Court fails to understand as to how any criminal

intent can be attributed in merging the said society into company, thattoo, to prevent the State Government from controlling it, which is themotive attributed by the respondents themselves. It rather shows theintent of the State Government which wanted to grab the control of theCricket Association. Such tendency on the part of the State authoritiesis condemned by Committee headed by former Chief Justice R.M.Lodha and approved by this Court. If at all, this is reflection upon theState Government. It also lends credence to the submission of theappellants that when the State Government fail to achieve the aforesaidpurpose, it went after the appellants. If at all, the subject matter was acivil dispute between the appellants and the respondents.

44. We may also mention that record reveals that respondent No.2personally supervised the investigation. However, we are eschewingthe discussion as to whether chargesheet is result of mala fide or politicalvendetta, since we feel that, ex facie, no case of cheating/fraud orcriminal breach of trust is made out. However, at the same time, itwould be necessary to point out that in the proceedings filed by theappellants under Section 482 Cr.P.C., respondent No.2 was impleadedas the allegations of mala fides were attributed to him. Since, we arenot looking into these allegations, respondent No.2 does not have muchrole to play in these proceedings. That apart, respondent No.2 has filedcounter affidavit stating that he is not necessary party and it is not hisjob to defend the prosecution. Having regard to the stand taken by therespondent No.1 not to prosecute these cases, even otherwise, no purposewould be served in continuing with these proceedings.

45. In view of our aforesaid discussion, argument of respondentNo.2 that the appeals have become infructuous cannot be accepted.

46. We are conscious of the scope of powers of the High Courtunder Section 482 of Cr.P.C. The inherent jurisdiction is to be exercisedcarefully and with caution and only when exercise is justified by thetests specifically laid down in the Section itself. Further, inherent powerunder this provision is not the rule but it is an exception. The exceptionis applied only when it is brought to the notice of the Court that gravemiscarriage of justice would be committed if the trial is allowed to proceedwhere the accused would be harassed unnecessarily. If the trial is allowedto linger when prima facie it appears to the Court that the trial couldlikely to be ended in acquittal. It is, for this reason, principle which is laiddown by catena of judgments is that the power is to be exercised by the

AHigh Court either to prevent abuse of process of any court or otherwiseto secure the ends of justice. However, whenever it is found that thecase is coming within the four corners of the aforesaid parameters, thepowers possessed by the High Court under this provision are very wide.It means that the Court has to undertake the exercise with great caution.However, the High Court is not to be inhibited when the circumstancesBwarrant exercise of such power to do substantial justice to the parties.This provision has been eloquently discussed in Bhajan Lal’s case whichhas become locus classicus. Principle Nos. (i) and (ii) of Indian OilCorporation are, therefore, become applicable. The entire subject matterhas been revisited in recent judgment in Vineet Kumar and some ofCthe discussion therein which takes note of earlier judgments is reproducedbelow:

“26. three-Judge Bench in State of Karnataka v. M.Devendrappa [State of Karnataka v. M. Devendrappa, (2002)3 SCC 89 : 2002 SCC (Cri) 539] had the occasion to consider theDambit of Section 482 CrPC. By analysing the scope of Section482 CrPC, this Court laid down that authority of the Court existsfor advancement of justice and if any attempt is made to abusethat authority so as to produce injustice the Court has power toprevent abuse. It further held that Court would be justified toquash any proceeding if it finds that initiation/continuance of itEamounts to abuse of the process of court or quashing of theseproceedings would otherwise serve the ends of justice. Thefollowing was laid down in para 6: (SCC p. 94)

“6. … All courts, whether civil or criminal possess, in the absenceof any express provision, as inherent in their constitution, all suchFpowers as are necessary to do the right and to undo wrong incourse of administration of justice on the principle quando lexaliquid alicui concedit, concedere videtur et id sine quo resipsae esse non potest (when the law gives person anything itgives him that without which it cannot exist). While exercisingGpowers under the section, the court does not function as courtof appeal or revision. Inherent jurisdiction under the section thoughwide has to be exercised sparingly, carefully and with caution andonly when such exercise is justified by the tests specifically laiddown in the section itself. It is to be exercised ex debito justitiaeto do real and substantial justice for the administration of which

alone courts exist. Authority of the court exists for advancementof justice and if any attempt is made to abuse that authority so asto produce injustice, the court has power to prevent abuse. Itwould be an abuse of process of the court to allow any actionwhich would result in injustice and prevent promotion of justice.In exercise of the powers court would be justified to quash anyproceeding if it finds that initiation/continuance of it amounts toabuse of the process of court or quashing of these proceedingswould otherwise serve the ends of justice. When no offence isdisclosed by the complaint, the court may examine the question offact. When complaint is sought to be quashed, it is permissibleto look into the materials to assess what the complainant hasalleged and whether any offence is made out even if the allegationsare accepted in toto.”

27. Further in para 8 the following was stated: (Devendrappacase [State of Karnataka v. M. Devendrappa, (2002) 3 SCC89 : 2002 SCC (Cri) 539] , SCC p. 95)

“8. … Judicial process should not be an instrument of oppression,or, needless harassment. Court should be circumspect and judiciousin exercising discretion and should take all relevant facts andcircumstances into consideration before issuing process, lest itwould be an instrument in the hands of private complainant tounleash vendetta to harass any person needlessly. At the sametime the section is not an instrument handed over to an accused toshort-circuit prosecution and bring about its sudden death. Thescope of exercise of power under Section 482 of the Code andthe categories of cases where the High Court may exercise itspower under it relating to cognizable offences to prevent abuse ofprocess of any court or otherwise to secure the ends of justicewere set out in some detail by this Court in State of Haryana v.Bhajan Lal [State of Haryana v. Bhajan Lal, 1992 Supp (1)SCC 335 : 1992 SCC (Cri) 426].”

In the instant case, the High Court simply noted those judgmentswhich put note of caution in exercising the powers under Section 482Cr.P.C. to quash such proceedings and dismissed the petition with ashallow examination of the case, thereby glossing over the material facts(which are noted hereinabove) and failing to examine that these pertinent

Aaspects were sufficient to demonstrate that no criminal case was madeout, particularly when all the concerned officers, who had taken thedecision, were let off on the ground that they had not committed anywrong.

47. As far as Writ Petition (Criminal) No. 135 of 2017 is concerned,Bthe appellants came to this Court challenging the order of cognizanceonly because of the reason that matter was already pending as theappellants had filed the Special Leave Petitions against the order of theHigh Court rejecting their petition for quashing of the FIR/Chargesheet.Having regard to these peculiar facts, writ petition has also beenentertained. In any case, once we hold that FIR needs to be quashed,Corder of cognizance would automatically stands vitiated.

48. As consequence, criminal appeals are allowed thereby settingaside the impugned judgment of the High Court, allowing the petitionfiled by the appellants under Section 482 Cr.P.C. and quashing the FIRNo. 12 of 2013 dated August 01, 2013 under Sections 406, 420, 120B ofDthe IPC and Section 13(2) of the PC Act and FIR No.14 of 2013 datedOctober 03, 2013 under Section 447 read with Section 120B of the IPC,Section 3 of Prevention of Damage to Public Property Act, 1984 andSection 13(2) of the PC Act. In view thereof, writ petition also standsdisposed of accordingly.

ENo order as to cost.

Devika Gujral

Appeals and Writ Petition disposed of.