CASE TITLE: Reena Bagga and Another vs. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11837/2023] and Himri Estate Pvt. Ltd. and 4 Others v. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11838/2023]
DECIDED ON: 08.08.2023
CORAM: Hon’ble Samit Gopal, J.
INTRODUCTION
Resolving divergent opinions concerning the suspension of the First Information Report (FIR) lodged by the Director of Shipra Estate against officials of Indiabulls Housing Finance Ltd. concerning disagreements related to a loan facility they had utilized, the Allahabad High Court has determined that without affording time for the Advocate General and the complainant’s legal representative to seek guidance, it is an appropriate situation to offer provisional safeguard.
Justice Samit Gopal, who was assigned the case as the third judge following a division in the bench of Justices Vivek Kumar Birla and Rajendra Kumar-IV, has ruled in favor of the officers of IHFL.
FACTS
The officers of IHFL expressed their discontent with the proliferation of legal actions stemming from a solitary loan transaction. Justice Kumar declined to grant immediate relief, citing the hasty progression of the matter and the lack of time afforded to the Additional Government Advocate (AGA) to gather guidance. He opined that the appropriate course was to allow the AGA the necessary time for instruction before delivering a consequential verdict that might adversely impact the opposing party.
On the contrary, Justice Birla supported the interim protection for the petitioners, drawing on the precedent set by Gagan Banga vs. Samit Mandal & another (2023). In this case, similar FIRs were under consideration, and the Supreme Court had granted protection to the financial institution and its officers.
The case was elevated to the Chief Justice’s attention, who subsequently delegated it to a third judge to solicit an opinion.
Currently, Justice Gopal has aligned with Justice Birla’s perspective, expressing:
“After reviewing the Supreme Court’s ruling in the matter of Gagan Banga vs. Samit Mandal & another: Contempt Petition (Civil) No. 774 of 2023 in Criminal Appeal No. 463 of 2022, along with the decision rendered by a Division Bench of this Court in Criminal Misc. Writ Petition No. 10893 of 2023 (Neeraj Tyagi and another vs. State of U.P. and 3 others), and considering the nature of the incident pertaining to financial institutions or money lenders pursuing recovery actions for their legitimate debts, with the proceedings adhering to the same trajectory, it is a suitable scenario to extend interim protection to the petitioners.”
In light of Shipra Group’s failure to fulfill its loan obligation to IHFL, Shipra Mall, an asset of the Shipra Group, was auctioned by IHFL. Himri Estate emerged as the successful bidder and acquired the mall.
Representative Mohit Singh of Shipra Group lodged several FIRs against IHFL officers and Himri Estate Pvt. Ltd. He alleged that the sale of Shipra Mall was illicit due to its undervaluation, resulting in substantial state revenue loss. Moreover, he claimed that specific officers were illicitly obtaining land in the vicinity, labeling them as land mafia from Delhi and NCR.
Conversely, the Additional Advocate General, representing the State, contended that given the potential sentences being less than 7 years, the petitioners needn’t fear arrest, thus negating the necessity for interim protection at this stage.
Additionally, the Informant’s legal counsel argued that the allegations against the petitioners extended beyond Shipra Mall to encompass illegally occupied lands held by the petitioners.
CASE ANALYSIS AND DECISION
The Court noted that the matter pertained to financial dealings involving loans, their non-repayment, and the subsequent auction of assets owned by the borrower.
In response to the argument put forth by the learned Additional Advocate General that the petitioners are unlikely to be arrested and any proceedings would adhere to the directives of the Supreme Court as referenced by him, the Court clarified that the interim order’s scope extends beyond solely preventing the arrest of the petitioners; it encompasses other aspects as well, as per the Court’s determination.
The case is scheduled to be heard before the division bench on August 11, 2023.
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Written by- Mansi Malpani
