Anil Sen And Another vs. State Of U.P. And 3 Others
Original PDF →Facts
The petitioners, Anil Sen and another, sought to quash a First Information Report (FIR) registered on June 28, 2019, under Sections 420 and 406 of the Indian Penal Code. The FIR concerned alleged fraud related to a proprietorship firm, K.D.M. Enterprises, operated by petitioner no. 1. This firm was engaged in the business of hiring E-Scooter Taxis and invited investments in exchange for E-scooters, which were firm assets. Memoranda of Understanding (MOUs) were exchanged as agreements. The petitioners contended that the firm aimed to create business prospects and employment, not to defraud creditors, and that the invested amount along with profits had been transmitted to the investor's account, with the last payment on May 4, 2019. The respondent no. 4 is the investor.
Held
The Court held that the transaction between the proprietorship firm and respondent no. 4, which formed the basis of the FIR, could not be examined within the scope of Article 226 of the Constitution of India. The Court reasoned that the merits and demerits of the allegations in the FIR cannot be scrutinized at this preliminary stage of a writ petition. Furthermore, the Court opined that interference at this juncture might impede the speedy investigation of the case. Consequently, the Court found no merit in the writ petition. The operative direction was the dismissal of the writ petition.
Key Issues
1. Whether the allegations in the First Information Report (FIR) warrant quashing under Article 226 of the Constitution of India, considering the nature of the transaction and the petitioners' defense. Petitioner's Contention: The learned counsel for the petitioner argued that the allegations in the FIR are false. They asserted that the firm's objective was to create business prospects and employment, and there was no intention to defraud creditors. They further submitted that the bank statements of respondent no. 4 showed the entire investment along with profits had been transmitted to his account, with the last payment on May 4, 2019. Revenue/State's Contention: The judgment does not record any specific arguments made by the respondent State or its counsel regarding the merits of the FIR allegations. However, the Court's reasoning implies a stance that the transaction's merits should not be examined at this stage.
AI-generated summary — verify with the full judgment below
Court No. - 44 Case :- CRIMINAL MISC. WRIT PETITION No. - 5851 of 2021 Petitioner :- Anil Sen And Another Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Shadab Alam Counsel for Respondent :- G.A. Hon'ble Mrs. Sunita Agarwal,J. Hon'ble Mrs. Sadhna Rani (Thakur),J. The supplementary affidavit filed today is taken on record. By means of the present petition, the petitioners are seeking quashing of the first information report dated 28.06.2019 registered as Case Crime No.0544 of 2019, under Sections 420 & 406 I.P.C., P.S.- Kasna, District- Gautam Buddh Nagar. It is sought to be submitted by way of the supplementary affidavit that the petitioner no.1 has incorporated a proprietorship firm in the name of K.D.M. Enterprises with the GST Registration No.09BLCPS5442Q1ZC and the official address of the said firm is office number 19, 2nd Floor, GNS Plaza Site-4, Kasana, Greater Noida Gautam Buddha Nagar Uttar Pradesh. It is admitted that the aforesaid firm was engaged in the business of hiring E-Scooter Taxis and in order to expand its business it had invited investment in exchange of E-Scooter which was asset of the firm. In the process of procuring investment, memorandum of understanding had been exchanged between the parties in the shape of agreement. The copy of one of such agreement has been brought on record as annexure- 'S.A.-3' of the supplementary affidavit. The contention is that the objective of the firm was to create business prospects and employment and it had not intended to defraud its creditors and for the matter of fact, the petitioner had not defrauded its creditors. The assertion in the writ petition is that the bank statements of the respondent no.4 filed as annexure-'2' to the writ petition shows that the entire investment made by the respondent no.4 alongwith the profits had been transmitted in his account, the last payment being dated 04.05.2019. For the above material, it is contended by the learned counsel for the petitioner that the allegations in the first information report are false. Considering the above, we may note that there is no dispute about the fact that the respondent no.4 had invested certain money in the proprietorship firm created by the petitioner no.
The transaction between the proprietorship firm and the respondent no.4 cannot be examined within the scope of Article 226 of the Constitution of India, as the merits and demerits of the allegations in the first information report cannot be seen at this stage. Moreover, interference at this stage may impede the speedy investigation. For the aforesaid, we do not find any merit in the writ petition and the same is, accordingly, dismissed. Order Date :- 3.9.2021 Radhika
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.