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Himachal Pradesh High Court · body

2025 DAILYLAW 3598 (HP)

Keshav Dutt Shreedhar v. Kamlesh Kumar Sharma

2025-11-11

Virender Singh

body2025
JUDGMENT : VIRENDER SINGH, J. 1. Petitioner has filed the present petition, under Section 438 and 442 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter referred to as ‘ BNSS ’) read with Section 528 of the , against the order dated 2.4.2025, passed by the Court of learned Judicial Magistrate First Class, Kangra at Dharamshala, (hereinafter referred to as ‘the trial Court’) in Cr. MA No. 506 of 2024, titled as Keshav Dutt Shridhar vs. Kamlesh Kumar and Others . 2. By way of the order dated 2.4.2025, the learned trial Court has dismissed the application preferred, by the petitioner, under Section 156(3) Cr.PC, seeking registration of FIR, against respondents No.1 and 2. 3. Vide order dated 01.08.2025, the State has been ordered to be impleaded, as, respondent No.3, in this case, and notice of the petition was ordered to be confined only to respondent No.3-State. 4. Record of the case has been requisitioned. 5. The parties to the present lis are hereinafter referred to, in the same manner, as, were referred to, by the learned trial Court. 6. Brief facts, leading to filing the present petition, before this Court, as, emerge from the record, may be summed up, as under:- 6.1. Complainant Keshav Dutt Shreedhar, has filed an application, under Section 156(3) of the Cr.PC, for registration of the FIR, against respondents No.1 and 2, Kamlesh Kumar Sharma and Nishant Sharma, on the basis of the following facts:- 1. That the complainant is a practising Lawyer of more that forty-40 years of practise and experience and is a designated Senior Advocate of High Court of H.P. at Shimla. That he has his permanent address as mentioned in the memo of the complaint/application. 2. That, he is as well a director and shareholder in M/S Shri Chamunda Laboratories and Projects Pvt. Ltd. With Regd. Office at A-1/228, Ground Floor, KH No. 1629/1, Phase V, Aya Nagar, Extension, Near Sanjay Tubewell New Delhi- 110047. 3. That, it is worthwhile to mention that Shri Chamunda Laboratories and Projects Pvt. Ltd, is a company incorporated under the relevant provisions of the companies Act having its registered office at A-1/228, Ground Floor, KH No. 1629/1, Phase V, Aya Nagar, Extension, Near Sanjay Tubewell, New Delhi-110047. That the respondent-accused Nos. 1& 2 are the Directors and Shareholders in the company and respondent/accused no. 1 is the father of the accused no. 2. 4. That the respondent-accused Nos. 1& 2 are the Directors and Shareholders in the company and respondent/accused no. 1 is the father of the accused no. 2. 4. That the complainant/applicant came in contact with the respondents/accused nos. 1 & 2 sometime in the years 2004. That the respondent/accused nos. 1 & 2 in their capacity as Directors of the company represented that the company was engaged in the hospitality business in Himachal Pradesh and successfully running a Hotel under the name and style of Hotel Sai Gardens at Palampur, now having 57 rooms/cottages, restaurants and Banquet. This, company, as aforestated somewhere in the year 2010, also built a Mega Mall which constituted a commercial space i.e. 23000 sq. feet at Bhagsu Nath, Upper Dharamshala. That due to various circumstances and assurance, which later turned out to be false and misleading and completely incorrect, the applicant/complainant agreed to invest in the company and became a 50% shareholder in the company. 5. That the applicant/complainant besides becoming 50% owner of the company was also offered a seat in the board of the company. That the applicant/complainant, as being an active practising Lawyer at Shimla was not in a position to participate or had a direct role in the management and affairs of the company. His wife, Sarita Shreedhar is a Professor of Physics and based in Chandigarh. She was also on Board of the Directors, however being based in Chandigarh, she also did not have any executive role in the company. 6. That, it was assured by the respondents/ accused nos. 1 & 2 that having invested, the applicant/complainant and his wife shall have no problems with day-to-day responsibilities which demand their time and attention and they can be rest assured that the company would be run in compliance with the laws and with transparency with all major decisions to be presented and approved by the board. They were further assured of regular returns on their investments. 7. That, however soon the complainant came to learn that the same was merely a ploy to secure the investment of the complainant and was part of the larger conspiracy to defraud the complainant in process. The applicant/ complaint started to uncover the conspiracy of the respondents/accused nos. 1& 2 and the fact that all financial decisions were being taken by respondent-accused nos. The applicant/ complaint started to uncover the conspiracy of the respondents/accused nos. 1& 2 and the fact that all financial decisions were being taken by respondent-accused nos. 1 & 2 behind closed doors and clandestinely and without any proper sanction from the Board of Directors and were being actively concealed from the applicant/complainant. The details of the financial irregularities and misappropriation are highlighted as under:- i. That another commercial operation by the name of Hotel Fresco was started in the premises owned by the Company. There was no intimation or approval of the Board of the Company which was ever taken or given. From the bare perusal of the books of accounts of the so-called Hotel Fresco if are examined, it will be clear that the Company property and resources were being used by this entity for the benefit of its proprietor/partner, while all the revenue and profits from the operations were being pocketed by the respondents/accused. ii. That the respondent/accused No. 2, has been illegally and without any due sanction from the Board of Directors occupying a cottage in the Hotel Sai Garden premises as his permanent residence. It is also important to mention that the respondent/accused no. 2 owns only 17.48% of the shares in the company and yet enjoys 100% resources of the Company in the manner as if it is his private property. All this activity, as stated above has been done without any permission or authorisation of the Board and if the same accommodation over the years was offered to the tourists, it would have earned a huge revenue to the company. That the act of using company's property and its other services for self- serving needs without due compensation has caused a huge loss to the company and the same is being continued till date. iii. That respondent/accused No. 2 has also been merrily drawing a 'salary' to the tune of Rs. 1,00,000/- (One Lakh) per month. It is specifically stated, that the Board of Directors had not sanctioned any such salary to be drawn by the respondent/accused No. 2 and this action is unilateral and tantamounts to theft of the Company's money and resources while misusing one's position of authority. iv. That, it is pertinent to note and mention that the company for the last more than 8 years has not been making any profits and is barely staying afloat. However, respondents/accused nos. iv. That, it is pertinent to note and mention that the company for the last more than 8 years has not been making any profits and is barely staying afloat. However, respondents/accused nos. 1 and 2 are using the same as their personal money- making scheme. That the aforementioned unilateral and unlawful action of drawing Rs. 1,00,000/- salary by Accused No. 2, from the company without any sanction has caused a great loss to the Company upwards of Rs. 12,00,000 (Rupees Twelve Lakhs) per annum. That, it is also relevant that this illegal action does not find mention anywhere in the company records. v. That the respondents/accused nos. 1 and 2 in furtherance of their criminal conspiracy set a partnership concern by the name of 'Pratha Projects'. That sometime in the year of 2020, a restaurant by the name of "Coy's Café" was opened under the ambit of 'Pratha Projects' in the hotel premises of the company and subsequently also at the commercial space of the company at Bhagsu Nath, near McleodGanj, Dharamshala. This entire set up was once again performed without any consent/ resolution of the company. That the proceeds of this restaurant, on the premises of company were received by respondents/accused nos. 1 and 2 while using the Company's premises rent free and using company's resources without any authorisation. That, if the rental value of the years for which the premises were put to unauthorised use is calculated, it amounts to a wrongful loss to the company. vi. That, being a matter of fact that the complainant as a shareholders or Directors or his wife were never made aware of this unauthorised commercial activity being undertaken from its property of even the existence of "Pratha Projects", being run by respondents/ accused nos. 1 and 2. That the knowledge of this duplicitous act came to the complainant much later from the Independent Auditor's report of 2022. A bare perusal of the Auditor's report reveals the glaring financial irregularities unearthed by the Auditors and the fact that information was being actively concealed by the respondents/accused nos. 1 & 2 not just from the Board of Directors but also from the Auditors. At this stage it is pertinent to reproduce the observations of the Independent Auditors which led to their final conclusion that "in our opinion these books of accounts are misstatements and are inaccurate. 1 & 2 not just from the Board of Directors but also from the Auditors. At this stage it is pertinent to reproduce the observations of the Independent Auditors which led to their final conclusion that "in our opinion these books of accounts are misstatements and are inaccurate. These do not give a true and fair view about the state of affairs of the company". Some of these observations bringing to light the deep rooted conspiracy are as follows:- The infirmities pointed out by the auditor in the audit report dated 08-09-2023, prepared for financial year 2021-2022 are reproduced herein below:- "We have not received explanation and written reply to the under mentioned queries/questions (i) reason for nearlynil turnover (ii) Besides this One Coys Café was operating from SAI GARDEN and Alfa Mall even then no-receipts were shown from the sale proceeds of Coys Cafe in the books of accounts. (iii) justification for purchase of new machine of Rs. 2.00 Lacs and refrigerator of Rs. 20000-00. Since no operations were there as per management verbal explanation. (iv) Hotel FRESCO was operating from Sai Garden and tourist had stayed during the financial year 2021-22 and have given their reviews but no income has been shown from the hotel FRESCO. (v) since the condition relating to operation of hotel fresco were similar in F.Y. 2020-21. Your operation were continuing and you have shown a receipt of Rs. 16,27,737/- except rent from UCO bank during the F.Y. 2021-22. Current year receipts are nil as per books of accounts. (vi) justification for salary paid and other operational expenses incurred during the year. (vii) The management have shown a advance of rupees 39,22,250/- received against sale of space from Sh. Kamlesh Kumar Sharma director of the company. No reply to the following questions regarding advance for space a) Area of space for which advance received. b) That the total value of property to be sold and rate per sq. ft. c) Board resolution for approving the transaction to related party. d) Advance for space booked in the name of Kamlesh Kumar Sharma director of the company. Details of space booked and copy of agreement of sell. (viii) rent agreement for "Pratha Projects" operating from premises of Sai Garden hotel. (ix) Copy of resolution for starting brand fresco hotel from Sai Garden premises. x) Copy of electricity bills for the last 3 years. Details of space booked and copy of agreement of sell. (viii) rent agreement for "Pratha Projects" operating from premises of Sai Garden hotel. (ix) Copy of resolution for starting brand fresco hotel from Sai Garden premises. x) Copy of electricity bills for the last 3 years. Current year electricity bills are of Rs. 102759/- xi) justification for expenses when there is no business done and shall be also paid/booked. xii) Gas & fuel charge of Rs. 17175/-, xiii) housekeeping of Rs. 57892/- xiv) Purchase of F & B Charges of Rs. 146948/" Copy of Audit report dated 08.09.2023 annexed herewith (vii) The Independent Auditors categorically observed that the books of Accounts including Balance Sheet and Statements of Profit and loss were not being kept in the proper Account Standards. Furthermore there has been a specific observation of the Auditors that improper books of accounts as required by law have been kept. That it is apparent that respondents/accused No. 1 and 2 are illegally siphoning off the income inflow of the Company and diverting it to 'Pratha Projects' an artificial entity created solely for the purpose of causing a wrongful loss to the Company while enriching the Directors. 8. That, despite several requests by the complainant, the accused persons have evaded all opportunities and attempts to rectify their illegal activities which are actively causing loss to the company, hold a meeting or offer any explanation or justification for these acts. The respondents/accused have actively conspired to commit and continue to commit crimes of theft, cheating, criminal breach of trust. 9. (i) Realising that these illegal activities will not go unchecked and un- challenged, since the Auditor's report, the accused No. 2 has started a vilification campaign against the Complainant. He first filed a complaint against the Complainant that the Complainant got him attacked in his house in Gurugram, Haryana. He also named some other people in the complaint including some who are not connected with the matter at all. The matter was investigated, and it is understood that nothing was found against the complainant herein. (Copy of his complaint and closure report of Haryana Police is attached). He also named some other people in the complaint including some who are not connected with the matter at all. The matter was investigated, and it is understood that nothing was found against the complainant herein. (Copy of his complaint and closure report of Haryana Police is attached). ii) In his continued attempt to brow beat the Complainant and force him not to follow the cheating and fraud complaint, Accused no.2 further filed a complaint with SP Kangra, SP Shimla and DGP Himachal and as a cheap diversionary tactic circulated this complaint widely including to the President of India, Prime Minister, Chief Minister, Chief justice and so on. iii) Seeing this not working, besides the Complainant, he started levelled wild allegations against the DGP of the State calling him a "Mobster". iv) Exhibiting extreme arrogance, accused no. 2 then held a supposed Press Conference in the Hotel Sai Garden, Palampur, Himachal to further his wild and sweeping allegations. v) with these crude attempts to embroil the Complainant in a Criminal case and with wide publicity given to these defamatory and false allegations, the Accused no. 2 has also committed crime with in the meaning of sections 211, 469,499, 500 and 505 of the IPC. 10. The Accused No.2 sent two emails dated 30.09.2023 and 06.10.2023 (Copies enclosed) trying to convene meeting of the Board of Directors in a short span of half an hour to three hours which were duly replied to while objecting to such illegal procedure adopted for convening such meetings. To these mails, rather than reply to the concerns raised, the Accused No. 1 on the contrary, chose to reply to the said emails on 09.10.2023 levelling baseless and personal allegations against the complainant. That it is also pertinent to mention that the Accused No. 1 and 2 are attempting to oust the complainant from decision making, by conducting Board Meetings in complete contravention of the provisions of the companies Act and are trying to induct Auditors that will give favourable reports and aid their operations by burying the illegalities in future reports. 11. From the aforesaid facts and the entire sequence of events as narrated above, it is evident that the Accused Persons have acted pursuant to a well- planned and deep rooted criminal conspiracy to divest the complainant of his hard earned money. 6.2. 11. From the aforesaid facts and the entire sequence of events as narrated above, it is evident that the Accused Persons have acted pursuant to a well- planned and deep rooted criminal conspiracy to divest the complainant of his hard earned money. 6.2. It is the further case of the complainant that he had moved a complaint on 08.11.2023, before the Additional Director General of Police, CID Shimla, which office was also designated, as Police Station under Economic Offence, along with documents. When, no action was taken, on the said complaint, in order to comply with Section 154(3) Cr.PC, a complaint was also submitted to Superintendent of Police, Shimla, along with relevant documents, through registered post and vide order dated 23.11.2023, his application dated 08.11.2023, was forwarded to Superintendent of Police Kangra. Thereafter, reminder was also issued to Superintendent of Police, Kangra at Dharamshala. 6.3. Since, no response has been received, as such, complainant has prayed that the police be directed to register the FIR, against respondents No.1 and 2. 7. The complaint, before the learned trial Court, was filed on 15.05.2024 and on 20.05.2025, it was fixed for consideration on 24.06.2024. The matter remained for consideration before the learned trial Court, on various dates and on 08.11.2024, the learned trial Court has sought the status report. Consequently, the police has submitted the status report. 8. After considering the status report on 02.04.2025, the learned trial Court has dismissed the complaint by holding that in view of the averments, as made in the application, no prima facie case for commission of cognizable offence is made out. 9. Perusal of the impugned order demonstrates that the prayer, as, made in the application was rejected, mainly, on the basis of the report submitted by the Police. 10. It is the specific averment of the complainant in the complaint that despite making the complaint to the Police on 08.11.2023 and 23.11.2023, no action has been taken. Hence, he has invoked the provisions of Section 156(3) Cr.PC, by filing the complaint, before the learned trial Court. 10. It is the specific averment of the complainant in the complaint that despite making the complaint to the Police on 08.11.2023 and 23.11.2023, no action has been taken. Hence, he has invoked the provisions of Section 156(3) Cr.PC, by filing the complaint, before the learned trial Court. Bare provisions of Section 156 of the Cr.PC, are reproduced, as under:- Police officer‘s power to investigate cognizable case.- (1) Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case which a Court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIII. (2) No proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate. (3) Any Magistrate empowered under section 190 may order such an investigation as abovementioned. 11. At the time of passing any order, under Section 156(3) Cr.PC, the Magistrate has to see only the prima facie case, at that stage. 12. The powers, under Section 156(3) of the Cr.PC, is to be exercised at pre-cognizance stage and the Magistrate has to see only the prima facie case at this stage. The exercise of the powers by the Magistrate, in pre- cognizance and post cognizance stage, are altogether different. 13. In the present case, it seems that the learned trial Court has fallen into an error, by dwelling into the allegations, levelled in the complaint, in the light of the stand, as taken by the police in the status report. Moreover, the complaint, before the learned trial Court, was filed, before the date of commencement of the BNSS i.e. 01.07.2024. The complaint is duly supported by the affidavit of the complainant and the documents. 14. In such situation, it seems that after commencement of the BNSS , on 01.07.2024, the learned trial Court has fallen into error by considering the application, under Section 175(3) of the , instead of 156(3) Cr.PC. 15. Even, after the commencement of the BNSS , on 01.07.2024, the proceedings, which were pending immediate before the date, when the came into force, the same procedure would apply to the proceedings, which fall within the definition of appeal, application, trial, inquiry or investigation. 15. Even, after the commencement of the BNSS , on 01.07.2024, the proceedings, which were pending immediate before the date, when the came into force, the same procedure would apply to the proceedings, which fall within the definition of appeal, application, trial, inquiry or investigation. In this regard, provisions of Section 531 of the , is reproduced, as under:- 531. Repeal and savings.— (1) The Code of Criminal Procedure, 1973 (2 of 1974) is hereby repealed. (2) Notwithstanding such repeal— (a) if, immediately before the date on which this Sanhita comes into force, there is any appeal, application, trial, inquiry or investigation pending, then, such appeal, application, trial, inquiry or investigation shall be disposed of, continued, held or made, as the case may be, in accordance with the provisions of the Code of Criminal Procedure, 1973 (2 of 1974), as in force immediately before such commencement (hereinafter referred to as the said Code), as if this Sanhita had not come into force; (b) all notifications published, proclamations issued, powers conferred, forms provided by rules, local jurisdictions defined, sentences passed and orders, rules and appointments, not being appointments as Special Magistrates, made under the said Code and which are in force immediately before the commencement of this Sanhita, shall be deemed, respectively, to have been published, issued, conferred, specified, defined, passed or made under the corresponding provisions of this Sanhita; (c) any sanction accorded or consent given under the said Code in pursuance of which no proceeding was commenced under that Code, shall be deemed to have been accorded or given under the corresponding provisions of this Sanhita and proceedings may be commenced under this Sanhita in pursuance of such sanction or consent. (3) Where the period specified for an application or other proceeding under the said Code had expired on or before the commencement of this Sanhita, nothing in this Sanhita shall be construed as enabling any such application to be made or proceeding to be commenced under this Sanhita by reason only of the fact that a longer period therefor is specified by this Sanhita or provisions are made in this Sanhita for the extension of time.” (Self emphasis supplied) 16. When, the proceedings were pending, on the day of commencement of the BNSS , then, the complaint filed by the complainant is to be decided, as per the provisions of Section 156(3) Cr.PC. When, the proceedings were pending, on the day of commencement of the BNSS , then, the complaint filed by the complainant is to be decided, as per the provisions of Section 156(3) Cr.PC. Under the provisions of Section 156(3) Cr.PC, there was no occasion/provision, enabling the Magistrate to call for the status report from the Police, as, the same can only be called, in post cognizance stage, as provided under Section 202 Cr.PC. 17. The scope of Section 156(3) Cr.PC has elaborately been discussed by a three judge Bench of Hon’ble Supreme Court, in Devarapalli Lakshminarayana Reddy & Others vs. V. Narayana Reddy & Others, (1976) 3 SCC 252 . Relevant paragraphs 17 and 18 of the judgment, are reproduced, as under:- 17. Section 156(3) occurs in Chapter XII, under the caption: "Information to the Police and their powers to investigate"; while s. 202 is in Chapter XV which bears the heading "Of complaints to Magistrates". The power It order police investigation under Section 156(3) is different from the power to direct investigation conferred by s. 202(1). The two operate in distinct spheres at different stages. The first is exercisable at the pre cognizance stage, the second at the post-cognizance stage when the Magistrate is in seisin of the case. 'That is to say in the case of a complaint regarding the commission of a cognizable offence, the power under Section 156(3) can be invoked by the Magistrate before he takes cognizance of the offence under s. 190(1)(a). But if he once takes such cognizance and embarks upon the procedure embodied in Chapter XV, he is not competent to switch back to the pre-cognizance stage and avail of s. 156(3). It may be noted further that an order made under sub-section (3) of Section 156(3), is in the nature of a peremptory reminder or intimation to the police to exercise their plenary powers of investigation under Section 156(1). Such an investigation embraces the entire continuous process which begins with the collection of evidence under Section 156(3) ends with a report or chargesheet under Section 173. On the other hand Section 202 comes in at a stage when some evidence has been collected by the Magistrate in proceedings under Chapter XV, but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure. On the other hand Section 202 comes in at a stage when some evidence has been collected by the Magistrate in proceedings under Chapter XV, but the same is deemed insufficient to take a decision as to the next step in the prescribed procedure. In such a situation, the Magistrate is empowered under Section 202 to direct within the limits circumscribed by that section, an investigation "for the purpose of deciding whether or not here is sufficient ground for proceeding ". Thus the object of an investigation under Section 202 is not to initiate a fresh case on police report but to assist the Magistrate in completing proceedings already instituted upon a complaint before him. 18. In the instant case the Magistrate did not apply his mind to the complaint for deciding whether or not there is sufficient ground for proceeding; but only for ordering an investigation under s. 156(3). He did not bring into motion the machinery of Chapter XV. He did not examine the complaint or his witnesses under Section 200 , Cr.P.C., which is the first step in the procedure prescribed under that Chapter. The question of taking the next step of that procedure envisaged in Section. 202 did not arise. Instead of taking cognizance of the offence he has., in the exercise of his discretion, sent the complaint for investigation by police under Section 156. 18. Judging the facts and circumstances of the present case, in the light of the decision, as referred to above, the learned trial Court, in the present case, has not applied its judicial mind to the factual position, as mentioned in the complaint, to decide whether or not, there exists a case for issuing of the direction, under Section 156(3) of the Cr.PC. 19. In such situation, the exercise of the powers by the learned trial Court to decide the matter, on the basis of the police report, is not sustainable in the eyes of law. The learned trial Court seems to have fallen into error, by exercising the powers, under Section 175 (3) of BNSS , whereas, as, held in the preceding paragraph, the procedure, as prescribed under the Cr. PC., would be applicable to the present case, being filed prior to commencement of the . 20. The learned trial Court seems to have fallen into error, by exercising the powers, under Section 175 (3) of BNSS , whereas, as, held in the preceding paragraph, the procedure, as prescribed under the Cr. PC., would be applicable to the present case, being filed prior to commencement of the . 20. At the cost of repetition, at the stage of exercising the powers, under Section 156(3) Cr.PC, the learned trial Court has to see the allegations, as contained in the application/complaint, supported by the documents. 21. In view of the above, the order dated 02.04.2025, impugned herein, does not stand in the judicial scrutiny of this Court and the same is set aside. The matter is remanded back to the learned trial Court to decide the application/complaint afresh, filed, under Section 156(3) Cr.PC., in view of the observations made above. 22. The present petition is allowed, in the above terms. Pending application(s), if any, shall also stand disposed of. 23. The complainant, through his counsel, is directed to appear before the learned trial Court on 20th November, 2025. Record be sent back.