Bombay HC directs Palghar Police to stay probe against Indiabulls Housing Finance – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/india/bombay-hc-directs-palghar-police-to-stay-probe-against-indiabulls-housing-finance/articleshow/82297054.cmsSynopsis

The mortgage lender had approached the court after a company shareholder approached the local police station in the Palghar District alleging siphoning of funds and sought the lower court’s intervention to direct the police to investigate the matter.

In a relief for theIndiabulls Housing Finance LtdNSE 2.67 % (IHFL), the Bombay High Court has stayed an investigation against the company by the Palghar police until the case is heard. The Court in its order, while staying the probe by local police observed that the complaint on which the case was filed “appeared to be malafide and deficient”.

The mortgage lender had approached the court after a company shareholder approached the local police station in the Palghar District alleging siphoning of funds and sought the lower court’s intervention to direct the police to investigate the matter.

The same shareholder later moved the Judicial Magistrate at Wada District and obtained a court order under Section 156 (3) of the Criminal Procedure Code for registering FIR and initiate an investigation.

Following this development, IHFL moved the high court to challenge the lower court’s order and sought quashing of the FIR against the company.

In his complaint to the Palghar court, Ashutosh Kamble, who owns about 500 shares claimed that he suffered a loss through the devaluation of his shares due to alleged siphoning of funds and misdealings by IHFL.

Senior Counsel, Amit Desai, who appeared for the NBFC, argued that the complaint lodged by respondent No 2 (Kamble) was absolutely malafide and part of similar attempts made earlier against the petitioners by certain persons seeking to initiate criminal proceedings on the basis of false and frivolous allegations, so as to extract money from the petitioners.

“While respondent no 2 purchased shares for the first time on March 17, 2021, within less than 10 days, he approached the police with his alleged grievances,” argued counsel for IHFL. “This was an absolutely malafide complaint, which the Magistrate failed to appreciate in the proper perspective and that there was not even a prima facie case made out for registration of FIR,” the counsel argued.

IHFL further argued that the respondent did not wait for the matter to proceed further and within four days he approached the higher authority i.e. Superintendent of Police and then immediately on April 3, 2021, filing the complaint before the Magistrate under Section 156(3) of the CrPC on April 7, 2021, and later the magistrate proceeded to pass the order directing registration of FIR.

“It has been laid down that complaints filed before the Magistrates need to be supported by affidavit so that the complainant can be held responsible for allegations and statements made in the complaint,” observed division bench of Justice SS Shinde and Justice Manish Pitale in its order. “It has been laid down that such requirement has to be satisfied so as to ensure that citizens are protected from perverse litigations and complaints filed before the Magistrates for initiating criminal proceedings only with a view to harass fellow citizens. Therefore, prima facie, we find some substance in the contentions raised in this context on behalf of the petitioners (IHFL).”

The court, in its order of April 27, said, since we prima facie are of the opinion that the complaint filed by respondent no 2 appears to be malafide and deficient, insofar as the complaint is not supported by a proper affidavit, ad-interim stay of the investigation deserves to be granted.

The court in its order, while granting interim relief to Indiabulls Housing Finance directed the local police to stay the investigation in the matter until the final disposal of the petition.

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