# HIMACHAL PRADESH CRICKET ASSOCIATION & ANR v. STATE OF HIMACHAL PRADESH & ORS

- **Citation:** [2018] 13 S.C.R. 868
- **Court:** Supreme Court of India
- **Decided:** 2018-11-02
- **Case number:** Criminal Appeal Nos. 1258-1259 of 2018
- **Bench:** A. K. Sikri, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/himachal-pradesh-cricket-association-anr-v-state-of-himachal-pradesh-ors-32542
- **Pages:** 41

## Headnote

Code of Criminal Procedure, 1973: s.482 - Quashing of FIRs
- In the instant case, lease of land was granted by the Government
to the appellant no.1 for construction of world class cricket stadium
- Additional land was allotted to appellant by Gram Panchayat - A
club house was constructed on the part of the infrastructure of the
allotted land - Another land was allotted for using commercially
and a hotel was constructed on it - Appellant no1 was initially
registered as a society which was later converted to a company -
Two FIRs against appellants and some other persons alleging illegal
grant 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/w
s.120B, s.3 of PDPP Act,1984 and s.13(2) of POC Act - High Court
dismissed the petition for quashing of FIRs by brushing aside the
argument of appellants that it was a case of vengeance, political
vendeta and mala fide - On appeal, held: No criminal case was
made out against the appellants, particularly when all the concerned
officers, who took the decision in grant of lease of land were let off
on the ground that they had not committed any wrong - High
Government Officials who were involved in lease grant were not
charged or proceeded for want of prosecution - Two senior officials
who took active part in decision making in lease grant were made
Principal Secretary and Advisor to CM respectively - Even as per
prosecution, there was no criminal act on part of the officers as
they had performed their appropriate administrative duties - Insofar
as conversion of Society into not for profit company under s.25 of
the Companies Act, 1956 was concerned, it was done as per the
mandate of BCCI - There was no element of criminality therein - In
the proceedings filed by the appellants under s.482, respondent
No.2 (CM) was impleaded, as the allegations of mala fides were
attributed to him - Since, no case of cheating/fraud or criminal
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breach of trust was made out, respondent No.2 did not have much
role to play in these proceedings - Having regard to the stand taken
by 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 - Himachal
Pradesh 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 which
cricket stadium was constructed and thereafter lease for
additional land meant for club house and also supplementary lease
for commercial activity i.e. the hotel. It is only in respect of the
land which is meant for cricket stadium that rental of Re.1/- per
month was agreed to be charged by invoking proviso to Rule 8 of
the H.P. Lease Rules, 1993. Thus, it was not contrary to law.
State of Himachal did not have any cricket ground, much less
State of art cricket ground. It was, for this reason, that the land
was given on lease for the purpose of constructing the cricket
ground, which may become pride of Himachal Pradesh, at nominal
rental. Insofar as lease in respect of club house and supplementary
lease for commercial activity (i.e. hotel) was concerned, the lease
money was fixed in accordance with Lease Rules, 2011, namely,
at commercial rates. There can hardly be any element of
criminality in these allotments inasmuch as six very senior officers
in the State Government (four of them of IAS Cadre and one
belonged to Himachal Pradesh Administrative Service) who had
examined the matter and only after their approval, the allotments
were made. There was no culpability attributed to them, which is
a very crucial factor. [Paras 37][901-G-H; 902-A-C]
2. In the two FIRs, seven IAS Officers, one Officer
belonging to Himachal Pradesh Administrative Service and one
Ex

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HIMACHAL PRADESH CRICKET ASSOCIATION & ANR.
v.
STATE OF HIMACHAL PRADESH & ORS.
(Criminal Appeal Nos. 1258-1259 of 2018)
NOVEMBER 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 Government
to the appellant no.1 for construction of world class cricket stadium
- Additional land was allotted to appellant by Gram Panchayat - A
club house was constructed on the part of the infrastructure of the
allotted land - Another land was allotted for using commercially
and a hotel was constructed on it - Appellant no1 was initially
registered as a society which was later converted to a company -
Two FIRs against appellants and some other persons alleging illegal
grant 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/w
s.120B, s.3 of PDPP Act,1984 and s.13(2) of POC Act - High Court
dismissed the petition for quashing of FIRs by brushing aside the
argument of appellants that it was a case of vengeance, political
vendeta and mala fide - On appeal, held: No criminal case was
made out against the appellants, particularly when all the concerned
officers, who took the decision in grant of lease of land were let off
on the ground that they had not committed any wrong - High
Government Officials who were involved in lease grant were not
charged or proceeded for want of prosecution - Two senior officials
who took active part in decision making in lease grant were made
Principal Secretary and Advisor to CM respectively - Even as per
prosecution, there was no criminal act on part of the officers as
they had performed their appropriate administrative duties - Insofar
as conversion of Society into not for profit company under s.25 of
the Companies Act, 1956 was concerned, it was done as per the
mandate of BCCI - There was no element of criminality therein - In
the proceedings filed by the appellants under s.482, respondent
No.2 (CM) was impleaded, as the allegations of mala fides were
attributed to him - Since, no case of cheating/fraud or criminal
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breach of trust was made out, respondent No.2 did not have much
role to play in these proceedings - Having regard to the stand taken
by 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 - Himachal
Pradesh 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 which
cricket stadium was constructed and thereafter lease for
additional land meant for club house and also supplementary lease
for commercial activity i.e. the hotel. It is only in respect of the
land which is meant for cricket stadium that rental of Re.1/- per
month was agreed to be charged by invoking proviso to Rule 8 of
the H.P. Lease Rules, 1993. Thus, it was not contrary to law.
State of Himachal did not have any cricket ground, much less
State of art cricket ground. It was, for this reason, that the land
was given on lease for the purpose of constructing the cricket
ground, which may become pride of Himachal Pradesh, at nominal
rental. Insofar as lease in respect of club house and supplementary
lease for commercial activity (i.e. hotel) was concerned, the lease
money was fixed in accordance with Lease Rules, 2011, namely,
at commercial rates. There can hardly be any element of
criminality in these allotments inasmuch as six very senior officers
in the State Government (four of them of IAS Cadre and one
belonged to Himachal Pradesh Administrative Service) who had
examined the matter and only after their approval, the allotments
were made. There was no culpability attributed to them, which is
a very crucial factor. [Paras 37][901-G-H; 902-A-C]
2. In the two FIRs, seven IAS Officers, one Officer
belonging to Himachal Pradesh Administrative Service and one
Executive Engineer, Dharamshala Division in Himachal Pradesh
PWD Department played their significant role at one stage or
the other. Insofar as the Director-cum-Special Secretary, Youth
Services and Sports Department was concerned, allegation against
him was that he ignored the rules and did not mention the
provisions of Lease Rules, 1993. He was also signatory to a
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HIMACHAL PRADESH
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lease deed. Entire FIRs proceeded on the basis that appellants
conspired with these Officers, among others. The imputation
against the Director-cum-Special Secretary was that in fixing the
rent at Re.1/- per month, he not only ignored the rules and did
not even mention in his noting thereby implying that he was party
to the alleged conspiracy. Similar allegations were against other
eight persons as well alleging their role at different stages.
Notwithstanding the same, three Officers were not even charged
on the purported ground that there were not enough evidence
and mala fide intention. In respect of other officers, Government
had declined the sanction. In case of some officers, State
Government had accorded the sanction for prosecution earlier
but later withdrew the same. There were two Gram Panchayat
members, who had issued no-objection for allotment of land for
club house, who were prosecuted. These three Officers were
public servants who remain as accused persons. Thus, in the
entire conspiracy story put up by the prosecution, high
Government officials were deliberately let off and very junior
Officers were become scapegoat in order to ensure that a case
under PC Act survives in respect of appellants as well who are
not public servants. Even otherwise, when the said eight persons
were not charged or proceeded against for want of prosecution,
this lent support to the allegations of the appellants in imputing
motives for their prosecution. [Para 41][903-B-H; 904-A-B]
3. There was no criminal act on their part and the facts do
not disclose any offence; the officers who processed the case of
the appellants were not prosecuted; two Officers who took active
part in the decision making were made Principal Secretary to
CM and Advisor to CM, respectively, by respondent No. 2 and
were not prosecuted; As per the prosecution, there was no
criminal act on the part of the officers and they performed their
appropriate administrative duties due to which sanction stood
declined by the Central Government and the CVC. That itself is
sufficient to absolve others from any criminal prosecution; even
otherwise the State Government continues to remain owner of
the land which is on lease and on which the appellants have
constructed assets worth above 150 crores; these assets are for
use of the public of the State and are being used as such. Further,
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filing of chargesheet and an order taking cognizance is not a final
judicial order. It is a preliminary process in criminal law and is
open to challenge in higher judicial fora. [Para 42][904-C-G]
4. The conversion of Society into not for profit company
under Section 25 of the Companies Act, 1956 was done as per
the mandate of BCCI. There can hardly be an element of
criminality therein. It rather shows the intent of the State
Government which wanted to grab the control of the Cricket
Association. Such a tendency on the part of the State authorities
was condemned by a Committee headed by former Chief Justice
and also approved by this Court. If at all, this was a reflection
upon the State Government. It also lent credence to the
submission of the appellants that when the State Government
failed to achieve the said purpose, it went after the appellants. If
at all, the subject matter was a civil dispute between the appellants
and the respondents. Ex facie, no case of cheating/fraud or
criminal breach of trust was made out. Since, these allegations
are not made out, respondent No.2 does not have much role to
play in these proceedings. That apart, respondent No.2 has filed
counter affidavit stating that he is not a necessary party and it is
not his job to defend the prosecution. Having regard to the stand
taken by the respondent No.1 not to prosecute these cases, even
otherwise, no purpose would be served in continuing with these
proceedings. [Paras 43, 44][904-G-H; 905-A-E]
5. The inherent jurisdiction under Section 482 Cr.P.C. is to
be exercised carefully and with caution and only when exercise
is justified by the tests specifically laid down in the Section itself.
Further, inherent power under this provision is not the rule but
it is an exception. The exception is applied only when it is brought
to the notice of the Court that grave miscarriage of justice would
be committed if the trial is allowed to proceed where the accused
would be harassed unnecessarily. The power is to be exercised
by the High Court either to prevent abuse of process of any court
or otherwise to secure the ends of justice. However, whenever
it is found that the case is coming within the four corners of these
parameters, the powers 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
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
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to be inhibited when the circumstances warrant exercise of such
a power to do substantial justice to the parties. In the instant
case, the High Court dismissed the petition with a shallow
examination of the case, thereby glossing over the material facts
and failing to examine that these pertinent aspects were sufficient
to demonstrate that no criminal case was made out, particularly
when all the concerned officers, who had taken the decision, were
let 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; Indian
Oil Corporation v. NEPC India Ltd. & Ors. (2006) 6
SCC 736 : [2006] 3 Suppl. SCR 704; Vineet Kumar &
Ors. v. State of Uttar Pradesh & Anr. (2017) 13 SCC
369 : [2017] 6 SCR 922 - relied on.
State of Bihar & Anr. v. P.P. Sharma & Anr. 1992 Supp
(1) SCC 222 : [1991] 2 SCR 1; Commissioner of Income
Tax, 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.
v. Sushil Kumar Modi & Ors. (1997) 4 SCC 770 : [1997]
1 SCR 490; Delhi Judicial Service Association, Tis
Hazari 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)
1 SCC 205 : [2012] 10 SCR 1079; R. Balakrishna Pillai
v. State of Kerala (2003) 9 SCC 700 : [2003] 2 SCR
436; Lalitha Kumari v. Government of Uttar Pradesh &
Ors. (2014) 2 SCC 1 : [2013] 14 SCR 713; State of
A.P. v. Golconda Linga Swamy and Anr. (2004) 6 SCC
522 : [2004] 3 Suppl. SCR 147; Umesh Kumar v. State
of Andhra Pradesh & Anr. (2013) 10 SCC 591 : [2013]
14 SCR 213; State of Tamil Nadu & Ors. v. K. Shyam
Sunder & Ors. (2011) 8 SCC 737 : [2011] 11 SCR 1094;
Andhra Pradesh Dairy Development Corporation
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Fedration v. B. Narasimha Reddy & Ors. (2011) 9 SCC
286 : [2011] 14 SCR 1; State of Himachal Pradesh v.
Nishant Sareen (2010) 14 SCC 527 : [2010] 13 SCR
1200; Ujjam Bai v. State of U.P. [1963] 1 SCR 778;
Naresh Shridhar Mirajkar & Ors. v. State of
Maharashtra & 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
referred to
Para 11
(2003) 263 ITR 345
referred to
Para 14
(2012) 344 ITR 544
referred to
Para 14
[1997] 1 SCR 490
referred to
Para 17
[1991] 3 SCR 936
referred to
Para 21
[2008] 9 SCR 943
referred to
Para 21
[2012] 10 SCR 1079
referred to
Para 22
[2003] 2 SCR 436
referred to
Para 22
[1990] 3 Suppl. SCR 259
relied on
Para 23
[2017] 6 SCR 922
relied on
Para 23
[2013] 14 SCR 713
referred to
Para 26
[2006] 3 Suppl. SCR 704
relied on
Para 27
[2004] 3 Suppl. SCR 147
referred to
Para 28
[2013] 14 SCR 213
referred to
Para 28
[2011] 11 SCR 1094
referred to
Para 28
[2011] 14 SCR 1
referred to
Para 28
[2010] 13 SCR 1200
referred to
Para 28
[1963] 1 SCR 778
referred to
Para 31
[1966] SCR 744
referred to
Para 31
[1990] 3 SCR 621
referred to
Para 31
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
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CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
Nos. 1258-1259 of 2018
From the Judgment and Order dated 25.04.2014 of the High Court
of 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 George
Chaudhary, Mrs. June Chaudhari, Sr. Advs., Mrs. Bihu Sharma, Ms.
Purnima Krishna, Snehasish Mukherjee, Manish Kumar, Akshay
Amritanshu, Ajay Marwah, Parmatma Singh, D. K. Thakur, Shariq
Ahmed, Kunal Verma, Varinder Kumar Sharma, Advs. for the appearing
parties.
The Judgment of the Court was delivered by
A. K. SIKRI, J. 1. Two FIRs are the subject matter of these
appeals. One FIR No. 12 of 2013 dated August 01, 2013 is under Sections
406, 420, 120B of the Indian Penal Code, 1860 (IPC) and Section 13(2)
of the Prevention of Corruption Act, 1988 (PC Act) has been registered
against the appellants herein as well as some other persons. Second
FIR No.14 of 2013 dated October 03, 2013 is under Section 447 read
with Section 120B of the IPC, Section 3 of Prevention of Damage to
Public Property Act, 1984 and Section 13(2) of the PC Act. The appellants
filed petitions under Section 482 of the Code of Criminal Procedure,
1973 (Cr.P.C.) before the High Court of Himachal Pradesh for quashing
of the said FIRs. These petitions have been dismissed by the High Court
vide common judgment dated April 25, 2014. That judgment is impugned
in the instant appeals. When the Special Leave Petitions (out of which
these appeals arise) were filed, notice thereof was issued on January 5,
2015 and stay of further proceedings was also granted in the case arising
out of the said FIRs which are pending before the Special Judge, Kangra,
Dharamshala, Himachal Pradesh. That stay has been extended from
time to time and is, therefore, continuing.
2. During the pendency of these proceedings, investigation was
completed. On the day judgment was pronounced by the High Court,
the chargesheets were filed in the Court of Special Judge. After the
filing of the said chargesheets, the appellants have also filed Writ Petition
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(Criminal) No. 135 of 2017 in this Court seeking quashing of these
chargesheets. Both these proceedings were clubbed and heard together
which we propose to dispose of by this common judgment.
3. Appellant No. 1 is a Cricket Association of Himachal Pradesh
which was initially registered as a Society under the Societies Registration
Act, 1860 vide Registration Certificate dated June 08, 1990. On
September 15, 2001, appellant No. 1 made an application for allotment
of land to develop and construct the world class cricket stadium and
consequently, the Commissioner-cum-Secretary (Education) granted
permission for transfer of land to the Himachal Pradesh Youth Services
and Sports Department with certain conditions. A lease deed dated July
29, 2002 was executed between appellant No.1 and respondent No. 1
through Director, Himachal Pradesh Youth Services and Sports
Department for the said land at Village Mouja and Tehsil Dharamshala,
District Kangra for construction of an international cricket stadium which
was duly constructed. On July 14, 2005, a not for profit company in the
name of Himalayan Players Cricket Association was incorporated under
Section 25 of the Companies Act, 1956. Name of this company was
changed to Himachal Pradesh Cricket Association on August 31, 2005.
4. Purusant to a proposal to host international cricket matches at
Dharamshala, the International Cricket Council inspected the cricket
infrastructure being developed at Dharmashala by appellant No. 1 and,
inter alia, observed that the quality of accommodation left much to be
desired. Need for some more facilities and hotel accommodation of
desired quality was specifically stressed.
5. Having regard to this report, the appellants decided to construct
a club house on the leased land. There was also a parcel of idle land in
the middle of the land allotted for the stadium. Appellant No.1 towards
this end made a request to the Director, Youth Services and Sports for
allotment of additional land adjacent to the stadium admeasuring 720
square metres, vide its letter dated July 03, 2008. Since it was Gram
Panchayat land, consent thereof was also needed for its allotment to the
appellant No.1. Appellant No.1, thus, approached the Gram Panchayat.
Pursuant to meetings between the office bearers of appellant No. 1 and
Gram Panchayat, members of Uparali Dhari Development Division,
Dharamshala, the said Gram Panchayat issued no objection for allotment
of the land. Proposal of appellant No. 1 for allotment of additional land
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
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was mooted with the authorities as well. Respondent No. 1 vide letter
dated November 16, 2009 took up the matter with the ACS-cum-FC
Revenue to the Government of Himachal Pradesh for approval to lease
out government land in Mohal Kand Mauja Khanyara, Tehsil
Dharamshala, District Kangra, measuring in 3-28-06 hectare in favour
of appellant No. 1. Respondent No. 1 granted approval to lease out the
aforesaid land in favour of appellant No. 1 vide letter dated November
16, 2009 which was conveyed vide letter dated November 18, 2009. As
a result, lease deed was executed between appellant No. 1 and respondent
No. 1 for lease of the said land situated at Mohal Kand Mauza Khanyara,
Tehsil Dharmashala.
6. Club house was constructed at the stadium premises at
Dharamshala under the name and style of "Aveda HPCA Club House".
Completion Certificate was issued on March 10, 2011 and was certified
complete in all aspects as per approved plan of the Executive Officer,
Municipal Council, Dharamshala. The Town and Country Planning
Department, Dharamshala also issued no objection certificate dated March
15, 2011 for use of part of the infrastructure of cricket stadium as club
house for cricket activities. Respondent No. 1 also approved the tariff
for availing the accommodation facilities of the club house vide its letter
dated September 08, 2011.
7. The Board of Control for Cricket in India (BCCI) granted
permission to the Himachal Pradesh Cricket Association to convert itself
from a "not for profit" society to a "not for profit" company during its
annual general meeting held on September 19, 2011. A majority of cricket
associations throughout the country have been converting themselves
from a not for profit society to a not for profit company registered under
the Companies Act, 1956 in order to ensure better and transparent
management of their affairs.
Realising that unless world class accomodation was available for
the teams playing at the stadium and the officials concerned
accompanying such teams, the venue at Dharamshala that was being
painstakingly developed by the appellant No. 1 from its own funds would
be grossly underutilised and the State would lose out in hosting cricket
matches, appellant No. 1 and its office bearers began working out a
method to construct a world class motel for such purposes.
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Appellant No. 1 realized that if the use of the same was restricted
only to usage during match days for use of teams and their officials, the
same would not be commercially viable. As the terms of the lease may
not be technically wide enough to cover this allied infrastructure being
developed for the game of cricket, vide its letter dated December 24,
2011, appellant No. 1 wrote to the respondent to request it to permit
commercial activity on the said land on even non match days and amend
the lease terms accordingly. The above letter was forwarded by the
District Magistrate to the Principal Secretary (Revenue), Government
of Himachal Pradesh and the Principal Secretary (Revenue), Government
of Himachal Pradesh issued no objection for execution of a supplementary
lease enabling commercial activity on the additional land at Kandi
provided that the lease money was charged in accordance with the Lease
Rules, 2011. A supplementary lease deed was executed between the
appellant No.1 and the State of Himachal Pradesh enabling use of the
additional land commercially. Necessary permissions for development
on the said land were obtained including for commercial hotel. The
hotel constructed under the name and style of "The Pavilion" obtained
registration with the Tourism Department of the State and Tariffs, etc.
were also fixed by the said Department on September 26, 2012. In the
meantime, on September 22, 2012 resolution was passed by the appellant
No. 1 company to take over the assets and liabilities of the society.
Agreement dated October 01, 2012 was also executed between the
Himachal Pradesh Cricket Association (the society) and Himachal
Pradesh Cricket Association (the Company) to enable the Society to
convert itself into a Company. Accordingly, the Society was converted
into a Company and the Himachal Pradesh Cricket Association stood
converted from a society to a not for profit company registered under
the Companies Act, 1956 and the Registrar of Companies was informed
of the same in due course.
8. Within a couple of months, from the aforesaid developments,
there was a change of political executive in the State of Himachal Pradesh
pursuant to the elections of legislative assembly. According to the
appellants, with the change of political power, tirade against the appellants
started by the new Government. In fact, even during the election
campaign, the Congress (I) had published a 'Congress Chargesheet'
wherein serious allegations were levelled against the appellants. The
appellants department sprung into action and started seeking information
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
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from the appellants on various aspects, though this information was
already available with the State Government. A formal FIR No. 12 of
2013 dated August 01, 2013 was registered which, according to the
appellants, is the result of the said 'Congress Chargesheet'. In fact,
some time before that, a complaint under Section 156(3) Cr.P.C. was
made by one Vinay Sharma against appellant No. 1 and its office bearers
in which orders were passed by Special Judge, Kangra on July 02, 2013
directing the police authorities to investigate the said case and submit
the report to it. Thus, two parallel proceedings were started.
9. Further allegation of the appellants is that investigation was
personally monitored by respondent No. 2 herein who was the Chief
Minister at that time. He had also made various public statements from
time to time that he was interested in taking over the entire function of
the Cricket Association and its assets. According to the appellants, at
the behest of respondent No. 2, even the Registrar of Societies, Himachal
Pradesh issued notice dated September 7, 2013 on the issue of formation
of company under Section 25 of the Companies Act, 1956 and taking
over the assets of the society. Against this notice, Writ Petition No.
7593 of 2013 was filed wherein the High Court passed the orders keeping
in abeyance the allegations raised in the notice dated September 7, 2013
of the Registrar of Societies.
10. Another FIR No. 14 of 2013 dated October 03, 2013 came to
be registered against the appellants and others alleging commission of
offences under Section 447 read with Section 120B of the IPC, Section
3 of the Prevention of Damage to Public Property Act, 1984 and Section
13(2) of the PC Act. Many other actions were taken by the respondents,
which according to the appellants, were mala fide moves, reference
whereto shall be made at the appropriate stage. At this juncture, the
appellants filed petition under Section 482 of Cr.P.C. on January 06,
2014 seeking quashing of FIR No. 12 of 2013 which stands dismissed
vide impugned judgment dated April 25, 2014.
11. The High Court in the impugned judgment has taken note of
catena of judgments of this Court pertaining to powers of the High Court
within the scope of Section 482 of Cr.P.C. Thereafter, it has observed
that after lodging of the FIR, investigation has been conducted and the
material collected during investigation discloses that 18 persons made
accused in the aforesaid FIR are prima facie involved in the commission
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of offences. On this ground, it has brushed aside the argument of the
appellants that it was a case of vengeance, political vendeta and mala
fide. The High Court has also observed that allegations of mala fide
based on the facts after lodging of the FIR are of no consequence and
cannot be the basis for quashing the proceedings. For this purpose, it
has 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 file
does not disclose at this stage how it is the case of mala fide. In the
opinion of the High Court, in such circumstances, merits of the case is to
be tested during trial inasmuch as FIR and Final Report of Investigating
Agency discloses that case for trial is made out. As the power under
Section 482 Cr.P.C. is to be exercised carefully, cautiously and in rarest
of rare cases, keeping in mind the law laid down by this Court, the High
Court refused to quash the proceedings. We may also record here that
one of the submissions of the appellants before the High Court was that
appellant No. 2 and other persons are not public servants and, therefore,
provisions of PC Act could not be invoked against them. This argument
has also been found to be unmerited on the ground that some of the
accused persons arrayed with the appellants are public servants and
also that allegation in the FIR is that all these accused persons has the
conspiracy and wrongful gain to themselves and wrongful loss to the
State, in the process, the officials misused their position to show favour
to other accused persons.
12. Mr. Patwalia, learned senior counsel appearing for the
appellants, at the outset, drew the attention of this Court to the fact that
M/s. Subhash Ahluwalia, Subhash Negi, Ajay Sharma, Deepak Sanan
and T.G. Negi, who are the IAS Officers, were associated with the
grant of three leases. They were the main persons who took active part
in deciding that the three leases should be granted to the appellants and
on that basis, final decision was taken. However, as far as these Officers
are concerned, prosecution sanction has either been denied or they have
not been prosecuted at all. Likewise, Mr. Gopal Chand, who belongs to
Himachal Pradesh Administrative Service, was arrayed as one of the
accused person, but in his case also, the sanction though given earlier
stood withdrawn. He has even been promoted to IAS cader. Mr.
Patwalia submitted in tabular form status of Officers who have allegedly
conspired with the appellants, which is as under:
1 1992 Supp (1) SCC 222
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
HIMACHAL PRADESH [A. K. SIKRI, J.]
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Sl.
No.
Name
of
Officer
Post
at
the
time of alleged
offence
Role as per FIR Sanction
FIR No. 12 of 2013 dated 01.08.2013 under Sections
406/420/120B IPC and Section 13(2), Prevention of
Corruption Act
1
Subhash
Ahluwalia
IAS, Directorcum-Special
Secretary,
Youth
Services
and
Sports
Department,
Government
of
Himachal
Pradesh.
Sh.
Subhash
Ahluwalia,
at
the
time
of
grant of lease
of
the
Government
Land to HPCA
for
the
construction of
Cricket
Stadium
had
ignored
the
rules and had
not mentioned
the
provisions
of Lease Rules,
1993
in
his
noting.
Further,
Sh.
Subhash
Ahluwalia was
a signatory to
the Lease Deed
dated
29.07.2002.
Not
Charged
(Not
enough
evidence
of
malafide
intention
).
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HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
HIMACHAL PRADESH [A. K. SIKRI, J.]
2
Subhash Negi
IAS, Secretary,
Youth Services
and
Sports
Department,
Government of
Himachal
Pradesh
Sh.
Subhash
Negi,
at
the
time of grant of
lease
of
the
Government
Land to HPCA
for
the
construction of
Cricket
Stadium
had
ignored
the
rules and had
not mentioned
the
provisions
of Lease Rules
1993
in
his
noting.
Not
Charged
(Not
enough
evidence of
malafide
intention).
3
T.G. Negi
IAS, Principal
Secretary,
Youth Services
and
Sports
Department,
Government of
Himachal
Pradesh.
Sh. T.G. Negi
made no efforts
to
reject
the
notings
of
accused
Sh.
Ajay
Sharma
and
instead
forwarded
the
same
for
approval of the
Chief Minister.
Not
Charged
(Not
enough
evidence of
malafide
intention).
4
Ajay Sharma
IAS, Directorcum-Special
Secretary,
Youth Services
In 2008, then
Chief Minister
P.K.
Dhumal
marked the
Prosecution
sanction
declined by
Central
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and
Sports
Department,
Government
of
Himachal
Pradesh.
application of HPCA
for permission of
construction of Club
House
and
its
commercial use to
Sh. Ajay Sharma and
asked him to prepare
the proposal for the
same. Sh. Ajay
Sharma, by abusing
his official position
proposed
for
permission to the
HPCA
with
the
approval
of
the
Chief Minister. The
land was leased only
for construction of
cricket stadium and
not club house. Sh.
Ajay Sharma,
by
abusing his office in
criminal conspiracy
with
HPCA,
contrary to the terms
and conditions of the
lease
deed
has
provided
undue
benefit to the HPCA
and loss to the State
Government.
Government
on
25.08.2015.
Prosecution
sanction
withdrawn by
the
State
Government
on
09.04.2018.
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5
Deepak Sanan
IAS, Principal
Secretarycum-Financial
Commissioner
,
Revenue
Department,
Government
of
Himachal
Pradesh.
Sh.
Deepak
Sanan
issued
NOC
for the
commercial use
of Government
land which was
leased to HPCA
for
the
construction of
Hotel Pavilion
by reversing the
earlier decision
of Council of
Minister. Sh.
Deepak Sanan
also notified the
Lease
Rules,
2011,
on the
basis of which
supplementary
lease
was
executed,
in
accordance
with Rule 9.
Prosecution
sanction
declined by
Central
Government
on
25.08.2015.
Prosecution
sanction
withdrawn
by the State
Government
on
09.04.2018.
6
Gopal Chand
HPAS,
Additional
Secretary,
Revenue
Department,
Government
of
Himachal
Pradesh
Sh.
Gopal
Chand
had
recommended
for
the
commercial use
of land leased
to
HPCA
in
Mohal
Kand
and marked the
file
to
Sh.
Deepak Sanan,
Prosecution
sanction
granted
on
03.04.2014
withdrawn
by the State
Government
on
03.08.2016.
Promoted to
IAS.
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
HIMACHAL PRADESH [A. K. SIKRI, J.]
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[2018] 13 S.C.R.
whereas under
Schedule 20 of
the
Business
Rules,
he
could
have
recommended
the matter to
be taken to the
Cabinet.
FIR No. 14 of 2013 dated 03.10.2013 under Sections 447/120B
IPC, Section 3 of the Prevention of Damage to Public Property
Act, 1984 and Section 13(2) of the Prevention of Corruption Act
7
K.K. Pant
IAS,
Deputy
Commissioner,
Kangra,
Himachal
Pradesh
On 14.03.2008,
Sh. K.K. Pant
chaired
a
meeting
with
other
accused,
without
following
due
procedure
and
without
having
any
statutory
power for doing
so,
for
reallocation
of
Type IV, UGC
accommodation
in the possession
of the Education
Department and
Prosecution
sanction
declined
by
Central
Government
on
27.03.2015.
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the presumptions
drawn
in
the
meeting
were
made
with the
intention to give
undue advantage
to HPCA. Sh.
K.K.
Pant
overlooked
the
report regarding
condition
of
building.
8
P.C. Dhiman IAS, Principal
Secretary,
Education
Department,
Government
of
Himachal
Pradesh
Sh. P.C. Dhiman
issued NOC to
the
Department
of Youth Services
and
Sports,
contrary to the
recommendations
/ conditions of the
Director, Higher
Education,
and
without
mentioning
the
disposal
of
building
in
accordance with
rules/norms and
recovery
costs
from HPCA.
Prosecution
sanction
declined by
Central
Government
on
24.08.2015.
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
HIMACHAL PRADESH [A. K. SIKRI, J.]
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9
Devi Chand
Chauhan
Executive
Engineer,
Dharamshala
Division,
HPPWD
Devi
Chand
Chauhan,
while
working
as
Executive
Engineer (Civil),
Dharamshala,
HPPWD
Division
forwarded
the
report sent by the
then SDO SubDivision No. 1,
Dharamshala,
regarding
dilapidated
condition
of
Type
IV
accommodations,
without
following
procedure as laid
down
by
the
Government
of
India,
Central
Public
Works
Department
Code, whihc led
two
illegal
demolition
of
two
storied
building
(Type
IV
accommodation)
of the Education
Department
Prosecution
sanction
declined
by
Department
Secretary but
recommended
by the then
Chief Minister
Sh. Virbhadra
Singh. Hence,
prosecution
sanction
granted
on
23.09.2014
and
15.10.2014
(FIR
No.
14/13
dated
03.10.2013)
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13. Thus, the Government Officers who have granted lease are
not been prosecuted. He, thus, submitted that the main Government
functionaries were left out which shows that the Government wanted to
protect its own Officers but, at the same time, roped in the appellants
and others because of political enmity.
14. Dilating on the aforesaid plea, namely, the entire prosecution
is due to political vendetta, without any legal basis, Mr. Patwalia submitted
that the genesis of the prosecution starts with the failed attempt by the
then State Government to take over appellant No. 1 in the year 2005
under the provisions of the HP Sports (Registration, Recognition and
Regulation of Associations) Act, 2005 due to the interim protection
granted by the Himachal Pradesh High Court on May 18, 2005. This
HIMACHAL PRADESH CRICKET ASSOCIATION v. STATE OF
HIMACHAL PRADESH [A. K. SIKRI, J.]
existing
adjacent to the
present Cricket
Stadium gate,
which was an
eyesore to the
HPCA and
alleged to be a
security threat
to the players.
Thus, the
motive of the
Executive
Engineer was to
intentionally
give an
advantage to
HPCA thereby
misusing his
official
position.
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Act was subsequently repealed. According to him, in view of the repeated
interference by State Governments in the internal affairs of autonomous
cricket associations, the BCCI has informally encouraged such member
associations to re-register themselves as not for profit charitable Section
25 Companies under the Companies Act, 1956, as amended, for better
legal compliances, transparency and to avoid interference in internal
affairs by State Governments. Accordingly, various member associations
of the BCCI have converted themselves to Section 25 not for profit
charitable companies governed by the provisions of the Companies Act,
1956. Appellant No. 1 also followed the suit as a result of aforesaid
mandate of the BCCI. Accordingly, a not for profit company in the
name of Himalayan Players Cricket Association was incorporated under
Section 25 of the Companies Act, 1956. On August 31, 2005, the said
Company was permitted to change its name to Himachal Pradesh Cricket
Association and was issued a fresh certificate of incorporation. During
this process, the HP Sports (Registration, Recognition and Regulation of
Associations) Act, 2005 stood repealed and no further steps were taken
in the interregnum to convert the society to a section 25 company.
Thereafter, on September 19, 2011, the BCCI took up the pending request
of appellant No. 1 to permit it to convert itself to a Section 25 not for
profit company and granted the same. Pursuant to the permission by
the BCCI, amendments were carried out by the members at the AGM
of the appellant No. 1 on September 22, 2012 resolving to convert the
appellant No. 1 society to a Section 25 Company. Accordingly, an
agreement was executed on October 01, 2012 converting the society to
a Section 25 Company and informing the Registrar of Companies of the
same. On October 31, 2012, appellant No. 1 now registered as a Section
25 Company under the Companies Act, 1956 informed the Registrar of
Societies of the State of Himachal Pradesh of the change in the
memorandum and rules of the appellants. Further, on November 02,
2012, once again the intimation regarding change in status of appellant
No. 1 from a not for profit society to a not for profit company was given
to the Registrar of Societies, State of Himachal Pradesh. Thus, from
October 01, 2012, appellant No. 1 has been existing as a Company with
due intimation to the State of Himachal Pradesh paying its lease rent
and taxes in accordance with law. He also argued that the effect of
such statutory conversion from a firm to a company by statutory
provisions for income tax purposes has been considered by the Bombay
High Court in the case of Commissioner of Income Tax, Mumbai v.
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Texspin Engg. and Mfg. Works, Mumbai2 and Punjab & Haryana
High Court in the case of Commissioner of Income Tax (Central),
Ludhiana v. M/s. Rita Mechanical Works, Ludhiana3 wherein it has
been held as under:
 "There is a difference between vesting of the property, in
this case, in the limited company and distribution of the property.
On vesting in the limited company under Part IX of the Companies
Act, the properties vest in the company as they exist. ...
 "In the present case, we are concerned with a partnership
firm being treated as a company under the statutory provisions of
Part IX of the Companies Act. In such cases, the company
succeeds the firm. Generally, in the case of a transfer of a capital
asset, two important ingredients are: existence of a party and a
counter-party and, secondly, incoming consideration qua the
transferor. In our view, when a firm is treated as a company, the
said two conditions are not attracted. There is no conveyance of
the property executable in favour of the limited company. It is no
doubt true that all properties of the firm vest in the limited company
on the firm being treated as a company under Part IX of the
Companies Act, but that vesting is not consequent or incidental to
a transfer. It is a statutory vesting of properties in the company as
the firm is treated as a limited company. On the vesting of all the
properties statutorily in the company, the cloak given to the firm is
replaced by a different cloak and the same firm is now treated as
a company, after a given date. ..."
15. On the aforesaid basis, submission of Mr. Patwalia was that
conversion of a not for profit society to a not for profit charitable company
which is expressly permitted by law cannot be construed as a crime.
The assets - in the present case leased land remain as they are. In fact,
the appellants have constructed a world class stadium and a world class
hotel on the leased premises. Importantly, the State Government continues
to remain the owner of the land and has the power under the leases to
cancel the same for violation of terms and conditions of the lease.
16.