THE HONOURABLE SRI JUSTICE B.V.L.N.

CHAKRAVARTHI

I.A.Nos.2 & 3 of 2023 in Criminal Petition No.8084 of 2023

&
I.A.Nos.2 & 3 of 2023 in Criminal Petition No.8085 of 2023

COMMON O R D E R:

Heard Sri Sidharth Luthra, Sri S.Nagamuthu, learned

Senior Counsels representing the petitioners/Accused Nos.1 and

2 through Virtual Mode; and Sri Posani Venkateswarlu, learned

Senior Counsel for the petitioners/accused Nos.1 and 2 and

Smt.Y.L.Siva Kalpana Reddy, learned Standing Counsel-cum-

Special Public Prosecutor for respondent No.1/Crime

Investigation Department (for brevity ‘CID’) through physical

mode.

2. These applications i.e., I.A.Nos.2 and 3 of 2023 in

Criminal Petition No.8084 of 2023 and I.A.Nos.2 and 3 of 2023

in Criminal Petition No.8085 of 2023 are filed by the petitioners/

accused Nos.1 and 2, under Section 482 of Code of Criminal

Procedure, 1973 (for brevity ‘CrPC’) to direct the respondent

No.1/CID not to take any coercive steps against the

petitioners/accused Nos.1 and 2 in Crime No.17 of 2023 on the

file of CID, PS, Amaravathi, Mangalagiri, Andhra Pradesh and to

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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stay all further proceedings in Crime No.17 of 2023 on the file of

CID, PS, Amaravathi, Mangalagiri, Andhra Pradesh, respectively,

pending disposal of quash petitions.

3. Sri Sidharth Lurthra, learned Senior Counsel appearing

for the petitioners/accused Nos.1 and 2 would submit that the

respondent No.1/CID registered the impugned FIR in Crime

No.17 of 2023 of CID, PS, Amaravathi, Mangalagiri, Andhra

Pradesh for the offence punishable under Sections 420, 467,

120B read with 34 of the Indian Penal Code, 1860 (for brevity

‘IPC’) against the petitioner/accused No.1 in Criminal Petition

No.8084 of 2023 and petitioner/accused No.2 in Criminal

Petition No.8085 of 2023 basing on a Report, dated 13.10.2023

presented by one Mr.Gadireddi Yuri Reddi, and they are illegally

proceeding with investigation against the petitioners, though the

alleged offence was not occurred in the territorial jurisdiction of

the CID, PS, Amaravathi, Mangalagiri, Andhra Pradesh.

4. He would further submit that as per the report presented

by the defacto-complainant, his father invested a sum of

Rs.5,000/- in the year 1962 in Margadarsi Chit Fund Private

Limited, which was incorporated on 31.08.1962 at Hyderabad

and his father was allocated 90 shares at a value of Rs.48/-

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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each and subsequently, his shareholdings in the company was

increased to 288 shares; While so, his father passed away on

17.05.1985 in Prague, Czechoslovakia and his mother passed

away in the year 1986 and then, the defacto-complainant tried

to contact the petitioner/accused No.1, but, the

petitioner/accused No.1 avoided to reveal the status of the

shareholdings of the deceased.

5. He would further submit that as per report in the year

2014, a news item was published in ‘Sakshi Daily Newspaper’

about his father profile and business activities including

investments and shares held in Margadarsi Chit Fund Private

Limited and then after persistent requests, the

petitioner/accused No.1 granted an appointment on 10.09.2016

and during the said meeting the defacto-complainant and his

brother Mr.Martin presented a letter for issuing duplicate ‘Share

Certificate’ for the shares held by their deceased father; and the

petitioner/accused No.1 agreed to change the ownership from

the name of the deceased to the defacto-complainant and his

brother; and later, on 29.09.2016, the defacto-complainant and

his brother were handed over a cheque for a Rs.39,74,400/-

towards dividend for the year 2007-2008, and on that day after
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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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sometime, the petitioner/accused No.1 instructed the defacto-

complainant and his brother to put signatures on an affidavit

prepared on a stamp paper worth of Rs.100/-, dated

26.09.2016; the affidavit states that his brother had no objection

to transfer the shares to the name of defacto-complainant and at

the same time, the defacto-complainant was given a cheque,

dated 05.10.2016 bearing No.296460 for Rs.2,88,000/- drawn

from Union Bank of India issued by Margadarsi Financiers and

the defacto-complainant was asked to sign on a form ‘SH-4’

without any date and then, the defacto-complainant refused to

sign, but, the petitioner/ accused No.1 intimidated the defacto-

complainant and his brother saying that no one are there to help

them, and threatened them with a point of gun and forced them

to sign on the stamp papers; therefore, the defacto-complainant

signed on ‘SH-4’ form, hundred rupee stamp paper, dated

26.09.2016 captioned as ‘Affidavit’ on which it is mentioned as

‘date of execution on 05.10.2016’ and on some other blank

documents and the ‘SH-4’ form do not contain the name of

transferee and date is kept blank.

6. Further allegations is that the defacto-complainant, due

to the pressure of the petitioner/accused No.1 signed on the

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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documents and at that point in time, the petitioner/accused

No.1 did not inform the defacto-complainant and his brother

that he is going to transfer their shareholdings to accused No.2

and therefore, they are under the impression that as the

signatures were obtained on blank papers and they are not

useful for any purpose and therefore, the defacto-complainant

did not present the cheque for encashment; Later, they could not

approach the petitioner/accused No.1 for dividends relating to

subsequent years.

7. It was further alleged that recently, the defacto-

complainant, through media came to know that investigation is

going on regarding the activities of the petitioners/accused Nos.1

and 2 and to his profound dismay came to know that his name

is not found in the list of shareholdings of the company, and

verification of the records in the office of the Registrar of

Companies, he discovered that his shares have been transferred

to the name of Smt. Cherukuri Sailaja Kiran (petitioner/accused

No.2 in Criminal Petition No.8085 of 2023) in the year 2016,

illegally and fraudulently without knowledge or consent of the

defacto-complainant and his brother.

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8. Further it was alleged that the Margadarsi Chit Fund

Private Limited have 37 branches in the State of Andhra Pradesh

and the profits accrued in the State of Andhra Pradesh are also

being enjoyed by them and as such he presented the report to

CID Police at Andhra Pradesh.

9. Learned Senior Counsel Sri Sidharth Luthra would submit

that as per the contents of the report presented by the defacto-

complainant/CID as stated above, the alleged offence was

occurred at Hyderabad i.e., threatening the defacto-complainant

and his brother at gun point and obtaining their signatures on

an affidavit, ‘SH-4 Form’ and other documents and transfer of

shares basing on the said documents in favour of Smt.Cherukuri

Sailaja Kiran (accused No.2) was also at Hyderabad and

Margadarsi Chit Fund Private Limited was incorporated in the

Hyderabad and therefore, none of the overt-acts alleged against

the petitioners/accused Nos.1 and 2 were occurred in Andhra

Pradesh; But, the report was presented to the CID Police at

Andhra Pradesh in Mangalagiri on 13.10.2023, after a lapse of

seven (07) years; Admittedly, the CID Police has registered many

cases against M/s.Margadarsi Chit Fund Private Limited against

the accused Nos.1, 2 and 3 and others in the recent past and in
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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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some cases, orders were passed by the High Court of Telangana

at Hyderabad and in some cases by this Court restraining the

CID Police, Andhra Pradesh from taking coercive steps against

the accused Nos.1 and 2 and others and in those circumstances,

for the reasons best known to the CID, Andhra Pradesh and the

defacto-complainant, they pressed the impugned report into

service on 13.10.2023 and basing on that CID Police, Andhra

Pradesh registered a case in Crime No.17 of 2023 of CID, PS,

Mangalagiri, Andhra Pradesh and started investigation though

they have no territorial jurisdiction to conduct investigation

against the petitioners and in those circumstances, the

petitioners/accused Nos.1 and 2 approached this Court to

quash the FIR in Crime No.17 of 2023 under Section 482 CrPC

and to restrain the CID Police from taking coercive steps against

the petitioners/accused Nos.1 and 2 including their arrest.

10. Learned Senior Counsel Sri Sidharth Luthra would further

submit that admittedly, the defacto-complainant earlier

presented a Report, dated 14.01.2017 to the Registrar of

Companies, Hyderabad, with respect to the same subject matter,

wherein it was specifically stated that the defacto-complainant

inadvertently signed on ‘Form SH-4’ and sent it back to the

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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company, which would indicate that the allegations made in the

report presented to the CID Police that his signatures on ‘SH-4

Form’, affidavit and other documents were obtained by the

petitioner/accused No.1 in his office at gun point, are false.

Learned Senior Counsel also has taken this Court to an ‘e-Mail’,

dated 15.06.2016 sent by the defacto-complainant to the

petitioner/accused No.1 wherein he stated about the offer to

purchase the shareholdings of his father and agreeing for the

same and all these circumstances, prima facie would indicate

that this case was registered by the respondent No.1/ CID,

Andhra Pradesh for the reasons best known to them, even

though they have no territorial jurisdiction to investigate the

alleged incidents mentioned in the report presented by the

defacto-complainant; therefore, If, the respondent No.1/CID

Police is allowed to proceed with investigation pursuant to the

impugned FIR, it would cause unwarranted and unjustified

harassment to the petitioners and the Hon’ble Supreme Court in

several judgments including in the case of M/s. Neeharika

Infrastructure Private Limited vs. State of Maharashtra

and others1 and Abhishek vs. State of Madhya Pradesh2

12021 AIR (SC) 1918.

2Criminal Appeal No.1457 of 2015, dated 31.08.2023 on the file of the
Hon’ble Supreme Court of India, New Delhi.
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held that interim order of stay of investigation during the

pendency of the quash petition can be passed with if the Court

prima facie is of the opinion that a case is made out for grant of

interim stay for further investigation and can also order that

police shall not take coercive steps, by giving brief reasons

whether non-interference by the High Court would result any

miscarriage of justice.

11. Learned Senior Counsel Sri S.Naga Muthu would submit

that admittedly, earlier CID Police, Andhra Pradesh have filed

several cases against the petitioners as well as M/s. Margadarsi

Chit Fund Private Limited and in some cases, the High Court of

Telangana and in other cases, this Court rendered interim

orders in favour of the petitioners/accused Nos.1 and 2 and

against the respondent No.1/CID and, therefore, the respondent

No.1/CID and the defacto-complainant pressed the impugned

report into service, though the alleged incident said to be

occurred in the year 2016 at Hyderabad, and now trying to

investigate the case to harass the petitioners, though,

respondent No.1/CID has no territorial jurisdiction at all; This

fact alone would suffice to show that the respondent No.1/CID

with an ulterior motive to cause unwarranted and unjustified

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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harassment to the petitioners/accused Nos.1 and 2 trying to

proceed with the investigation by taking coercive measures

against the petitioners/accused Nos.1 and 2, which includes

their arrest and therefore, it is a fit case where this Court shall

intervene treating it as an exceptional case, as non-interference

of this Court would result miscarriage of justice and therefore,

prays for grant of stay pending disposal of the quash petitions.

12. Smt. Y.L.Sivakalpana Reddy, learned Standing Counsel

representing respondent No.1/CID vehemently opposed for

granting any interim relief as requested by the petitioners/

accused Nos.1 and 2 and contended that the respondent No.1/

CID may be permitted to file counter in the quash petitions; She

would further submit that ‘SH-4 Form’ signed by the defacto-

complainant is not available with the respondent No.1/CID

Police and if it is available it may evidence, whether stamp

affixed on it is at Vijayawada or at Hyderabad and if stamp is

affixed at Vijayawada, it would give territorial jurisdiction and it

is a crucial document required to decide the territorial

jurisdiction and therefore, no orders be passed staying the

further investigation in this case, pending filing counter by the

respondent No.1/CID in the quash petitions.

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13. Learned Standing Counsel would further submit that the

Hon’ble Supreme Court in M/s.Neeharika Infrastructure

Private Limited case (supra) has laid down certain guidelines

for passing an interim order in quash petitions in exercise of

powers under Section 482 CrPC or under Article 226 of the

Constitution of India and interim order shall only be passed in

the rarest of rare cases only and this case is not one of such

nature and therefore, no interim order can be passed in these

petitions as prayed by the petitioners/accused Nos.1 and 2.

14. In the light of above rival contentions, the point for

consideration is:

“Whether the interim Orders granting stay of further

investigation in the case can be passed as prayed
for?”

P O I N T:-

15. It is an admitted fact that one Mr. Gadireddi Yurireddi,

resident of Uttar Pradesh presently staying at Hyderabad

presented impugned report to respondent No.1/CID PS,

Mangalagiri, Andhra Pradesh on 13.10.2023 and on the very

same day, the respondent No.1/CID Police registered case in

Crime No.17 of 2023 for the offence punishable under Sections

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420, 462, 120B read with 34 of IPC against the petitioners/

accused Nos.1 and 2 herein, who filed the quash petitions vide

Criminal Petition Nos.8084 and 8085 of 2023 under Section 482

CrPC.

16. The contents of the report are already stated above while

reproducing the arguments of the learned Senior Counsel

Sri Sidharth Luthra. The main ground is that on 29.09.2016 the

defacto-complainant and his brother requested the

petitioner/accused No.1 to issue Share Certificate relating to the

shareholdings of their deceased father and on that day, they

were given a cheque for Rs.39,74,400/- towards dividends

payable for the shareholdings of their father and after sometime

on the very same day, the petitioner/accused No.1 instructed

the defacto-complainant and his brother to sign on an affidavit

and on a blank form ‘SH-4’. They were also given a cheque

bearing No.296460 for Rs.2,88,000/- drawn on Union Bank of

India issued by Margadarsi Financiers. While handing over the

cheque they were asked to sign on ‘SH-4 form’ (Security Transfer

Form as per Section 56 of the Companies Act, 2013) and the

defacto-complainant and his brother were reluctant to sign on

the said documents and then, they were intimidated to sign at

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the point of gun by the petitioner/accused No.1 and therefore,

the defacto-complainant and his brother subscribed their

signatures to the document and the defacto-complainant was

under the impression that they will not be used for any purpose

as they signed only on blank papers; recently through media,

the defacto-complainant came to know about the cases

registered by the respondent No.1/CID against the petitioners/

accused Nos.1 and 2 and Margadarsi Chit Fund Private Limited

and then verified the records of the Registrar of Companies and

found that their shareholdings were transferred in the name of

accused No.2 viz., Cherukuri Sailaja Kiran; and the profits

accrued for the dividends were all from the business conducted

in the branches located from Andhra Pradesh; Hence they

presented a report to the respondent No.1/CID police in Andhra

Pradesh.

17. So, the allegations as such culled out from the report

presented by the defacto-complainant mentioned in the

impugned FIR in Crime No.17 of 2013 registered by the

respondent No.1/CID Police would disclose that the alleged

incident, dated 26.09.2016 includes signing of documents by the

defacto-complainant and his brother i.e., on the affidavit, ‘SH-4

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Form’ and transfer of shares were occurred at Hyderabad only.

None of the said overt acts were occurred in the State of Andhra

Pradesh. Though incidents were occurred in the year 2016, the

report presented in 2023. Defacto-complainant says that due to

fear of petitioner/accused No.1, could not take any action for the

last seven years and now, on seeing through the media that CID

police is taking action against the petitioner/accused No.1 and

Margadarsi Chit Fund Private Limited, the defacto-complainant

presented the report to CID police in Andhra Pradesh.

18. It is an admitted fact, as pointed out by the learned Senior

Counsel Sri Sidharth Luthra that the defacto-complainant

presented a report, dated 14.01.2017 to the Registrar of

Companies stating that he has applied to the company for

transmission of equity shares in his name and filled necessary

documents as per the instructions of the company along with an

affidavit, dated 05.10.2016 and in the said report, he stated that

it was told to him that shares will be transferred to his name

through ‘Form SH-4’ and while signing ‘SH-4 Form’ he was

under the impression that the shares of his father will be

transferred to him and he inadvertently signed on „Form SH-

4‟ and sent it back to the company, which would indicate that

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I.A.Nos.2 & 3 of 2023 in Crl.P.No.8085 of 2023
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he has sent ‘SH-4 Form’ to the company after he signed at some

other place. No allegation of intimidation as found in the report

presented to CID is found in the said report presented to the

Registrar of Companies. Further, the contention of the defacto-

complainant in the report that he presented report to the

respondent No.1/CID Police recently only, and he came to know

about the transfer of shareholdings of his father using ‘SH-4

Form’ signed by him earlier, prima facie appears to be not true,

in view of his own representation presented in the year 2017 to

the Registrar of Companies.

19. Admittedly, in the recent past, the respondent No.1/CID

Police has had registered many cases against the petitioners as

well as Margadarsi Chit Fund Private Limited and the High

Court of Telangana in some matters and in few matters this

Court granted interim orders restraining the respondent

No.1/CID police from taking coercive action and now, as rightly

pointed out by the learned Senior Counsels for the

petitioners/accused Nos.1 and 2, the present FIR is registered

against the petitioners/accused Nos.1 and 2 basing on an

alleged incident said to have been occurred at Hyderabad, seven

years ago.
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20. The contention of the learned Standing Counsel for the

respondent No.1/CID Police that ‘SH-4 Form’ may contain some

information disclosing the place of the stamp affixed on ‘SH-4

Form’ may be at Vijayawada, is only a feeble attempt to say that

the respondent No.1/CID police have territorial jurisdiction. The

above facts and circumstances would disclose the things

otherwise, and makes out a prima facie case for coming to an

opinion that the FIR was registered at Andhra Pradesh by the

respondent No.1/CID police for the reasons best known to them

and the defacto-complainant, on the alleged incidents occurred

at Hyderabad, that to in the year 2016..

21. As rightly submitted by the learned Senior Counsel for the

petitioners/accused Nos.1 and 2 that the CID police, Andhra

Pradesh may have power to register ‘Zero FIR’ for the incidents

occurred at Hyderabad, but they have no authority to conduct

investigation in the considered opinion of this Court.

22. The Hon’ble Apex Court in M/s. Neeharika

Infrastructure Private Limited and Abhishek cases (supra)

held that when the High Court is of the prima facie view that

further investigation or proceeding pursuant to the FIR is likely

to cause unwarranted and unjustified harassment to the

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petitioner, the High Court may grant an interim order in favour

of the accused and further, the High Court is of the prima facie

opinion that an exceptional case is made out for grant of interim

stay for further investigation, under Section 482 CrPC or under

Article 226 of the Constitution of India, by giving brief reasons

why stay/interim order is warranted/is required, so that it can

demonstrate the application of mind by the Court.

23. In the case on hand, the facts and circumstances

discussed above, would prima facie make out the case to say

that the respondent No.1/CID Police are trying to conduct

investigation about the incidents allegedly occurred at

Hyderabad, that to in the year 2016, basing on the report

presented to them in Andhra Pradesh and furthermore, after

several restraint orders against the respondent No.1/CID Police

in the cases registered by them, and in favour of the

petitioners/accused Nos.1 and 2 and also the company, would

establish that they are trying to conduct investigation to cause

unwarranted and unjustified arrest of the petitioners/accused

Nos.1 and 2 by using arm twisting methods. and therefore, this

Court is of the opinion that this is a fit case to grant interim stay

of investigation pursuant to lodging of FIR in Crime No.17 of

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2023 on the file of CID Police, Mangalagiri, Amaravathi, Andhra

Pradesh, pending disposal of the quash petitions.

24. In the result, applications in I.A.Nos.2 and 3 of 2023 in

Criminal Petition No.8084 of 2023 and I.A.Nos.2 and 3 of 2023

in Criminal Petition No.8085 of 2023 are ordered granting stay of

further investigation or proceedings pursuant to the FIR in

Crime No.17 of 2023 of CID PS, Mangalagiri, Amaravathi,

Andhra Pradesh for a period of eight (08) weeks.

JUSTICE B.V.L.N. CHAKRAVARTHI

18th October 2023.
DNB