'Abuse Of Process' : Karnataka High Court Dismisses Petition Seeking Criminal Action Against Azim Premji Under RBI Act

A single bench of Justice Suraj Govindaraj while dismissing the petition said:

"I am of the considered opinion that the writ petition filed is an abuse of process of law and of this court, the same is not maintainable. The grievance of the petitioner has already been addressed by RBI by its order dated 5.09.2017 passed. If at all the petitioner has any grievance as regards the said order, the petitioner is required to take adequate and necessary steps not by filing of proceedings by way of a private complaint before the Magistrate or by way of writ petition before this Court."

The petitioner had challenged the order dated July 28, 2020, by which the private complaint filed by it was dismissed. In its complaint It was alleged that the RBI Act was amended with effect from 9.1.1997 to strengthen the role of RBI in supervising Non Banking Finance companies (NBFC). Section 45 IA of the RBI Act made it mandatory for all the NBFC to obtain registration from RBI in the event of the business being conducted without such registration, such an entity could be prosecuted under Section 58B(4A).

The complainant alleged that respondents being directors of various companies were carrying on non-banking financial business in the said companies without registration and as such had committed offences under Section 45IA of the RBI Act and as such they were to be prosecuted.

The magistrate court dismissed the private complaint holding that the representation earlier submitted by the petitioner was still pending with the Governor of the RBI for consideration. The status of said representation was not known. In the absence thereof, the Court was of the opinion that no direction can be issued to the Governor of the RBI.

Senior Advocate S Ganesh, instructed by Advocate Sandeep Huligol appearing for the respondents raised a preliminary objection on the maintainability of the petition. It was submitted that "The above writ petition is not tenable, that the issue raised in the private complaint has already been decided by the Delhi High Court in W.P.No.4905/2017. Moreover, the petitioner having filed PIL before this Court and having withdrawn the same unconditionally without reserving any liberty, the present writ petition is not maintainable and as such, the writ petition is to be dismissed."

It was also pointed that the petitioner had also filed a PIL in W.P.No.3635/2020 before the High Court whereunder the Governor of RBI and various other entities had been arrayed as parties and that in the said matter also allegations were made as regards violation of RBI Act, more particularly relating to registration of the NBFC.

The said PIL having been heard by the Division Bench of this Court, upon the Division Bench of this court not being convinced with the said matter, the petitioner after addressing arguments in the matter sought for withdrawal of the same during the proceedings on 1.10.2020 and as such, the petition was disposed of as unconditionally withdrawn.

It was contended that once the proceeding had been filed making allegations before this Court as a PIL or otherwise and the same had been withdrawn, the filing of the present writ petition is barred by relying on the decision of the Apex Court in Sarguja Transport Service –v- State Transport Appellate Tribunal and others [1987(1) SCC 5].

Senior advocate R.V.S. Naik, instructed by Advocate V.V.Giri, for respondent No.1 (RBI), submitted that "The claim of the petitioner is hit by the principles of res judicata inasmuch as the RBI vide its order dated 5.9.2017 has rejected the claims of the petitioner. If at all the petitioner has any grievance, the petitioner ought to have challenged the order dated 5.9.2017. Same not having been challenged, a private complaint could not have been filed by the petitioner.

Further, it was said that "The said order of the RBI having been made in pursuance of the order of the Hon'ble Delhi High Court has an effect of res judicata, the petitioner cannot once again reagitate the same except by way of an appeal"

AdvocateR.Subraminian,appearing for the petitioner submitted that proceedings which had been filed before the Delhi High Court were different from that which had been filed before the Magistrate.

Before the Delhi High Court, the relief which had been sought for was for a mandamus to decide on the representations given by the petitioner, whereas the proceedings in PCR had been filed to register a complaint against respondents.

Moreover, the letter dated 5.9.2017 of RBI cannot be said to be an order passed by the RBI inasmuch as there is no judicial or quasi judicial proceedings which took place. The said letter has been issued on the basis of documents available, no hearing was conducted and therefore, the same is not in compliance with the directions of the Delhi High Court and as such, the said letter dated 5.9.2017, cannot be said to be an order passed by the RBI.

The PIL which had been filed before this Court was also relating to a completely different aspect inasmuch in the said PIL, the petitioner had sought for the constitution of a Multi Disciplinary Investigation team to investigate and prosecute the 11th respondent therein and his associates, which is completely different from that which is sought for before the Magistrate.

The court said:

"The bench went through the proceedings filed before the Delhi High Court, Karnataka High Court and the private complaint and noted that "It cannot be disputed now by the petitioner that the relief sought for before the Delhi High Court, in the PIL before this Court, as also in the private complaint filed before the Magistrate, are one and the same though by legal and linguistic gymnastics they have been worded differently."

It added :

"What this court is required to look into and appreciate is if the reliefs sought for on the allegations made are one and the same. Clever drafting and or subterfuge resorted to in such drafting would not take away the fact that the allegations made in all three proceedings are one and the same.The wording being different is only the careful and ingenious drafting of the prayers and/or the reliefs sought for since the forums are different but essentially in all the three matters what has been sought is a direction to the RBI to take action against respondents No.2 to 7 for alleged violation of Section 45-IA of the RBI Act."

The bench also noted that RBI has categorically debunked the allegations made by the petitioners against respondents. It has categorically stated that the merger cannot be annulled or RBI cannot approach the Court for annulment of such merger.

Accordingly, the bench said "Though it has been contended by R.Subramanian that the present writ petition is more in the nature of an appeal from the order passed by the trial Court, having regard to the aforesaid facts and the aforesaid proceedings, I am of the considered opinion that the said PCR No.7111/2020 is one more proceedings filed by the petitioner in furtherance of the proceedings before the Hon'ble Delhi High Court, PIL filed before this Court, the proceedings before the Company Court, etc."

It added :

"The allegations and/or complaints of the petitioner having already been considered by the RBI and a detailed order dated 5.9.2017 having been passed by the RBI, I am of the considered opinion applying the principles laid down by the Apex Court in Sarguja's case that when the petitioner unconditionally withdraws a particular matter, the said subject matter could not be re-agitated in any other proceedings."

The bench concluded by saying :

"Though it is sought to be contended that the order passed by the Delhi High Court would operate as res judicata. I am of the considered opinion that the order of the Delhi High Court was only a direction to the RBI to consider the complaints and pass an order. Such a direction not being one on merits cannot be termed to operate as res judicata. For an order to operate as res judicata it has to be passed on merits between the same parties. The order of the Hon'ble Delhi High Court would not qualify to be that passed between the same parties since the parties in the present matter are different and as such, I am of the considered opinion that the said order would not operate as res judicata."

Case Details:

Case Title: INDIA AWAKE FOR TRANSPARENCY And AZIM HASHAM PREMJI.

Case No: 11482 of 2020

Date of order: January 18, 2021.

Coram: Justice Suraj Govindaraj:

Appearance: Advocate R SUBRAMANIAN for petitioner.

Senior Advocate R.V.S. NAIK, a/w Advocate SURYANARAYANA, FOR R1-RBI;

Senior Advocate S.GANESH, a/w advocate SANDEEP HULIGOL, FOR R2 TO R7.