No registration of FIR in commercial offences without legal opinion from attorney’s office: High Court

Read Judgement: PARKWOOD DEVELOPERS PVT. LTD v. STATE OF PUNJAB AND ANOTHER 

 LE Correspondent

Chandigarh, July 28, 2021: The Punjab and Haryana High Court has held that there will be no registration of FIR in commercial disputes without obtaining legal opinion from the government attorney’s office.

The bench of Justice Arvind Sangwan directed the Director General of Police, Punjab to issue the necessary directions to all the Senior Superintendents of Police in the state of Punjab, the Deputy Superintendents of Police and all the Station House Officers of the concerned police stations in this regard as well.

The bench stated that if any direction is issued by any Commission in a dispute making out commercial offences (other than in cases where a direction is issued by a Magistrate under Section 156(3) Cr.P.C. or by a High Court or the Supreme Court), it will follow the judgment of the Supreme Court in Lalita Kumari vs Govt. of U.P. and others and that is before registration of the FIR in a casual manner, they will obtain the opinion of the District Attorney/Deputy District Attorney (Legal) whether any offence is made out or not, in cases arising out of commercial dispute.

The brief facts of the present case are that the petitioner is a company engaged in the business of building and construction activity of multi-tower projects and is undertaking one such project in Sector 116, Mohali.

It was submitted that the complainant Hari Om Paul Jalota, who is an NRI, had booked two flats with the petitioner-company in 2011 and has made part payment of Rs 24 lakh on different dates.

As per the stipulation, the possession of the flats was to be handed over in March, 2014 on making balance payment. Since the petitioner company could not hand over the possession in time, the complainant approached the NRI Commission.

On 24.07.2019, the NRI Commission marked an investigation to the Senior Superintendent of Police, S.A.S. Nagar, Mohali, and during the investigation, a compromise/settlement was arrived at between the petitioner and the complainant after the latter agreed to return the money with interest.

Later, the NRI Commission by order dated 18.12.2019 directed the Senior Superintendent of Police, S.A.S. Nagar, Mohali, to take appropriate action and issued notice to the petitioner as the company failed to pay part of the payment and got the cheques dishonoured.

Even as the petitioner-company argued that despite the fact that the entire amount stands returned and only part of the interest remains to be paid, the NRI Commission again passed an order on 02.06.2021, directing the Senior Superintendent of Police, S.A.S. Nagar, Mohali, to submit the status report regarding the investigation before the next date of hearing.

Later, the police lodged an FIR against the company on the ground that even though the petitioner has agreed to make the payment of interest, the cheque bounced and therefore, offence under Section 420 IPC is made out.

In the petition before the high court, the company stated that at no stage of time did the petitioner deny its liability to repay the amount and has only sought time to make the payment because of financial hardship on account of the COVID19 situation.

The petitioner further argued that before registration of the FIR, no legal opinion was taken by the Deputy Superintendent of Police, Kharar or by the Senior Superintendent of Police, S.A.S. Nagar, Mohali, as it is apparent from the bare language of the FIR that the case has been registered only on the basis of the orders of the NRI Commission and therefore, the investigation was not carried out in a proper manner prior to registration of the FIR.

Deciding the matter, the bench stated, “The petitioner and the complainant are directed to appear before the Mediation and Conciliation Centre of this Court on 10.08.2021  as the petitioner has offered to return the balance amount subject to receiving the original documents from the complainant”.

In the meantime, no coercive action be taken against the petitioner, it added.

The Bench further said “the Director General of Police, Punjab is directed to issue necessary directions that  it will follow the judgment of the Hon’ble Supreme Court in Lalita Kumari’s case (supra) and before registration of the FIR in a casual manner, they will obtain the opinion of the District Attorney/Deputy District Attorney (Legal) whether any offence is made out or not, in cases arising out of commercial dispute.”