MUNICIPAL CORPORATION OF FARIDABAD Vs. STATE

JUDGEMENT

(1.) The present petition is filed by the Municipal Corporation of Faridabad through its Director-cum-Commissioner, Town and Country Planning, Haryana as an intervener seeking quashing of orders dated 23.7.2002 of the Additional Sessions Judge (in short 'ASJ') directing release of bank guarantees executed in favour of the petitioner by the accused. The order was passed in a revision petition challenging the order of the Metropolitan Magistrate dated 29th May, 2002 releasing the bank guarantees. Before coming to the order it will be appropriate to narrate the background in which the FIR was filed.

(2.) On 6.12.1991, an agreement was entered into between respondent No. 2, Durga Builders Pvt. Ltd. claiming to be the owner in possession of land mentioned in the annexure to the agreement with the Governor of Haryana through Director, Town and Country Planning, Haryana (hereinafter referred to as the 'Director') for grant of licence for carrying out and completing development work for setting up a colony in village Ismailpur, Tehsil and District Faridabad, Haryana. The agreement, inter alia, required respondent No. 2 to submit bank guarantees to the Director. The bank guarantee could be invoked as per Clause 3 on cancellation of licence on grounds mentioned in the agreement. Similarly Clause 6 provided that the Director could release the bank guarantee after the layout plans and development works or part thereof in respect of the colony or part thereof was complete. It further provided that 1/5th of the bank guarantee amount was to be kept unreleased to ensure upkeep and maintenance of the colony. It appears that respondent No. 2 invited investors and prospective buyers for the land to be allotted in the colony intended to be developed by it. It also appears that respondent No. 2 obtained investment and price for land from a far larger number of people than the number of plots that could be allotted. The development work did not make much headway and those investors and prospective buyers started demanding return of their money or delivery of possession of land. The FIR in question i.e. FIR No. 48/2001 was registered on the complaint of some such investors.

(3.) Criminal proceedings were initiated in the Court of Mr. M.C. Gutpa, Metropolitan Magistrate. Respondent No. 2 made two applications to the Metropolitan Magistrate for releasing or de-freezing the account of Deutsche Bank, Connaught Place and Central Bank of India, Green Park, New Delhi of M/s. Durga Builders Pvt. Ltd. and for direction to the Crime Branch to release the amount of Rs. 3,25,13,000/- of the bank guarantee and FDs lying at the Deutsch Bank to respondent No. 2. Mr. R.K. Nanda of M/s. Durga Builders Pvt. Ltd. The respondent No. 2 submitted to the Magistrate that the Crime Branch had seized all the records of respondent No. 2 and had directed the banks not to allow the operation of the accounts on account in which approximately Rs. 20 lakhs of respondent No. 2 were lying unutilised, that the bank guarantee lapsed on 6.12.1998 and the bank was relieved and discharged of its obligation towards the liability under the bank guarantee, that the bank can now refund the margin money of the guarantees to respondent No. 2, that accused R.K. Nanda was willing to settle with the investors who are willing to take back the principal amount, that the accused would stand liable for any action initiated by any beneficiary and that the amount be released which could be used for the purpose of a settlement with the investors. The Metropolitan Magistrate heard the accused and the state at length and observed that as per the clauses of the bank guarantee the bank had a discretion to renew or refuse to renew the bank guarantee, that the bank guarantee having lapsed the bank was under no obligation towards the Director, that there was no hurdle for the bank to release the funds in favour of the accused or respondent No. 2 and directed that the margin money for the guarantees in the form of FDRs deposited by R.K. Nanda be released and that the amount be released for settlement of the claims of the investors.