In A Rare Tiebreaker, Allahabad High Court Grants Interim Protection To Indiabulls Officers In FIRs By Shipra Group

Settling conflicting views regarding the stay of FIR lodged by the Director of Shipra Estate against officers of Indiabulls Housing Finance Ltd. over disputes in a loan facility availed by them- without granting time to the Advocate General and counsel for the complainant for seeking instructions- the Allahabad High Court has ruled that it is a fit case for grant of interim protection.

Justice Samit Gopal, the third judge to whom the matter was referred to following a split in the division bench of Justices Vivek Kumar Birla and Rajendra Kumar-IV, ruled in favour of IHFL officers.

IHFL officers were aggrieved of multiplicity of proceedings for a single loan transaction. Justice Kumar had refused interim relief since the matter was taken out of turn and the AGA was not given time to seek instructions. "Proper way is to give time to AGA to take necessary instructions and later to pass effective order causing damage to other side," he had said.

Justice Birla on the other hand favoured the grant of interim protection to the petitioners based on Gagan Banga vs. Samit Mandal & another (2023) whereby FIRs identical in nature were the subject matter and the Apex Court passed an order granting protection to the financial institution, its officers.

The case was mentioned before the Chief Justice who then nominated it to a third judge for opinion on the case.

Now, Justice Gopal has endorsed the view of Justice Birla, stating,

"Perusing the order of the Apex Court in the case of Gagan Banga vs. Samit Mandal & another: Contempt Petition (Civil) No. 774 of 2023 in Criminal Appeal No. 463 of 2022 and also the order passed by a Division Bench of this Court in Criminal Misc. Writ Petition No. 10893 of 2023 (Neeraj Tyagi and another vs. State of U.P. and 3 others) and also looking to the nature of the incident being related to financial institutions of money lenders who were pursuing recovery proceedings of their enforceable debts and the proceedings thereof satisfy the same, it is a fit case for grant of interim protection to the petitioners."

Since Shipra Group defaulted in the loan payment to IHFL, the property of Shipra Group, specifically Shipra Mall was auctioned by IHFL. Himri Estate emerged as a successful bidder and purchased the mall.

One Mohit Singh, representative of the Shipra Group filed multiple FIRs against the officers of IHFL and Himri Estate Pvt. Ltd alleging that the sale of Shipra Mall was illegal as it was sold at a lessor valuation. The sale had caused a great loss of revenue to the State. Further, it was alleged that certain officers are bhumafias of Delhi and NCR who have been illegally acquiring land in the nearby areas.

Counsel for Petitioner argued that the dispute was purely civil in nature, and it was maliciously turned into criminal prosecution. Further, he contested that Petitioners, herein were covered by the interim protection granted by the Supreme Court in Gagan Banga.

Meanwhile, the Additional Advocate General, representing the State, argued that since the offences were punishable for less than 7 years, the Petitioners shall not be arrested and there was no requirement of any interim protection at this stage.

In addition to the above, Counsel for the Informant argued that the case against the Petitioners was not limited to Shipra Mall, but extended beyond, to lands which had been possessed by the Petitioners illegally.

The Court observed that the case was related to financial transactions- Loan, its non-payment and subsequent auction of properties of the defaulter.

“The argument of learned Additional Advocate General that the petitioners will not arrested and the proceedings, if any, will be taken up as per the directions of the Apex Court in the judgments relied by him is concerned, the interim order as granted is not limited to merely protecting the arrest of the petitioners but is on other counts too,” held the Court.

The case is listed on 11^th August, 2023 before the division bench.

Case Title: Reena Bagga and Another vs. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11837/2023] and Himri Estate Pvt. Ltd. and 4 Others v. State of UP and 2 Others [Criminal MISC. Writ Petition No. – 11838/2023]

Case Citation: 2023 LiveLaw (AB) 253

Appearances: Rakesh Dwivedi, Senior Advocate assisted by Raghav Dwivedi, Varad Nath for petitioners. Siddharth Dave, Senior Advocate assisted by Syed Imran Ibrahim and Rahul Agarwal, for first informant. P.K. Giri, Additional Advocate General alongwith Ajay Singh, Additional Government Advocate for the State of U.P. and the S.H.O. concerned.

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