2021 INSC 0307
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REPORTABLE
IN THE SUPEME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (CRIMINAL) NO.3869 OF 2021
A P MAHESH COOPERATIVE URBAN
BANK SHAREHOLDERS WELFARE 
ASSOCIATION                                                      … PETITIONER(S)
VERSUS
RAMESH KUMAR BUNG AND ORS.                    …RESPONDENT(S)
WITH
SPECIAL LEAVE (CRIMINAL) NO. 3875 OF 2021
J U D G M E N T
V. Ramasubramanian, J.
1. Challenging an order passed by the High Court for the State of
Telangana   in   two   interlocutory   applications   granting   stay   of   all
further  proceedings including  the arrest of the Respondents 1 to  3
herein   (petitioners   before   the   High   Court),   pending   two   main

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petitions   for   quashing   the   criminal   complaints   in   Crime   Nos.   218
and 222 of 2021 of Banajara Hills Police Station, Hyderabad, the  de
facto  complainant, has come up with these Special Leave Petitions.
2. We   have   heard   Shri   Dil   Jit   Singh   Ahluwalia,   learned   counsel
for   the   petitioner   and   Mr.   Siddharth   Luthra   and   Mr.   Niranjan
Reddy, learned senior counsel appearing for the Respondent Nos. 1
to 3 herein.
3. The petitioner herein filed two complaints on the file of the III
Additional   Chief   Metropolitan   Magistrate   at   Hyderabad   against   the
Respondents   1   to   3   herein   on   19.02.2021.   The   learned   Magistrate
passed   an   order   under   Section   156(3)   of   the   Code   of   Criminal
Procedure,   directing   the   police   to   register   cases   and   take   up
investigation,   pursuant   to   which,   the   Police   registered   two   First
Information   Reports   (FIR   for   short)   in   Crime   Nos.   218   and   222   of
2021 respectively on 12.03.2021 and 13.03.2021.
4. The Respondents 1 to 3 herein who were the accused in those
two complaints were described in those two complaints respectively
as  (i) Presently   Chairman   and   erstwhile   Senior   Vice   Chairman;
(ii)   Managing   Director   and   CEO;   and   (iii)   Presently   Vice   Chairman

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and   erstwhile   Chairman   of   A.P.   Mahesh   Cooperative   Urban   Bank.
The   offences   complained   of   by   the   petitioner   against   the
Respondents 1 to 3 herein were under Sections 409, 420, 467, 468,
471   and   477A   read   with   120B   IPC.   It   is   necessary   to   take   note   at
this   stage   that   the   Cooperative   Bank   involved   is   actually   a   multi­
state   cooperative   society   governed   by   the   Multi­State   Cooperative
Societies Act, 2002.
5. Immediately   after   the   registration   of   the   complaints,   the
Respondent   Nos.   1   to   3   herein   filed   two   petitions   in   Criminal
Petition Nos. 2370 and 2371 of 2021 under Section 482 of the Code
seeking   to   quash   the   criminal   complaints.   Pending   disposal   of   the
criminal complaints, the Respondents 1 to 3 herein sought interim
stay   of   all   further   proceedings   including   their   arrest,   in   FIR   Nos.
218 and 222 of 2021.
6. The   applications   for   stay   in   I.A.   Nos.   1   and   1   of   2021   were
hotly   contested   by   the   petitioner   herein,   as   the   petitioner   was
arrayed as the second respondent in the quash petitions.
7. After hearing the Respondents 1 to 3 herein (persons accused)
and   the   petitioner   herein   ( de   facto   complainant),   the   High   Court

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passed a reasoned order on 27.04.2021 granting stay of all further
proceedings in both the complaints. It is against the said order that
the petitioner has come up with the above SLPs.
8. Briefly and broadly, the reasons provided by the learned Judge
of   the   High   Court   for   granting   stay   of   further   proceedings   in   the
complaints are as follows:­
(i) That while one of the two complaints relates to ‘loan
fraud’, the other relates to ‘voter fraud’;
(ii) That   the   term   of   office   of   the   Board   of   Directors   of
the Cooperative Bank expired in April, 2020 and the
election   process   that   was   set   in   motion   in   March,
2020   culminated   in   the   holding   of   elections   on
20.12.2020;
(iii) That   there   was   a   huge   acrimony   surrounding   the
elections,   leading   to   the   filing   of   a   batch   of   writ
petitions   both   before   and   after   the   conduct   of
elections;
(iv) That   there   was   an   over­lapping   of   the   allegations
relating   to   ‘loan   fraud’   and   ‘voter   fraud’   in   the   writ
petitions also, challenging or supporting the election
process;

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(v) That   in   the   said   batch   of   writ   petitions,   another
learned Judge of the same High Court had passed a
common  order  on   08.01.2021,   directing   the  results
of the election to be declared and the newly elected
Board to take charge but directing the newly elected
Directors   not   to   take   policy   decisions   until   further
orders;
(vi) That   even   before   the   registration   of   the   FIRs   in
March,   2021   the   police   issued   a   notice   under
Section 91 Cr.PC to the Manager of the Bank asking
him   to   preserve   the   CCTV   footage   of   a   particular
period,   which   was   clearly   in   violation   of   the
mandate of law; and
(vii) That the allegations of ‘voter fraud’ and ‘loan fraud’
are   inter­related   to   the   issues   raised   in   the   writ
petitions   and   that   therefore   further   proceedings   in
the criminal complaints are liable to be stayed.
9. Assailing the said order of the learned Judge, it was contended
by Mr. Ahluwalia, learned counsel for petitioner:­
(i) That the High Court should not have stayed further
proceedings,   when   on   a   plain   reading   of   the
complaints,   cognizable   offences   are   prima   facie
made   out,   especially   in   the   teeth   of   the   law   laid
down   by   this   Court   in   Neeharika   Infrastructure

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Pvt. Ltd . vs.  State of Maharashtra & Others 1
 and
Skoda   Auto   Volkswagon   India   Pvt.   Ltd .   vs.
State of U.P . 2
;  
(ii) That   the   impugned   order   is   clearly   contrary   to   the
decisions   of   this   Court   in   Mohd.   Allauddin   Khan
vs.     State   of   Bihar   &   Ors . 3
  and   K.   Jagdish     vs.
Udaya   Kumar   GS 4
  in   as   much   as   it   holds   the
pendency   of   civil   writ   petitions   relating   to   voter
fraud,   as   having   any   bearing   upon   the   criminal
complaints; and
(iii) That   the   High   Court   was   in   error   in   thinking   that
some   of   the   allegations   pertained   to   disputes
arbitrable   under   Section   84   of   Multi­State
Cooperative   Societies   Act,   2002   and   that   such   a
view   is   in   the   teeth   of   the   decision   of   this   Court   in
N.N.  Global  Mercantile  Pvt.  Ltd . vs.   Indo  Unique
Flame Ltd . 5
10. Mr.   Ahluwalia,   learned   counsel   for   the   petitioner   took   us
through   all   the   documents   including   the   pleadings   in   the   writ
petitions, the interim order passed in the writ petitions, the various
complaints made to the police as well as the Reserve Bank of India
1   (2021) SCC Online SC 315
2   (2020) SCC Online SC 988
3   (2019) 6 SCC 107
4   (2020) 14 SCC 552
5   (2021) SCC Online SC 13

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and   the   way   the   State   treated   those   complaints.   He   also   drew   our
attention   to   various   passages   in   the   decisions   of   this   Court   in
Neeharika  (supra) and made a passionate appeal that heavens will
certainly fall if the stay granted by the High Court is not vacated.
11.  In   response,   Messrs.   Siddharth   Luthra   and   Niranjan   Reddy,
learned senior counsel appearing for respondents 1 to 3 argued:­
(i) That   normally   this   Court   would   not   interfere   with
an interim order passed by the High Court when the
main matter is pending adjudication before the High
Court;
(ii) That   what   is   taken   exception   to   in   Neeharika
(supra) is the tendency of courts to pass innocuous
orders,   not   to   take   coercive   steps   and   that   too
without assigning any reasons; and
(iii) That in the case on hand the High Court had more
justifiable   reasons   than   one   to   grant   a   stay   and
such   reasons   are   also   recorded   by   the   learned
Judge   and   that   the   tendency   to   foist   criminal
complaints   at   the   time   of   elections   can   be   taken
note   of   by   courts   whenever   a   challenge   is   made   to
the initiation of the prosecution.
12. We   have   considered   the   rival   submissions   and   also   gone
through   pleadings   and   documents.   Before   we   proceed   to   consider

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the rival contentions, it is necessary to take note of the sequence of
events   that   preceded   the   lodging   of   the   FIRs,   as   they   throw   some
light on the first principle of Criminal Law  that   “witnesses may lie,

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but circumstances may not”.   The sequence is as follows:­
(i) The term of office of the erstwhile Board of Directors
of the Cooperative Bank was to expire in April, 2020
and   hence   a   Returning   Officer   was   appointed   in
February, 2020. An election notification was issued
on   18.03.2020   but   it   was   withdrawn   after   COVID­
19 struck;
(ii) A final voters list was issued on 17.11.2020 followed
by a fresh election notification on 24.11.2020;
(iii) The   1 st  
respondent   herein   was   the   Senior   Vice
Chairman   and   the   3 rd
  respondent   herein   was   the
Chairman   in   the   erstwhile   Board   of   Directors.   The
2 nd
  respondent   was   the   Managing   Director   and
CEO;
(iv) Immediately   after   the   election   notification   dated
24.11.2020 was issued, the petitioner herein filed a
writ   petition   on   30.11.2020   in   W.P.   No.   21795   of
2020,   praying   for   a   declaration   that   the   proposed
conduct   of   elections   based   on   a   bogus   voters   list
dated   17.11.2020   was   illegal   and   contrary   to   the
provisions   of   the   Multi­State   Cooperative   Societies
Act,   2002,   as   well   as   certain   provisions   of   the
Banking   Regulation   Act,   on   account   of   the
illegalities   committed   by   the   then   Board   of
Directors.   Pending   their   Writ   Petition   No.   21795   of

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2020,   the   petitioner   herein   sought   two   interim
reliefs in I.A. Nos. 1 and 2 of 2020, respectively  for
(i)   the  conduct   of   a   thorough   investigation   with   the
help   of   police/investigation   agencies   and   to   bring
the   culprits   before  law;   and   (ii)   stay   of   operation   of
the bogus voters list.
(v) Though   the   aforesaid   writ   petition   was   filed   on
30.11.2020, the elections were held as scheduled on
20.12.2020.   The   counting   of   votes   began   on
21.12.2020,   but   half­way   through,   the   Returning
Officer   decided   to   stop   the   counting   of   votes,   for
reasons   not   decipherable   now   and   in   any   case   not
necessary for the present dispute;
(vi) Therefore,   few   more   writ   petitions   came   to   be   filed
by   certain   individuals   including   the   1 st
  Respondent
herein.   The   details   of   those   writ   petitions   are   as
follows:­
W.P.No. Filed By Prayer Made
23849/202
0 Srinivas Asawa Challenging   the   action   of   the
Returning   Officer   in   stopping
the   process   of   counting   of
votes   and   seeking   a   direction
to declare the results
23853/202
0 Ramesh Kumar 
Bung (1 st
 RR) ­do ­
23869/202
0 Shrikant Inani ­do­
23976/202
0 Shaligram Dhoot 
and Mala Dhoot Challenging   the   action   of   the
Returning   Officer   in
conducting the elections in an
arbitrary   manner   and   seeking

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fresh elections 
(vii) The applications praying for  interim relief in all the
aforesaid   writ   petitions   were   taken   up   together   by
another   learned   Judge   of   the   High   Court.   After
hearing   elaborate   arguments,   the   learned   Judge
passed a common order dated 08.01.2021 in all the
Interim   Applications   in   those   writ   petitions.   The
operative portion of the said order reads as follows:­
“(i)  I.A.  No.   1  of  2020   in  W.P.No.   23853,   I.A.   No.  1  of
2020 in W.P. No. 23869 and I.A. No. 1 of 2020 in W.P.
No.   23849   of   2020   are   ordered   and   the   Returning
Officer   is   directed   to   announce   the   result   of   the
election held on 20.12.2020;
ii)   in   I.A.   No.   1   of   2020   in   W.P.   No.   21795   of   2020,
issue notice, returnable by 02.02.2020;
iii)   I.A.   No.   2   of   2020   in   W.P.   No.   21795   of   2020   is
filed praying to stay the operation of bogus voters list
dated   17.11.2020.   for   the   reasons   stated   above,
petitioner   is   not   entitled   to   the   relief   sought   in   the
interlocutory   Application   I.A.   No.   2   of   2020   in   W.P.
No. 21795 of 2020 is dismissed;
iv)   In   I.A.   No.   1   of   2020   in   W.P.No.   23976   of   2020
petitioners   are   praying   to   suspend   the   declaration   of
results   of   the   election.   For   the   reasons   stated   above,
petitioners   are   not  entitled   to  the  relief   sought   in  the
Interlocutory Application. I.A.No.1 of 2020 in W.P. No.
23976 of 2020 is dismissed;
v)     I.A.   No.   2   of   2020   in   W.P.   No.   23976   of   2020   is
filed  to  direct the 4 th
  respondent Bank  to conduct re­
election   to   the   posts   of   Directors.   Unless   the   Court
holds   that   the   election   process   undertaken   by   the
Returning   Officer   is   vitiated,   Court   cannot   direct   re­
election. Therefore, prayer sought in this Interlocutory
Application cannot be granted at this stage. I.A. No. 2
of 2020 in W.P. No. 21976 of 2020 is dismissed;

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vi)   Until   further   orders,   the   newly   elected   Directors
are   directed   not   to   take   policy  decisions   affecting  the
affairs   of   the   society  and   the   bank,   including   dealing
with   the   funds   of   the   society   except   for   attending   to
day   to   day   needs   of   the   Society   and   the   Bank   and
payment of salaries and allowances of the staff.”
(viii) Challenging one portion of the common order dated
08.01.2021   forbidding   the   newly   elected   directors
from   taking   any   policy   decisions,   the   Management
of   the   Bank   filed   two   writ   appeals   in   W.A.   No.   21
and   22  of  2021.  Upon   being  informed  that  the   writ
petitions were listed for hearing on 09.02.2021, the
Division   bench   disposed   of   the   writ   appeals   by   an
order dated 21.01.2021, granting opportunity to the
Management   of   the   Bank   to   move   an   appropriate
application   before   the   learned   Judge   seeking
necessary clarification;
(ix) Pursuant   to   the   aforesaid   order   of   the   Division
Bench,   the   2 nd
  Respondent   moved   applications   for
clarification, but later chose to withdraw the same;
(x) On   02.01.2021   and   03.01.2021,   (a   few   days   before
the learned Judge passed the common interim order
in   the   writ   petitions),   the   petitioner   Association
claims   to   have   sent   by   post,   a   complaint   to   the
police;
(xi) Thereafter, on 22.01.2021, the petitioner admittedly
moved   the   Hon’ble   Minister   for   Agriculture,
Marketing   and   Cooperation,   Government   of

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Telangana, with a petition regarding the inaction on
the   part   of   the   police   on   the   complaints   allegedly
sent by post on 02.01.2021 and 03.01.2021. On the
petition   so   given   by   the   petitioner   herein,   the
Hon’ble   Minister   issued   a   direction   to   the
Commissioner   of   Police   on   22.01.2021   to   the
following effect:­
“Enclosed   are   the   complaints   wherein   serious
allegations   are   made   of   commission   of   cognizable
offences.     Kindly   get   both   the   FIRs   registered   and
investigation   be   carried   out   immediately.     Copies   of
FIRs be forwarded to Government within two days.”
(xii) On   03.02.2021,   the   petitioner   herein   filed   a   fresh
writ   petition   in   W.P.   No.   2724   of   2021   with   the
following main and interim prayers:­
“ MAIN PRAYER:
In light of the extraordinary facts and circumstances
above, this Hon’ble  Court may graciously be pleased
to   pass   a   writ   of   mandamus   or   an   order(s)/
direction(s) of the nature of mandamus:
(i)  Directing   Respondent   No.   2   to   suspend   the
Board   of   Directors   of   Respondent   5   Bank   and
appoint   an   administrator   (as   has   also   been
recommended   by   Respondent   No.   4   to   Respondent
No.   2   vide   letter   No.   6392/Coop­I/A2/2020   dated
23.12.20)   in   view   of   the   serious   allegations   of   inter
alia   large­scale   money   siphoning,   fraud,   falsification
of   documents   and   forging   of   records   done   by
Respondent   No.   7   and   Respondent   No.   8,   in
conspiracy   with   Respondent   No.   6,   which   acts   are
gravely prejudicial to the interest of both the Society
as   well   as   its   members,   contrary   to   the   Multi   State
Cooperative   Societies   Act,   2002   and   Bye   laws   of
Respondent   No.   5,   for   which   cognizable   offences
Respondent   No.   4   has   directed   Commissioner   of
Police, Hyderabad to register two FIRs and carry out
investigation immediately;

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(ii)  Directing   Respondent   No.   3   to   carry   out   a
forensic   audit   of   the   bank   as   recommended   vide
letter   No.   6392/Coop­I/A2/2020   dated   23.12.20   of
Respondent   No.   4   to   Respondent   No.   2,   which   has
informedly   been   recommended   onward   by
Respondent No. 2 to Respondent No. 3;
(iii) Directing   Respondent   No.   3   for   removal   of
Respondent   No.   6   as   the   MD   &   CEO   of   Respondent
No. 5 Bank in view of the serious allegations against
him of inter alia large­scale money siphoning, frauds,
falsification   of   documents,   forging   of   records   of
Respondent   No.   5   Bank,   done   in   conspiracy   with
Respondent Nos. 7 and 8;
(iv) pass   any   other   orders/directions   deemed   just
and reasonable to protect the interests of thousands
of   small   investors   of   the   Bank   in   the   facts   and
circumstances of the case. 
INTERIM   PRAYERS:   For   the   reasons   stated
hereinabove,   pending   disposal   of   the   writ   petition,
the   Petitioner   herein   prays   that   this   Hon’ble   Court,
in light of the extra­ordinary facts and circumstances
above, may graciously be pleased to:
(i) ad interim suspend the Boards of Directors of
Respondent   No.   5   bank,   appoint   a   Retired   Supreme
Court/High   Court   Judge   as   an   administrator   of
Respondent   No.   5,   during   the   pendency   of   the   writ
petition   or   Respondent   No.   2   acting   upon
representation   No.   6392/Coop­I/A2/2020   dated
23.12.20   forwarded   by   Respondent   No.   4   to
Respondent   No.   2   or   representation   of   Petitioner
dated   17.01.21   to   Respondent   No.   3,   whichever   is
earlier, so as to secure the proper management of the
Bank and to prevent causing irreparable harm to the
interest   of   the   small   depositors   of   the   Petitioner­
association,   in   view   of   the   serious   allegations   of
large­scale   money   siphoning,   fraud,   falsification   of
documents,   forging   of   records   of   Respondent   No.   5,
by Respondent No. 6 in conspiracy with Respondent
No. 7 and Respondent No. 8, which criminal offences
of  serious  fraud  are  under  police  investigation; or  in
the   alternative,   suspend   Respondent   No.   6   and
appoint   a   retired   Managing   Director   of   any   Public
Sector   Undertaking   Bank   as   an   ad   interim   MD   and
CEO   of   the   Respondents   No.   5   bank,   until
Respondent   No.   2   has   acted   upon   the   Petitioner’s

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representation   dated   17.01.21   or   during   the
pendency of this petition, whichever is earlier; and 
(ii) until   further   orders   direct   that   the   newly
elected   Directors   to   not   to   take   any   policy   decisions
affecting   the   affairs   of   the   society   and   the   bank,
including dealing with the funds of the society except
for   attending   to   the   day   to   day   needs   of   the   Society
and   the   Bank   and   payment   of   salaries   and
allowances   to   the   staff,   as   already   directed   by   this
Hon’ble Court vide order dated 08.01.21 in CWP No.
21795/2020   filed   by   the   Petitioner,   which   is   sub
judice; and pass any other orders/directions deemed
just   and   reasonable   to   protect   the   interests   of
thousands of small investors of the Bank in the facts
and circumstances of the case.”
(xiii) On 05.02.2021 the High Court ordered notice before
admission   in   W.P.   No.   2724   of   2021   but   did   not
grant any interim order;
(xiv) By coincidence or otherwise, the Deputy Registrar of
Cooperative Societies, who was nominated to be the
Returning   Officer   for   the   conduct   of   the   elections,
was   also   issued   with   a   charge   memo   on   the   very
same day namely 03.02.2021, the date on which the
petitioner filed their second writ petition in W.P. No.
2725   of   2021.   Contending   that   the   charge   memo
was   the   product   of   the   handiwork   of   certain
disgruntled   elements,   the   Returning   Officer   filed   a
writ   petition   in   W.P.   No.   3679   of   2021.   On
22.02.2021, the  High  Court granted interim  stay  of
further proceedings pursuant to the charge memo;
(xv) In   the   meantime,   the   petitioner   lodged   two
complaints   on   the   file   of   the   III   Additional   Chief

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Metropolitan Magistrate on 19.02.2021, one of them
revolving   around   allegations   about   the   grant   of
loans   and   the   other   revolving   around   allegations
relating to voter fraud.
(xvi) The   learned   Magistrate   passed   an   order   under
Section   156(3)   of   the   Code,   pursuant   to   which,   the
police  registered  an  FIR  bearing  No.218  of  2021  on
12.03.2021   and   an   FIR   bearing   No.222   of   2021   on
13.03.2021;
(xvii) Praying   for   quashing   of   these   two   complaints,   the
Respondents   1   to   3   herein   filed   Criminal   Petition
Nos. 2370 and 2371 of 2021. The Respondents 1 to
3 impleaded the petitioner herein as 2 nd
 Respondent
in   those   quash   petitions.   According   to   the
petitioner,   the   learned   Judge   heard   arguments   in
the   petitions   for   interim   stay   pending   the   quash
petitions   and   reserved   orders   on   23.03.2021.   It   is
claimed   by   the   petitioner   that   thereafter   they   filed
counter   affidavits   to   the   criminal   petitions   on
01.04.2021.   It   is   further   claimed   by   the   petitioner
that   thereafter   they   also   filed   a   memo   on
15.04.2021 enclosing a copy of the judgment of this
Court   in   Neeharika   (supra)   dated   13.04.2021.
However, the learned Judge passed a common order
granting   stay   of   further   proceedings   in   both   the

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quash   petitions,   on   27.04.2021.   Therefore,   the
petitioner has come up with the above SLPs.
13. The   above   sequence   of   events   would   show   that   the   petitioner
herein who was admittedly registered as an Association only in the
year   2019   (as   per   the   averments   in   Para   2   of   W.P.No.21795   of
2020), fired their first salvo, only against the proposed elections, by
filing  a writ petition  on 30.11.2020. After  failing  to  get any  interim
order   preventing   the   Returning   Officer   from   proceeding   with   the
election,   the   petitioner   indulged   in   a   multipronged   attack,   by
sending   police   complaints   by   post   on   02.01.2021   and   03.01.2021,
then moving  the Hon’ble Minister and getting  a direction from  him
to   the   Commissioner   of   Police   on   22.01.2021,   thereafter   moving   a
post­election   writ   petition   in   Writ   petition   No.2724   of   2021   to
prevent the newly elected Board from taking charge and then filing
private complaints before the III Additional Metropolitan Magistrate
on   19.02.2021   and   getting   an   order   under   Section   156(3)   of   the
Code leading to the registration of the FIRs. The complaints lodged
by   the   petitioner   Association,   contained   allegations   relating   to   the
period   2016­2019   and   2020,   though   the   association   itself   was
registered only in 2019.

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14. It   is   of   interest   to   note   that   the   petitioner   Association   which
lawfully   came   into   existence   by   registering   itself   as   an   Association
under   the   relevant   law   only   in   2019,   started   off   only   with   a
grievance   relating   to   the   elections   and   the   creation   of   the   post   of
Chairman Emeritus, at the beginning. It appears that the petitioner
Association   moved   a   writ   petition   way   back   in   February,   2020   in
W.P.   No.   3687   of   2020   expressing   an   apprehension   that   elections
will not be conducted fairly. But a learned Judge of the High Court
dismissed   the   writ   petition   by   an   order   dated   20.02.2020.   As
against the said order, the petitioner filed a writ appeal in W.A. No.
154 of 2020 which is stated to be pending.
15. The petitioner has made a passing reference in Paragraph 3 of
their writ petition W.P. No. 21795 of 2020, to the above writ appeal
W.A. No.153 of 2020, which even according to them, related only to
an election dispute.
16. Similarly,   the   petitioner   has   made   a   passing   reference   to
another   writ   appeal   in   W.A.No.141   of   2020   in   Para   3   of   their   writ
petition in W.P.No.21795 of 2020. This, according  to  the petitioner
Association   related   to   the   conferment   of   the   title   of   Chairman

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Emeritus   on   the   1 st
  Respondent   herein.   The   background   facts
relating to this writ appeal, are not disclosed by the petitioner fully
in their writ petition.
17. Therefore,   it   is   obvious   that   the   petitioner   started   a   dispute
first   against   the   conferment   of   the   title   of   Chairman   Emeritus   on
the   1 st
  Respondent   and   then   they   raised   issues   with   regard   to   the
proposed   elections,   first   in   a   writ   petition   filed   in   February,   2020
and   then   in   a   writ   petition   filed   in   November,   2020.   It   is   only
thereafter that the allegations relating to loan fraud were raised by
the   petitioner   Association.   Apparently,   the   petitioner   had   the
blessings of the powers that be, which is why a direction was issued
on   22.01.2021   by   the   Hon’ble   Minister,   to   the   Commissioner   of
Police to register the complaints and report to the Government.
18. What is important to note, is the fact that in I.A.No.1 of 2020
in W.P.No.21975 of 2020 the petitioner had prayed for a direction to
Respondents 1 to 4 therein (namely the State of Telangana, Central
Registrar,   the   Returning   Officer  and   the   Management   of   the   Bank)
to   conduct   a   thorough   investigation   with   the   help   of   the
police/investigation   agencies.     The   learned   Judge   who   heard   this

20
I.A.   along   with   other   applications   in   the   connected   writ   petitions,
merely ordered (on 08.01.2021), notice returnable by 02.02.2021 in
the said application.
19. In   the   next   writ   petition   W.P.No.2724   of   2021   filed   by   the
petitioner   on   03.02.2021   (after   the   declaration   of   results   pursuant
to   the   order   of   the   High   Court   dated   08.01.2021),   the   petitioner
again made a prayer for interim relief to suspend the elected Board
on the ground that allegations of large scale money siphoning, fraud
and   falsification   and   forging   of   documents   are   under   police
investigation. On the date on which W.P.No.2724 of 2021 was filed
namely   03.02.2021,   no   FIR   was   pending,   but   the   petitioner   was
emboldened   to   make   such   a   statement   in   their   writ   petition,   on
account of the endorsement that they were able to secure from the
Hon’ble Minister on 22.01.2021. It is only after failing to secure any
interim   order   even   in   the   second   writ   petition   that   the   private
complaints   were   filed   by   the   petitioner   before   the   Magistrate   on
19.02.2021.
20. Therefore,   it   was   patently   an   election   dispute   which   was
sought   to   be   converted   to   a   criminal   case.   More   often   than   not

21
election   disputes   are   fought   on   different   turfs,   such   as   polling
booths,   police   stations   and   court   rooms.   Sometimes,   persons   who
raise   these   disputes   manage   to   camouflage   their   real   motive   by
words   clothed   in   high   moral   fiber   and   strong   legal   content.   But
unfortunately,   the   petitioner   could   not   do   it   successfully   in   this
case,   as   the   election   disputes   came   to   the   court   first   before   the
petitioner   could   fall   back   upon   allegations   of   loan   fraud.
Fortunately, the High Court saw through the game. This is why the
High   Court   in   its   impugned   order,   granted   the   extraordinary   relief
of stay of further proceedings including the arrest of Respondents 1
to 3 herein. The facts are so glaring and the background setting so
shocking,   that   the   High   Court   correctly   found   it   to   be   a   fit   and
proper case to grant interim reliefs to Respondents 1­3 herein.
21. Having seen the factual aspects, let us now deal with the three
questions   of   law   on   which   the   learned   counsel   for   the   petitioner
sought to raise a high pitch.
22. As rightly pointed out by the learned senior counsel appearing
for Respondents 1 to 3,   Neeharika   (supra) certainly allowed space
for the High Court to pass an interim order of the nature impugned

22
herein,  “ in exceptional cases with caution and circumspection,
giving brief reasons ” . What is frowned upon in  Neeharika  (supra)
is the tendency of the courts to pass blanket, cryptic, laconic, non­
speaking   orders   reading   “no   coercive   steps   shall   be   adopted”.     In
Paragraph   60   of   the   Report   in   Neeharika   (supra),   this   Court
recognized that there may be allegations of abuse of process of law,
converting   a   civil   dispute   into   a   criminal   dispute,   with   a   view   to
pressurize   the   accused.   In   the   order   impugned   in   these   petitions,
the   High   Court   has   given   elaborate   reasons   as   to   how   the
allegations   of   bank   fraud   were   developed   during   the   proceedings
concerning   allegations   of   election   fraud.   Therefore,   the   impugned
order cannot be said to be bad in the light of  Neeharika   principles.
23.   In   fact,   Neeharika   reiterates   the   parameters   laid   down   in   the
celebrated decision in   State of Haryana    vs.   Bhajan Lal 6
.   One of
the   cardinal   principles   evolved   in   Bhajan   Lal   (supra)   found   in
paragraph 102 (7) reads as follows:
“where   a   criminal   proceeding   is   manifestly   attended   with   mala
fide and/or where the proceeding is maliciously instituted with an
ulterior motive for wreaking vengeance on the accused and with a
view to spite him due to private and personal grudge”    
6    1992 Supp (1) SCC 335 

23
In   paragraph   37   of   the   decision   in   Neeharika ,   the   above
passage from   Bhajan Lal   is extracted.   In fact   Bhajan Lal   (supra)
took note of the view expressed by Bhagwati, C.J. in   Sheonandan
Paswan   vs.   State   of   Bihar 7
  to   the   effect   “that   a   criminal
prosecution,   if   otherwise   justifiable   and   based   upon   adequate
evidence,   does   not   become   vitiated   on   account   of   malafides   or
political vendetta of the  first  informant  or complainant.”   Yet   Bhajan
Lal   (supra)   laid   down   seven   principles   in   paragraph   102,   the   last
which   we   extracted   above.     The   seven   principles   enunciated   in
paragraph   102   of   Bhajan   Lal   (a   two­member   Bench)   are   actually
quoted with approval in  Neeharika  (a three­member Bench).
24. In fact, one of  the  interim  prayers sought  by  the petitioner  in
the civil writ proceedings is for the conduct of a forensic audit. The
said   prayer   is   pending   consideration.   Allegations   of   the   nature
projected   by   the   petitioner   cannot   be   taken   for   their   face   value
without a forensic audit and the court cannot go by the  ipse dixit  of
the petitioner. 
7    (1987) 1 SCC 288

24
25. It is completely wrong on the part of the petitioner to contend
that   the   High   Court   was   swayed   by   the   pendency   of   civil   writ
proceedings.   The   High   Court   actually   took   note   of   the   manner   in
which   the   color   of   the   entire   proceedings   changed   from   February
2020   to   February   2021   and   it   is   in   that   background   that   the
learned   Judge   took   note   of   the   pendency   of   civil   proceedings   and
the overlapping of allegations. Therefore, the petitioner cannot press
into   service   the   ratio   in   Mohd.   Allauddin   Khan   (supra)   and   K.
Jagdish  (supra).
26. Even the decision in  N.N. Global Mercantile Pvt. Ltd.  (supra)
will   not   go   the   rescue   of   the   petitioner   since   the   reference   in   the
impugned   order   to   Section   84   of   the   Multi­state   cooperative
Societies   Act,   2002   is   only   for   the   limited   purpose   of   dealing   with
the allegations relating to admission of members.
27. Therefore,   we   are   of   the   considered   view   that   the   High   Court
was   perfectly   justified   in   granting   interim   protection   to   the
Respondents   1   to   3   herein   and   in   ensuring   that   the   supremacy   of
the ballot is not sabotaged by the authority of the police. Hence the
SLPs   are   dismissed.   Consequently   the   applications   for   stay   are

25
dismissed   and   the   stay   earlier   granted   is   vacated.   The   vacate   stay
petitions are closed in view of the dismissal of the stay applications.
………………………………..J. 
(INDIRA BANERJEE)
………………………………..J.
(V. RAMASUBRAMANIAN)
New Delhi
July 20, 2021