FACTS
The given appeal arose from the judgement delivered by the High Court of Calcutta in 2015, in which the court quashed the complaint of the Appellant under Sections 379, 403 and 411 of the IPC.
Furthermore, the appeals arise from a criminal complaint filed by the Appellant company, now under the control of Respondent Number 17, Harshvardhan Singh Lodha. The dispute is surrounding the legality of the will executed by Priyamvada Devi Birla in 1999 which was in favour of Rajendra SIngh Lodha, the father of Respondent No. 17 and Harshvardhan Singh Lodha as well
The complaint involves allegations of theft and misappropriation involving documents No.1 to 54, involving Respondents 1 to 16. The Appellant claims to have had possession of all the documents in the previous litigations and claimed their usage in filing a representation to be illegal. This claim is backed by evidence of Birla using the documents in previous submissions to the appropriate authorities.
This case is part of a larger dispute concerning the M.P Birla Group of Industries and several trusts established by the founders of the Group. Many of these documents were also used in civil litigations involving several of the trusts[1].
ISSUES RAISED
- The issue before the Supreme Court was if this was a case that involved theft and misappropriation on part of Adventz Investments and Holdings Ltd (Respondent)
- Would the filing of the documents in question with the Company Law Board constitute theft
CONTENTIONS
Contention by Appellant
The Appellants argued that 54 documents had been misappropriated by Adventz Investments and Holdings Ltd. The Appellant’s contention was that the 54 documents in question had been misappropriated as they claim the documents to have been obtained by Adventz without the required approval or authorisation from the Birla Corporation.
Furthermore, Birla Corporation alleged that someone walked into Birla office premises and took the documents in question without approval.
Birla Corporation reports that they had previously been used before the Company Law Board, thus attempting to prove the original ownership of the documents.
Birla Corporation filed a suit against many persons by listing them in the suit by name, with charges of Sections 379 (Theft)[2], 403 (Misappropriation)[3], 411 (Handling Stolen Property)[4] along with 120-B (Conspiracy) of the Indian Penal Code[5].
This list included 16 Respondents, most of whom were part of the Birla Family in the form of trustees and shareholders.
Lastly, Birla Corporation argued that using such documents in official submissions such as those to the Company Law Board by Adventz is a criminal offence
Contention by Respondents
The Respondents argued against the allegations of dishonestly acquiring the confidential property of the Appellant i.e Birla Corporation. Their contention was that the documents used were copies of the original ones.
They contended that due to the familial nature of the lawsuit, along with their existing civil lawsuits in other courts regarding the execution of the will, the copies of confidential documents were given to many members in question, while within their capacities of shareholders or trustees.
Furthermore, Adventz held that the Birla camp did not provide any evidence to prove the existence of theft and more specifically did not even attempt to clarify how Adventz managed to get possession of the documents in question.
Adventz further argued the lack of individual accountability. Their argument hinged on the Respondents cited by the Appellants, arguing that while Birla accused Adventz of theft and misappropriation, they have failed to specifically mention the person responsible for this offence, which adds to the baseless nature of their claim according to Adventz.
Adventz argued further that using documents in the legal sense does not qualify as dishonesty, but standard legal procedure, therefore negating the dishonest appropriation charge levied by the Appellant.
RATIONALE
The Supreme Court of India had few issues to solve in this case. The most obvious one is the status of confidential documents submitted as per legal procedure, with other issues such as the possible misappropriation of documents as alleged by Birla Corporation.
Another important issue raised in this case is that of malicious intent, which is a result of the alleged dishonesty shown by Adventz Investments and Holdings Ltd.
The first issue the Supreme Court dealt with was the production of documents for usage. The Court observed that not all the documents were not used for official submissions and some were used for intra-company communication such as the Internal Audit Report, the entire activity does not fall in the category of ‘dishonest’.
The Court saw that in context of the definitions of ‘dishonest intention’ and ‘wrongful loss’ to Birla and a ‘wrongful gain’ to Adventz, the use of copies of the original documents do not qualify as theft and misappropriation of property.
The Court stated that while the term ‘document’ as given under Section 29 of the IPC[6], did fall under the definition of ‘moveable property’ and can fall under the purview of theft, the nature of the documents in this case was of ‘Corporeal Property’ which meant the topic at hand would be subject to the matter of ‘theft’, an observation that was not taken into account by the High Court of Calcutta.
The Supreme Court further broke down the argument by observing that while Adventz had not followed company procedure in obtaining and using the documents for official submissions, that act does not amount to ‘theft’.
The documents in question were divided in two parts; Document No. 1-28 and 29-54. The Court comfortably dismissed the complaint filed by Birla for Documents 1-28 as they found no evidence for ‘dishonest intention’ or ‘wrongful gain’ on part of Adventz along with no evidence for a ‘wrongful loss’ on part of Birla Corporation.
In the question of Document Nos. 29-54, some of the original documents were missing, with Adventz not fully able to provide a valid defence for the same. This reality opened the possibility of theft to occur. In light of this finding, the Supreme Court allowed the criminal complaint against Adventz surrounding Document No. 29-54 to go ahead.
Lastly, the court observed that due to the heavy civil litigation background of the case, the existing civil litigations were to continue without change.
The Court held that while internal procedures were overlooked, the use of document No. 1-28 did not constitute theft and misappropriation and proceeded to quash the complaint for this under Article 136 of the Constitution of India and allowed the complaint for Document No. 29-54 to continues due to the possibility of theft.
DEFECTS OF LAW
For the most part, the Supreme Court ruling does not consist of any loophole or defect in the existing law and its application in the same. However, certain approaches taken by the Appellant, along with a possible defect in the Supreme Court Judgement itself of this criminal complaint can constitute as defects to law.
The criminal nature of the complaint in itself. The idea that filing of documents with legal authorities was a criminal offence was an erred argument, as was noted by the Supreme Court and orders to the Calcutta High Court to amend the same in their judgement.
The Supreme Court did not ask the counsel for Birla Corporation to demonstrate how Adventz could have stolen documents from Birla’s premises without anyone knowing. Despite the Appellant not providing clear evidence with regards to the method applied in the alleged theft, the Supreme Court did not press the matter during the case.
INFERENCE
Birla Corporation Ltd v Adventz Investments and Holdings Ltd. is an interesting case relating to criminal as well as corporate law.
Due to the inherent familial background of this case, the judgement of the same was a complex one to say the least. This case was the result of a will execution that split the owned companies of the Birla family. As was mentioned in the case, there were many civil litigations ongoing at the time of this case, relating to the ownership of a multitude of other companies.
The Supreme Court in this case laid down the guidelines for handling such a criminal complaint, as the High Court of Calcutta had ruled in the favour of Adventz, without noting nor correcting the mistake of treating the submission of documents as a criminal matter instead of a civil matter.
Another important matter in this case was the absence of Documents No. 29-54 as Adventz had not been able to properly give an explanation for the same, which had the potential for a criminal theft, which was ignored by the High Court, further displaying the need to be more specific in each case.
Furthermore, the Supreme Court’s ruling showed the possibility of a misuse of criminal complaints for corporations to ease their way to stifle legal disputes. The Supreme Court laid importance on the immoral nature of this act and further cautioned against this act, which was a mere tactic to put pressure on an otherwise civil dispute.
Name: Jay Pandya
College: Kirit P. Mehta School of Law, NMIMS University
[1] Birla Corporation Ltd. v. Adventz Investments and Holdings Ltd, AIR 2019 SC 2390.
[2] Indian Penal Code, 1860, § 379, No. 45, Acts of Parliament, (India), 1860.
[3] Indian Penal Code, 1860, § 403, No. 45, Acts of Parliament, (India), 1860.
[4] Indian Penal Code, 1860, § 411, No. 45, Acts of Parliament, (India), 1860.
[5] Abhinav Sekhri, Birla v. Adventz: A Snapshot Of The Supreme Court And Criminal Law & Procedure, LiveLaw, (Jun 17,2024, 3:36PM) https://www-livelaw-in.svkm.mapmyaccess.com/columns/snapshot-of-the-supreme-court-and-criminal-law-procedure-145235.
[6] Indian Penal Code, 1860, § 29, No. 45, Acts of Parliament, (India), 1860.