Supreme Court Upholds High Court's Directive for Criminal Investigation in Disputed Testamentary Case, The Supreme Court affirms Bombay High Court’s exercise of plenary powers to investigate alleged fraudulent activities in a high-profile estate dispute.
In a landmark decision, the Supreme Court of India has upheld the Bombay High Court's directive to initiate a criminal investigation into the alleged fraudulent activities surrounding the estate of the late Purvez Burjor Dalal, a Parsi Zoroastrian resident of Mumbai. The estate, valued at over Rs. 100 crores, became the center of a contentious legal battle following the emergence of two rival wills post the testator's demise in 2011.
The apex court, comprising Justices Pankaj Mithal and Prasanna B. Varale, dismissed the appeals filed by Bai Avabai Hormusji Tata Trust, among others, challenging the Bombay High Court's orders. The court ruled that the High Court was within its jurisdiction to exercise its inherent and plenary powers under Article 215 of the Constitution to safeguard the estate from alleged misappropriation.
The controversy erupted when substantial sums were allegedly siphoned from the estate under questionable circumstances. The High Court had appointed an Administrator pendente lite to oversee the estate, who unearthed suspicious financial transactions, including transfers to entities like Amoha Traders and the appellant Trust. The Administrator's reports accused these entities and individuals, including Mr. Sukhadwalla, of conspiring to divert estate funds.
The appellants contended that the High Court overstepped its jurisdiction by ordering a police investigation in a testamentary suit, which they argued should focus solely on the genuineness of the wills. However, the respondents, including the Administrator and other beneficiaries, argued that the investigation was crucial to unravel the alleged conspiracy and protect the estate.
The Supreme Court, in its detailed judgment, emphasized that the High Court retained its character as a Constitutional Court even while exercising testamentary jurisdiction. It noted that the High Court's directive for a criminal investigation was not merely an exercise under the Code of Criminal Procedure but an invocation of its broader powers to prevent abuse of its process.
The judgment also reiterated that the High Court's actions were necessary due to the obstructive and deceitful conduct of the involved parties, which left the court with no alternative but to initiate an investigation.
The Supreme Court's decision underscores the judiciary's commitment to upholding justice and protecting estates from fraudulent activities, even when it involves invoking extraordinary measures. The court's ruling allows the investigation to proceed, ensuring that the truth is uncovered and the estate is preserved for its rightful beneficiaries.
Bottom Line:
High Court in its testamentary jurisdiction retains plenary and inherent powers under Article 215 of the Constitution to direct criminal investigations into allegations of fraud and misappropriation of estate funds. The appointment of an Administrator pendente lite under Section 247 of the Indian Succession Act, 1925, places the estate in custodia legis, and the Court is duty-bound to protect it from depletion or fraud.
Statutory provision(s): Article 215 of the Constitution of India, Indian Succession Act, 1925 (Sections 211, 247, 269), Criminal Procedure Code, 1973 (Sections 340, 341).
Bai Avabai Hormusji Tata Trust v. Shernaz Faroukh Lawyer, (SC) : Law Finder Doc id # 2906315
