Andhra HC (Pre-Telangana)
Ms. Rama R. Rao And 2 Ors. vs Mr. Veerabhadra R. Bathina And Anr. on 7 June, 2002
Equivalent citations: 2002(2)ALD(CRI)289, 2002(2)ALT(CRI)209
JUDGMENT S.R.K. Prasad, J.
1. The petitioners who are accused 4 to 6 in C.C.No.1988 of 1997 on the file of the XI Metropolitan Magistrate, Secunderabad invoke the inherent powers of this court to quash the proceedings initiated against them for the offences punishable under Sections 120-B, 500 and 501 I.P.C.
2. The facts that arise for consideration can be briefly stated as follows:
The first respondent is an employee ofM/s. Intergraph Corporation, USA. M/s. Intergraph Corporation, USA has a subsidiary in India known as Intergraph (India) Pvt. Ltd. The first respondent was appointed as a Director on the Board of Directors of Intergraph (India) Pvt. Ltd. on 31-7-1987.The shares of Intergraph (India) Private Limited are held by two Indian shareholders viz. the second petitioner and one Mr. Manu, to the extent of one share each. The entire balance shares are held by M/s. Intergraph Corporation, USA. The first respondent functioned as Chairman of Intergraph (India) Pvt. Ltd. with effect from 21-1-1993.As the matters stood thus, five top officials of Intergraph (India) Private Limited resigned on 8-4-1996 due to dissatisfaction caused among the staff in respect of the mismanagement by the petitioners and other three accused. The first accused by name Dr. Tom D. Steele @ Tommy Steele asked the first respondent to submit report. The first respondent submitted his report to the said Dr. Tom D. Steele @ Tommy Steele mentioning the mismanagement on the part of the petitioners. It is alleged that the petitioners bore grudge against the first respondent for his comment made in the report and hatched a criminal conspiracy to defame the first respondent and thereby cause wrongful loss to him by damaging his reputation. On 15-5-1996 a meeting was held and a resolution was passed.It was mentioned in the minutes of that meeting that V. Rao Bathina (first respondent) had resigned from the Board of Directors of the company and resolutions were passed. The resolutions which are relevant are as follows:
"b) Resolved that the resignation of Mr. V. Rao Bathina Director of the Company is accepted with immediate effect, consequently he cease to be the Chairman of the Company and the action committee shall be dissolved and all duties and powers vested upon him through the said offices will stand revoked and nullified.
c) Further resolved that the Officers of the Company are hereby authorized to file form 32 with the Registrar of Companies, Andhra Pradesh and to place a notice in the local newspapers notifying the said changes.
d) "Resolved that Mr. V. Rao Bathina is no longer a signatory to the Accounts of the Company with the following banks: 1. The Vysya Bank Ltd., S.P. Road, Secundrabad 2. Global Trust Bank Ltd., Secunderabad, 3. State Bank of India, Yellareddyguda, Hyderabad, and that the Company furnish a copy of the resolution of the respective Banks."
3. The first petitioner communicated the extracts of the resolution about the resignation of V. Rao Bathina (first respondent) and got a public notice issued in Eenadu, a Telugu daily newspaper and in the Deccan Chronicle, an English daily newspaper, on 22-5-1996.It is mentioned in the public notice that notice was given that Mr. V. Rao Bathina is no longer associated with Intergraph (India) private Limited and any future correspondence may be addressed to the Company Secretary. Again a meeting was conducted on 30-10-1996 and it led to passing of the following resolutions:
"i) "RESOLVED THAT the resolution passed at the meeting of the Board of Directors held on the 15th May, 1996 to the effect that Mr. VRB has resigned as a Director of Company and that such resignation had been accepted with immediate effect and any consequential action taken thereon be and is hereby revoked and cancelled.
ii) AND RESOLVED FURTHER THAT Mr. VRB continues to be Director of the Company.
iii) AND RESOLVED FURTHER THAT save and accept the recordal and declaration that Mr. VRB continues to be a Director of the Company. It is hereby reiterated and recorded that he shall not have any additional powers or duties as a director and he shall no longer be the signatory to any Bank Accounts of the Company and/or continue to Administer the Intergraph Employees Gratuity Group and/or Intergraph India Private Limited Superannuation Scheme or have any power to appoint trustees or do or perform any acts, deeds, matters or things in that behalf.
iv) AND RESOLVED FURTHER THAT the Secretary of the Company be and is hereby authorized to do and perform all such acts, deeds, matters and things as may be necessary, desirable or expedient to give effect of this resolution and, in particular, to intimate the Registrar of Companies, Andhra Pradesh, to withdraw form 32 dated the 23rd May, 1996 filed by the Company with the Registrar".
4. It is mentioned in the minutes of the meeting held on 30-10-1996 that the acceptance of resignation of V. Rao Bathina (first respondent) was based on an understanding that he resigned from the Board of Directors. In the said minutes it is also stated that after due deliberation it was unanimously resolvedthat the resolution passed at the meeting of the Board of Directors held on 15th May, 1996 to the effect that the first respondent resigned as a Director of Company and that such resignation was accepted with immediate effect and any consequential action taken thereon be and was revoked and cancelled. Again it was clarified by means of other resolutions that V. Rao Bathina (first respondent) continues to be Director of the Company.He shall not have any additional powers or duties as a director and he shall no longer be the signatory to any Bank Accounts of the Company and/or continue to Administer the Intergraph Employees Gratuity Group and/or Intergraph India Private Limited Superannuation Scheme or have any power to appoint trustees or do or perform any acts, deeds, matters or things in that behalf. The Secretary of the Company be andwas authorized to do and perform all such acts, deeds, matters and things as may be necessary and desirable or expedient to give effect of this resolution and, in particular, to intimate the Registrar of Companies, Andhra Pradesh, to withdraw form 32 dated 23rd May, 1996 filed by the Company with the Registrar. The grievance of the first respondent is that the resolutions were passed to defame and damage the reputation in the business and banking circles and the right thinking people of the society and he was subject to ridicule and contempt in the society.Therefore, the first respondent filed a criminal complaint under Sections 120-B, 500 and 501 I.P.C on 19-11-1997 against the petitioners and other three accused. The Magistrate after recording sworn statement took congnizance of the case and registered the sameas C.C.No.1988 of 1997. Aggrieved by the same the petitioners filed this petition.
5. The learned counsel for the petitioners contends that the contents of the publication of the above resolutions and the intimation thereof made to the Registrar of Companies do not constitute defamation and as such no offence is made out and the proceedings have to be quashed. The learned counsel for the first respondent has strenuously urged that the contents of the complaint prima facie establish the offences alleged and the petitioners are to be tried and the proceedings cannot be quashed. The learned counsel has placed reliance upon the decision in M.N. DAMANI v. S.K. SINHA1. Adverting to the contentions, the Supreme Court in the said decision at paragraphs 8 and 11 held thus:
"8. We have considered the rival submissions. The High Court relying on para 7 of the judgment in MADHAVRAO JIWAJIRAO SCINDIA v. SAMBHAJIRAO CHANDROJIRAO ANGRE exercising jurisdiction under Section 482 quashed the proceedings. The learned Judge did not bestow his attention to the facts of that case and the discussions made in paras 6 sand 8 of the said judgment. In that case the complaint was filed for offences punishable under Sections 406 and 407 read with Sections 34 and 120-B of the Penal Code. That was a case where the property was trust property and one of the trustees was a member of the family. The criminal proceedings were quashed by the High Court in respect of two persons but they were allowed to be continued against the rest. In para 6 of the same judgment it is clearly stated that the Court considered relevant documents including the trust deed as also the correspondence following the creation of the tenancy and further took into consideration the natural relationship between the settlor and the son and his wife and the fallout.Para 8 of the judgment reads: (SCC pp. 695-96) "8. Mr. Jethmalani has submitted, as we have already noted, that a case of breach of trust is both a civil wrong and a criminal offence. There would be certain situations where it would predominantly be a civil wrong and may or may not amount to criminal offence. We are of the view that this case is one of that type where, if at all, the facts may constitute a civil wrong and the ingredients of the criminal offences are wanting. Several decisions were cited before us in support of the respective stands taken by counsel for the parties. It is unnecessary to refer to them.In course of hearing of the appeals, Dr. Singhvi made it clear that Madhavi does not claim any interest in the tenancy. In the setting of the matter we are inclined to hold that the criminal case should not be continued."
Thus, the said judgment was on the facts of that case, having regard to various factors including the nature of offences, relationship between the parties, the trust deed and correspondence following the creation of tenancy. The High Court has read para 7 in isolation.If para 7 is read carefully two aspects are to be satisfied: (1) whether the uncontroverted allegations, as made in the complaint, prima facie establilsh the offence, and (2) whether it is expedient and in the interest of justice to permit a prosecution to continue. On a plain reading of the order of the Magistrate issuing summons to the respondents, keeping in view the allegations made in the complaint and sworn statement of the appellant, it appears to us that a prima facie case is made out at that stage. There are no special features in the case to say that it is not expedient and not in the interest of justice to permit the prosecution to continue.The learned Judge has failed to apply the tests indicated in para 7 of the judgment on which he relied. The High Court could not say at that stage that there was no reasonable prospect of conviction resulting in the case after a trial. The Magistrate had convicted the respondents for the offences under Section 138 of the Negotiable Instruments Act and the appeal filed by the respondents was also dismissed by the learned Sessions Judge. Assuming that the imputations made could be covered by Exception 9 of Section 499 IPC, several questions still remain to be examined --- whether such imputations were made in good faith, in what circumstances, with what intention, etc. All these can be examined on the basis of evidence in the trial. The decisions in MANJAYA v. SESHA SHETTI, 3, SAYED ALLYv. KING EMPEROR 4 andANTHONI UDAYARv. VELUSAMI THEVAR 5 cited by the learned counsel for the respondents are the cases considered "after conviction" having regard to the facts of those cases and the evidence placed on record.The decision in BABOO GUNNESH DUTT SINGH v. MUGNEERAM CHOWDRY 6 arose out of a suit for damages for defamation. These decisions, in our view, are of no help to the respondents in examining whether the High Court was justified and right in law in quashing the criminal proceedings, that too exercising its jurisdiction under Section 482 Cr.P.C.
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11. Having regard to the facts of the instant case and in the light of the decisions in SEWAKARAM SABHANI v. R.K. KARANJIA, CHIEF EDITOR, WEEKLY BLITZ 1 and SHATRUGHNA PRASAD SINHA v. RAJBHAU SURAJMAL RATH 2 we have no hesitation in holding that the High Court committed a manifest error in quashing the criminal proceedings exercising jurisdiction under Section 482 Cr.P.C."
6. It is clear from the law laid down by the Supreme Court that the court has to see whether uncontroverted allegations, as made in the complaint, prima facie establish the offence, and (2) whether it is expedient and in the interest of justice to permit a prosecution to continue. It is further stated that the order of the Magistrate issuing summons to the respondents, keeping in view the allegations made in the complaint and sworn statement will make out prima facie case and the question of claiming exceptions under Section 499 I.P.C. and examination thereof will arise only at the time of trial. In STATE OF KARNATAKA v. M. DEVENDRAPPA & ANR.2, the Supreme Court reviewed the entire law andadumbrated the following legal principles to exercise under Section 482 Cr.P.C. mentioned hereunder:
"6. Exercise of power under Section 482 of the Code in a case of this nature is the exception and not the rule. The section does not confer any new powers on High Court. It only saves the inherent power which the Court possessed before the enactment of the Code. It envisages three circumstances under which the inherent jurisdiction may be exercised, namely, (i) to give effect to an order under the Code, (ii) to prevent abuse of process of Court, and (iii) to otherwise secure the ends of justice. It is neither possible nor desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction. No legislative enactment dealing with procedure can provide for all cases that may possibly arise. Courts, therefore, have inherent powers apart from express provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in the section which merely recognizes and preserves inherent powers of High Courts. All Courts, whether civil or criminal possess, in the absence of any express provision, as inherent in their constitution, all such powers as are necessary to do the right and to undo a wrong in a course of administration of justice on the principle "quande lex aliquid aliqui concedit, concedere videtur in sine que ipsa, esse non potest" (when the law gives a person anything it gives him that without which it cannot exist). While exercising powers under the Section, the Court does not function as a Court of appeal or revision.Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in the Section itself. It is to be exercised exdebite justitiae to do real and substantial justice for the administration of which alone Courts exist. Authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce, injustice, the Court has power to prevent abuse. It would be an abuse of process of process of Court to allow any action which would result in injustice and prevent promotion of justice.In exercise of the powers Court would be justified to quash any proceeding if it finds initiation/continuance of it amounts to abuse of process of Court or quashing of these proceedings would otherwise serve the ends of justice. When no offence is disclosed by the complaint, the Court may examine the question of fact. When a complaint is sought to be quashed, it is permissible to look into the materials to assess what the complainant has alleged and whether any offence is made out even if the allegations are accepted in toto.
7. In R.P. KAPUR vs. STATE OF PUNJAB , thisCourt summarized some categories of cases where inherent power can and should be exercised to quash proceedings.
(i) Where it manifestly appears that there is a legal bar against the institution or continuance, e.g. want of sanction;
(ii) Where the allegation in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged;
(iii) Where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge.
8. In dealing with the last case, it is important to bear in mind the distinction between a case where there is no legal evidence or where there is evidence which is clearly inconsistent with the accusations made, and a case where there is legal evidence which, on appreciation, may or may not support the accusations.When exercising jurisdiction under Section 482 of the Code, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not or whether on a reasonable appreciation of it accusation would not be sustained. That is function of the trial Judge. Judicial process should not be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into consideration before issuing process, lest it would be an instrument in the hands of private complainant as unleash vendetta to harass any person needlessly. At the same time the section is not an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to cognizable offences to prevent abuse of process of any Court or otherwise to secure the ends of justice were set out in some detail by this Court in STATE OF HARYANA AND OTHERS vs. Ch. BHAJAN LAL AND OTHERS . A note of caution was, however, added that the power should be exercised sparingly and that too in rarest of rare cases. The illustrative categories indicated by this Court are as follows:-
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a congnizable offence, justifying an investigation by police offers under Section 156 (1) of the Code except under an order of Magistrate within the purview of Section 155 (2) of the Code.
(3) Where the uncontroverted allegations made in the F.I.R. or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where the allegations in the F.I.R. do not constitute a congnizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.
(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengence on the accused and with a view to spite him due to private and personal grudge.
9. As noted above, the powers possessed by the High Court under Section 482 of the Code are very wide and the very plenitude of the power requires great caution in its exercise. Court must be careful to see that its decision in exercise of this power is based on sound principles. The inherent power should not be exercised to stifle a legitimate prosecution. High Court being the highest Court of a State should normally refrain from giving a prima facie decision in a case where the entire facts are incomplete and hazy, more so when the evidence has not been collected and produced before the Court and the issues involved, whether factual or legal, are of magnitude and cannot be seen in their true perspective without sufficient material. Of course, no hard and fast rule can be laid down in regard to cases in which the High Court will exercise its extraordinary jurisdiction of quashing the proceeding at any stage.(See: THE JANATA DAL ETC. vs. H.S. CHOWDHARY AND ORS. ETC. (, DR. RAGHUVIR SARAN vs. STATE OF BIHAR & ANR . It would not be proper for the High Court to analyze the case of the complainant in the light of all probabilities in order to determine whether a conviction would be sustainable and on such premises, arrive at aconclusion that the proceedings are to be quashed. It would be erroneous to assess the material before it and conclude that the complainant cannot be proceeded with.In proceeding instituted on complaint, exercise of the inherent powers to quash the proceedings is called for only in a case where the complaint does not disclose any offence or is frivolous, vexatious or oppressive. If the allegations set out in the complaint do not constitute the offence of which cognizance has been taken by the Magistrate, it is open to the High Court to quash the same in exercise of the inherent powers under Section 482 of the Code. It is not, however, necessary that there should be meticulous analysis of the case before the trial to find out whether the case would end in conviction or acquittal. The complaint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court .When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court which decides the fate of the accused person. The allegations of malal fides against the informant are of no consequence and cannot by itself be the basis for quashing the proceeding. (See: MRS. DHANALAKSHMI vs. R. PRASSNNA KUMAR AND QRS. , STATE OF BIHAR & ANR. Vs. P.P. SHARMA I.A.S. & ANR. (1992 SUPPL. (1) SCC 222), RUPAN DEO BAJAJ (MRS.) & ANR. vs. KANWAR PAL SINGH GILL & ANR. , STATE OF KERALA & ORS. vs. O.C. KUTTAN & ORS. , STATE OF U.P.vs. O.P. SHARMA , RASHMI KUMAR (SMT.) vs. MAHESH KUMAR BHADA , SATVINDER KAUR vs. STATE (GOVT. OF NCT OF DELHI) AND ANR. , RAJESH BAJAJvs. STATE NCT OF DELHI AND ORS. .
10. This is a case where sworn statement was recorded. The complaintwas taken on file and the Magistrate issued the process. It is clear from the principles laid down by the Supreme Court that unless there is special features the court shall not interfere and quash the proceedings. Caution had been given to the courts by stating that the power has to be exercised sparingly. It is also stated by the Supreme Court that if the justice requires the courts shall not keep quite for exercising the inherent powers. One of the resolutions passed on 15-5-1996 states that the first respondent resigned. One of the resolutions passed on 30-10-1996 discloses that the first respondent resigned. The resolutions passed on 30-10-1996 clarify and state that due to understanding that the first respondent resigned as his resignation was accepted and he was restored back to Director post and that his powers were curtailed. The said fact was also communicated to the Registrar of Companies.By doing so, wrong statements have been made to the public. They affect prima facie the reputation of the first respondent. The resolution that the first respondent resigned appears to be obviously based upon a wrong set of facts and the same is communicated to the Registrar of Companies as well as the newspapers.The other wrong statement in another resolution is that he was restored back to the directorship. These acts taken as a whole constitute the offence of defamation. The motive for petitioners to do the above acts is that the first respondent submitted adverse report against the petitioners. In any view of the matter it is a matter to be decided by the trial court on evidence. It is also contended by the first respondent's counsel that the offences are continuing offences and there is no bar of limitation. This issue is also left open to the decision of the trial court after recording evidence.Therefore, I respectfully disagree with the contentions advanced by the learned counsel for the petitioners that the resolutions passed and communicated do not constitute any offence of defamation. Moreover, a civil suit is said to have been instituted claiming damages by the first respondent. This is not a fit case where inherent powers of this court can be exercised to quash the proceedings in view of the falsity in the resolutions, which are communicated.
11. The criminal petition is accordingly dismissed.