Jharkhand High Court
Phool Chand Ram Mahto @ Fulchand Mahto vs The State Of Jharkhand on 2 August, 2021
Equivalent citations: AIRONLINE 2021 JHA 1087
Author: Sanjay Kumar Dwivedi
Bench: Sanjay Kumar Dwivedi
-1- Cr. M.P. No. 3762 of 2019
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Cr. M.P. No. 3762 of 2019
1. Phool Chand Ram Mahto @ Fulchand Mahto, aged about 67 years,
son of Ghanshyam Mahto, resident of 12A, Manjhiladih, Poriya, P.O. &
P.S. Isri, District- Giridih
2. Rameshwar Prasad Yadav @ Ramesh Prasad Yadav, aged about 62
years, son of Nathu Prasad, resident of Bagodardih, P.O. & P.S.
Bagodar, District- Giridih
3. Ravindra Kumar Singh @ Rabindra Kumar Singh, aged about 49 years,
son of Jainarayan Singh, resident of Anand Nagar, P.O. Bodo, P.S.
Giridih(T), District- Giridih
4. Pratap Kumar Yadav, aged about 58 years, son of Ramnath Yadav,
resident of Village-Balak, P.O. & P.S. Giridih, District- Giridih
5. Motilal Mahto, aged about 59 years, son of Babulal Mahto, resident of
Chiruwan, P.O. Kapilo, P.S. Sariya, District- Giridih
6. Rajendra Mahto @ Rajendra Kumar, aged about 62 years, son of
Anand Lal, resident of Village- Belma, Poriya, Ishri Bazar, P.O. & P.S.
Isri, District- Giridih
7. Jagarnath Mahto @ Jagnath Mahto, aged about 52 years, son of Nem
Narayan Mahto, resident of Village- Alargo, P.O. & P.S. Nawadih,
District- Bokaro ... Petitioners
-Versus-
1. The State of Jharkhand
2. Deg Lal Ram, son of Late Kunjo Nayak, resident of Jharkhand
Commerce Inter College, Dumri, P.O. & P.S. Dumri, District- Giridih
... Opposite Parties
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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
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For the Petitioners : Mr. P.P.N. Roy, Sr. Advocate Mr. A.K. Sahani, Advocate For the Opposite Party-State : Mr. Manoj Kumar, G.A.-III For Opposite Party No.2 : Mr. Rahul Kumar, Advocate Ms. Apoorva Singh, Advocate
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10/02.08.2021. Heard Mr. P.P.N. Roy, learned Senior counsel assisted by Mr. A.K. Sahani, learned counsel for the petitioners, Mr. Manoj Kumar, learned counsel for the opposite party-State and Mr. Rahul Kumar, learned counsel for opposite party no.2.
2. This criminal miscellaneous petition has been heard through Video Conferencing in view of the guidelines of the High Court taking into account the situation arising due to COVID-19 pandemic. None of the parties have complained about any technical snag of audio-video and with their consent -2- Cr. M.P. No. 3762 of 2019 this matter has been heard.
3. The petitioners have filed this criminal miscellaneous petition for quashing the order dated 27.06.2019 passed by the learned Judicial Magistrate, 1st Class, Giridih in Complaint Case No.179 of 2017, whereby, cognizance of the offences under Sections 409, 420, 477A, 120B and 506 of the Indian Penal Code has been taken and summons under Section 204 of the Code of Criminal Procedure has been issued against the petitioners.
4. A complaint case was filed by opposite party no.2 on 09.02.2017, which was numbered as Complaint Case No.179 of 2017, wherein, it has been alleged that on 09.09.2004, the opposite party no.2 became the Principal of Jharkhand Commerce College, Dumri and he preferred a writ application being W.P.(S) No.631 of 2007 wherein an interim order was passed on 23.02.2007. It has also been alleged that the opposite party no.2 filed Title Suit No.7 of 2007 in the Court of the learned Munsif, Giridih wherein an order was passed on 28.07.2008. In spite of such judicial orders and on 03.02.2012, the accused persons (petitioners), being in conspiracy with each other, opened an account in Dumri Branch of the Bank of India in the name of the College and withdrew a sum of Rs.27,00,000/- and misappropriated the same.
5. Mr. P.P.N. Roy, learned Senior counsel appearing for the petitioners draws attention of the Court to the order dated 27.06.2019, whereby, cognizance has been taken against the petitioners and the petitioners have been summoned in that case. By way of referring the impugned order, he submits that there is no satisfaction and there is no application of mind by the learned court below and in that view of the matter, the impugned order is bad in law. To buttress this argument, learned Senior counsel relied upon -3- Cr. M.P. No. 3762 of 2019 paragraphs 7, 8 and 16 of the judgment rendered by this Court in the case of Jagat Narayan Prasad v. The State of Jharkhand & another in Cr.M.P. No.148 of 2011, which was decided on 23.03.2021.
6. Paragraphs 7, 8 and 16 of the said judgment are quoted herein below:
"7. Learned Senior counsel for the petitioner further submits that in the order taking cognizance, it is also not reflected as to how the petitioner is involved in such crime as the petitioner was the Special Officer of Jhumri Telaiya Municipality. He further submits that the cognizance order is not in terms of the well settled procedure prescribed by this Court in the case of Amresh Kumar Dhiraj & Others v. State of Jharkhand & Another, reported in 2020 (1) JLJR (Jhr).
8. Paragraph 22 of the said judgment is quoted herein below:
"22. The order taking cognizance under Section 190 Cr.P.C. and order issuing process under Section 204 Cr.P.C., can very well a composite order but as observed, the application of mind would be different in both cases. This application of mind must be reflected in the order itself. The order should not be mechanical. Magistrate has to mention at least that there are sufficient materials to proceed against the persons and what are the primafacie materials to proceed against them. He need not pass a detail judgment evaluating the materials, which are before him. The detail reasons as to why he is taking cognizance or issuing process are not to be mentioned but at least what are the bare minimum prima- facie materials against the accused-petitioners should be mentioned in the order issuing summon and prima facie what offence is alleged, in the order taking cognizance."
xxx xxx xxx
16. In the order taking cognizance, there is no discussion as to what material is against the petitioner. Only on solemn statement of the complainant, cognizance has been taken against the petitioner. There is no mention of any witnesses as to what they have stated against the petitioner. It is an admitted fact that the petitioner was the Special Officer of Jhumri Telaiya Municipality and for not discharging the official duty, the said complaint case has been filed. In view of the judgments delivered by the Hon'ble Supreme Court in the case of State of Orissa and Others v. Ganesh Chandra Jew (supra) and Amresh Kumar Dhiraj & Others v. State of Jharkhand & Another (supra), sanction was required to be obtained. An application under Section 482 Cr.P.C. is maintainable to quash proceeding, which is ex facie bad for want of sanction, frivolous and in abuse of process of court. This is a fit case to exercise power under Section 482 Cr.P.C. The cognizance order will not survive in view of the fact that there is no -4- Cr. M.P. No. 3762 of 2019 whisper of any allegation against the petitioner. Accordingly, the order taking cognizance dated 07.09.2010 passed by the learned Chief Judicial Magistrate, Kodarma in Complaint Case No.327 of 2009 including the entire criminal proceeding in the said case are quashed, so far as the petitioner is concerned."
By way of referring this judgment, Mr. P.P.N. Roy, learned Senior counsel submits that this Court has come to the conclusion that in the order taking cognizance, there is no discussion as to what material is against the petitioner of that case and, therefore, that petition was allowed.
7. Mr. P.P.N. Roy, learned Senior counsel appearing for the petitioners further submits that the complaint case was filed by way of suppressing the materials and in that view of the matter also, the entire criminal proceeding is bad in law and this Court may interfere. To buttress this argument, he relied upon the judgment rendered by this Court in the case of T.S. Rajmani & anr. v. State of Bihar & anr. , reported in 2005 (3) Eastern Criminal Cases 507 (Jhr.) and submits that the case of the petitioners is fully covered in light of the discussions made in paragraph 8 of the judgment.
8. Paragraph 8 of the said judgment is quoted herein below:
"8. Admittedly, it is a settled principle of law that the learned Court below has to see; whether prima facie case is made out or not from the facts alleged in the complaint petition and if prima facie case is made out, then the learned Court below has to take cognizance in the matter. In the instant case also, the learned Court below has to take cognizance in the matter. In the instant case also, the learned Court below has taken cognizance on the ground that a prima facie case is made out. It is also settled principle of law that defence of the accused has not be looked into in the quashing application, but there are also several case laws including the case of State of Haryana and others v. Chy. Bhajan Lal and others, reported in AIR 1992 SC 604 wherein it has been held that in certain circumstances, cognizance taken or entire criminal prosecution can be quashed. What find here in the quashing application is that a number of case laws have been referred but not by the petitioners, but on behalf of the opposite party No.2. But in the counter-affidavit, no materials has been brought on record on behalf of the opposite party -5- Cr. M.P. No. 3762 of 2019 No.2 to show that material referred to in the quashing application is incorrect but it has only been mentioned that the fact referred in certain Para is incorrect, but what is correct position that has not been brought on record through annexure or through averments and, therefore, by suppressing material fact and by twisting the fact by way of vindictive attitude towards accused persons in the case, a false case is brought. Apex Court has already passed orders in several cases that when it is found that there will be an abuse of the process of the Court by allowing proceeding to continue processes, then the Court must step in and quash that proceeding. Here also, I find that the opposite Party No.2 complainant has filed the complaint case suppressing the materials facts and in order to harass the petitioners to come to some sort of settlement specifically to the terms of the complainant and if such proceeding is allowed to continue, it will be an abuse of the process of the Court and through the process of the Court, the complainant O.P. No.2 will derive benefit in the name of continuance of the proceeding."
9. Learned Senior counsel appearing for the petitioners also submits that the case in hand is civil in nature as one Title Suit No. 7 of 2007 was pending and according to him, it is well settled position that if the case is civil in nature, the criminal proceeding is bad in law. To buttress this argument, he relied upon the judgment rendered by the Hon'ble Supreme Court in the case of Indian Oil Corpn. v. NEPC India Ltd., reported in (2006) 6 SCC 736.
10. Paragraph 15 of the said judgment is quoted herein below:
"15. Coming to the facts of this case, it is no doubt true that IOC has initiated several civil proceedings to safeguard its interests and recover the amounts due. It has filed CS No. 425 of 1997 in the Madras High Court and OS No. 3327 of 1998 in the City Civil Court, Chennai seeking injunctive reliefs to restrain NEPC India from removing its aircrafts so that it can exercise its right to possess the aircrafts. It has also filed two more suits for recovery of the amounts due to it for the supplies made, that is, CS No. 998 of 1999 against NEPC India (for recovery of Rs 5,28,23,501.90) and CS No. 11 of 2000 against Skyline (for recovery of Rs 13,12,76,421.25) in the Madras High Court. IOC has also initiated proceedings for winding up NEPC India and filed a petition seeking initiation of proceedings for contempt for alleged disobedience of the orders of temporary injunction. These acts show that civil remedies were and are available in law and IOC has taken recourse to such remedies. But it does not follow therefrom that criminal law remedy is barred or IOC is estopped from -6- Cr. M.P. No. 3762 of 2019 seeking such remedy."
11. Learned Senior counsel appearing for the petitioners further elaborates his argument by submitting that if a case is for harassment and there is an abuse of the process of the Court, this Court is fully under jurisdiction to exercise its power under Section 482 of the Code of Criminal Procedure. To buttress this argument, he relied upon the judgment rendered by the Hon'ble Supreme Court in the case of Inder Mohan Goswami & Another v. State of Uttaranchal & Others , reported in 2008 (1) JLJR 82 (SC).
12. Paragraphs 23, 24 and 27 of the said judgment are quoted herein below:
"23. This court in a number of cases has laid down the scope and ambit of courts powers under section 482 Cr.P.C. Every High Court has inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent abuse of the process of the court. Inherent power under section 482 Cr.P.C. can be exercised:
(i) to give effect to an order under the Code;
(ii) to prevent abuse of the process of court; and
(iii) to otherwise secure the ends of justice.
24. Inherent powers under section 482 Cr.P.C. though wide have to be exercised sparingly, carefully and with great caution and only when such exercise is justified by the tests specifically laid down in this section itself. Authority of the court exists for the advancement of justice. If any abuse of the process leading to injustice is brought to the notice of the court, then the Court would be justified in preventing injustice by invoking inherent powers in absence of specific provisions in the Statute.
xxx xxx xxx
27. 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. The 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. The High Court should normally refrain from giving a prima facie decision in a case where all the 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 such magnitude that they cannot be seen in their -7- Cr. M.P. No. 3762 of 2019 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 proceedings at any stage."
13. On the same point, learned Senior counsel for the petitioners also relied upon the judgment rendered by the Hon'ble Supreme Court in the case of All Cargo Movers (I) Pvt. Ltd. & Ors. v. Dhanesh Badarmal Jain & Anr., reported in 2008 (1) JLJR 51 (SC).
14. Paragraph 17 of the said judgment is quoted herein below:
"17. In G. Sagar Suri & Anr. v. State of U.P. & Ors., [(2000) 2 SCC 636], this Court opined :
"8. Jurisdiction under Section 482 of the Code has to be exercised with great care. In exercise of its jurisdiction the High Court is not to examine the matter superficially. It is to be seen if a matter, which is essentially of a civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing process a criminal court has to exercise a great deal of caution. For the accused it is a serious matter. This Court has laid certain principles on the basis of which the High Court is to exercise its jurisdiction under Section 482 of the Code. Jurisdiction under this section has to be exercised to prevent abuse of the process of any court or otherwise to secure the ends of justice."
15. Learned Senior counsel appearing for the petitioners further relied upon the judgment rendered by the Hon'ble Supreme Court in the case of Mrs. Anita Malhotra v. Apparel Export Promotion Council & Anr. , reported in 2011 (8) Supreme 1.
16. Paragraph 13 of the said judgment is quoted herein below:
"13. In Harshendra Kumar D. vs. Rebatilata Koley and Others, (2011) 3 SCC 351, while considering the very same provisions coupled with the power of the High Court under Section 482 of the Code of Criminal Procedure, 1973 (in short 'the Code') for quashing of the criminal proceedings, this Court held:
"25. In our judgment, the above observations cannot be read to mean that in a criminal case where trial is yet to take place and the matter is at the stage of issuance of summons or taking cognizance, materials relied upon by the accused which are in the nature of -8- Cr. M.P. No. 3762 of 2019 public documents or the materials which are beyond suspicion or doubt, in no circumstance, can be looked into by the High Court in exercise of its jurisdiction under Section 482 or for that matter in exercise of revisional jurisdiction under Section 397 of the Code. It is fairly settled now that while exercising inherent jurisdiction under Section 482 or revisional jurisdiction under Section 397 of the Code in a case where complaint is sought to be quashed, it is not proper for the High Court to consider the defence of the accused or embark upon an enquiry in respect of merits of the accusations. However, in an appropriate case, if on the face of the documents -- which are beyond suspicion or doubt -- placed by the accused, the accusations against him cannot stand, it would be travesty of justice if the accused is relegated to trial and he is asked to prove his defence before the trial court. In such a matter, for promotion of justice or to prevent injustice or abuse of process, the High Court may look into the materials which have significant bearing on the matter at prima facie stage."
As rightly stated so, though it is not proper for the High Court to consider the defence of the accused or conduct a roving enquiry in respect of merit of the accusation, but if on the face of the document which is beyond suspicion or doubt placed by the accused and if it is considered the accusation against her cannot stand, in such a matter, in order to prevent injustice or abuse of process, it is incumbent on the High Court to look into those document/documents which have a bearing on the matter even at the initial stage and grant relief to the person concerned by exercising jurisdiction under Section 482 of the Code."
By way of referring this judgment, he submits that the Court in appropriate cases can look into the documents for coming to a right conclusion.
17. On the point of civil nature of cases and criminal proceeding, learned Senior counsel for the petitioners relied upon the judgment rendered by the Hon'ble Supreme Court in the case of Thermax Ltd. v. K.M. Johny, reported in (2011) 13 SCC 412.
18. Paragraph 34 of the said judgment is quoted herein below:
"34. The principles enunciated from the abovequoted decisions clearly show that for proceeding under Section 156(3) of the Code, the complaint must disclose relevant material ingredients of Sections 405, 406, 420 read with -9- Cr. M.P. No. 3762 of 2019 Section 34 IPC. If there is a flavour of civil nature, the same cannot be agitated in the form of criminal proceeding. If there is huge delay and in order to avoid the period of limitation, it cannot be resorted to as a criminal proceeding."
19. Last but not the least, Mr. P.P.N. Roy, learned Senior counsel appearing for the petitioners relied upon the judgment rendered by the Hon'ble Supreme Court in the case of Birla Corporation Limited v. Adventz Investments and Holdings, reported in 2019 (5) Supreme
403.
20. Paragraphs 60 and 61 of the said judgment are quoted herein below:
"60. The High Court held that witness P.B. Dinesh has stated about alleged involvement of some of the accused and there is no fundamental error committed by the Magistrate in following the procedure under Chapter XIX of the Criminal Procedure Code. The High Court further observed that the flaw at the worst would be a procedural irregularity. The order dated 08.10.2010 taking cognizance of the offence under Sections 380, 411 and 120B IPC against respondents No. 1 to 16 are liable to be set aside. The Magistrate who is conducting an investigation under Section 202 Cr.P.C. has full power in collecting the evidence and examining the matter. We are conscious that once the Magistrate is exercised his discretion, it is not for the Sessions Court or the High Court to substitute its own discretion for that of the Magistrate to examine the case on merits. The Magistrate may not embark upon detailed enquiry or discussion of the merits/demerits of the case. But the Magistrate is required to consider whether a prima case has been made out or not and apply the mind to the materials before satisfying himself that there are sufficient grounds for proceeding against the accused. In the case in hand, we do not find that the satisfaction of the Magistrate for issuance of summons is well founded.
61. The object of investigation under Section 202 Cr.P.C. is "for the purpose of deciding whether or not there is Aug 03 2021 Page 16 of 23 sufficient ground for proceeding". The enquiry under Section 202 Cr.P.C. is to ascertain the fact whether the complaint has any valid foundation calling for issuance of process to the person complained against or whether it is a baseless one on which no action need be taken. The law imposes a serious responsibility on the Magistrate to decide if there is sufficient ground for proceeding against the accused. The issuance of process should not be mechanical nor should be made as an instrument of harassment to the accused. As discussed earlier, issuance of process to the accused calling upon them to appear in the criminal case is a serious matter and lack of material particulars and non-application of mind as to the -10- Cr. M.P. No. 3762 of 2019 materials cannot be brushed aside on the ground that it is only a procedural irregularity. In the present case, the satisfaction of the Magistrate in ordering issuance of process to the respondents is not well founded and the order summoning the accused cannot be sustained. The impugned order of the High Court holding that there was compliance of the procedure under Section 202 Cr.P.C. cannot be sustained and is liable to be set aside."
By way of referring this judgment, learned Senior counsel submits that the Court was required to consider whether prima facie case has been made out or not and if there is non-application of mind, this Court may interfere with the entire criminal proceedings.
21. Mr. Rahul Kumar, learned counsel appearing for opposite party no.2 by way of inviting attention of the Court to the complaint case, which is under challenge submits that the petitioners, by way of opening separate bank account in the name of the Jharkhand Commerce Inter College, Dumri, have misappropriated Rs.27 Lakhs of the college, which has been alleged in paragraph 2 of the complaint case. He further draws attention of the Court to the counter affidavit filed on behalf of opposite party no.2 and submits that by letter dated 08.01.2019, the District Education Officer was authorized to operate the bank account of the college. By way of referring Annexure-F of the counter affidavit, he submits that the account of the Jharkhand Commerce Inter College, Dumri has been operated by the petitioners, who are accused in the complaint case and they have misappropriated the sum of Rs.27 Lakhs of the college. By way of referring the cognizance order, he submits that the order is very composite and the learned court below has right taken cognizance and call upon the petitioners for facing the trial.
22. Mr. Manoj Kumar, learned counsel appearing for the opposite party- -11- Cr. M.P. No. 3762 of 2019 State submits that there is no illegality in the impugned order. He further submits that opposite party no.2 is also facing criminal case which is disclosed in the counter affidavit filed on behalf of the State.
23. In light of the above submissions of the learned counsel for the parties, after going through the materials on the record and on perusal of the complaint case, it is crystal clear that there is allegation against the petitioners of misappropriation of sum of Rs.27 Lakhs of the said college. At this stage, this Court is not required to look into the fact whether prima facie case has been made out against the petitioners or not. However, by way of Annexure-E of the counter affidavit filed on behalf of opposite party no.2, the District Education Officer was authorized to operate the account of the college and the petitioners were restrained to operate the account. Annexure-F of the counter affidavit filed on behalf of opposite party no.2 suggests that the amounts have been withdrawn from the account of the Jharkhand Commerce Inter College, Dumri, which was the subject matter of the trial.
24. The judgment relied by Mr. P.P.N. Roy, learned Senior counsel appearing for the petitioners in Cr.M.P. No. 148 of 2011 is distinguishable to the facts and circumstances of the present case as in that case, the Special Officer was the petitioner, who was made accused while discharging his duty as a official. In that case, not even a single allegation was whispered against that petitioner, whereas, in the case in hand, it is crystal clear that the court below has considered the depositions of the witnesses, documents and thereafter cognizance order has been passed.
25. So far as the judgment relied by the learned Senior counsel for the petitioners on the point of civil dispute is concerned, it is well settled -12- Cr. M.P. No. 3762 of 2019 proposition of law that it is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import. Merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. If in the case of civil nature criminal element is there, both the proceedings can go simultaneously. It has been held by the Hon'ble Supreme Court in the case of Medchl Chemicals & Pharma (P) Ltd. v. Biological E. Ltd., reported in (2000) 3 SCC 269, in paragraphs 15, 16, 17, 18 and 19, which are quoted herein below:
"15. In the matter under consideration, if we try to analyse the guidelines as specified in Shivalingappa case can it be said that the allegations in the complaint do not make out any case against the accused nor do they disclose the ingredients of an offence alleged against the accused or the allegations are patently absurd and inherently improbable so that no prudent person can ever reach to such a conclusion that there is sufficient ground for proceeding against the accused? In the present case, the complaint as noticed above does not, however, lend credence to the questions posed. It is now well settled and one need not dilate on this score, neither do we intend to do so presently that the allegations in the complaint will have to be accepted on the face of it and the truth or falsity of which would not be gone into by the Court at this earliest stage as noticed above: whether or not the allegations in the complaint were true is to be decided on the basis of the evidence led at the trial and the observations on this score in the case of Nagpur Steel & Alloys (P) Ltd. v. P. Radhakrishna ought to be noticed. In para 3 of the Report this Court observed:
"3. We have perused the complaint carefully. In our opinion it cannot be said that the complaint did not disclose the commission of an offence. Merely because the offence was committed during the course of a commercial transaction, would not be sufficient to hold that the complaint did not warrant a trial. Whether or not the allegations in the complaint were true was to be decided on the basis of evidence to be led at the trial in the complaint case. It certainly was not a case in which the criminal trial should have been cut short. The quashing of the complaint has resulted in grave miscarriage of justice. We, therefore, without expressing any opinion on the merits of the case, allow this appeal and set aside the impugned order of the High Court and restore the complaint. The learned trial -13- Cr. M.P. No. 3762 of 2019 Magistrate shall proceed with the complaint and dispose of it in accordance with law expeditiously."
16. Be it noted that in the matter of exercise of the High Court's inherent power, the only requirement is to see whether continuance of the proceeding would be a total abuse of the process of court. The Criminal Procedure Code contains a detailed procedure for investigation, charge and trial, and in the event, the High Court is desirous of putting a stop to the known procedure of law, the High Court must use a proper circumspection and as noticed above, very great care and caution to quash the complaint in exercise of its inherent jurisdiction. Recently, this Court in Trisuns Chemical Industry v. Rajesh Agarwal observed:
"5. The respondent's counsel in the High Court put forward mainly two contentions. The first was that the dispute is purely of a civil nature and hence no prosecution should have been permitted, and the second was that the Judicial Magistrate of the First Class, Gandhidham has no jurisdiction to entertain the complaint. Learned Single Judge has approved both the contentions and quashed the complaint and the order passed by the Magistrate thereon.
6. On the first count learned Single Judge pointed out that there was a specific clause in the memorandum of understanding arrived at between the parties that disputes, if any, arising between them in respect of any transaction can be resolved through arbitration. The High Court made the following observations:
'Besides supplies of processed soyabean were received by the complainant Company without any objection and the same have been exported by the complainant Company. The question whether the complainant Company did suffer the loss as alleged by it are matters to be adjudicated by the civil court and cannot be the subject-matter of criminal prosecution.'
7. Time and again this Court has been pointing out that quashing of FIR or a complaint in exercise of the inherent powers of the High Court should be limited to very extreme exceptions (vide State of Haryana v. Bhajan Lal and Rajesh Bajaj v. State NCT of Delhi).
8. In the last referred case this Court also pointed out that merely because an act has a civil profile is not sufficient to denude it of its criminal outfit. We quote the following observations: (SCC p. 263, para 10) '10. It may be that the facts narrated in the present complaint would as well reveal a commercial transaction or money transaction.
But that is hardly a reason for holding that the offence of cheating would elude from such a transaction. In fact, many a cheatings were committed in the course of commercial and also money transactions.'
9. We are unable to appreciate the reasoning that the provision incorporated in the agreement for referring -14- Cr. M.P. No. 3762 of 2019 the disputes to arbitration is an effective substitute for a criminal prosecution when the disputed act is an offence. Arbitration is a remedy for affording reliefs to the party affected by breach of the agreement but the arbitrator cannot conduct a trial of any act which amounted to an offence albeit the same act may be connected with the discharge of any function under the agreement. Hence, those are not good reasons for the High Court to axe down the complaint at the threshold itself. The investigating agency should have had the freedom to go into the whole gamut of the allegations and to reach a conclusion of its own. Pre-emption of such investigation would be justified only in very extreme cases as indicated in State of Haryana v. Bhajan Lal."
17. On a careful reading of the complaint, in our view, it cannot be said that the complaint does not disclose the commission of an offence. The ingredients of the offences under Sections 415, 418 and 420 cannot be said to be totally absent on the basis of the allegations in the complaint. We, however, hasten to add that whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evidence to be led at the trial in the complaint case but simply because of the fact that there is a remedy provided for breach of contract, that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact they "are not mutually exclusive but clearly coextensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect the civil remedies at all for suing the wrongdoer in cases like arson, accidents, etc. It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import".
18. Mr Mishra, the learned Senior Advocate for the respondents herein being the accused persons, strongly relied upon the decision of this Court in the case of Dr Sharma's Nursing Home v. Delhi Admn. wherein this Court observed:
"We find that both the learned courts have rested their findings on deception only and did not go into the question whether the complaint and its accompaniments disclosed the other essential ingredient of the offence under Section 420 IPC, namely, dishonest inducement."
Mr Mishra relying upon Dr Sharma case also contended that Section 24 IPC has defined the word "dishonesty" to mean a deliberate intent to cause wrongful gain or wrongful loss. It has been the specific case of the complainant that from the beginning of the transaction there was a definite intent on the part of -15- Cr. M.P. No. 3762 of 2019 the accused persons to cause wrongful loss to the complainant. This aspect of the matter, however, has not been taken note of by the learned Single Judge. The decision of this Court in Dr Sharma case thus does not lend any assistance to Mr Mishra in support of quashing of the criminal complaint. Some other decisions have also been cited but we do not feel inclined to refer to the same except one noted above since they do not advance the case of the respondents in any way whatsoever.
19. Considering the factual aspect of the matter, we unhesitatingly state, however, that the issue involved in the matter under consideration is not a case in which the criminal trial should have been short-circuited. We, thus, without expressing any opinion on the merits of the case allow the appeal and set aside the impugned order of the High Court and restore the complaint. The learned trial Magistrate shall proceed with the complaint and dispose of the same in accordance with the law with utmost expedition. Be it clarified however that observations as above in this judgment be not taken as an expression of any opinion of ours."
26. Thus, the judgment relied by the learned Senior counsel for the petitioners on the point of civil nature, in the facts and circumstances of the present case, is not helping the petitioners.
27. In the judgment relied by the learned Senior counsel for the petitioners in the case of Mrs. Anita Malhotra (supra), the Hon'ble Supreme Court has referred to look into the documents, which are public in nature. This judgment is not helping the petitioners on the ground that two documents brought on record by opposite party no.2 are public documents, which suggest that even after restraining the petitioners, they have operated the bank account of the college. Thus, this judgment is not helping the petitioners.
28. In the judgment relied by the learned Senior counsel appearing for the petitioners in the case of Birla Corporation Limited (supra), the Hon'ble Supreme Court considered Chapter XIX of the Code of Criminal Procedure and held that process should not be issued in a mechanical way to any of -16- Cr. M.P. No. 3762 of 2019 the accused. This aspect of the matter is well settled that issuing the summon in criminal case is very serious in nature and the Magistrate is required to apply his mind. The facts of the said judgment are distinguishable. Thus, this judgment is also not helping the petitioners.
29. It is well settled that so far as Sections 190, 204 of the Code of Criminal Procedure are concerned, these are the sections by which cognizance and summon power have been provided to the trial court. The mens rea can only be decided at the time of trial and not at the stage of issuing summons. When prosecution relies upon the materials, strict standard of proof is not to be applied at the stage of issuance of summons nor to examine the probable defence which the accused may take. All that the Court is required to do is to satisfy itself as to whether there are sufficient grounds for proceeding. Before summoning the accused, the facts stated will have to be accepted as they appear on the very face of it. For issuance of process against the accused, it has to be seen only whether there is sufficient ground for proceeding against the accused and the Court is not required to weigh the evidentiary value of materials on record. The Court is not to examine the merits and demerits of case and not to determine the adequacy of evidence for holding the accused guilty at the time of taking cognizance. These are the subject matters of the trial. This aspect of the matter has been considered by the Hon'ble Supreme Court in the case of State of Gujarat v. Afroz Mohammed Hasanfatta , reported in 2019 (2) JLJR (SC) 163 . Paragraphs 35, 37, 43, 47 and 48 of the said judgment are quoted herein below:
"35. Whether the statement of Prafulbhai Patel is in the nature of hearsay and whether it is supported by 'contemporaneous exposition' and whether it would fall under -17- Cr. M.P. No. 3762 of 2019 'res gestae' and whether it is admissible or not is to be seen only at the time of trial. We are not inclined to go into the merits of the contention of either party as the same is to be raised and answered only at the time of trial. Observing that before summoning the accused, the facts stated will have to be accepted as they appear on the very face of it, in Bhaskar Lal Sharma, it was held as under:-
"11. .....The appreciation, even in a summary manner, of the averments made in a complaint petition or FIR would not be permissible at the stage of quashing and the facts stated will have to be accepted as they appear on the very face of it. This is the core test that has to be applied before summoning the accused. Once the aforesaid stage is overcome, the facts alleged have to be proved by the complainant/prosecution on the basis of legal evidence in order to establish the penal liability of the person charged with the offence."
xxx xxx xxx
37. For issuance of process against the accused, it has to be seen only whether there is sufficient ground for proceeding against the accused. At the stage of issuance of process, the Court is not required to weigh the evidentiary value of the materials on record. The Court must apply its mind to the allegations in the charge sheet and the evidence produced and satisfy itself that there is sufficient ground to proceed against the accused. The Court is not to examine the merits and demerits of the case and not to determine the adequacy of the evidence for holding the accused guilty. The Court is also not required to embark upon the possible defences. Likewise, 'possible defences' need not be taken into consideration at the time of issuing process unless there is an ex-facie defence such as a legal bar or if in law the accused is not liable.
xxx xxx xxx
43. The learned counsel for the State submitted that there is a clear evidence of flow back of Rs.16,00,00,000/- to the account of respondent as commission from the company controlled by Madanlal Jain which has not been explained. Insofar as the receipt of over Rs.16,00,00,000/- "as commission" by the respondent-accused for his role in the scam, the learned Single Judge discarded the same on the erroneous ground that "there is no mens-rea or culpable knowledge on the part of the accused". Whether the accused- respondent had mens-rea or not is not to be established at the stage of issuance of summons. In Bholu Ram v. State of Punjab and Another, (2008) 9 SCC 140, this Court held that mens rea can only be decided at the time of trial and not at the stage of issuing summons.
xxx xxx xxx
47. The learned Single Judge in the impugned order extensively extracted statement of the witnesses viz. Jafar Mohammed, brother of respondent, Samir Jiker Gohil, Manager of Nile Industries and other witnesses of Angadias Firms, concluded that none of the statements allege anything incriminating against the respondent. The learned Single -18- Cr. M.P. No. 3762 of 2019 Judge further observed that " neither the angadiyas nor the cheque discounters who admittedly were recipients of huge cash payments for further transfer to other companies, alleged any dealing or transaction with the petitioner, much less any incriminating transaction". There was huge flow of money into the account of the respondent and Nile Trading Corporation and also to his brother Jafar Mohammed. During trial, it is for the prosecution to show how these money transactions are linked to establish that the respondent was collecting money from remitters and transmitting the same to Prafulbhai Patel through Angadias. At the stage of issue of process, the court is not required to go into the merits of the evidence collected and examine whether they are incriminating the accused or not.
48. The learned Single Judge extracted the statement of Angadias in extenso and observed that the representatives of S. Babulal Angadia and P. Umeshchandra whose names are appearing in the statements of Prafulbhai Patel also did not reveal any such transaction with the respondent herein. Likewise, the learned Single Judge also referred to the banking transactions and observed that the bank statements of the respondent and his brother do not show commission of any offence lodged against the respondent even on prima facie basis. As discussed earlier, at the stage of issuance of process, sufficiency of evidence or otherwise is not to be seen. Meticulous consideration of the statement of witnesses and other materials produced is unfolded. The above materials produced by the prosecution ought not to have been brushed aside by the learned Single Judge to quash the order of issuance of summons to the respondent-accused. As to whether these evidence are sufficient to sustain the conviction of the respondent-accused or whether he has a plausible defence or explanation is the matter to be considered at the stage of trial. The learned Single Judge ought not to have weighed the merits of the case at the initial stage of issuance of summons to the accused."
30. As a cumulative effect of the aforesaid facts, it is not a case of exercising power under Section 482 of the Code of Criminal Procedure. Accordingly, this criminal miscellaneous petition stands dismissed. The petitioners may take all the points at appropriate stage before the trial court.
31. Interim order dated 20.01.2020 stands vacated.
(Sanjay Kumar Dwivedi, J.) Ajay/ A.F.R.