Allahabad High Court
Sunil Bharti Mittal And 3 Ors. vs State Of U.P.& Another on 9 February, 2017
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
AFR
Reserved Criminal Misc. application No. 1162 of 2008 (U/s 482 Cr.P.C.)
1. Sunil Bharti Mittal
M/s Bharti Airtel Limited,
H-5/12, Quatab Ambience, Mehrauli Road,
New Delhi.
2. Shankar Prasad,
C/o VSNL
3. S.S.Singh
12, Rani Laxmi Bai Marg,
Jahangirabad Palace,Hazratganj,
Lucknow.
4. Ajai Singh
R/o Connect Mahanagar,
Lucknow
........Applicants
Vs.
1. State of Uttar Pradesh
2. Deepak Srvastava, A/o 50 years
S/o Late Dr. G.N. Srivastava,
R/o 5/596 Vikas Khand Gomti Nagar
Lucknow .....Opposite parties
Counsel for Applicants :- Ashish Mishra,Kamlesh Singh,Mohd. Naseer-Ullah
Counsel for Opposite Party :- Govt.Advocate,Shobhit Kant
...........
Hon'ble Anil Kumar Srivastava II,J.
1. Heard Sri G.S.Chaturvedi, learned Senior Advocate assisted by Shri Ashish Mishra, learned counsel for the petitioners, learned AGA and perused the record.
2. Opposite party No. 2 is represented through counsel but none is present on his behalf, although counter affidavit has been filed on his behalf.
3. The instant petition under section 482 Code of Criminal Procedure ( In short ''Cr.P.C.') has been filed with the prayer to quash the proceedings of Complaint Case No. 449 of 2007, Deepak Srivastava Vs. Sunil Bharti Mittal and others under section 420/406 Indian Pena Code (In short ''IPC'), Police Station Gomti Nagar, District Lucknow pending in the court of Additional Civil Judge (Junior Division), Court No. 36, Lucknow and the impugned orders dated 13.08.2007 and 16.1.2008 passed by the learned Magistrate summoning the accused petitioners to face the trial under section 420 IPC.
4. A complaint was filed by opposite party no. 2 against the petitioners stating that the petitioners are connected and working for each other in Airtel Company and are responsible for the business, affairs and policies of the company. The petitioner No.1 is Chairman/Managing Director of the Airtel Company and is responsible for all the affairs and business including policies of the Company. Petitioners have floated a scheme that if any individual purchases Airtel connection under the scheme, he shall be entitled for the Air Ticket to and fro to any destination mentioned in the scheme. Opposite party no. 2 on the advertisement and allurement of the petitioners purchased three connection Nos. 9935521244, 9935502146 and 9935502145 in the name of Deepak Srivastava i.e. complainant, Meenu Srivastava and Soumya Srivastava, respectively. It was the pre condition of the scheme that the purchaser must continue the connection for three months and pay the charges in time. Opposite party no. 2 complied with the conditions and he received three free Air Ticket Forms, which were duly filled in and sent to the petitioners. Complainant and his family made preparations for travelling to south India during summer vacation in the month of May, 2006. Forms were returned by the opposite parties stating that they have not been filled in properly. When no fresh forms were sent, then a notice was sent by opposite party no 2 to the petitioners on 1.8.2006, but opposite party no.2 received a fresh form which mentions that Air Port taxes would be Rs. 1800/- instead of Rs. 442/-. Opposite part no. 2 again submitted the duly filled the form and gave the date for availing the facility in Dashera vacation, but tickets were not made available to him. Opposite party no. 2 talked to the office of Infovision Solutions, A/-2/4 (Lower G.F.), Vasant Vihar New Delhi make my Trip and the offers for the petitioners but of no use. A notice was again sent on 15.9.2006 by the opposite party no. 2.
5. On 13.10.2006 at about 11.00 a.m., the opposite party no. 2 received a telephonic call from ''make my drip' on behalf of Airtel and informed that no direct flight to the destination is available, hence the flight from Delhi to Chennai can be available before 30th October, 2006, but on inquiry by opposite party no. 2 from Railway Station, it was revealed that no reservation in any train is available from Lucknow to Delhi. Whole scheme of the opposite party no. 2 is fraud and they have connived together misrepresented, misled and played fraud with the complainant .
6. On these allegations statement of one Arvind Kumar Srivastava was recorded by the learned Magistrate. Statement of complainant was also recorded under section 200 Cr.P.C.
7. The learned Magistrate passed an order dated 13.8.2007 summoning the accused to face the trial under section 420 IPC. Aggrieved by the impugned order, the petitioners have filed this petition for quashing the impugned orders and further proceedings of the complaint case.
8. Learned Senior Advocate appearing for the petitioners submits that the learned Magistrate has passed an erroneous order, which is not tenable under the law. It is further submitted that the learned Magistrate has summoned the accused under section 420 IPC, but no ingredients of cheating could be proved. It is further submitted that it is stated in the complainant that the petitioners are the Managing Director and other connected persons of the Airtel Company, but the Airtel Company has not been arrayed as an accused in the complaint. It is further submitted that the information was given to the complainant well in time. As per the complainant assertions, he received the message on 30th October,2006, wherein 17 days' time was there for reaching Delhi, which was enough time to reach Delhi, but the complainant himself did not reach Delhi in time, hence the part on behalf of the petitioners under the agreement was completed well in reasonable time. There was no reason or mens rea to cheat the complainant by the petitioners. The offer for 30th October, 2006 was in unequivocal term. As per the scheme itself the form which was filled in by the complainant was for the destinations namely, Coimbatore, Cochin and Trivendrum. For all the three destinations flight was available from Delhi. Even in the scheme, chart of flights shows that from Lucknow the only destination is Delhi and Mumbai. It is further submitted that in the notice dated 01.08.2006, the complainant himself has mentioned that the Company has cheated and misrepresented him, but the company is not arrayed as an accused. It is further submitted that even for the sake of argument if it is accepted that he could not avail the facility of 30th of October, 2006 as proposed by the petitioners then the opposite party no. 2 complainant could have made a request for change of dates but no such request has ever been made.
9. Learned counsel for the petitioners has placed reliance upon Sharad Kumar Sanghi Vs. Sangita Rane, (2015) 12 SCC,781 and submitted that the Hon'ble Apex Court has held that if the Company is not made a party, no proceeding can be initiated against it even vicarious liability may be fastened under certain statutes.
10. Learned AGA submits that the impugned orders were passed by the learned Magistrate within the jurisdiction.
11. On the basis of arguments placed by the learned counsel for petitioners and learned AGA, following points arose for determination:-
(1) Whether the principle of vicarious liability can be fastened on the petitioners in the circumstance when the Company has not been made a party to the proceedings?
(2) Whether the dispute is of civil nature?
(3) Whether the learned Magistrate has exercised its jurisdiction in accordance with law?
12. In paragraph 3 of the complaint, it is mentioned that "That the opposite parties floated a scheme, that if the individual purchases the Airtel connections under the scheme, he shall be entitled for the Air Ticket to and from to any destination mentioned in the scheme."
13. Paras- 1 and 2 of the complaint are extracted below:-
1. "That the opposite party nos. 1 to 4 are connected and working for each other in Airtel Company and are responsible for the business of Airtel Company and its affairs and policies.
(2) That the opposite party no. 1 is the Chairman/Managing Director of the Airtel Company and is responsible for all the affairs and business of the company and its policies."
14. In all three paragraphs alongwith notice dated 1.8.2006 (paragraph-5), it is stated that "That you and your company have cheated and misrepresented for which I have no option but to take legal action." It means that the allegations have been levelled against the Airtel Company.
15. In Sharad Sanghi's case (supra) the facts are that the appellant, who is the Managing Director of M/s Sanghi Brothers (Indore) Ltd. Indore which is a registered company duly incorporated and registered under the Companies Act, 1956, and is engaged in the business of automobile sale, finance and shipping etc. having branches at various places including the city of Bhopal. The respondent complaint obtained a quotation from the Bhopal branch for a purchase of a TATA Diesel vehicle model SFC 709/38 LB in the month of April 1998 and the vehicle was delivered to the respondent on 1.5.1998 on payment of the price deposited at Bhopal vide bank draft issued from State Bank of India, Sarni, Betul. The respondent faced difficulty with the vehicle and eventually he came to know in the month of August, 2000 that there was a discrepancy in the engine number of the invoice issued to him. On further enquiry, he found that there is a letter issued by Tata Engineering and Locomotive Company (TELCO) on 7.11.2000 that in the course of transit from the company to Bhopal, the said vehicle had met with an accident as a result of which the engine was replaced by another engine. Coming to know, the respondent filed a complaint. It is stated under section 200 CrPC that M/s Sanghi Brothers (Indore) Ltd., Indore being represented by the Managing Director, Sharad Kumar Sanghi, had suppressed the information and deliberately cheated the respondent." (para 2).
16. The learned Magistrate took the cognizance of the offence. It was contended before the High Court that the Company was not made an accused in the complaint and the complaint was not maintainable and further that there was no mens rea.
17. It was held by the Hon'ble Apex Court in Sharad Kumar Sangh's case (Supra) in paras 9,10 and 11, which are reproduced here below:-
9. "The allegations which find place against the Manging Director in his personal capacity seem to be absolutely vague. When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability. In Maksud Saiyed vs. State of Gujrat (2008) 5 SCC 668, it has been held, thus : (SCC p. 674, para 13) "13. Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156 (3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. Indian Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability."
10. In this regard, reference to a three -Judge Bench decision in S.M.S. Phamaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89 would be opposite. While dealing with an offence under Section 138 of the Negotiable Instruments Act, 1881, the Court explaining the duty of a Magistrate while issuing process and his power to dismiss a complaint under Section 203 without even issuing process observed thus: (SCC p. 96. para 5).
"5.......a complaint must contain material to enable the Magistrate to make up his mind for issuing process. If this were not the requirement, consequences could be far reaching. If a Magistrate had to issue process in every case, the burden of work before Magistrates as well as harassment caused to the respondents to whom process is issued would be tremendous. Even Section 204 of the Code starts with the words "if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding" The words "sufficient ground for proceeding" again suggest that ground should be made out in the complaint for proceeding against the respondent. It is settled law that at the time of issuing of the process the Magistrate is required to see only the allegations in the complaint and where allegations in the complaint or the chargesheet do not constitute an offence against a person, the complaint is liable to be dismissed."
After so stating, the Court analyzed Section 141 of the Act and after referring to certain other authorities answered a referent and relevant part of the answer reds as follows):
(S.M.S. Phamaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC 89SCC p. 103 , para 19) "19.........(a) It is necessary to specifically aver in a complaint under Section141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied."
The same principle has been reiterated in S.K. Alagh v. State of U.P. (2008) 5 SCC 662, Maharashtra State Electricity Distribution Co. Ltd. v. Datar Switchgear Ltd. (2010) 10 SCC 479 and GHCL Employees Stock Option Trust v. India Infoline Ltd. (2013) 4 SCC 505.
11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the Company , the Company has not been made a party and, therefore, the allegations are restricted to the Managing Director. As we have noticed earlier, allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statutes. It has been so held by a three -Judge Bench in Aneeta Hada vs. Ghodfather Travels and Tours (P) (Ltd.) (2012) 5 SCC 661 in the context of the Negotiable Instruments Act, 1881.
18. Facts of the present case are similar. The accusations have been levelled against the Airtel Company which has not been arrayed as an accused. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would leave to the conclusion that the respondents herein were personal liable for any offence. No mens rea has been alleged in the complaint. No allegations have been levelled against the petitioners in their individual capacity, rather it is an admitted position that the sufficient time was given to the complainant to reach Delhi to avail the facility. It is not like that the petitioners were not extending the benefit of scheme to the complainant. It is also not the situation that no time was given to them to reach Delhi. It is further relevant that even in the scheme, the free flight facility was extended for one destination. In the chart annexed with the scheme, the destinations which have been filled in by the complainant in their application forms were such, as is apparent from Annexure No. 5 to this petition which was available from Delhi only. From Lucknow the only flights destination were to Delhi or Mumbai, but the destinations shown by the complainant in his form which is Coimbatore, Chennai and Trivendrum were available from Delhi and the offer was made for taking flight from Delhi which the complainant did not avail.
19. The necessary ingredient of section 420 IPC is defined in section 415 IPC which reads as under:-
"415.Cheating.--Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". Explanation.--A dishonest concealment of facts is a deception within the meaning of this section."
20. None of the ingredients of section 420 IPC could have been proved by the complainant in the complaint.
21. A scheme was floated by the Company for individual subscriber. It is not the case of the complainant that scheme was floated to cheat him or no subscriber has ever been allowed by the Company to avail the facility. It was a sort of an agreement wherein both the parties i.e. company as well as the subscriber have to perform their own part. When the duly filled form was received in the Company, an offer was given to the complainant to avail the facility, meaning thereby that the Company has fulfilled his part under the agreement which now it was upto the complainant either to accept the offer or to make a counter proposal for change of date. Complainant admittedly received the offer, but neither accepted the offer nor made a counter offer. In this package when the Company has completed his part under the agreement and the complainant has not completed his part, then it cannot be said that there was any mens rea on the part of the Company. When there was no mens rea , then it can not be accepted even at the preliminary stage of taking cognizance that the complaint has legs to stand.
22. In a recent judgment delivered by Hon'ble the Apex Court on 14.12.2016 in Criminal Appeal No.1225 of 2016 (arising out of SLP(Crl.) No.9318 of 2012) Abhijit Pawar vs. Hemant Madhukar Nimbalakar & Anr. It was held that the admitted position in law is that in those cases where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, it is mandatory on the part of the Magistrate to conduct an inquiry or investigation before issuing the process. Section 202 of the Cr.P.C. was amended in the year by the Code of Criminal Procedure(Amendment) Act, 2005, with effect from 22nd June, 2006 by adding the words that ''and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction'. There is a vital purpose or objective behind this amendment, namely, to ward off false complaints against such persons residing at a far off places in order to save them from unnecessary harassment. Thus, the amended provisions casts an obligation on the Magistrate to conduct inquiry or direct investigation before issuing the process, so that false complaints are filtered and rejected.
Referring the case law in Vijay Dhanuka vs. Najima Mamtaj (2014) 14 SCC 638;
"11. Section 202 of the Code, inter alia, contemplates postponement of the issue of the process "in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" and thereafter to either inquire into the case by himself or direct an investigation to be made by a police officer or by such other person as he thinks fit. In the face of it, what needs our determination is as to whether in a case where the accused is residing at a place beyond the area in which the Magistrate exercises his jurisdiction, inquiry is mandatory or not.
12. The words "and shall, in a case where the accused is residing at a place beyond the area in which he exercises his jurisdiction" were inserted by Section 19 of the Code of Criminal Procedure (Amendment) Act (Central Act 25 of 2005) w.e.f. 23.6.2006. The aforesaid amendment, in the opinion of the legislature, was essential as false complaints are filed against persons residing at far off places in order to harass them. The note for the amendment reads as follows:
"False complaints are filed against persons residing at far off places simply to harass them. In order to see that innocent persons are not harassed by unscrupulous persons, this clause seeks to amend sub-section (1) of Section 202 to make it obligatory upon the Magistrate that before summoning the accused residing beyond his jurisdiction he shall enquire into the case himself or direct investigation to be made by a police officer or by such other person as he thinks fit, for finding out whether or not there was sufficient ground for proceeding against the accused."
The use of the expression "shall" prima facie makes the inquiry or the investigation, as the case may be , by the Magistrate mandatory. The word "shall" is ordinarily mandatory but sometimes, taking into account the context or the intention, it can be held to be directory. The use of the word "shall" in all circumstances is not decisive. Bearing in mind the aforesaid principle, when we look to the intention of the legislature, we find that it is aimed to prevent innocent persons from harassment by unscrupulous persons from false complaints. Hence, in our opinion, the use of the expression"shall" and the background and the purpose for which the amendment has been brought, we have no doubt in our mind that inquiry or the investigation, as the case may be, is mandatory before summons are issued against the accused living beyond the territorial jurisdiction of the Magistrate."
23. In Mehmood UI Rehmand vs. Khazir Mohammad Tund (2016) 1 SCC (Cri) 124; it was held as under :
"20. The extensive reference to the case law would clearly show that cognizance of an offence on complaint is taken for the purpose of issuing process to the accused. Since it is a process of taking judicial notice of certain facts which constitute an offence, there has to be application of mind as to whether the allegations in the complaint, when considered along with the statements recorded or the inquiry conducted thereon, would constitute violation of law so as to call a person to appear before the criminal court. It is not a mechanical process or matter of course. As held by this Court in Pepsi Foods Ltd [Pepsi Foods Ltd. v. Judicial Magistrate, (1998) 5 SCC 749 : 1998 SCC (Cri) 1400] to set in motion the process of criminal law against a person is a serious matter.
22. The steps taken by the Magistrate under Section 190(1)(a) CrPC followed by Section 204 CrPC should reflect that the Magistrate has applied his mind to the facts and the statements and he is satisfied that there is ground for proceeding further in the matter by asking the person against whom the violation of law is alleged, to appear before the court. The satisfaction on the ground for proceeding would mean that the facts alleged in the complaint would constitute an offence, and when considered along with the statements recorded, would prima facie, make the accused answerable before the court. No doubt, no formal order or a speaking order is required to be passed at that stage. The Code of Criminal Procedure requires speaking order to be passed under Section 203 CrPC when the complaint is dismissed and that too the reasons need to be stated only briefly. In other words, the Magistrate is not to act as a post office in taking cognizance of each and every complaint filed before him and issue process as a matter of course. There must be sufficient indication in the order passed by the Magistrate that he is satisfied that the allegations in the complaint constitute an offence and when considered along with the statements recorded and the result of inquiry or report of investigation under Section 202 CrPC, if any, the accused is answerable before the criminal court, there is ground for proceeding against the accused under Section 204 CrPC, by issuing process for appearance. The application of mind is best demonstrated by disclosure or mind on the satisfaction. If there is no such indication in a case where the Magistrate proceeds under Sections 190/204 CrPC, the High Court under Section 482 CrPC is bound to invoke its inherent power in order to prevent abuse of the power of the criminal court. To be called to appear before the criminal court as an accused is serious matter affecting one's dignity, self-respect and image in society. Hence, the process of criminal court shall not be made a weapon of harassment." Emphasis added. "
24. Hon'ble Apex Court has further dealt with the nature of inquiry which is required to be conducted by the Magistrate and referring the case of Vijay Dhanuka (supra) it was held as under:
"14. In view of our answer to the aforesaid question, the next question which falls for our determination is whether the learned Magistrate before issuing summons has held the inquiry as mandated under Section 202 of the Code. The word "inquiry " has been defined under Section 2(g) of the Code, the same reads as follows:
"2. (g) ''inquiry' means every inquiry, other than a trial, conducted under this Code by a Magistrate or court,"
It is evident from the aforesaid provision, every inquiry other than a trial conducted by the Magistrate or the court is an inquiry. No specific mode or manner of inquiry is provided under Section 202 of the Code. In the inquiry envisaged under Section 202 of the Code, the witnesses are examined whereas under Section 200 of the Code, examination of the complainant only is necessary with the option of examining the witnesses present, if any. This exercise by the Magistrate, for purpose of deciding whether or not there is sufficient ground for proceeding against the accused, is nothing but an inquiry envisaged under Section 202 of the Code."
25. In Sonu Gupta versus Deepak Gupta (2015) Vol.3 SCC 424, it was held by the Hon'ble Apex Court that :-
"At the stage of cognizance and summoning the Magistrate is required to apply his judicial mind only with a view to take cognizance of the offence, or in other words, to find out whether prima facie case has been made out for summoning the accused persons. At this stage, the Magistrate is not required to consider the defence version or materials or arguments nor is he required to evaluate the merits of the materials or evidence of the complainant, because the Magistrate must not undertake the exercise to find out at this stage whether the materials will lead to conviction or not." (Para 8)
26. Summoning of an accused in a criminal matter is a serious matter where it is expected from the learned Magistrate to exercise his judicial conscience and mind at the time of passing an order for summoning of the accused. It could not be passed mechanically. Although it is true that specific reasons for summoning of the accused are not required to be mentioned but at the same time order must show that the learned Magistrate has applied his judicial mind in summoning the accused. It is more important in the cases where the accused are residents of beyond the jurisdiction of the learned Magistrate as has been held in Abhijit Pawar'case (Supra).
27. Impugned order shows that the learned Magistrate has not applied his judicial mind at the time of taking cognizance. Learned Magistrate did not look into the aspects that even if the allegations levelled in the complaint are treated as correct then will it result in conviction? Although at the time of summoning, it was not necessary but at the same time when the allegations ex facto shows their non existence then such an order of taking cognizance cannot said to be lawful exercise of the jurisdiction vested in the learned Magistrate. It is a case of misuse of process of law .
28. Accordingly the impugned orders dated 13.08.2007 and 16.1.2008 passed by the learned Additional Civil Judge (Junior Division), Court No. 36, Lucknow in Complaint Case No. 449 of 2007, Deepak Srivastava Vs. Sunil Bharti Mittal and others under under section 420/406 IPC, Police Station Gomti Nagar, District Lucknow are bad in law.
29. Consequently the petition is allowed. Proceedings of Complaint Case No. 449 of 2007, Deepak Srivastava Vs. Sunil Bharti under section 420/406 IPC, Police Station Gomti Nagar, District Lucknow pending the court of learned Additional Civil Judge (Junior Division), Court No. 36, Lucknow are quashed. Impugned orders dated 13.08.2007 and 16.1.2008 passed by the learned Additional Civil Judge (Junior Division), Court No. 36, Lucknow in Complaint Case No. 449 of 2007, Deepak Srivastava Vs. Sunil Bharti under section 420/406 IPC, Police Station Gomti Nagar, District Lucknow is also quashed.
Order Date: 09.02.2017 GSY