Allahabad High Court
M/S Sumac International Ltd. ... vs The State Of U.P. & Anr. [At 1:15 P.M] on 16 March, 2018
Author: Chandra Dhari Singh
Bench: Chandra Dhari Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH A.F.R. Reserved on 21.02.2018 Delivered on 16.03.2018 Court No. - 11 Case :- U/S 482/378/407 No. - 7760 of 2017 Applicant :- M/S Sumac International Ltd. Thru.Awadhesh Kumar Verma & Ors Opposite Party :- The State Of U.P. & Anr. Counsel for Applicant :- A.K. Verma - In Person,Salil Kumar Srivastava Counsel for Opposite Party :- Govt. Advocate,Amit Chaudhary Hon'ble Chandra Dhari Singh,J.
01. By the instant petition under section 482 of the Code of Criminal Procedure has been filed against the order dated 17.10.2017 passed by Judicial Magistrate, Lakhimpur Kheri in Criminal Case No. 702 of 1994, subsequent Nos. 3226 of 2015 and 890 of 2017 (Bajaj Hindustan Ltd. Vs. Sumac International Limited and another). The applicant has further prayed for quashing of the entire proceedings of Criminal Case No. 702 of 1994, subsequent Nos. 3226 of 2015 and 890 of 2017 (Bajaj Hindustan Ltd. Vs. Sumac International Limited and another), pending in the court of Judicial Magistrate, Lakhimpur Kheri.
02. Brief facts of the case are as under :-
i) A sugar factory in the name of Sharda Sugar Industries Pvt. Ltd. was established, which at present running in the name of Bajaj Hindustan Ltd., Unit Palia Kala, P.S. Palia, District Kheri. The Bajaj Hindustan Ltd., Unit Palia Kala decided to increase the production of the Factory and for which they decided to purchase a machinery for the expansion of their project. Pursuant to above expansion of project, the Director of Bajaj Hindustan Ltd. Sri Shishir Bajaj invited the applicant no.2 Sri A.K. Verma, the Managing Director of Sumac International Ltd. to his office, situate in Bombay and discussed to him for expansion of the Unit at Palia Kala.
ii) The petitioner no.1 company has collaboration with M/s Polymax of Australia with respect of 1067 mm X 2134 mm mill size. The agreement dated 12.05.1988 was signed and witnessed by Indian High Commissioner in Australia. The agreement between M/s Sumac International Ltd. and M/s Polymax of Australia had been approved by the Government of India on 04.12.1987 and the same is incorporated in the formal agreement dated 12.05.1988.
iii) Sharda Sugar Industries Ltd. placed an order dated 27.01.1990 to the Sumac International Ltd. for supply of complete milling tandem for expansion of project of their Sugar Mill on the terms and conditions as set out therein. The total price of equipment inclusive of basic price has been given as Rs.432 Lacs. In the above price driving units such as Esteem Turbine, High Speed Reduction Gear Box, 1st Stage Open Spur Gearing, 2nd Stage Open Spur Gearing to achieve ultimate speed of the mill to 2.8 to 2.5 RPM of each mill are not included. The price for 3 sets i.e. for 3 mills is given by Sumac as Rs.135 Lacs and so cost of the each driving unit will be Rs. 45 Lacs designing and engineering, fabrication, supply, packaging and forwarding, loading and unloading and freight upto Palia Kala erection Unit. It has also been provided in this clause that Sharda Sugar Industries Ltd. was planning to install hydraulic power pack with hydraulic motors on each Mill and for that they have said that they would not import the equipment but will place their additional order on Sumac on a price of Rs.45 Lacs for each Mill drive.
iv) Pursuant to the above mentioned clause and in continuation to the purchase order dated 27.01.1990, a second purchase order was issued by Sharda Sugar Industries Ltd. on 29.03.1990 following the discussions between the parties. In this purchase order, it was mentioned that the modifications and clarifications in the 2nd purchase order were based on the discussion to remove any ambiguity which existed in the matter.
v) The terms of payment in the 1st purchase order were provided under clause 17 and they were of 10% of the price which came to Rs.43.20 Lacs was required to be paid as a 1st advance along with the order, however, the same was revised as per the 2nd purchase order amounting to Rs.75 Lacs and was required to be paid by April, 1990. The 2nd advance of 5% of the purchase price which came to Rs.21.60 Lacs was required to be paid as per the 1st purchase order by March, 1990 but as per the revised purchase order the amount increased to Rs.27.50 Lacs and was required to be paid by May, 1990. The 3rd advance of 5%, which also came to Rs.21.60 Lacs as per the 1st purchase order was required to be paid by May, 1990, but as per the revised purchase order the amount increased to Rs.37.50 Lacs and it was to be paid by June, 1990.
vi) From the above, it was clear that a total of Rs.150 Lacs was to be paid in advance and the remaining 75% of the basic price as per the 1st purchase order but as per 2nd purchase order 80% was to be paid against the supplies made.
vii) Out of Rs.150 Lacs as advance, Sharda Sugar Industries Ltd. could pay only Rs.75 Lacs as advance and the remaining 50% of the advance amounting to Rs.75 Lacs was never paid to Sumac International Ltd.
viii) Under clause 8 of the 1st purchase order the delivery period and terms of delivery were specified which remained unrevised in the 2nd purchase order and it provided that the entire equipments shall be delivered by Sumac International Ltd. in such a manner that the milling tandem shall be ready for trials by 31.07.1991. It was however, noted that the delivery/dispatch of 1st consignment shall commence after 01.07.1990.
ix) When the contract was still subsisting and even the contract period had not been over, which was till July, 1991, Sharda Sugar Industries Ltd., as they have alleged in the complaint canceled the contract on 16.09.1990. By means of this cancellation letter they have demanded the refund of Rs.75 Lacs which was given to Sumac International Ltd. as advance.
x) Thereafter it has been alleged by Sharda Sugar Industries Ltd. that on 25.03.1992, they sent a demand notice through Advocate for Rs.75 lacs with interest upto 29.02.1992.
xi) Thereafter another notice dated 02.12.1993 have been sent through their Advocate, under section 434 of the Indian Companies Act to pay the aforesaid amount along with interest @ 25% per annum which they have alleged was served on Sumac International Ltd.
xii) It was only when M/s Bajaj Hindustan Ltd. failed to retrieve the advance money of Rs.75 lacs from Sumac International Ltd. in the manner mentioned above, they filed a criminal complaint on 07.03.1994 under sections 424, 420, 465, 467, 468, 471, 474, 409, 120-B IPC in the court of Addl. Judicial Magistrate-I, Lakhimpur Kheri.
xiii) The aforesaid complaint was filed through one Sri R.A. Faruqui, the Chief Engineer of M/s Bajaj Hindustan Ltd. Palia Unit, who was authorized to file the criminal complaint in the Court of law against Sumac International Ltd., its Directors and other officers and also authorized to do and cause to do such acts, deeds and things and execute and cause to be executed all such documents, instruments, writings etc. as required in connection with the said complaint. Along with the complaint, documents were also filed and this Board resolution dated 13.12.1993 was filed as document no.1.
xiv) After filing of the complaint on 07.03.1994, Sri R.A. Faruqui recorded his own statement under section 200 Cr.P.C.
xv) After the statement of only Sri R.A. Faruqui, no other witness was presented by M/s Bajaj Hindustan Ltd. to record their statements in support of the complaint.
xvi) After statement under section 200 Cr.P.C., the Magistrate took the cognizance of the offence and issued the summoning order on 12.04.1994 without taking any evidence under section 202 Cr.P.C.
xvii) After appearance of the accused persons namely, applicant nos. 2 and 3 numerable opportunities were taken by M/s Bajaj Hindustan Ltd. to produce witnesses under section 244 Cr.P.C.
xviii) The applicants no.2 and 3 continued to appear in the court and other co-accused persons of the complaint case namely V.K. Singhal, Kamal Jeet Singh, Rajiv Arora and C.S. Shinde did not appear in the Court.
xix) On 02.02.1998, an application was moved on behalf of M/s Bajaj Hindustan Ltd. in the Court of Magistrate that the case against the applicant nos. 2 and 3 namely, Awadhesh Kumar Verma and O.P. Rastogi be continued and the case against other co-accused persons namely V.K. Singhal, Kamal Jeet Singh, Rajiv Arora and C.S. Shinde be separated. The cases against other co-accused were separated and the case against applicant nos. 2 and 3 continued under section 244 Cr.P.C.
xx) On 04.04.1998, the complainant did not produce any evidence under section 244 Cr.P.C. and the case was adjourned for 17.04.1998 for evidence under section 244 Cr.P.C.
xxi) For several years no evidence under section 244 Cr.P.C. were adduced and on 26.07.2013 the Court gave last opportunity to produce evidence under section 244 Cr.P.C. and the case was adjourned to 10.09.2013.
xxii) On 21.01.2015 the Magistrate closed the evidence under section 245 Cr.P.C.
xxiii) On 24.03.2015, an application was moved for recalling the order dated 21.01.2015 and also for giving an opportunity to produce evidence under section 244 Cr.P.C.
xxiv) On 28.01.2016, the applicants moved an application in the Court of Magistrate for discharge under section 245 Cr.P.C. on the ground that the last opportunity was given to the complainant to produce evidence on 26.07.2013 and on 21.01.2015, the evidence under section 244 Cr.P.C. was closed.
xxv) Thereafter, the case was adjourned on several dates and on 19.09.2016 the application dated 24.03.2015 filed by M/s Bajaj Hindustan Ltd. was allowed and once again M/s Bajaj Hindustan Ltd. was allowed to give evidence under section 244 Cr.P.C. on payment of Rs.2,000/- as cost and the case was fixed for 17.10.2016, while no orders were passed on the application filed by the applicants for their discharge under section 245 Cr.P.C.
xxvi) On 17.10.2016, again the evidence under section 244 Cr.P.C. was not produced and an application was moved by M/s Bajaj Hindustan Ltd. through counsel who had no authority for seeking time to deposit the amount of cost and the case was again adjourned to 18.11.2016 for evidence under section 244 Cr.P.C.
xxvii) Even after 19.09.2016, no evidence was submitted by M/s Bajaj Hindustan Ltd. under section 245 Cr.P.C. and again on 19.01.2017, M/s Bajaj Hindustan Ltd. obtained exemption for the appearance in the Court.
xxviii) On 26.04.2017, the Magistrate without giving any reasons allowed the application of M/s Bajaj Hindustan Ltd. submitting the list of fresh witnesses posting the matter for 27.04.2017 for evidence under section 244 Cr.P.C. On 26.04.2017 another order was passed whereby on the inability of the counsel for M/s Bajaj Hindustan Ltd. to produce evidence on 27.04.2017, the matter was posted for 28.04.2017. While allowing the fresh list of witnesses of M/s Bajaj Hindustan Ltd., the Magistrate did not give any reasons.
xxix) On 28.04.2017, the applicants filed objections before the Magistrate to the effect that the Magistrate should first of all examine the witnesses under section 245 Cr.P.C. whose names have been given in the complaint and only thereafter must allow the witnesses of supplementary list to be examined under section 244 Cr.P.C.
xxx) The Magistrate rejected the objection of the applicants vide order dated 28.04.2017, on the ground that the witnesses of supplementary list was present and since the Hon'ble High Court has given one months time to decide the case so it is not necessary that whether M/s Bajaj Hindustan Ltd. first produces the witnesses of the complaint list or the supplementary list because that will not make any difference in the case.
xxxi) On 26.04.2017, the applicants' brought to the notice of the Magistrate that after the death of Sri R.A. Farooqui, the complainant, no one has replaced him and no specific authorization by the Board of Bajaj company has been placed on record and witnesses submitted along with the complaint have not been produced till date even after 23 years as noted in the High Court order to pursue the complaint. Hence the complaint cannot be continued.
xxxii) On 27.04.2017, the Court passed the order to start the evidence. The Magistrate asked M/s Bajaj Hindustan Ltd. to file the necessary authorization in 2 days and allowed them to go ahead with the evidence of fresh witnesses under section 244 Cr.P.C.
xxxiii) On 28.04.2017, objections on behalf of applicants was filed against the submission of fresh list of witnesses by M/s Bajaj Hindustan Ltd. which was rejected by the Magistrate and since order to commence evidence has already been passed on 27.04.2017, evidence of Sri Munna Lal Chaudhary commenced as complainant with an assurance that he will file his authorization letter of the Board.
xxxiv) Evidence of Munna Lal Chaudhary was completed and during his cross-examination, he admitted being a complainant substituting the dead earlier complainant late Farooqui but towards the end in Q 67, he backed out as a complainant.
xxxv) On 08.05.2017 when no authorization was filed by the Board of Directors of M/s Bajaj Hindustan Ltd. and in view of the fact that Sri Munna Lal Chaudhary was produced as a complainant who himself denied being a complainant, ultimately the accused filed an appropriate application. The application stated that since no specific authorization to nominate a complainant has been filed by the M/s Bajaj Hindustan Ltd., the complaint cannot continue since it is not maintainable in the eyes of law and the accused have to be discharged under section 245 Cr.P.C. The accused filed the above application dated 08.05.2017 on the basis of the orders of the Hon'ble High Court in case no. 7259 of 2016 dated 04.04.2017.
xxxvi) On 09.05.2017, in response to the above application M/s Bajaj Hindustan Ltd. filed a Board resolution dated 21.06.2013 at 4.00 pm appointing one Mr. Jyala working as Factory Manager and authorized him as complainant in the said complaint. The said authorization does not come under the purview of authorization as per section 291 of the Companies Act, 1956 for the purpose of the complaint and is not similar to as given in 1994 by the Board of Directors of M/s Bajaj Hindustan Ltd. Appointing/ authorzing Mr. R.A. Farooqui as a complainant.
xxxvii) The application under Section 245 Cr.P.C. has been rejected vide order dated 17.10.2017 and case was fixed for resuming evidence under section 244 Cr.P.C. on 31.10.2017.
03. Mr. Salil Srivastava, learned counsel for the applicants submitted that the complaint reveals that there is forgery in the collaboration agreement with M/s Polymax Inc. Australia, specially in view of the fact that along with the complaint only one page of the agreement has been filed and the entire agreement was not filed, whereby the complainant tried to set up the case of forgery while factually the entire agreement was duly signed by the Indian High Commissioner in Australia followed by approval by Government of India before signing of the contract and as such no offence against the present applicants in respect of forgery as alleged can be said to have been made out.
04. The learned counsel for the applicants further contended that filing of the Company Petition before the Company Court in the year 1994, the complainant side had issued a statutory legal notice under the provisions of Companies Act in order to enable them to file the Company Petition before the Court of competent jurisdiction, whereby, it is evident that there was civil litigation by executing first agreement, modified agreement, legal notices under Companies Act, and filing of the Company Petition before the Company Court, whereby, it can be said that there is no component and contents of the criminal offences for which criminal proceedings have been initiated which are prolonging before the Court of Magistrate for about 23 years and the applicants are suffering the agony of criminal trial, specially when no offence against the applicants is made out and the continuance of criminal proceedings pursuant to the impugned complaint against the applicants is futile exercise of criminal jurisdiction resulting into the abuse of the process of the law.
05. It is submitted that the applicants entered into contractual agreement duly signed by the parties to the agreement after due deliberations, for the purposes of expansion of Sugar Mill of complainant at Palia, District Lakhimpur Kheri and the agreement/purchase orders signed by the parties to the agreement entering into contractual relationship, are reflective of facts that there was stipulation clause that in case of any dispute or differences between the parties to the agreement, the same can very well be resolved by resorting to the arbitration for which arbitration clause was provided therein which has been admitted by the complainant side. He further contended that the initiation of criminal prosecution pursuant to the impugned complaint is a sort of futile exercise and continuance of the criminal proceedings before the court below is by way of harassment to the applicants and will be of no significance specially, when the rights of the parties can very well be adjudicated by the Arbitrator as stipulated in the agreement deed.
07. The learned counsel submitted that the contents of the impugned complaint filed by M/s Bajaj Hindustan Ltd. contemplates the purchase order and agreement, which is a sort of contractual relationship between the parties to the agreement which has been converted into criminal prosecution by way of criminal complaint. He further contended that in the criminal case pursuant to the impugned complaint is prolonging for last about 23 years and the groundless criminal proceeding on the basis of the complaint is tantamount to the resulting into the abuse of the process of law. In view of the fact that about 100 dates were fixed within the span of 17 years under section 244 Cr.P.C. but no evidence under section 244 Cr.P.C. was lead by the complainant and as such, it is obvious that criminal prosecution on the basis of impugned complaint is a sort of harassment to the accused by dragging the criminal prosecution founded upon the contractual relationship coupled with the fact that there is an arbitration clause for which efficacious remedy is available.
08. Learned counsel for the applicants contended that it is well established that entire criminal prosecution is tainted with malafide on the part of the complaint having regard to the fact that the continuance of criminal proceedings prolonging for 17 years only at the stage of section 244 Cr.P.C. is a sort of harassment to the applicants and the prosecution on the basis of complaint is going on for last 23 years and as such it is a fit case in which the jurisdiction under Section 482 Cr.P.C. of this Hon'ble Court is required to be invoked to quash the same.
09. Counsel for the applicants contended that the order dated 19.09.2016 passed by the Magistrate by recalling and setting aside the order dated 21.01.2015, whereby the evidence under section 244 Cr.P.C. was closed by the learned predecessor Magistrate, is in clear violation of the statutory bar envisaged under section section 362 Cr.P.C. and the order dated 19.09.2016 is wholly erroneous and non-est in the eye of law and deserves to be quashed in view of the fact that the successor Magistrate cannot set aside or recall the order passed by the predecessor Magistrate.
10. The application moved by the accused under section 245(2) Cr.P.C. has been erroneously rejected by the learned Magistrate by means of an order dated 17.10.2017 without considering this aspect of the matter that no witness as mentioned in the list of witnesses filed under section 204(2) Cr.P.C. was adduced by the complainant side under section 244 Cr.P.C. and as such the applicant/accused was entitled to be discharged under section 245(2) Cr.P.C. and the order passed by the Magistrate rejected the application is wholly erroneous in view of the fact that the same is not founded upon appreciation of evidence which was condition precedent for the purposes of adjudication of consideration of question of discharge.
11. Counsel for the applicants further contended that the complaint was filed, the statement of complainant was recorded and no other oral evidence was led under section 202 Cr.P.C. except those documents which form part of complaint and thus it was incumbent upon the Magistrate to have considered the principles envisaged under section 33 of the Evidence Act, which deals with the legal position that the statement of the witness recorded on the basis of the complainant can only be read when the accused has an opportunity to cross examine the complainant and since the complainant is now dead, the opportunity of the accused to cross-examine the complainant is vanished and as such the statement so recorded cannot be read as contemplated under section 33 of the Evidence Act and in absence of any other oral evidence the applicant was entitled to be discharged for which he had moved an application under section 245(2) Cr.P.C. The Magistrate concerned while rejecting the application for discharge under section 245(2) Cr.P.C. has not dealt with any evidence upon which the prosecution relied upon in support of the complaint and thus the order passed by the Magistrate rejecting the application for discharge under section 245(2) Cr.P.C. is erroneous in law and deserves to be quashed on this ground alone in view of the fact that reason for rejection of application on the basis of evidence was required to have been given.
12. Learned counsel for the applicants has submitted that copy of one page of the collaboration agreement has been filed by the complainant by saying it to be a sort of forgery against the accused persons and as such the applicants filed the collaboration agreement in its entirety before this Hon'ble Court, which can very well be looked into in exercise of powers under section 482 Cr.P.C. as laid down by the Supreme Court in the case of Rajiv Thapar Vs. Madan Lal [2013 (3) SCC 330].
13. The counsel for the applicants contended that in the case of State of Haryana Vs. Bhajan Lal [1992 (Supp.1) SCC 335] the Hon'ble Apex Court propounded 7 principles for invoking jurisdiction of the High Court under section 482 Cr.P.C. to quash the criminal prosecution, if it is established that the continuance of the criminal prosecution is tantamount to the resulting into abuse of process of the Court and the applicant, out of 7 principles stipulated in the judgment, relies upon clause 3 and clause 5of the aforesaid judgment.
14. Sri Amit Chaudhry, learned counsel appearing for opposite party no.2 vehemently opposed the contentions made by the learned counsel for the applicants. It is submitted that the present petition under section 482 Cr.P.C. is not maintainable for the reason that for the same reliefs, sought by the applicants, two petitions had been filed earlier numbered as Crl. Misc. Case No. 245 of 1995 and Crl. Misc. Case No. 7259 of 2016. He further contended that the impugned order dated 17.10.2017 passed by the court concerned is a reasoned order which is final in nature against which the proper remedy was by way of filing a criminal revision in this Hon'ble Court, thus, the present petition deserves to be dismissed seeking indulgence from the Hon'ble Court through improper remedy.
15. He further contended that the order passed by the concerned Magistrate is a well reasoned order and has been passed after considering the grounds raised by the applicants. He relied on Onkar Nath Mishra Vs. State (NCT of Delhi), 2008 (2) SCC 561, wherein the Hon'ble Apex Court has held as under:
"11. It is trite that at the stage of framing of charge the court is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom, taken at their face value, disclosed the existence of all the ingredients constituting the alleged offence. At that stage, the court is not expected to go deep into the probative value of the material on record. What needs to be considered is whether there is a ground for presuming that the offence has been committed and not a ground for convicting the accused has been made out. At that stage, even strong suspicion founded on material which leads the court to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged would justify the framing of charge against the accused in respect of the commission of that offence."
16. Learned counsel for opposite party no.2 further contended that the genesis of the purchase order was the alleged agreement that the applicants company had with Polymax, Australia. The applicants had agreed that the machines supplied to the complainant would be as per the design and specifications of Polymax Australia. Despite demand being raised by the complainant for providing the copy of the agreement between Sumac International Pvt. Ltd. and Polymax Australia, the same was not provided and after persistent demands only a Photostat copy of the first page of the said agreement was provided. The applicants knew it fully well that they did not have the capacity to fulfill the specifications of the machines wanted by the complainant and complainant would not have entered into a contract with them unless the applicants could show to the complainant that they indeed have the capacity to fulfill the complainant's demand, therefore they mislead the complainant into believing that they had an agreement with Polymax Australia, and thereby induced the complainant into paying Rs.75 lacs as part payment of the contract. When the complainant realized that the applicants had misled the complainant into entering into an agreement and paying Rs.75 lacs, it rescinded the contract and demanded a refund of the advance and when the same was not done by the applicants, then the complaint was filed against the applicants.
17. Sri Chaudhry further submitted that the applicants have also relied upon the arbitration clause of the purchase order between the applicants and the complainant but it was not disclosed by them that the said remedy has been refused by the Hon'ble High Court vide order dated 01.09.2017 passed in Arbitration Application No. 39 of 2017 M/s Sumac International Ltd. Lucknow through Managing Director Vs. M/s Bajaj Hindustan Sugar Ltd. Lakhimpur Kheri. He further contended that the Apex Court has held in the case of S.W. Palanitkar and others Vs. State of Bihar and another [2002 (1) SCC 241] that "merely because there is an arbitration clause in the agreement that cannot prevent criminal prosecution against the accused if an act constituting a criminal offence is made out even prima-facie."
18. I have gone through the impugned order and have also appreciated the contentions of both the sides.
Before I proceed to examine the impugned order of the court below and the facts of the case, it may be desirable to refer the settled legal principles which have to be applied in the instant case.
19. The section 204(2) Cr.P.C. uses the words, 'list of prosecution witnesses' which was filed by the complainant before summoning order passed on the complaint and section 244 Cr.P.C. also contemplates 'prosecution witnesses' meaning thereby that for the purposes of prosecuting the accused, entire witnesses as mentioned in the list of section 204 Cr.P.C. should have been produced by the complainant to prosecute the accused; specially when no prosecution witness from that list as mentioned above has ever been produced in order to enable the Magistrate to form an opinion to frame the charge against the accused under section 245(1) of Cr.P.C. which deals with entire evidence under section 244 Cr.P.C. and failure on the part of the complainant to lead the evidence under section 244 r/w 204(2) Cr.P.C. the accused applicants having no other option except to invoke section 245(2) Cr.P.C. to claim discharge.
20. The documents in the form of agreements are the basis of Company Petition No. 2 of 1994, pending before the Company Court being in High Court in original side, and the genuineness and forgery of those documents can very well be decided by the Company Court on the basis of the evidence led by respective parties and as such the instant criminal complaint pending before the court below is statutorily barred by section 195/340 r/w 192 Cr.P.C. and the impugned criminal prosecution by way of criminal complaint in respect forgery of documents as alleged at the instance of 'Court' as defined under section 195 Cr.P.C. would be permissible and the criminal prosecution by way of instant criminal complaint at the instance of private complainant would be impermissible in view of the fact that section 195 of Cr.P.C. provides that no Court shall take cognizance in respect of cheating and forgery etc. can be instituted except on complaint in writing of that Court.
21. In the case of Ram Narayan Poply Vs. C.B.I. [2003(3) SCC 661] dealing with the question of attractability of the provisions of sections 420, 467, 468, 471 IPC, under which the applicants have been summoned, have been elaborately dealt as follows:
"366. Section 420 deals with cheating and dishonestly inducing delivery of property. The offence of cheating is made of two ingredients. Deception of any person and fraudulently or dishonestly inducing that person to deliver any property to any person or to consent that any person shall retain any property. To put it differently, the ingredients of the offence are that the person deceived delivers to some one a valuable security or property, that the person so deceived was induced to do so, that such person acted on such inducement in consequence of his having been deceived by the accused and that the accused acted fraudulently or dishonestly when so inducing the person. To constitute the offence of cheating, it is not necessary that the deception should be by express words, but it may be by conduct or implied in the nature of the transaction itself.
367. Section 467 relates to forgery of such documents as valuable securities and of other documents mentioned.
368. Section 468 deals with forgery for the purpose of cheating. The offence is complete as soon as there was forgery with a particular intent.
369. Section 471 deals with using as genuine a forged document. For the purpose of convicting an accused under section 467 read with section 471 IPC, it has to be show that an accused either knew or has reason to believe that the document was forged.
370. Section 463 defines forgery and section 464 deals with making a false statement. Section 463 reads as follows.
"463. Forgery-[Whoever makes any false documents or false electronic record or part of a document or electronic record, with intent to cause damage or injury], to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery."
371. In order to constitute forgery, the first essential is that the accused should have made a false document. The false document must be made with an intent to cause damage or injury to the public or to any class of public or to any community.
372. The expression 'intent to defraud' implies conduct coupled with intention to deceive or thereby to cause injury. In other words, defraud involves two conceptions namely, the deceit and injury to the person deceived, that is infringement of some legal right possessed by him but not necessarily deprivation of property. The term 'forgery' as used in the statute is used in its ordinary and popular acceptations.
373. The definition of the offence of forgery declares the offence to be completed when a false document or false part of a document is made with specified intention. The questions are (i) is the document false (ii) is it made by the accused and (iii) is it made with an intent to defraud. If at all the questions are answered in the affirmative, the accused is guilty."
22. The criminal complaint instituted before the court below reveals the forgery by saying that copy of one page of collaboration agreement has been filed by the complainant against the accused and the applicant filed the collaboration agreement in its entirety duly signed by counsel General of India in Australia before the court below as well as before this Hon'ble Court which can very well be looked into in exercise of powers under section 482 Cr.P.C. as laid down by the Hon'ble Apex Court in view of the fact that a document which touches the very sustainability of the criminal prosecution can very well be looked into by this Court by invoking the inherent powers under section 482 Cr.P.C. in view of the fact that criminal court dealing with the matter is not empowered to consider those documents upon which the accused relied upon and as such the inherent jurisdiction of this Hon'ble Court is being invoked for the purposes of considering and establishing that no forgery can be said to have been made out against the present applicants as mentioned in the complaint in view of the principles of law laid down by Hon'ble Apex Court in Rajiv Thapar's case (Supra),wherein it has been laid down that if, a document is of sterling character touching the very sustainability of the criminal prosecution can only be looked into by the High Court in exercise of inherent power under section 482 Cr.P.C. not by the court below.
23. In the case of Indra Mohan Goswamy Vs. State of Uttranchal [2007 (12) SCC 1] intention to cheat with fraudulent dishonest from its inception even at the initial stage and in order to hold a person guilty of cheating, it is necessary to show that the fraudulent and dishonest intention at the time of making of the promise is necessarily desirable and mere failure to subsequently keep a promise, it cannot be assumed that he had all along with culpable intention to breach the promise from the very beginning, so as to constitute the cheating while admittedly there is a contractual agreement between the parties to the agreement which was entered into and signed by the parties to it after due deliberations made on different dates and as such the offence of forgery and cheating cannot be said to have been established from the contents of the complaint filed by complainant in order to prosecute the applicants in the instant case and it is also well established that civil remedy should not be permitted to be converted into a criminal action in order to create a pressure upon the accused. In in the case of Indra Mohan Goswamy (Supra), the Apex Court held as under:
"30. The court noticed that the tendency of perjury is very much on the increase. Unless the courts come down heavily upon such persons, the whole judicial process would come to ridicule. The court also observed that chagrined and frustrated litigants should not be permitted to give vent to their frustration by cheaply invoking jurisdiction of the criminal court."
24. In the case of State of Karnataka Vs. L. Munniswamy [1977 (2) SCC 699], the Hon'ble Apex Court has propounded that the wholesome power under section 482 Cr.P.C. entitles the High Court to quash the proceedings and if it comes to the conclusion that allowing proceedings to continue would result into abuse of process of Court and the criminal proceedings pending before the court below ought not to be permitted to degenerate by way of weapon of harassment in the form of criminal prosecution and as such inherent jurisdiction is sought to be invoked for quashing the entire proceedings for which the applicant is suffering the agony of criminal trial and the aforesaid view has been reiterated by the Apex Court in the case of Pepsi Food Ltd. and another Vs. Special Judicial Magistrate and others [1998 (5) SCC 749] has held as under:
"28. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. it is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused."
25. The inherent power under section 482 cr.P.C. is to do the right and undo a wrong in the course administration of justice on the principle "quando lex aliquid alicue concedit, concedere videturid sine quo res ipsa esse non potest" (when the law gives a person anything, it gives him that without which it cannot exist). Section 482 Cr.P.C. envisage three circumstances under which the inherent jurisdiction may be exercised.
i) to give effect to an order under the Cr.P.C.
ii) to prevent abuse of the process of Court; and
iii) to otherwise secure the ends of justice.
This power is to be exercised exdebito justitia to do real and substantial justice for the administration of which above courts exist.
26. In Weain V. HNH International Holdings Ltd. [2014] EWHC 3542 (Ch), Mr. Justice Barling Struck out a claim for delay, holding that the claimant's delay amounted to an abuse of process. There are also a few interesting observations about the role of experts and a detailed consideration of the principles relating to striking out an action where delay amounts to an abuse of process.
27. In Williams V. Spautz, Mason CJ, Dawson, Toohey and McHugh JJ pointed to two important reasons for the existence of the doctrine.
"The first is that the public interest is the administration of justice requires that the court protect its ability to function as a Court of law by ensuring that its processes are used fairly by State and citizen alike. The second is that, unless the Court protects its ability so to function is that way, its failure will lead to an erosion of public confidence by reason of concern that the Court's processes may lend themselves to oppression and injustice."
28. More recently in Moti V. The Queen [2011] HCA 50, the High Court [French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ] confirmed two broad purposive categories of abuse of process:
"The third basic proposition is that as pointed out in the joint reasons of four members of this Court in Williams V. Spautz [76], two fundamentals policy considerations affect abuse of process in criminal proceedings. First; the public interest in the administration of justice requires that the court protect its ability to function as a Court of law by ensuring that its processes are used timely by State and citizen alike; Second, "unless the Court protects its ability so to function in that way, its failure will lead to an erosion of public confidence by reason of concern that the Court's processes may lend themselves to oppression and injustice. "Public confidence in this context refers to the trust reposed constitutionally in the Court to protect the integrity and fairness of their processes. The concept of abuse of process extends to use of the Courts" processes is a way that is inconsistent with those fundamental requirements."
29. In Prabatbhai Aahir @ Prabatbhai and others Vs. State of Gujarat and another [(2017) 9 SCC 641], the Hon'ble Apex Court has held as under:
"13. The same principle was followed in Central Bureau of Investigation v Maninder Singh by a bench of two learned Judges of this Court. In that case, the High Court had, in the exercise of its inherent power under Section 482 quashed proceedings under Sections 420, 467, 468 and 471 read with Section 120-B of the Penal Code. While allowing the appeal filed by the Central Bureau of Investigation Mr Justice Dipak Misra (as the learned Chief Justice then was) observed that the case involved allegations of forgery of documents to embezzle the funds of the bank. In such a situation, the fact that the dispute had been settled with the bank would not justify a recourse to the power under Section 482:
"...In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large. It is not a case of simple assault or a theft of a trivial amount; but the offence with which we are concerned is well planned and was committed with a deliberate design with an eye of personal profit regardless of consequence to the society at large. To quash the proceeding merely on the ground that the accused has settled the amount with the bank would be a misplaced sympathy. If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved."
14. In a subsequent decision in State of Tamil Nadu v R Vasanthi Stanley5, the court rejected the submission that the first respondent was a 4 (2016) 1 SCC 389 5 (2016)1 SCC 376 woman "who was following the command of her husband" and had signed certain documents without being aware of the nature of the fraud which was being perpetrated on the bank. Rejecting the submission, this Court held that:
"... Lack of awareness, knowledge or intent is neither to be considered nor accepted in economic offences. The submission assiduously presented on gender leaves us unimpressed. An offence under the criminal law is an offence and it does not depend upon the gender of an accused. True it is, there are certain provisions in Code of Criminal Procedure relating to exercise of jurisdiction Under Section 437, etc. therein but that altogether pertains to a different sphere. A person committing a murder or getting involved in a financial scam or forgery of documents, cannot claim discharge or acquittal on the ground of her gender as that is neither constitutionally nor statutorily a valid argument. The offence is gender neutral in this case. We say no more on this score..." "...A grave criminal offence or serious economic offence or for that matter the offence that has the potentiality to create a dent in the financial health of the institutions, is not to be quashed on the ground that there is delay in trial or the principle that when the matter has been settled it should be quashed to avoid the load on the system..."
15. The broad principles which emerge from the precedents on the subject, may be summarised in the following propositions :
(i) Section 482 preserves the inherent powers of the High Court to prevent an abuse of the process of any court or to secure the ends of justice. The provision does not confer new powers. It only recognises and preserves powers which inhere in the High Court;
(ii) The invocation of the jurisdiction of the High Court to quash a First Information Report or a criminal proceeding on the ground that a settlement has been arrived at between the offender and the victim is not the same as the invocation of jurisdiction for the purpose of compounding an offence. While compounding an offence, the power of the court is governed by the provisions of Section 320 of the Code of Criminal Procedure, 1973. The power to quash under Section 482 is attracted even if the offence is non-compoundable.
(iii) In forming an opinion whether a criminal proceeding or complaint should be quashed in exercise of its jurisdiction under Section 482, the High Court must evaluate whether the ends of justice would justify the exercise of the inherent power;
(iv) While the inherent power of the High Court has a wide ambit and plenitude it has to be exercised; (i) to secure the ends of justice or (ii) to prevent an abuse of the process of any court;
(v) The decision as to whether a complaint or First Information Report should be quashed on the ground that the offender and victim have settled the dispute, revolves ultimately on the facts and circumstances of each case and no exhaustive elaboration of principles can be formulated;
(vi) In the exercise of the power under Section 482 and while dealing with a plea that the dispute has been settled, the High Court must have due regard to the nature and gravity of the offence. Heinous and serious offences involving mental depravity or offences such as murder, rape and dacoity cannot appropriately be quashed though the victim or the family of the victim have settled the dispute. Such offences are, truly speaking, not private in nature but have a serious impact upon society. The decision to continue with the trial in such cases is founded on the overriding element of public interest in punishing persons for serious offences;
(vii) As distinguished from serious offences, there may be criminal cases which have an overwhelming or predominant element of a civil dispute. They stand on a distinct footing in so far as the exercise of the inherent power to quash is concerned;
(viii) Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations fall for quashing where parties have settled the dispute;
(ix) In such a case, the High Court may quash the criminal proceeding if in view of the compromise between the disputants, the possibility of a conviction is remote and the continuation of a criminal proceeding would cause oppression and prejudice; and
(x) There is yet an exception to the principle set out in propositions (viii) and
(ix) above. Economic offences involving the financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance.
16. Bearing in mind the above principles which have been laid down in the decisions of this Court, we are of the view that the High Court was justified in declining to entertain the application for quashing the First Information Report in the exercise of its inherent jurisdiction. The High Court has adverted to two significant circumstances. Each of them has a bearing on whether the exercise of the jurisdiction under Section 482 to quash the FIR would subserve or secure the ends of justice or prevent an abuse of the process of the court. The first is that the appellants were absconding and warrants had been issued against them under Section 70 of the Code of Criminal Procedure, 1973. The second is that the appellants have criminal antecedents, reflected in the chart which has been extracted in the earlier part of this judgment. The High Court adverted to the modus operandi which had been followed by the appellants in grabbing valuable parcels of land and noted that in the past as well, they were alleged to have been connected with such nefarious activities by opening bogus bank accounts. It was in this view of the matter that the High Court observed that in a case involving extortion, forgery and conspiracy where all the appellants were acting as a team, it was not in the interest of society to quash the FIR on the ground that a settlement had been arrived at with the complainant. We agree with the view of the High Court. The present case, as the allegations in the FIR would demonstrate, is not merely one involving a private dispute over a land transaction between two contesting parties. The case involves allegations of extortion, forgery and fabrication of documents, utilization of fabricated documents to effectuate transfers of title before the registering authorities and the deprivation of the complainant of his interest in land on the basis of a fabricated power of attorney. If the allegations in the FIR are construed as they stand, it is evident that they implicate serious offences having a bearing on a vital societal interest in securing the probity of titles to or interest in land. Such offences cannot be construed to be merely private or civil disputes but implicate the societal interest in prosecuting serious crime. In these circumstances, the High Court was eminently justified in declining to quash the FIR which had been registered under Sections 384, 467, 468, 471, 120-B and 506(2) of the Penal Code.
30. In the case of State of Haryana vs. Bhajan Lal [1992 (Supp.1) SCC 335] the Hon'ble Apex Court has laid down seven principles for invoking the inherent jurisdiction under section 482 Cr.P.C. to quash the criminal prosecution if it is demonstrated before this Hon'ble Court that continuance of the criminal prosecution will tantamount resulting in to abuse of the process of the Court. Clause 3 and 5 of the aforesaid judgment are reproduced as under:
"3. Where the uncontroverted allegation made in the First Information Report 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.
5. Where the allegations made in the First Information Report or complaint are so absurd and inherently improbable on the basis of which no prudent person can never reach a just conclusion that there is sufficient ground for proceedings against the accused."
31. In view of the fact that the Magistrate concerned has ignored this aspect of the matter that criminal proceedings upon the impugned complaint prolonged for 23 years and the proceeding under section 244 even upon more than 100 dates were fixed during the span of 17 but in vain and no witness has been produced in support of the assertions made in the complaint and the Magistrate concerned did not take care of and rejected the application under section 245(2) Cr.P.C. without categorically recording any finding of satisfaction as contemplated under section 245(2) Cr.P.C.
32. The Magistrate waiting for more than 100 dates by affording opportunity to the complainant to legal evidence of witnesses under section 244 Cr.P.C. within the span of 17 years resultantly closed the evidence by means of an order dated 21.01.2015 and the same was recalled and set aside by successor Magistrate by means of an order dated 16.09.2016 dealing with the case against the statutory prohibition as envisaged under section 362 Cr.P.C. It is admitted fact that the matter has been pending since 07.03.1994 more than 23 years. The pendency of the criminal proceedings against the applicant of such long time is nothing but an abuse of process of the Court.
33. The petitioners undisputedly are facing the agony of criminal trial since last 23 years and the continuance of the criminal proceedings pursuant to the impugned complaint did not disclose any sort of criminal liabilities in resulting the abuse of process of the Court specially when remedy by way of arbitration clause, penalty clause and also by way of civil action for which civil remedy has been resorted to by the complainant himself is permissible under law.
34. While looking into consideration the special facts and circumstances of the case and having considered the arguments advanced on behalf of both the parties, the petition under section 482 of the Code of Criminal Procedure deserves to be allowed. The proceedings of the Criminal Case No. 702 of 1994, subsequent Nos. 3226 of 2015 and 890 of 2017 (Bajaj Hindustan Ltd. Vs. Sumac International Ltd. and another), pending in the court of Judicial Magistrate, Lakhimpur Kheri as also the order dated 17.10.2017 passed by Judicial Magistrate, Lakhimpur Kheri in the aforesaid complaint case, are quashed.
35. Accordingly, the application under section 482 Cr.P.C. is allowed.
[Chandra Dhari Singh, J] Order Date :- March 16th, 2018 Prajapati