Jharkhand High Court
R.S.S.L.N.Bhaskarudu vs State Of Bihar & Anr. on 21 December, 2011
Author: H.C.Mishra
Bench: H.C.Mishra
Cr.W.J.C No.130 of 1999 (R )
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In the matter of an application under Article 226 and 227 of the Constitution
of India.
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R.S.S.L.N. Bhaskarudu ----- Petitioner
-Versus-
1.The State of Bihar (Now State of Jharkhand)
2. Gurnam Singh ----- Respondents.
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For the Petitioner : Mr.Delip Jerath, Sr.Advocate
For the Complainant : Mr.Deepak Kumar Bharati, Advocate
For the State : Mr.Rajesh Kumar, G.P.-V.
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Present
THE HON'BLE MR.JUSTICE H.C.MISHRA
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C.A.V On :- 21.12.2011 Delivered On: - 05/01/2012
H.C.Mishra, J. This writ application has been filed by the petitioner, being the
Chairman cum Managing Director of Maruti Udyog Limited, who has been made accused in Chutia P.S Case No. 78 of 1999, corresponding to G.R case no. 1355 of 1999 for the offence under Sections 406 / 34 of the Indian Penal Code, praying herein for quashing the entire criminal proceeding as against him in the said criminal case.
2. The facts of the case lie in a very short compass. The opposite party no.2, Gurnam Singh had filed a complaint case in the Court of Chief Judicial Magistrate, Ranchi, which was registered as Complaint Case no. 308 of 1999. In the said complaint case, petitioner was made one of the accused persons alongwith the others, who were the officials and executives of M/s Ashish Automobiles, Main Road, Ranchi as also, one Sri M.K.Somani, the Managing Director of Somani Swiss Industries Limited, having its registered office at Kolkata. The complainant has alleged that the petitioner, who was the accused no. 3 in the said complaint case, was the owner of Maruti 2 Vehicles and had floated a scheme for sale of Maruti Vehicles through their authorized dealers, one of them being accused no. 2, Sri M.K.Somani, who used to book the car through their Sales Executives namely, accused nos. 1 and 4 who were the Sr. Executive and Sales Officer of M/s Ashish Automobiles Limited. The complainant, accordingly, contacted accused nos. 1 and 4 and they agreed to accept the price of one Maruti Car upon getting clearance from the accused no. 2 Sri M.K.Somani who was at Kolkata and consequently, with the approval of Sri M.K.Somani, one Maruti vehicle was booked by the complainant after paying the price for the same, which he had arranged after taking loan from the Punjab National Bank at the interest of 18% per annum. According to the complainant's case, in spite of deposit of the price of the car, the car was not delivered to him and hence, the complaint petition was filed against the accused persons including the petitioner, being the Chairman cum Managing Director of M/s Maturi Udyog Limited.
3. So far as this petitioner is concerned, it is only alleged that the money was deposited in the name of Maruti Udyog Limited, of which, the petitioner was the Chairman cum Managing Director and in spite of assurance given by him, neither the car was delivered nor the money was refunded to the complainant.
4. The said complaint petition was sent for institution of the police case, on the basis of which, Chutia P.S case no. 78 of 1999, corresponding to G.R No.1355 of 1999 was instituted against the accused persons including this petitioner.
5. The petitioner has challenged the institution of the F.I.R against him, submitting inter alia, that even if all the facts stated in the complaint petition are accepted to be true, no offence is made out as against the petitioner. It has also been submitted that according to the complaint petition, the entire dealings was made with the other accused persons and not with this petitioner directly and only due to the fact that the petitioner is the Chairman cum Managing Director of Maruti Udyog Limited, the petitioner cannot be made vicariously 3 liable for the offences, if any, committed by the other accused persons. As such, the only question to be determined in this writ application is as to whether on the basis of the statements made in the complaint petition, any offence is made out against the petitioner being the Chairman cum Managing Director of the Maruti Udyog Limited.
6. From the plain reading of the complaint petition it appears that there is no allegation against the petitioner in the entire complaint petition, except stating that the petitioner is the owner of the Maruti Vehicles and had floated a scheme for sale of the Maruti Vehicles through his authorized dealers and that even though, the money was deposited in the name of Maruti Udyog Limited, of which, the petitioner is the Chairman cum Managing Director, neither the delivery of the car was made, nor the money was refunded to the complainant.
7. It may be pointed out at this stage that in paragraph 21 of the writ application, it is stated that the petitioner had been informed by the Chief Executive Officer of the Ashish Automobiles, Sri M.K.Somani that the booking amount deposited by the complainant along-with interest had been refunded to him being Rs.1,92,962/- towards principal and Rs.18,450/- towards interest, which amount has been duly received by the respondent no. 2 complainant. A counter affidavit has been filed by the respondent no. 2 complainant, in which, this paragraph has been replied in the following terms:
" xi) That with respect to the statements made in para 21 of the writ petition it is stated and submitted that the statements made therein are misconceived and not true to the extent that the petitioner in terms of the order Booking form dated 30.10.1998 had themselves agreed vide clause 2 of the terms and conditions of sales to pay interest @ 20% per annum on the payment of vehicle from the date of deposit and secondly vide letter dated 7th April 1999 the petitioner and representative had agreed 4 to pay extra interest @8% per annum over and above the M.U.L rate for the period of delay and hence in the above context the total interest arrived is @ 28% per annum on the amount of deposit, which the petitioner, his company or representatives are yet to make to the instant respondent to the extent of Rs.19,148.70 Paise which is still due on account of interest and hence the averment made in the aforesaid para of writ petition is squarely rejected."
8. This statement, thus, being a disputed question of fact, cannot be looked into in the writ jurisdiction and as such, I am not entering into the factual question whether the payment was actually made to the petitioner or not. The said averment of the complainant has been quoted only because it finds mentioned therein that the representative (herein the dealer) had also agreed to pay extra interest @8% per annum over and above the M.U.L rate for the period of delay. In this connection, a letter dated 7th April 1999 has been brought on record by the complainant as Annexure-A/1, issued by Ashish Automobiles, in reply to the legal notice given by the complainant, showing their inability to refund the amount or to deliver the car due to sudden cancellation of Sales Tax Registration, ordered by the Commercial Taxes Authorities due to the pending dispute before them and promising to pay the extra interest @ 8% per annum over and above the M.U.L rate.
9. It is, thus, clear from the above that the payment was made though in the name of Maruti Udyog Limited, but it was not paid to the petitioner directly, rather it was paid to the authorized dealer of the Maruti Udyog Limited and whatever transaction and dealings were there, they were with the authorized dealer and not with this petitioner directly. Though the documents have been brought on record, to show that the petitioner at his level had also tried to resolve the dispute between the complainant and the dealer, but the same could not be resolved by the petitioner. It appears from the Annexure A/1, brought on record by the respondent complainant himself, that there was some 5 genuine difficulty due to the cancellation of Sales Tax Registration of the dealer, due to which, neither the car could be delivered nor the money was refunded and the dealer Ashish Automobiles had agreed to make the payment of extra interest @8% per annum over and above the MUL rate for the period of the delayed delivery of the vehicle.
10. Learned counsel for the petitioner has submitted that the petitioner has been falsely implicated in this case, inasmuch as, it is well settled principle of law that the petitioner being only the Chairman cum Managing Director of Maruti Udyog Limited, cannot be held liable for the offence under Sections 406 / 34 of the Indian Penal Code by way of vicarious liability, which might have been committed by the dealer. Learned counsel has, accordingly, submitted that the initiation of the criminal case against this petitioner is absolutely bad in the eyes of law, apart of causing unnecessary harassment to the petitioner and has prayed for quashing the same.
11. In support of his contention, learned counsel for the petitioner has placed reliance upon an unreported Judgment dated 29.02.1996 of this Court in Criminal Miscellaneous No. 2932 of 1995 (R) in the case of B.S Bargava & Anr. Vs The State of Bihar & Anr., wherein in the similar case instituted against Maruti Udyog Limited, it was found that though the draft was issued in the name of Maruti Udyog Limited, but it was deposited with the dealers and not directly to the Maruti Udyog Limited. It was also found that there was no privity of contract between the complainant and the Maruti Udyog Limited. Accordingly, the criminal case instituted against the Company was quashed by this Court, holding that there cannot be any criminal liability on the face of it against the petitioner company though there might be some civil liability of the petitioner for getting the amount encashed.
12. Learned counsel has also drawn attention of this Court towards the decision of the Hon'ble Supreme Court of India in the case of Maharashtra State Electricity Distribution Company Limited and Anr. Versus Datar Switchgear Limited and Ors., reported in 6 2010 (10) SCC 479, in which, the Chairman of the Maharashtra State Electricity Board was made an accused for the offence under Sections 192 and 199 read with Section 34 of the Indian Penal Code, it was held as follows :-
"30. It is trite law that wherever by a legal fiction the principle of vicarious liability is attracted and a person who is otherwise not personally involved in the commission of an offence is made liable for the same, it has to be specifically provided in the statute concerned. In our opinion, neither Section 192 IPC nor Section 199 IPC incorporate the principle of vicarious liability, and therefore, it was incumbent on the complainant to specifically aver the role of each of the accused in the complaint. It would be profitable to extract the following observations made in S.K.Alagh {(2008)5 SCC 662 (p.667, para 19)}.
"19. As, admittedly, drafts were drawn in the name of the company even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a company or an employee cannot be held to be vicariously liable for any offence committed by the company itself." (Emphasis supplied).
13. Placing reliance on this decision, learned counsel submitted that in absence of any specific averment demonstrating the role of petitioner in the commission of the offence in the complaint petition, there is no criminal liability of the petitioner and as such, the petitioner could not have been made an accused in the complaint petition, or in the F.I.R lodged pursuant thereto. Learned counsel has, 7 accordingly, prayed that the continuation of the criminal proceeding against the petitioner is absolutely illegal and is fit to be quashed.
14. Learned counsel for the respondent complainant, on the other hand, submitted that it is well settled principle of law that the Chairman cum Managing Director is the trustee of the Company and if any offence is committed by the Company or its authorized agent, the Chairman is equally liable for the same. In support of his contention, learned counsel has placed reliance upon the decision of the Hon'ble Supreme Court of India in the case of Shivanarayan Laxminarayan Joshi and ors. Vs. State of Maharashtra and ors., reported in A.I.R 1980 SC 439, wherein, it has been held that the Managing Director of the company being the trustee of the assets, has sufficient dominion and control over the property of the company as well as, he is the trustee of the company.
15. Learned counsel for the respondent complainant has also placed reliance upon the decision of the Hon'ble Supreme Court of India in the case of K.K.Ahuja Vs. V.K.Vora and Anr., reported in 2009 (10) SCC 48, wherein, it has been held that the Managing Director is prima facie in charge of and responsible for the company's business and affairs and can be prosecuted for offences by the company.
16. Reliance has also been placed by the learned counsel for the complainant upon a decision of the Hon'ble Supreme Court of India in the case of Iridium India Telecom Limited Vs. Motorola Incorporated and Ors., reported in 2011 (1) SCC 74, wherein, it has been held that the criminal proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under Section 482 of the Cr.P.C. In the said case, it has also been held that the corporation may also be held 8 criminally liable for the acts of its officers or agent. Placing reliance on this decision, learned counsel submitted that at this initial stage, it is not a fit case for quashing the criminal proceeding against the petitioner.
17. After having heard learned counsels for both the sides and upon going through the record, I find that even if the allegations made in the complaint petition are taken in entirety against this petitioner, the only allegation against the petitioner is that the petitioner being the Chairman cum Managing Director of Maruti Udyog Limited is the owner of Maruti Vehicles, who had floated a scheme for sale of the vehicles through his authorized dealers and lastly, it has been stated that though the price of the car was deposited in the name of Maruti Udyog Limited, of which, this petitioner is the Chairman cum Managing Director, but neither the car was delivered to the complainant nor the money was returned back. Except this allegation, there is no other allegation against the petitioner in the entire complaint petition and whatever allegations are there, they are against the officials and executives of the authorized dealer to whom the payment was made and by whom, neither the delivery of the car was made to the complainant nor his money was refunded. It cannot be said that there was any mens rea on part of the petitioner at any stage of the transaction. Thus, I am of the considered view that in the given circumstances whatever liability of the petitioner is there, it may be civil liability, but there cannot be any criminal liability of the petitioner. Similar view has been taken by this Court in case of B.S Bargava (supra) in Criminal Miscellaneous No. 2932 of 1995(R) as referred above. This apart, in absence of any specific role assigned against the petitioner, in my considered view, no offence can be said to be made out against the petitioner and the petitioner cannot be said to have committed the offence under Section 406 of the penal Code by any legal fiction of the principle of vicarious liability, as it is well settled that if and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. The case of the petitioner is fully covered by the decision of the Hon'ble Supreme Court of India 9 in the case of Maharashtra State Electricity Distribution Company Limited (supra).
18. In view of the aforementioned discussion, I find and hold that though there may be civil liability of the petitioner, being the Chairman of the Maruti Udyog Limited to see that either the car was delivered to the complainant or his money was paid back with due interest, but so far as criminal liability is concerned, I find, there is no criminal liability of the petitioner in view of the fact that there is no specific allegation of any offence committed by the petitioner in the entire complaint petition and as such, the continuance of the criminal proceedings against the petitioner is absolutely illegal and cannot be sustained in the eyes of law.
19. In view of the aforementioned discussions, the FIR as well as the entire criminal proceeding in Chutiya P.S Case No. 78 of 1999 corresponding to G.R No. 1355 of 1999, so far as it relates to the petitioner only, is, hereby, quashed. This writ application is, accordingly, allowed.
(H.C.Mishra,J.) Jharkhand High Court, Ranchi Dated: - 05/01/2012 N.A.F.R/B.S