Karnataka High Court
Mr Behram Bomanji Dubash vs The State Of Karnataka on 25 May, 2010
Equivalent citations: 2010 CRI. L. J. 3963, 2010 (3) AIR KANT HCR 615, (2012) 3 KANT LJ 634, (2011) 3 ALLCRILR 463
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 25th DAY OF MAY 2010
BEFORE 0'
THE HONBLE MR. JUSTICE K.N.KESHAvAN'ARAfA$IA A *
CR1... P. NO. 1891/2006 C /W CR]... P. NG."z;e6"9/2'obS.'
CRL. P. NO. 3892/2007 &,c'RL--.--p, S518/200.7 V A
1A: cm." .«7-
BETWEEN: .
1.
MR. BEHRAM BOMANJI DUBASH
AGED ABOUT 63 YRARS.
S/O BOMANJI D; 'DU_BAS}i,_
R/AT DARABSHAW HOD-SE1,' ;
BALLARD ESTATE, 0 A
MUMBAI.
MR. R._R-.._BIr§ZIN_GE ._
S/O R..VBH11x.{GE, ' .,
R;'OvDAP.ABSH;AW'. HoUS'E; A
:e3AI.I4/xI<T,»' 'i--.I~:.S'T.A'I'E, _ _ --
MUMBAI. * "
MRS. .,BPJiIFi"FA{2\'l@\R. DUBASH
AGED ABOUT 51':YE'"ARS, .
w;'.o MRSEHRAM BOMANJI DUBASH,
E/o BENZERTERIQACEX, NO 95--A,
A1:3.DE.11;«f3AFFAR KHAN ROAD,
T SWQRLIV ._SE=.2A FACE,
. 1v1IIM,,BA1x- 400 018.
MR; BOMANJI DUBASH
AGED ABOUT 65 YEARS,
S,/.0 MR BOMANJI D DUBASH,
0' R/AT HUSMAN BUNGALGW,
NO 89-B, BHULABHAI DESAI ROAD,
MUMBAI -- 400026.
W
5. MRS. DUSHA DARAB DUBAS
AGED ABOUT 58 YEARS.
W/O MR DARAB B DUBASH
R/AT HUSMAN BUNGALOW.
NO 89vB, BHULABHAI DESAI ROAD.
MUMBAI - 400 026 PEETTEEEES'--- "'
( BY SR1. AMIT DESAI & B.N.JAYA;;)_EyA_,_ ADV.' }" * C .
AND: I ' ' '
THE STATE OF KARNATAKA
BY THE STATION HOUSE 0 J. ECEER.
J.P. NAGAR POLICE STATION, ' ._ ' _ '_
BANGALORE » 560078, _ " RESPQNDENT
( BY SR1: B.BAIAKRISHxNAt, HCc};§§.':+*oi*< _
gm c:siL.§ég_1§éo..'4é'e9Vg' écaé
BETWEEI\T:_ ' '
JAGRESH Kuwmfi-»RAb.IA;AVS. '-
S /0 KANWAL SINC;£{RA.NA;.
AGED: 33 _ " -
occ; PVT SERVECE, '
A-1 OBEROI" GARDEN,
" _ 3rd._CRQSS»»T.LANE, COMPLEX,
'ANIJHERE
.MfUMEA_1;A _ PETITIONER
' (.B&'T'SR:.éV;jE§;ADHAV & P. PRASANNA KUMAR, ADVS. 3
ANI5;
.. 'PH-E STATE OF KARNATAKA,
" 'BY ,3 P NAGAR POLICE.
_V 'BANGALORE.
1 2 REPRESENTED BY STATE '
PUBLIC PROSECUFOR.
HIGH COURT BUILDING
BANGALORE -- 560 001. RESPONDENT
( BY SRI. B. BALAKRISHNA, HCGP FOR R1 }
BK CRL.P.NO. 3892/ 2007
BETWEEN:
PRAKASH.
s/0 BALACHANDER KARYEKAR.
AGE: 53 YEARS, _
occ: COMPANY SECRETARY _
PRACTHIONER, "
FORMER EMPLOYEE OF
ORIENTAL FLORATECH INDIA' LTD...: " -- . ._
DARABAKSHA HOUSE,"-. _ g_' . '
2ND FLOOR BELLARD ES'};'_ATE,-
MUMBAI 38. R/AT NO.90.1. /15... '
ACCOLADE c.QQPERAT1VE
HOUSING SO(3IE'I*{;. .
HAJERE »DURGAV
THANE WEST -- 2:000' 604;», ~ '
MUMBAI. * % PETITIONER
( Ry 4sRI.c. H...JfAE.}{AV"'&EPRASANNA KUMAR, Am/S.)
A .1'H'E0TAsT'A*~:.'E {SF ARNATAKA
BYJ P NACEAR POLICE,
BANGAJZJORE,
REPRESENTED BY STATE PUBLIC PROSECUTOR.
AAHTIGH COURT BUILDING.
V. BANGALORE W 560001. RESPONDENT
'VBYA SR1. BBALAKISHNA, HCGP FOR R} J
M
IN CR.L.P.NO. 3618/2007
BETWEEN:
DILIP SUDHAKAR PENDSE
AGED ABOUT 51 YEARS.
S / O SR1 SUDHAKAR TRIMBAK PENDSE,
NO.602 ROYAL GRACE APARTMENTS,
LT COLONY ROAD, J _
No.2 DADAR(E), T = ._ -1' I
MUMBAI -- 400014. I .. .. 'PETITIONE-R
( BY SR1. C. PATTABI RAMAN,»A£)_v.)
AND: 1%
STATE OF KARNATAKA «.
REP. BY CCB, * '0
N T PET POLICE STATION, " I
BANGALORE. _ ~ .. "
THROUGH »
COMMISSIDNIEEPOIQICE S'
(F & M SQUAD}, c;.'c:,B,--_
N.T.PET, = * I ~
BANGALORE -- '5.50002."--~ RESPONDENT
( 1--3Y_ SR1. Bf'EALAKR1SHNA, ADV. )
GPINL;-P.189x"1'/0'6"IS FILED U/S482 cR.P.O PRAYING T0
VQUASI-'I,A'ND SET ASIDE TI-I ORDER DT.20.I2.03 IN
c.c.INO.,.1:2,4I73/-01 AND C.C.NO.20672/O3 ON THE FILE OF
"STH AcMM., B'LORE. AND PLEASED TO STAY
.PR0CEED~I0NGPS IN C.C.NO.12473/01 AND C.c.N0.20672/03
FILE OF THE V AMIVL, BANGALORE.
I C_EL.P.NO.4069/O6 IS FILED U/S482 CR.P.C PRAYING
.. TL32_QUASH ENTIRE PROCEEDINGS PENDING ON THE FILE
" OF THE v ADDL., CMIVL, B'LORE CITY IN C.C.NO.206'?2/03.
CRL.P.NO. 3892/2007 IS FILED U/S.482 CR.P.C
I I "HPRAYING TO QUASH THE ENTIRE PROCEEDINGS PENDING
IV
ON THE FILE op' THE V ADDL.CMM., B'LORE CETY IN
C.C.NO.12473/O1 As AGAINST THE ACCUSED NO.?"/PE'1'R.
HEREIN.
CRLP. NO. 3618/2007 Is FILED U/s.--.%As'2"
PRAYING TO QUASH THE ENTIRE PROCEEDINGS PENDING
on: THE FILE 0? I ADDLIW c.M.A/I"'v«1B}I,oREiV IN" 1'
C.C.NO.20672/20O3.
THESE CRIMINAL I>ETITIo1\Is,
AND RESERVED FOR oI2oERs'2_ COMEIG ore FOR
PRONOUCEMENT THIS DAY, 'FHE._COUPJ1' PRONOEJCED THE ''
FOLLOVVING:
In all these petitions "i;nde1£--.'--55ection 482 of
Code of 'the Code') the
respective' been arraigned as
2003 on the file of
the v.._Add1'. have sought for
quashing the criminal proceedings launched
agatinsnttiitllein. As these petitions relate to one and the
"CEi.IniII:a}'proceedings in C.C.No.20672/2003 and
since Eonzinon questions of fact and law arise for
cezn,sidVe'ration, alt these petitions were heard together
'"end"are being disposed of by this common order.
Q
2. Petitioners 1 to 5 in Criminal Petition
No.1891/2006 have been arraigned as accuse.d~No_s:.1.
2, 4, 5 and 6 respectively, ~
Cr1.P.No.4069/06 has been arraigned it
petitioner in Cr1.P.No.3892/07 1thasf beef1i=s;r:g;ig}1§§a. :"as_
accused NO.7, while the petitioner in has" V
been arraigned as accused ;>Jo.3gm°u1e charge sheet filed
by the Assistant Comniissioiiaertt F & M Squad,
cos, N.T.Pet','i..i31ang§a1ore.:Ralleging v_"of§'e.nces punishable
under SeC§tions_g: 'V':.Vf 34 IPC.
-M and Agritech Ltd. (for
short 'S"cgr1qtv limited company having its
A_ registered ofi'1c'e:at__N.~o.6~1-71, Lakdi--ka--pu1, Hyderabad,
' ;A;P, :(.';Vo'113_orate Office at No.284, II Main, J .P.Nagar
Bangalore was the compiainant before the
Poiieetand it has been arraigned as respondent No.2 to
A petitions. The petitioners herein are stated to be
tithe Chairman, Directors and officials of M/s. Oriental
7
Fioratech India Ltd. (for short 'Oriental'], a public
limited company having its registered office at Ii floor,
Darabshaw house, Ballard Estate, Mumbai.
4. Facts leading to the presentation"'oif*v:.'..ti;iese _
petitions are as under:
Oriental was engaged in 'florictilture coI1sult.ancfy',
plant propagation activit1':es=.._
materials to various flO_ric'u.1tural .'c'or;1_pariies and
growe1's. The activitydlof j.Scai1.etwas floricuiture
namely gro\Aring._.and"V'eXport' 'cut roses. Some
tirne:'-during-l Scarlet conceived a project
for groafingl the'r_oses-- to export the same to overseas
corintfies. According to Scarlet in a seminar on
»A V:Vfloric1iitu1'ai*iindustry held during the month of July-
" in Bangalore City, accused No.1
being the Director of Oriental and other
2 stafi rnembers met Smt.G.Avanija Reddy, the Managing
AV§Director and G.Rajashekar Reddy, Director (CWs. 1 and
Val
8
2) of Scarlet and represented to them that Oriental is
the authorised representative / agent for major rose
breeders of the world namely (1) De Ruiters Nevv1.R«oses
internationai B.V. (2) Terra Nigra b.v. and
Sohne and that Oriental is having markefirigv .V
and practical experience in vlariouesf} aspects rose
production in Indian c1ima.tie.__c0ndit_ions. S.
cws. 1 and 2 stated to .fgm¥1e'dlfthe fcempany
'Scarlet; and after '*«n:egotiat;tior1sV.fa:"Memorandum of
Understandingsffor short jfMoI_:§) 21.12.1994 was
entereVdlmi' Oriental and Scarlet for
consultancy' the implementation of the
project ofl"Ilorieul'tur've Scarlet. Under the said MOU
gari1ong"t'other thinigsllit was agreed that Oriental should
proVide»..aJ'i lasvsistance and co--operation in procuring the
pianting for the purpose of the project either by
pprocuiiing the same from its own propagation faciiities
it or. sourcing the same from elsewhere. The duration of
= ...the said consultancy agreement was from the date of
«r/
9
the execution of the agreement and until the first export
of cut flowers by Scarlet or 31.3.1996, whichever is
earlier. However, the agreement provided for extension
of the period by one calendar year from the.
date on mutually agreed terms, For t'ne"'*
services to be provided by Oriental,
to pay one time fee of Rs.2'€l__'la}ihsl atl:different.._:stages as-S'
mentioned in the agreemen_t_._liE'hereafter',' -()'rie,'r1tal sent
report on variety port "folio tes.eaf1et';ly along with its letter
dated 29. 12. of Scarlet in 4-
hectare _v ét_o"""C5riental, for 4 hectare
project'-Scarlet plants and the price of
each. plant the? nursery of the Orientai was Rs.58/--
'plant incltisivemolf royalty. Oriental informed Scarlet
that' V°8:_i.va1ieties recommended in its report to
Sca,rlet_; could supply Scarlet only 5 varieties
narnely... Vivaldi, Tineke, First Red and Aalsrneer
--..VC:io!,ciue'Sfor June, 1995 planting and other varieties namely
Dallas, Cardinal for November or December
9®/
10
planting. Oriental required Scarlet to confirm the orders
at the earliest. Though Scarlet initially thought of
implementing the project in an area of 4 hectaresglatctthe
first instance they started in an area of 1 hectare.
was later extended by another 1 hectare...'y_u_:
terms and conditions of the MOD,
technical support to Scarlet.___for iznpiemeatiitatilgfl of
project and also supplied per the
orders placed by Sca.rle't_ai1d made payments to
Oriental as perthe bil}s.raised»,_ lilovtfexier. according to
Scarlet _v déiay"'in supply of plants by
Oriental of planting material supplied
was also poorfvvhich resulted in high mortality of
.. ., 01'; accourit of this, Scarlet went on insisting
Rs.1O lakhs which was paid by them
as--~..ad\(ance= for the second hectare but the same was not
Agagreedl to by Oriental and therefore Scarlet was
it 'A.V_com5pelled to place orders for planting materials for the '
= »---second hectare also. According to Scarlet, the quality of
M
El
planting materials supplied even for the 2nd hectare was
poor, as a result Scarlet suffered great loss. When the
roses were ready for cutting and exporting, Scarlet
called upon Oriental to send grower's _
enable export of flowers, as, without = it
from the original propagator, €XpO1'l:I"Ofi'r0$¢s.f0 oxrggseas
countries was not possible--._,.and"V.thc, ro,sesf-e);p.orted.,l'
without the growers certificate was liable for
confiscation and the ""eXflporter}, was, rlexgposed for criminal
action. However Oriental the grower's
certificate"inif,resp{ect:'of:two ifarieties namely Tineke and
First l"€eri«. while=.in_:'1*e_spect of other varieties grower's
certi.ficates'were,sent.V'D1iring October 1997, in a flower
,ga1le'cl'"14"iora 1997 held in Bangalore, CWs. l
o'ne_i.~Piter Stropper of Terra Nigra Holland who
the~loreeders of First Red variety and learnt that
is not a licensed propagator of Terra Nigra
it '..VVarieties and that Terra Nigra is contemplating to
= ...--initiate legal action against Oriental. Subsequently.
&/
12
Scarlet also came to know that even in respect of Tineke
variety Oriental is not a licensed propagator and in spite
of the same Oriental has received from Scarlet yalue
of the plants inclusive of royalty and has _
the royalty to the propagator. mMOn 'w
differences arose between Scarlet and :Orienta1. 'Seal'-},€t
made claims against Orier:t_al.._f0r refilild Harjno"§,1pnt3
also the loss stated to have___h'ee_n' ..i_r1czirre;cl._ bylthern on
account of non supplyilof g,'.Ijo'*«gy\'r<p3r4";<3«voofC'aOI"L'if_icate in respect
of Tineke and _;F'r'J_fst Iێd"va;ietie.s.' to Scarlet
their "1:Ǥ't~ and Scarlet was of
the opinion Directors and officials of
Oriental rnisetrepresenting that they are authorised
propagators of and First Red varieties of roses,
V's,:}~1 and 2 to part with money and thereby
Oriental' cheated Scarlet. It is in this background
CW.l-*C:t§AVa,nija Reddy, Managing Director of Scarlet
it a complaint before J .P.Nagar Police )Bangalore on
" »v-311.1999 against Oriental and Mr.Behrarn Bornanji
13
Dubash (accused No.1], Chairman of Oriental,
Mr.R.R.Bhinge (accused No.2), Mr.Phendse .;a¢¢fis.epd
No.3), Directors of Orientai. Mr.P.B.Ka1yei{ar
No.7), Company Secretary of Oriental it
(accused No.8], authorised representatiye
alleging offences punishabifgunder 418C'
and 420 IPC. Basedon the".P.Nagar
Police registered the case 99 for the
aforesaid FER to the
jurisdictionaiihéé'1\éi'agist.rafe§,Ckfifterii'investigation, the Police
filed charge sheet
someyytirne against six persons namely
the vtwo"v.Di'rectors, the Company Secretary,
. tiieiiiatithorised representative and the Chief Executive
for the aforesaid offences. The
1earne.§i'.Magistrate by order dated 7.7.2001, took
..cogni::ar1ce of the offences alleged in the charge sheet
directed issuance of summons to the persons
" -"named as accused therein. After coming to know of the
/by
14
learned Magistrate taking cognizance and orderingissue
of summons, two of the accused persons
Bhinge and Behram B. Dubash filed
Section 482 of the Code before ifluu
Cr1.P.Nos.245 and 246 of 2003 d'ané,'isb'ug1hr,Agtqii1a§h§.rig:c£L
the proceedings on varioupusflggroun_ds._ said"
petitions, the compladnant'i§ir'anija lieddyygwas also
arraigned as after hearing
both sides, allowed those
petitionsf the investigation was
perfuvnctoryiivzproper investigation as
such cannot be called as a
final ..report inthe of law. This Court also pointed
,oi1t .seirera1,ginfirrnities in the investigation and therefore
aside the order passed by the learned
Magistrate" A taking cognizance and directed
..Conirnissioner of Police, Bangalore City to entrust the
""._Virrv'estigation of the case to a Senior Police Officer not
"below the rank of a Assistant Commissioner of Police or
V.
15
to entrust the investigation to any special investigating
agency like CCB or COD and to submit final.
within a period of 6 months from the daterof
order. The accused were Vdirectedttuu
investigation and to appear before
investigation was entrustedjo._Assistant._ Commissioner' '
of Police, CCB Vzwifio jg fl"conduActing"V§ further
investigation ultimatéeivt charge sheet on
19.11.2003 the under Section
418 and the petitioners herein.
The onreceipt of the charge sheet.
by order took cognizance of the
offence a}.iegedV.and".di"rected issue of summons to the
. .. _ Petitic}.fiers..herein.mAfter coming to know of filing of fresh
and the learned Magistrate taking 5
cognizance' and issuing summons, the petitioners
..preseI1-tied these petitions under Section 482 of the Code
A' 'g_Vs'eeri§ing to quash the criminal prosecution launched
" V-"against them. Inter aiia on the ground that the order
e/
16
dated 20.12.2003 passed by the learned Magistrate
taking cognizance and issuing summons against.» the
petitioners is bad in law, inasmuch as the »1.e'arne'd
Magistrate has mechanically passed the_ V'
application of judicious Inind
along with the final report; that 'th_e'Vlearned.lViagistrat'e"g
has failed to see that evenr_'"if_ the.elntirelkievidence
collected during the A--.infires'~tAiga.tion_jpfoducedd along with
the final reportare acce.pt--ed' V.at:_its"'fac'eIrjvalue, no case is
made out of the offences
a1legedd;d'"ltha:t. Magistrate has failed to see
that the tried to convert a civil dispute
intgg, liiabiiitvg and it is abuse of process of the
gcourtias 'such continuance of the criminal prosecution
Vresu'1ts'»in inisearriage of justice and in order to prevent
abuse_v'0f_V'p'rocess of the court, it is just and necessary
for court to quash the proceedings in exercise of
A' jurisdiction under Section 482 of the Code.
<
war
17
5. Upon service of notice of this petition,
complainant -- Scarlet has appeared through its counsel
while the State is represented by Additional
Pleader.
6. I have heard Sri.Arneet Besai, harried" Sienior
Counsel for petitioners__v""~..in
Sri.C.H.Jadav. Advocate for"'p.etit,ioners in
Cr1.P.Nos.-4069/O6 .58/92V1'»:f'(:}7'4Sri.Pattabiramar1.
Advocate appearing ;§'éf'lpp§§:;£i¢:i¢f1sS'1n:cf1.P.No.3618/07
and also" appearing for
3 No.2 and Sri.Ba}akrishna
Additional " Pleader appearing for
reqoondent if State.
-Desai, learned Senior Counsel would
it The entire dispute is a commercial dispute
and the criminal complaint filed on
3.11.1999 by Scarlet nearly one year after
5/
(ii)
18
Scarlet accepting amount of Rs.92,515/~ in
full and final settlement of ail its clairns in
the month of November 1998 itself.
attempt to coerce Oriental to pa3)f_:'sorI1.e'
money and thus Scarlet"has"..tri.edlV'to convert
a civil dispute into a 1
Even frorn the collected dviirring the
inVestigatic1:1p.a11d along with the
repor'€;"'it.:is."'Oriental had a
1. De New Roses
' ._B.V. in respect of First Red
patgrépropagation contract signed at
Hazorswoude on 11.3.1994 and at Bombay
A '«..:1on__3.9.1994 and thus as on 21.12.1994, the
'V 1 -1' on which the MOU was entered into
4' between the parties and the letter dated
29.12.1994 from Oriental to Scarlet, in
respect of First Red variety Oriental was a
we
19
licensed propagator, as such, it cannot be
said that Oriental has made any::'~«._faJ.se
representation to the Scarlet:-.
intention to cheat, 4Soniefi' cbrrifoerciallt V'
disputes regarclingifi
between De Rnite:rs,_pNevV' Roses '~lnte'rnational"' 9
B.V. and: ...Oriental.'V,_:*vsfhich was iiltimately
settled in £he,'eari§'» year 2000 by itself
cannot be a_, g_"1§ound"_jto "come to prima facie
had no authority to
" - Rédirariety of roses.
In respect VTineke variety, Oriental had
plefflliyssion as per letter dated 29.6.1994
'«.}ti?om Terra Nigra b.v. a copy of which letter
9 A 1 isenclosed to the charge sheet and thus, as
it on the date of the MOU, Oriental had license
even in respect of Tineke as such Oriental
had a right to propagate both First Red and
V
(Vi)
21
and ultimately accepted Rs.92,5l5/-- from
Oriental in full and final settlement ofjallp its
claims and later with a Viewf'to.fgcoe;tfcet
Oriental to pay some -,
has filed false coniplaintp.
commercial dispttte into. 'A V
The entire betvtreen_:FSca:;rlet and
Oriental V ""belA.p:"'s_een from long
correspondences' was' "with regard to
_ tomliave been paid by
* Sc'aIiwet'tto"vtQ"rie11t.a1 on account of failure on
= 44CV)rienta1 to provide growefs
certificate in respect of Tineke and First Red
'4..:Var_ieties and though the dispute was settled
-: iiitublovember 1998 itself by Scarlet accepting
ll 4% Rs.92.515/-- in full and final settlement of all
its claims, about 1 year later a frivolous
complaint came to be filed alleging mis--
@/
22
representation and inducement on the part
of Oriental with an intention to 'cheat
Scarlet. Though materials
with the charge sheet did not.V-inaiie -.
case, the learned':
application of Vfnind " taken'
and ordered issueioi' summons' as such the
said order is} i1?j__egaif therefore the
proceedings"a25e liable to quashed.
_ e ~to*5 in Crl.P.No.1891/2006 are
it does not make out any
against them. The only basis for
'«.:'i'mp1icating petitioners 3 to 5 who have been
'V A arraigned as accused 4 to 6 is the further
4' statement of CW.1 under Section 161 of
Cr.P.C. wherein it is merely stated that the
accused -4 to 6 as Directors of Orienta} are
&/
23
also liable to be prosecuted and in the said
statement no overt acts are attribtited
against those accused persons ~
of the same. the learned glias ll
directed issue of siirninons against "
also. In respect I\Eol1_: '
Bornanji I)1.ibashi,""abVsoii1te1y'there nothing
on record ffiecember 1994 he
V representation
accused No.2 is
dddd H " is only the alleged
-- = said to have been made
Thus no offence is made out
.,againstm'f any of the petitioners in
" dlllCrl.§~t?.No.1891/O6.
the transaction was between two public
limited companies, no offence could be
alleged against the Managing Director,
@
24
Director, or the employees of the public
limited company in respect of any:
offence by the company, as, in ~
offences there is no" if
such the cognizance'.
Magistrate agairist"~~the V
and the ofiicials..roff)_:rie11tal 'resp~ect of the
alleged offence been committed
I
)p(i_x)_ been arraigned as an
' learned Magistrate could not
liavc _ cognizance against the
functionaries of Oriental in respect of offence
'«..f:ppunishable under Sections 418 and 420 r/w
A of IPC. Therefore, the learned Senior
Counsel sought for quashing of the
proceedings. In support of his submissions,
learned Senior Counsel placed reliance on
5/
25
several decisions of the Apex Court and this
Court.
14. Sri.C.H.Jadav, learned counsel.g..__"foi*:fthe
petitioners in Crl.P.Nos.4069/O6 and
from adopting the arguments offlearried l(;ou'Iise.l;.
submitted that both the petitior1ers.. are g.g'em'pv1cyét§.é'~vtjfx.L
Oriental and they were not"'paTrti_es to' no V
allegation has been in complaint
as such there were out any case
against thena under Section
420 order taking cognizance and
issuing these petitioners is a clear
iahuse process of the court and the law.
~l_._5~.l Sri'.'C.Pattabiraman, learned counsel appearing
in Crl.P.No.3618/07 contended that this
petitioner is only a Director of Oriental and no specific
"ii .oyert act is alleged against him nor he was a signatory
to MOU and absolutely there was no allegation $
26
this petitioner to the effect that at any stage he had in
any way made false representation with an int.en_t'i_o_rr--to
induce the complainant and thereby to cheat
such the ingredients of Section .420.IPCf_: it
facie established therefore the
quashed.
16. Sz'i.S.Mahesh3 leariiodgcotinsetl"forarespondent
No.2 fairly submittedtpirectors of the
Company "have a good case
but as agiaints-'t. its Managing Director
as well as CVEC1;"v.prirna__ufacie -'case has been made out as
such there "is no for quashing the proceedings.
it this further" subrnission that root cause for the
r norrproduction of growers certificate by
H respect of Tineke and First Red varieties
the accused were under an obligation to secure the
V' sarrie "from the propagators as without growers
certificate, complainant could not export the roses to
.g/
27
overseas countries as it would expose the exporter to
Criminal action. It is his further submission that, in the
letter dated 29.12.1994 from Oriental to Scarlet, there is
a Clear indication of representation by the
the complainant that they are authorised;_prop.aga'Lors V'
and that the value of the
royalty. The undisputedV.i'fact
secure growefs certificated' the
propagators and 1' on representing
that they are the licensed of Tineke and
First "of'"ro'ses on the strength of such
representation payments from Scarlet
including priniahtllfacie offence under Section 420
of _rnade""out and the order of the learned
cognizance and directing issue of
su»:nmons_"has not resulted in any illegality or
irregularity as such there are no grounds to quash the
_ pi"?-,,proc«eedings, therefore, he sought for dismissal of we at...
'7s?t\-<~\%tv~j~e»«
28
17. In the light of the submissions of both sides
and having regard to facts and circumstances
case, the point that arise for consideration »
"Whether 'in the b fac'ts*v--'::"w.
circumstances of the case; I.
under Section 482 _ of
criminal prosecution __ V'
petitioners is warrantedéi"',._ ' _g
18. It is weil s'ettied princiip1e.piaw that criminal
prosecution gets the Magistrate
acting' of the Code takes
cognizance or the ciauses (a) (b) and (c)
thereunder; = In -.PAepst'...u~7Foods ltd. Vs. Special Judicial
Migfgisitrate [1§9s--...{s) sec 749] it has been ruied that
I an accused person in a criminal case is a
serious 'matter and criminal law cannot be set into
moticgnas a matter of course.
19. Though the expression 'taking cognizance' is
it "not defined under the Code, the said expression has
<&/
29
come up for interpretation before the Apex Courii and
various High Courts in the country in several ca.se_:s~._4
20. In Darshan Singh Ram
Maharashtra [AIR 1971 so 2372},...W_hi1e;con;'si.c1efingVtheKV'
purport of Section 190 of the Code, hxasl
thus,
"Taking cognizance - does not V V .inL:olve
anyformal actio'r1v:oTrAii--adeed of any kind
but occurs as applies
his n1i:id"«Tio"thé__ sus;i5ec'teci'-iconiiinission of an
o_ffencei.:g._ "'?:h'en2_fore, takes place
' a_ Magfiistrate first takes
offence. This is the
position, the Magistrate takes
" ivcognizaricei of an offence on a complaint, or on
V. poiryce or upon information of a
-- ioifiher than a police officer. "
Narayandas Bhagwandas Madhavdas Vs.
Astatéigéj West Bengal [AIR 1959 so 1113], the Apex
while considering the case in which the
30
Magistrate had taken cognizance of offences as per
Section 190(1)(a] of the code has observed that.
"There is no special charm or
magical formula in the expression ' ''
cognizance" which merely means H
application of the mind of
the facts mentioned in cogjmqaiaiinitl
view to takingfurther.a:;ftion."' it i l
X X X x x
"What Section 190 'Vcontetnplateslisfithat
the Magistrate once he
makes h_i'r'nself':fiillyfconscious- aware of
the __in:j- complaint and
__or test the validity of the
said"allegatifJI1Sv{ " ' «
2-2. In Kishiiiivsingh Vs. State of Bihar [(1993) 2
*l.:6}.,:Jiilvliiifibeen held that,
"When the Magistrate takes notice of
~ accusations and applies his mind to the
it allegations made in the complaint or police
' report or information and on being satisfied
that the allegations, if proved, would
V
31
constitute an offence, decides to initiate
judicial proceedings against the allegeclfig
offender, he is said to have taken cognizaiice' ~ 2
of the offence. "
23. In State of West Benga{"'Vt;.
{(1995) 1 sec 684] the Ape§:"--~Couttv- af'te1_' i;gii§=:§y1g.,,;;r+;te loft,'
the fact that the eXptessionj_5?.te;'r:;i_ng_v coénimancei' has not
been defined in the Co'de--ldas =it1 para 43,
I7. tits, it means
taking?'-t. . This would
incliideif l V o initiating judicial
thevlojjfender in respect of
:'that_ steps to see whether
there" = for initiating judicial
' "p.roceed:'ngs or for other purposes. The word
V it-'ogri.1fAzanceV' ttttt "indicates the point when a
or a Judge first takes judicial
an offence. It is entirely a different
from initiation of proceedings; rather it
_ it the condition precedent to the initiation of
proceedings by the Magistrate or the Judge.
Cognizance is taken of cases and not of
V
persons. "
32
24. After referring to all the above decisions, the
Apex Court in the case of State of Karnatalpciajtcgnd
another Vs. Pastor P. Raju [(2006) 6 Supreifiewt.'
Cases 728] has observed thus in para -13; = .1: 9 V.
"13. It is necessary 1:]
taking cognizance of offence
same thing as T
Cognizance is taken af"titef_:'nitial when
the Magistrate ¢ppz:es~ mind to the
facts :5 a police
report 'tece-feted from any
othe? . 'offence has been
if process is at a
Vvsubseqyugent-» after considering the
it the court decides to
v -proceed.' '1.'.'T."L€ ojfenders against whom
. apr~imafac1§e"case is made out."
3
2S.'.V'}\_SA~n:he1d in Tula Ram Vs. Kishore Singh{(19'7'7)
4 SCC'A':=159; in State of Bihar Vs. P.P.Sharma [1992
Supplement (1) SCC 222]; and in State of Maharashtra
.. _ Sharadchandra Vinayak Dongre {(1995) 1 SCC 42], it
l
33
is only upon consideration of the materials submitted
along with the final report under Section 173 of_ the
Code, and satisfying himself that the prima -is
made out, the Magistrate empowered to
as per Section 190(1](b] of the Cioldetakes of
the offences aiieged and proceeds.pto._take.pf;1,rtherll
for issue of process to the 'accused pers'on1s,.°'£;,heI1 only
proceedings in a crirninal _cas.e."i'stand colinmenced.
Therefore, taking cogni_zance_c:f t.h.e."oIffences alleged on
application -of lj}ildicic'.us,tnindis-V.'av--.condition precedent
for procee'ding tlhejcrirnihal"prosecution against any
person, and as a" cognizance of the offence is
not _t_aken"-Vin ac'cordan"ce With law, certainly criminal
' ' . prosecution cannottze proceeded with.
- :Pepsi Foods Ltd..'s case referred to supra,
the has observed that the order of the
jviagistrate summoning the accused must reflect that he
&/
34
has applied his mind to the facts of the case and the law
applicable thereto.
27. In Devendra Vs. State of U..P.
4951, it has been heid that it is obligatoryettetthe:patt.d'et*t
the Magistrate to apply his mind t0:.4the""cor;tehts~hf
charge sheet, and such app1.i_cati0h_.o'f rnir,1d'~
should be reflected in the order;
28. En perusal of of the order
sheet ma.ir3tai:ned§;A_ Magistrate in
c.c.1\:»et.2t0sd§72/210003 :"'~,iVrtdicates"v: that after the 10
submvittedd the sheet, on 20.12.2003 the
offiCe_Vp1aced_'th_e--. before the learned Magistrate
office riot'e"and the learned Magistrate passed
the' The notings in the order sheet reads
as._3;nd.er:_ " dd
"20.12.03. Charge sheet filed by the
, A.C.P. of police C.C.B.F & M (J.P.Nagar P.S.}
Through senior A.P.P. as against the accused
W
35
for an offence punishable u/s. 418-420 r/wh
34 Lee. _
Original F.I.R. in Cr.No.633/99AV...._cteVd'uh;
complaint, charge sheet and con.}jiected.n:"'
papers are hereby checked, V
A-1 is on anticipatory bditfoft
Court--9"'*. , A 'V A ' ht
A-2 is on bail of5'¢h:.}iCMM. ~ L
Accused 3,.-dnd 7'T,are"Lon'police 'bail.
A.5, 6 and"'Et T9
Accused COPE! ,€'.r1c"ld,5:§Ci;'_.A"v V 1 ~
t1'1ej':rTeeo1:*tfis';v.:»Cognizance of the
o£fenee:Vis;"1ta,ke1a case and issue
and Issue N.B.W. to
A45, 5 'on 8.1.2004."
V' 29. As cou1'ci"'t§e seen from the above, the order
learned Magistrate» do not in so many
Wogftdsx the application of judicious mind to the
niatefiajs produced by the 10 along with the charge
except the learned Magistrate stating that he has
V. .,_..1oerused the records. The order does not reflect as to
&/
36
whether the learned Magistrate was satisfied about the
existence of prima facie case. Though in the charge
sheet offences punishable under Sections
r/vv 34 IPC are mentioned, the order
Magistrate do not specifically indicate' asgto; of
which offence he has taken tlielleogniaance "
iearned Magistrate has indioated taken
cognizance of the offene.e ..Qffences.'f
30. Under Section,:4~l.V8.'lof cheats with
the knowled_gell;;tl1'a,;.Vis Iik'e1y.j_4thereby"':to cause wrongful
loss to the interest in the transaction to
Which the cheating' he was bound either by law
or, legal contractito protect, shali be punished with
i or fine or with both. Section 420 of IPC is
Section for cheating. Section 415 IPC
defines. fcheating' and it reads as under;
"415. Cheating
Whoever, by deceiving any person,
fraudulently or dishonestly induces the
W.
37
_ person so deceived to deliver any property to
any person, or to consent that any person__
shall retain any property, or intentionally.,,_:'i~.,_
induces the person so deceived to do o;""o;Init:_" , A'
to do anything which he would not
3 he were not so deceived; "and, 'ac: or-Q',
onus' sion causes or is likely tof_'ca'use.damag_." it
or harm to that person body',
reputation or property, to
E)q9lanation__ _4 ,_ it
A dishonest I co:z_¢.%;¢;i1nieéi,t~s ,:of fact is a
deceptionuvith
_ -~ and dishonestly
inducing '€1eIi~9Vfe1-'y%""¢gf"1V.>roperty
u"Whoe.ver"- Vcheats and thereby
it dish,onestly'*----induces the person deceived to
any property to any person, or to
« Vr'::r1ji_er:e,'~t.V,c'1'i'ter or destroy the whole or any part
fvaluable security, or anything which is
" signed or sealed, and which is capable of
A it being converted into a valuable security, shall
be punished with imprisonment of either
38
description for a term which may extend to
seven years, and shall also be liable to fine"
Thus Section 415 of IPC requires, 'IV
(1) deception of any person
(2) (a) fraudulently or d;--;hbne~.sizg me: A
person i ._ _ _ _ __ y
(i) to deliver any
(ii) to consent that person 'shalt 'retain
any _V y
(b) Intentionally to do or omit
to anythirg or omit he were
not omission causes
or to" harm to that person
in -repputatinn, or property.
31I*I_:i the _ease ffridaya Ranjan Prasad Verma
vs..«Sta'te of Another [ (2000) 4 Supreme Court
' ;(:ases..:_ __ Apex Court, while _ considering the
H Section 415 of 390, has held thus in
paras 15;
"14. On a reading of the section it is
manifest that in the definition there are set
M
akfi '
39
forth two separate classes of acts which the
person deceived may be induced to do. In
first place he may be inducedfraudulently
dtshonestly to deliver any property
person. The second class of acts
the section is the doingjior
anything which the person
not do or omit toVdo*~,if were
deceived. In the of ' cases tithe
inducing must 'dishonest. In
the second class the must
be ffiaudulent or
_ - the question it has
to be }'ceptj.'A'--ir;i"---«.__rinirid that the distinction
y._betu45ee_n vrnere breach of contract and the
offence is a fine one. It depends
V intention of the accused at the time
which may be judged by his
subsequent conduct but this subsequent
* conduct is not the sole test. Mere breach of
it contract cannot give rise to criminal
-- prosecution for cheating unless fraudulent or
dishonest intention is shown right at the
.
40
beginning of the transaction, that is the when the offence is said to have committed. Therefore it is the intention is the gist of the offence. To hold _ guilty of cheating it is neces's'a:-'J ta he had fraudulent or dishoru.,ést:'inten'tion the time of making.»'th_e proznise. 0. mere failure to keep such a culpc.-hie beginning, that the promise cannot be presugiied; 1"' V The said been 'reiterated in Indian Oil Co1'po:°atio'nf5I.?s§:'::£§IFP€iVg Indtia"*Ltd. [2006 6 sec 736]: in Veer Anil Kumar Agarwai {2007 AIR sow? 43161"and._,ii1.,fi1der Mohan Goswami 82. Anr. V. State of Lg_fttaranc-.hai 82. Ors. [AIR 2008 Supreme Court ,g1,25l1{ggggfi,u " catena of decisions of the Supreme Cotirtftgheéi principles relating to exercise of jurisdiction tinder Section 482 of the Code to quash the complaint or criminal proceedings are well settled. According to (V 41 these principles a criminal proceedings can be quashed if the materials placed before the Court along the final report submitted under Section 173 of even accepting as true and correct at its not constitute any offence allegfid or alleged against the accused.
quashed where it is a of the" V court, or when the criniinal-'pVrocee'dii1gh'is 'fo.L1rtci to have been initiated with'krn__ala for wreaking vengeance or««to'*-cause:h:armf'~o:_Vwhere the allegations are irnprobable.
.-'State of Punjab [AIR 1960 Supreme Apex Court while considering s5Cspe._of Hsection 561~A of the old Code which Section 482 of the present Code has held that inherent jurisdiction of the High Court can be nexercised to quash the proceedings in a proper case ,.,,4éitb.er to prevent abuse of process of any couw 42 otherwise to secure ends of justice. The Apex Cotzrt in the said decision has set out certain catego1°iesjof'fc_ases where the inherent jurisdiction to proceedings can and should be '*exercis_4ed7V4" o_f,the V categories of the cases enumerated 'thereu"nder_is, "
(II) Where the 'cddlegafiohrtsp in, Information Report or_..the.._co.{r:ptdiht,,,_eoe§n if they are taked" cit", an value and accepted in ~'do"ti1;§t'-V"C0nstitute the cases 'no ques'tton :e_vi(;Ience arises; it is _ the complaint or the': it :VA3'«.'Infoi*r:.1;:1tio_n Report to decide alleged is disclosed or no t;-« ., in the "" "case of State of Kamataka Vs. (2) SCC 169] the Apex Court while scope of Section 482 of the Code has Apobserved thus in para 7:
"7. In the exercise of this wholesome power, the High Court is entitled to quash a .«&/ 43 proceeding if it comes to the conclusion that allowing the proceeding to continue wouldvgbe: an abuse of the process of the Court the ends of justice require that the proceed-ingr-it ought to be quashed. '1'hesav_i_ng Court's inherent powersfivbothi A.irizcivill'and-.___ criminal matters, is_rd.esigned"r--to ab'; salutary public purposetilrwhichh proceeding ought not~---- permittedi to degenerate into' ilveaplon '4 or persecution. ---- the veiled oby'ect;'behind the very natitrebblvof which the structure the like would
-Court in quashing the proceeding inthe'---.interest of justice. The ends _ of justice' are higher than the ends of mere has got to be administered to laws made by the legislature.
« necessity for making these observations is that without a proper " realisation of the object and purpose of the A provision which seeks to save the inherent powers of the High Court to do justice between the State and its subjects, it would l be impossible to appreciate the width and contours of that salient jurisdiction. "
35. In State of Haryana Vs. Bajanla§""iAIRl._:119_§2A Supreme Court 604], the Apex Court .s the scope of Section 482 of the Constitution of India sand after 'i*efem.1'ngp:vt4oV se§VeredVV:> decisions on the point outa .th.ue_:vcat:e%gories of cases in which the :tnay'vvlAinterfere in exercise of powers und'erpArtic1e*v:Q..2'6V .:'the..VCVon.stitution of india 0:: of proceedings relating "offences to prevent abuse of process to secure ends of justice as .._Where the allegations made in the 1 V' lfrgéormafion Report or the complaint, they are taken at their face value and " accepted in their entirety do not prima facie constitute an offence or make out a case &/ against the accused.
45 flxxxx 3} Where the uncontroverted allegatioris4:"'..V made in the FIR or complaint "
evidence collected in support of the not disclose the comrniss_ion.__of and make out a case
4)xxxx
5) Where the allegcuitio'r1s.umatie'the'f;FIR or complaint iarid irztierently improbable on the; of :é_o prudent person ever Vrezich."a.ju_stV-cericlusion that 'there; Q$'2gff"u3.i;en;t for proceeding fagains ti " ' 36;, ln M/s 'I:';a.iic'tn"'oil Corporation Vs. M/s NEPC Inqgjia" Limitewrejjorted in AIR 2006 so 2730, the Apex . Court_'ai'ter"--.referring to its several earlier decisions on out the relevant principles to be borne the Courts while exercising jurisdiction Amitglervlllsection 482 of Cr.P.C. Those relevant principles W 46 as enumerated by the Apex Court in this de<:isio_1:_1__ read as under:
"9. The principles relating to jurisdiction under Section 482 of th;e"Cr;I5,';CT.l"to'_' h quash complaints and criminal. f1pui'nceeding'src,__. 1-,.' have been stated reiterated by tcourt': in several decisions. .afe_i_u xxx xxx Xxx ] The---principles, rele.vaIit to our purpose are}. _
(i) where the iii the] .cotrij5laint, even if theyi face value and V do not prima facie or make out the case alleged accused.
_ A AForx"thw--«purpose, the complaint has to :"l§&a.rr1ined as a whole, but without the merits of the allegations.
Ifsleither a detailed inquiry nor a meticulous " analysis of the material nor an assessment of the reliability or genuineness of the A allegations in the complaint, is warranted iv.
47 while- examining prayer for quashing of a__ complaint.
(ii) A complaint may also H where it is a clear abuse c;f'the.processjtof_the{L court, as when the criniinai'_'Aproceedin'g found to have been-..__ fdes/ malice for wrealting _vengeance to cause harm, orwhere 'theV:"allegatiorLs"'V are absurd and inherently _ {iiil p5iL§er; "shall not, however, to i'~'3il.'flVft3""VVV'()f scuttle a tsgegegginjgtejjroseeu-tion}"""3"lie power should be fused -with abundant caution.
xlfivl) ' Ahcorrqnjlaint is not required to uerbatini"--'reproduee the legal ingredients of .oj]fence alleged. if the necessary factual is laid in the complaint, merely on thegggound that a few ingredients have not .. been stated in detail, the proceedings should V " * not be quashed. Quashing of the complaint is warranted only where the complaint is so bereft of even the basic facts which are «t:/ 48 absolutely necessary for making out the offence.
{U} A given set of facts may make _{ "
purely a civil wrong: or (b) purely a it offence: or (C) a civil wrong; as..alsc.-i offence. A commercial ° :1; '' contractual dispute, ,o:p_art _ it cause of action for seelcirig r"ernedy:.'.=iniiciiril law, may also inuvolvea ojflfencefij As the nature of sco;5e.of_c.ioil--V;§::oceedings are differentfrom A the mere fact corrgolaiiit relates..tQfa commercial or :b'reoci1.__ofcont:'act, for which a or has been availed, notVby»a~fir"o:1'nd to quash the criminal _ _proceeciing;é;. The test is whether the aliegation3....._._i_fl the complaint disclose a _vcrirn.iVna,l offence or not."
« Bhajanlafs case and in few other suidseauiehit decisions, the Apex Court had observed that it xt1i1'e_ power under Section 482 of the Code should be Alezitercised sparingly and that too in the rarest of rare M 49 cases. However, in Sam Mittal v/s Government of Karnataka the issue as to whether the expressi'onf..'_'the rarest of rare cases" is appropriate while exeroisi.n'-g power under Section 482 '--(.',y1*.I"_:.C._Wforth' consideration and since there was d_ift'erenCe of ..opli1io11._ among the learned Judges 'eto'1';stitdt:ing the" ' matter was referred tag. 3: The"1arger Bench of the Apex Court observing in its judgment 3 SCC 574 dddd T' "rarest of rare cases" the words 'sparingly arid.,withvVcircllfiasiféection' while describing the yd " scope _VVSectlon 482, those words merely V dd reiterate what is intended to . eonveyed by the words 'sparingly and circuntspection'. They mean that the power under Section 482 to quash ll -pl'oceedings should not be used mechanically or routinely, but with care and caution, only when a clear case for quashtng Ls made out and failure to interfere would lead to a &/ 50 miscarriage of justice. The expression "rarest of rare cases" is not used in the sense which it is used with reference to for ojfences under Section 302 IPC, "
emphasise that the power under Section CrPC to quash the FIR or criminal proceedings should be used spar*t11g:Zjyai.'iV and'~ circurnspection. Jurig-r_nents._V_are it construed as statues. wordsV_o'rs in judgments to be tnierpretedi. like pro~vis'ions of a statue. Some judgment should be. read. contextually and a_fe'b}:;1ot tn--tend'ed v--.taken literally. 'ya. .;tir:".e a. phrase or :"expression:- intention of emphasising abpolint a principle or even by . ,way'u" A a» .flo.urish of writing style. Ratio ofa judgment is not to be discerned stray word or phrase read in « is<5zation.i"
"para 8 of the said decision, Their Lordships "obserired that quashing of complaint or criminal
-- lblproceedings under Section 482 of Cr.P.C. depends on .g/ 51 fact and circumstances of each case. Their Lordships have also noticed the various categories of cases-nvvhere power under Section 482 of Cr.P.C. can prevent abuse of process of a_11dT.to llsvejeure ends of justice as stated in BajaiFa¢_1I't1l;s case; - _ a, it
38. Keeping the afor'esai.,d principle-S laizv in' mind, I have peruse'd.._the"t'c'opiesj'o.fA thelchalrge sheet papers made available to whether the present cas-e"wairai1tsg i~i=iterfei9enceV:V,Tlof this Court in exercise "482 of Cr.P.C. if the present case V'is:"-coinpsiiclered 'on the touch stone of the principles.._}aid Apex Court in the aforesaid decisions, in m3r,considered opinion, the interference of r ppcgiirittvttinder Section 482 of the Code is warranted A ingredients of offence of cheating punishable undertéfiection 420 of EPC and under Section 418 has A "it" llnotbeen made out. &------« 52
39. It is an undisputed fact that Oriental and Scarlet entered into an MOU on 21.12.1994 whereunder Oriental agreed to render consultancy and ,adifisoiy Services to Scarlet for its flor.i,cu1tiire.'_"u other areas, in respect oi?' development, preparation S ' '=~proj ect ,_ "report, ' ' seiection of varieties,'re'Eat.ing dtofacviiiities and equipment, know practices of cut roses, etc. A copy of by the 10 during along with the charge sheet".fj§1a,oi.igi;':asfpét_faause (7) in Article 1 of MOU Oriental agreed to provide all assistance and co- . operation prociiring planting materials p%@g for project either by procuring the same from its propagation facilities or sourcing the same fromelshewhere, there is no indication in the MOU that made any representation that it is the " »-'authorised propagator of any varieties of roses. The (V 53* MOU also do not refer to the alleged representation or assurances said to have been made by accLi;s'eilf"*«No,,42 and the other staff members of Oriental to in the Seminar stated to haV~e""b--e.en it August 1994 with regard to the floricultural industryV»andV.git representative / agents breeders of the World. From the charge sheet papers it is by the 10 in the chariéii .l':jli--be:hai'f is based on the made by CW5. 1 and 2 Code during investigation. In theiizritten' coinplaintlllodged on 3.11.1999, there is no re"ferefice"i'to the alleged assurances said to have been " No.2 and other staff members of O1'*i_enta'i' the seminar. No doubt, as could be seen frromttthe contents of the letter 29.12.1994 from Oriental 9' Sicarlet, a copy of which is produced along with the " ~-"charge ' sheet, the Orientai has indicated its &/ 54 preparedness to supply rose plants of different varieties at a cost of Rs.58/~» per plant inclusive of per this letter, they offered to supply different of rose plants such as Kiss, VivaZ'o';i,-. it Even in this letter, there is no had made any representation» to" Scarlet it authorised representative thelfnopagator of the aforesaid varietiestof. these varieties of roses car;r1otVp:y1i3e countries unless the 'issued with growers certificate"frorn these varieties or its authorised As Oriental had offered to supply the4"afo1'e.s'aid'-varieties of rose plants at a cost of .. «. per plar1tiriclus=ive of royalty, the Oriental was uriderfan ''obligation to secure the growers certificate to in respect of these varieties from the propagators or its authorised representative. However, if failure on the part of Oriental to secure the l " grovver's certificate by itself cannot give raise to criminal & 55 prosecution for cheating unless a fraudulent or dishonest intention is shown right at the begir1ninlg--.yof the transaction i.e., the time when stated to have been it that except Tineke and First Red other varieties Oriental to"
Scarlet. Even as per the _Scarie't~th§e dispute only relates to non§securirlg:' certificate in respect of of roses. Even if the entire; Vlhyiithe 10 along vvith the charge' facie it would not indicate ulthat at any time made any false representation' ....*toA°. lS:carlet or fraudulently and dishonestly inducedyscarlet to deliver any property and 'theretiyatieeeived Scarlet.
39. -tfxdssuming for the purpose of argument that the statement of CWs. 1 and 2 that Accused No.2 and l "'.other members of staff of Oriental, in the Seminar held @/ 56 during July -- August 1994 represented that they are the authorised representatives / agents of majorf rose breeders of the world, is true and correct, materials produced along with the chargeluu cannot be said that such and was made with an inlterition to Vdec.eVii;eu;S>carIet by'"
inducing them to havetransacticrrwith Cfierrtal and to part with money. 'dispute that in respect of -Reolr New Roses Intemationah»:l'3§l? are the exclusive representatiifes cut rose. As could be seen a "propagation contract entered into between Roses International B.V. and a..copylof'Wvhich is produced along with charge has been granted with a license by De Riii__ters' * Roses International B.V. to reproduce several :varieties of cut roses including First Red. The agreement was signed in I-Iazerswoude on is 11.3.1994 and at Bombay on 3.9.1994. The said &/ 57 license was in force until 31.12.1994 and was renewable by De Ruiters New Roses International~..iB.._\f. on yearly basis.
40. In respect of Tineke the Fax message of Terra 29.6.1994, a copy of with the charge sheet, Orierit_alr- 3; to sell Tineke variety o_f to be done by Oriental as: required by Terra Nigra letter prima facie it is noiticedl Oriental was permitted to sell 'lYneke_rose"4plant1s.4 it «ill. "rfromfl these documents produced along with 'sheet itself, it is clear that as on the date when No.2 and other members of the staff of Oriental' said to have made representation to Scarlet in the.:Seminar held during July -- August 1994 that they ll -are authorised representatives of various varieties of out &/ 3%,.
58 roses cannot be termed as a false representation. Of course, in the several correspondences copies ofeewhich are produced along with the charge sheetfthlat disputes arose between Oriental on the propagators of aforesaid two ya,:ieties.,.'of respect of payment of royalty aridlon oflthiat there was some delay in securing growe_r"s certificate. However, on this basis," itlca_:j1not~--_'bel'*said that Oriental had made false. representation "to Svcafrlet with a View to induce Scarlet £it:(:)_--."€11.t:'E'l': 1~into_«-- af contract and thereby to cheat V correspondences between O1*iental_uarid of which are produced along the cliargeeslheet, would indicate that on account of ~i_I1 securing grower's certificate in Red and Tineke varieties of roses, Scarlet went .on-demanding Oriental to refund the advances ..paid lbysit and also the losses said to have been incurred 9 As per the legal notice dated 2.2.1999 issued on " "hehalf of Scarlet to Oriental, demand was made for (V 59 refund of Rs.14.23,230/- being the amount collected towards royalty in respect of First Red and Tineke Varieties as Oriental failed to secured the grower's certificate. The other correspondences Oriental had made some more claims regardiiig poor V' quality of the plants and its Scarlet scaled down its de.mand'=to"-Rs.3 and ultimately it appears cheiilue for"; was received by Scarlet 1. settlenient of its claims as could be lees-r'«il.ciated 13.11.1998 from,'lSbcar1eijtV_V '._'lVVv}Xbout 1 year later the complaint- "flied. The materials produced along 'the 'charge sheet further indicates the honest . .efforts"i'irri'ade iiii "Oriental with the propagators for secLi1irig.V'gro\a.?~er's certificate in respect of Tineke and First Redrarieties. Materials produced by the IO further ..prima'~--*facie indicates that Oriental has subsequently royalties due to the propagators of these two " -"varieties of roses. Thus from the discussion made &/ 60 above, it is manifestly clear that the material on record do not prima facie indicate that Oriental had at any 'time by making false representation induced Scarletio enter into transaction and to deliver moneyii. ~ absolutely no material on record to" fthatu"
Oriental had dishonest intentio"'ns?'_'of and with such intention theyj"m_adeA.fal_se representation. ' Therefore, there are no ,-prirna"*»-._facie"A 'materials to constitute the offence ,_of"uehe'ating*».Vas. defied under Section 415, l~PC.ir opinion. the leasrmvifd witlitout his judicious mind to thesepvniateriaisl' are produced along with the charge sheet forming any opinion about the existence of a prima facie case proceeded to take W the offence alleged and has issued su'mmons,to the petitioners herein. .42; Yet another aspect which the learned 'Nlagistrate has failed to apply his judicious mind is @/ 61 whether the Director and other staff of Oriental co_1_,_i_ld be held vicariously liable for the aforesaid offences"'e:éi§i"'to have been committed by the company. Apex Court in the case of s.M.:s;'"P::aninaeefifieeiis'.iLtii, Vs. Neeta Bhalla and another lSu.;'$re,n1e"
3512] the normal rule in the*~..casels VrinvolijingvHlcrirninalV' liability is against that"is one is held to be criminallit ::ab1§--}e:~ another. Of course, subject to provisions being made in statntesii to others.
"State Of U.P. and others {(2093) 142 eomp. Acne? 228 (son, the Apex Court while ' if considqeririg thetcjiiestion as to whether the criminal against the Managing Director of a '~c_ompanj; and others, for offences punishable under xsections 405 and 406 of we said to have been & 62 committed by a Company can be allowed to continue, has observed thus in para 16:
"16. Indian Penal Code, save"
except some provisions specifically' therefor, does not conten1jolate.. A .' liability on the partof a party whpi: not] charged directly for olffianhl offence. "
Again in paras t';'1'ev.'(;9~:'g')jVart has observed 1 were drawn even if appellant its he cannot be said to have an offence under section '"4~{36 of'th_e"Indfi.ian Penal Code, 1860. I1" and A A. i~.kijhen__a contemplates creation of such 'V T. it provides specifically therefor. V A In absence of any provision laid down z the statute, a director of a cornpanu or emplouee cannot be held to be vicariously liable for anu offence committed bu the cogflgangg itself (see Sabitha Ramamurthy v. 63 R. B. S. Channabasavaradhya [2006] 10 SCC____ 581 'I. (underlining is mine)
20. We may, in this regard, l the provisions of the Essentials it Act, 1955, Negotiableiinstrtin tents Act; 952 J etc, have created is interesting to -14A of the 1952 Act' spec§f'ically llofience of crim.ir*iaI4<__ breac'li_: .oftru'stf in respect of the employees by the "of the Eaqalanations apbendeal 405 of the Indian Penal l8'60,.....awlegal fiction has been created
-effect that the employer shall be deerneti to have committed an offence of ~ 'criminal breach of trust. Whereas a person in charge of the affairs of the company and in control thereof has been made vicariously s 64 liable for the ojfence committed by the...__ company along with the company but even a case falling under section 406 of A Penal Code, 1860, vicarious 'liability:
held to be not extendable zio__ 'directors or officers of the conipanymfsee Iliaksua v. State of Gujarat [2GO'7j' Scale 3i1V8]. Thus from the in respect of Indian t.othe extent provided therein',d'--tliereV_is principles of vicarious liability; pp * of" offences committed by a company, tiiere-is no special provision in Indian Penal
- (,fo'dié finaking functionaries of such company "for any of the offences committed by t1ie..co__n1pany. As noticed earlier, in the complaint initially 'lodged by Scarlet, there was no allegation of any
-the functionaries of Oriental making any false
-*v-'representation. Reading of the entire complaint and &/ 65 other materials collected during investigation do not prima facie indicate the role played by each ofifithese petitioners as functionaries of Oriental. The__transactis)n'« p was between Oriental and Scarletpppwhich 'w limited companies. In the coriipplaintfl' apar.t°'fro.¥n___ the company, 5 persons were as V. accus*e:d.f 'Hvowever,._' in the charge sheet ;__subsepque1<itlyr_y_p_Oompany namely Oriental Floratech -not arraigned as accused but are stated to be the ~an'd_ of Oriental have been In the absence of any facie_. indicate the individual overt actssaid to ~-have been committed by these petitioners, the l.eaifne'd.y_Magistrate could not have taken cognizance .of'__the'valleged.-offences against these petitioners as they cannot' ' saddled with the criminal liability by H application of principles of vicarious liability. Therefore, "?.the°'order taking cognizance of the offence alleged and it "the order directing issue of summons to the petitioners 5/ 66 herein is perverse and illegal and is without any basis. The learned Magistrate before summoning:.f"~«.:t'h'e petitioners to face the criminal charge has.-totalljf to apply his judicious mind and to opinioii it about the existence of prima facie was under an obligation tohaae done: so_l::efcre"calling V' upon the petitionerssto 2before'éth*e'A"Court to answer the charge.
44. *mat_erfifalsu produced along with the charge'"' that the entire dispute between "ScaVr:1Vetf is a commercial dispute and Scarietliad to3'convert this commercial dispute as__fcriminal"ca,se; This is evident from the fact that ¢:,§§car1e.t a petition before the National Consumer Commission, New Delhi in Original Petitioln. .No.-49 making a huge claim against Oriental "ii the said petition came to be dismissed. The appeal filed before the Supreme Court agaisnt the said order &/ 67 came to dismissed as withdrawn on the ground that Scarlet will take steps for appointment of an arbitrator in pursuance of the agreement. Admittedly-,4":Scariet*didud * not seek appointment of arbitrator' and 1fe.Vfer'_}_th€ it dispute for adjudication nor (suit enforce the claim. In the meanwhile."S£:ariet"vhad"re'ceivedt" V certain payments .fi'Qir1 flfiii'i-A and final settlement of its with the same, S$cari.et':gfi_i.eq a year later alleging From this, it is T' had tried to convert a coinrnterciai 'a criminal case. Therefore, there is 'force the contention of the learned .:3jei1ioi9'i:'{f3ounse1 appearing for the petitioners that the filed with an intention to coerce Oriental to" pay' vsorne more money. In M/s. Indian Oil it Corporation v. M/s NEPC India Ltd., the Apex Court has fldeprecated the growing tendency of converting civil "dispute to a Criminal case, as under in para 10:
V 68
"10. While on this issue, it is necessary to take notice of a growing tendency business circles to convert purely disputes into criminal cases. Tliis obviously on account of _ a .'prov:aIent impression that civil law Trem..eC1ifEs--,,a1'.e '-time, f consuming and do not adequately.g',.protept "
the interests of Iend'er.s*,fcreditors--.._g§3uch"a3' tendency is seen in severalfamily"dispiites also, leading to» down of marriages/ families. ._'-'also an impressic1n:y1' that if pers'o.i_i. somehow be enta"ng:le'd;_in prosecution, there V'isi"a--.lil¢.elili:iF§od cc,,;fs,,;,n,:,1,,.3m settlement. Any Vieffert disputes and claims.
Which do not .involve any criminal offence, 'by 'applying pressure though criminal prosecution' """ "should be deprecated and if t' _ "discoura.ged. In G. Sugar Suri v. State of (LP. Vt2ooo'(:'zj' sec 636], this court observed:
it is to be seen if a matter, which is x essentially of civil nature, has been given a cloak of criminal offence. Criminal proceedings are not a short cut of other remedies available in law. Before issuing M 69 process a criminal court has to exercise a great deal of caution. For the accused it is serious matter. This Court has laid principles on the basis of which ""
is to exercise its jurisdiction und_e"r"'Section 482 of the Code. Jurisciictiori Section has to be exercised"to:'prevent;:abu'se of the process of any-.._c'ourt or.__othe:rwise""to secure the ends of jus'£_i.Qe'.~".__
45. Thus~.fromVt-'ne_ that even if entire Inater,ial:3iproclucediV.a1;§f;g"\?}iti1" the charge sheet are acceptediipatllltigieirl'face value' in its entirety, they do not prirnafi the offence punishable under S€Sé"Ei(V).vr1S_-}-3+:1(A(.'?;v_ 420 against these petitioners there nhasllbeen an attempt by Scarlet to convert rdispute into a criminal case only with a View to.,coeree_ "(§ri'ental to succumb to their preségrtfiftactics by V the Scarlet.
46. In Indira Mohcm Goswa.my's case referred to _ supra, in para 45 the Apex Court has observed that the '70 Courts must ensure that criminal prosecution is not used as an instrument of harassment or for-'seeking private vendatta or with an ultimate niotiveato ' the accused.
47. Therefore, in the offi discussions, I am of the :vf§CElS€ for prosecuting the petitio:i'ieArs under Sections 418 and 420'.{P'C to prevent abuse of secure ends of to quash the entire proceediiigsetvivn'ioffitits power under Section 482 of the dtciriininai prosecution launched is to continue against the petitioners it would ppttrniscarriage of justice and it amounts to the abuse of process of the court.
Therefore, I am. of the considered opinion that the entire Vcrirninal proceedings launched against these petitioners Hiire liable to quashed. I &--./ 71
48. Accordingly, the petitions are a11owec':',:.""'1.'he criminal proceedings launched against these ;pef.itiQhi.:;:S~~. in C.C.N0.206'72/2003 on the fiie of C.M.M. Bangalore, are hereby qfilashefifiv 4' ' RS/*